Australia eyes 10pc renewable liquid fuel use by 2030

Australia must target 10pc renewable liquid fuel use by 2030 to help reach its goal of 43pc reduction in greenhouse gas emissions (GHG) from 2005 levels, the country's main biofuels lobby said on 22 May.

The Bioenergy Australia report, titled Transitioning Australia's Liquid Fuel Sector, recommended enacting a domestic low-carbon fuel emissions crediting system, to drive existing refiners to purchase renewable fuels from producers. It also suggested assigning tax credits for each litre of blended fuel or biofuel sold, depending on the fuel's emissions intensity, and a lowering of fuel excise rates for blended renewable fuels. The report also recommended setting government procurement targets for Australia's defence forces, which use up to 320mn l/yr of liquid fuels.

Substituting just 6pc of New South Wales' gasoline with bioethanol would result in the equivalent of taking 730,000 vehicles off the road, the report said. Replacing 2pc of diesel with biodiesel or renewable diesel around the country would effectively remove the emissions of 29,000 rigid trucks. Replacing 10pc of jet fuel with sustainable aviation fuel (SAF) would be the equivalent of reducing the distance flown by a Boeing 747 aircraft by 220mn km/yr. These could be achieved through stronger fuel efficiency standards, which Australia is likely to introduce.

The Bioenergy Australia report warned Australia faces lost economic opportunity if it fails to foster a mature bioenergy sector to help its transport industry sector abate GHG emissions.

Australia has lagged on biofuels development despite a push by farm groups for ethanol mandates to support the sugar and grains industries. Global investment in liquid renewable fuels more than doubled in 2021 to about $8bn, but Australia is falling behind countries like the US, UK, Canada, Brazil, India and others which mandate, subsidise or incentivise production at greater levels, the report said.

The nation's vast distances and remote primary industries mean that transport, mining, agriculture and construction sectors account for close to half of Australia's energy consumption in liquid fuels. But many ethanol production facilities closed in 2020 and 2021, while little investment took place during the 2010s, leaving the country heavily reliant on fuel imports.

Biomass from Australia's agricultural industry is largely underutilised. More could be exported to economies with advanced renewable fuel sectors, mirroring EU concerns about the effect of the US Inflation Reduction Act, unless greater domestic incentives are provided, the report said. Presently 70pc of tallow and 80pc of canola oil is shipped from Australia to countries where increasing quantities of biodiesel are being produced.

The federal government has largely prioritised electrification of industry and transport as part of its ambitious GHG emissions reduction targets, but last year announced a new advisory body to help it development policies to decarbonise the aviation sector and drive investment in SAF.

By Tom Major