Chris Bowen and Jim Chalmers to announce $1.1bn for new low-carbon fuels industry under Future Made in Australia policy
This little tree, planted on a cattle farm in outback Queensland, produces oil that can fuel a plane or truck. It’s part of a new industry that federal Labor is backing with $1.1bn in grants.
Businesses and farmers will share in more than $1 billion of federal grants to help turn crops and waste into green power for planes and trucks.
The move by the Albanese government aims to create jobs in the regions and offset the decline in Australia’s fuel security while also lowering the nation’s emissions.
Senior ministers Jim Chalmers and Chris Bowen will formally announce the $1.1bn commitment on Wednesday, in an expansion of Labor’s Future Made in Australia policy.
The policy has attracted more than its fair share of criticism since it was unveiled in April last year, particularly over the decision to spend large sums of taxpayer money taking on China in solar panel development.
But extra support for a local renewable fuel industry is likely to be far better received.
“It’s a total no-brainer,” said Bioenergy Australia CEO Shahana McKenzie, who has been working with the government on its plans.
The next step will be further consultation between now and the middle of next year.
“I can imagine it would effectively be a fund that producers of renewable fuels would be able to bid into,” Ms McKenzie said.
The cash from Canberra will only assist on the supply side of the equation.
“We are going to need demand-side measures into the future in order to really scale up the industry,” Ms McKenzie said.
That could take the form of a mandate requiring airlines to start using a small percentage of sustainable aviation fuel, known as SAF.
Mandates already exist in the UK and mainland Europe, along with parts of the US and Asia.
As highlighted during the recent Bush Summit series, 70 per cent of Australia’s canola exports are to Europe to be turned into biofuel, including SAF, because there is no market here.
That biofuel can then end up in the tank of a Qantas plane departing airports such as London’s Heathrow or Charles de Gaulle in Paris.
Meanwhile, Australia imports nearly all its liquid fuel needs, leaving the nation vulnerable if geopolitical tensions boil over.
A recent partnership between Qantas, Sydney Airport and Ampol imported nearly two million litres of SAF, which was originally cooking oil from restaurants in China.
Qantas has a voluntary goal of 10 per cent SAF in its fuel mix by 2030.
There is no large-scale refinery in Australia that can turn oils into SAF.
The new $1.1bn grants scheme will focus on low-carbon fuel production. An earlier allocation of a separate $250 million was targeted at research and development.
One of the companies to benefit from an R & D grant was Queensland’s Jet Zero, which is about to start civil works on the first ethanol to SAF refinery at Townsville.
The company, whose investors include Qantas and Airbus, also recently began a trial plantation of native pongamia oil trees west of Charters Towers, with the aim of producing biofuel.
Jet Zero ecologist Ketti Ketmontri, who helped plant the trees, said: “What we are growing is on a grazing property where it is not competing with cropping land.”
Originally published as Chris Bowen and Jim Chalmers to announce $1.1bn for new low-carbon fuels industry under Future Made in Australia policy
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