Australia commits $720m to kick-start biofuel production
The ten-year Cleaner Fuels Program will support onshore production of renewable diesel and SAF.
The Albanese government has pledged $1.1 billion (US$720 million) to develop a domestic low-carbon liquid fuel industry, framing it as a way to cut emissions, improve fuel security and create jobs in regional Australia.
The ten-year Cleaner Fuels Program will support onshore production of renewable diesel and sustainable aviation fuel, which can replace fossil fuels in existing engines. The first large-scale output is expected by 2029.
Australia already exports nearly $4 billion (US$2.6bn) in feedstocks such as canola and tallow that could be refined locally. The Clean Energy Finance Corporation (CEFC) estimates a mature domestic industry could reach $36 billion (US$23.7bn) by 2050. It also projects that switching to cleaner fuels could avoid about 230 million tonnes of emissions by mid-century – equivalent to the annual output of 86 million cars.
Treasurer Jim Chalmers said the investment was not only about climate but also about reshaping the economy. “This is a downpayment on developing an entirely new industry in Australia,” he said. “From the farm to the refinery, from primary production to processing, this will create more jobs and more opportunities for Australian workers and businesses.”
Climate and Energy Minister Chris Bowen argued that domestic production offered a pathway to reduce emissions in sectors where electrification remains difficult, such as aviation, shipping and heavy construction. Agriculture Minister Julie Collins said the move would provide new markets for farmers and strengthen regional economies, while Acting Infrastructure Minister Murray Watt pointed to the potential for job growth in transport and logistics.
