Australia's proposed biofuels mandate should initially focus on fuels already produced domestically and could begin as early as 2027, according to industry lobby group Bioenergy Australia.
Some elements of the federal mandate could be introduced ahead of the government's planned 2029 start date, Bioenergy Australia chief executive Shahana McKenzie told the Australian Renderers Association Symposium in Melbourne on 16 September.
Under the proposed mandate, fuel suppliers, refiners and importers would need to replace a rising share of the diesel, petrol and jet fuel they supply with eligible low-carbon liquid fuels (LCLF) from 2029 before transitioning to a carbon intensity-based system from 2035. Australia currently has no national biofuels mandate, but New South Wales and Queensland states operate ethanol-blending mandates, although these are not strictly enforced.
Australia could begin by mandating fuels already available in the domestic market, such as ethanol and biodiesel, while allowing newer fuels including sustainable aviation fuel (SAF), renewable diesel (RD) and e-fuels more time to scale up before being incorporated around 2030, she said.
The Australian government launched consultation last month on the LCLF mandate. The government is considering a target of 750mn-1.9bn litres by 2030, rising to 3.45bn-8.9bn litres by 2035. The consultation period closed earlier this week.
McKenzie said Australia should ultimately mandate all eligible renewable fuels, but argued existing ethanol and biodiesel production could provide an early foundation for the policy. This approach would support capacity growth while recognising Australian feedstocks, encouraging domestic processing and ensuring imported fuels are held to equivalent sustainability standards.
Australia's biodiesel production capacity is around 100mn litres/yr, while ethanol production was about 175mn litres in 2022 against nameplate capacity of roughly 440mn l/yr, according to Bioenergy Australia. At full capacity, domestic ethanol production could supply about 2.8pc of Australia's gasoline demand, while biodiesel capacity could meet around 0.3pc of diesel consumption, based on Australian Petroleum Statistics (APS) fuel sales data for August 2025-July 2026.
Australia's ethanol-blended gasoline sales totalled 1.69bn litres in August 2025-July 2026, equivalent to 11pc of total automotive gasoline consumption of 15.58bn litres, according to APS data. Assuming the blend was predominantly E10, the actual ethanol volume consumed would be around 168.6mn litres, or just over 1pc of total gasoline sales.
Australia currently has no commercial SAF or RD production, although several projects have been proposed. One of the most advanced is Jet Zero's 113mn l/yr Project Ulysses alcohol-to-jet facility in Townsville, which is in the front-end engineering and design (FEED) stage.
