Australia commits $735 million to kickstart low-carbon fuel industry
The Australian government announced on Wednesday that it will invest $735 million over the next decade to develop a low-carbon energy industry, a move warmly welcomed by the country’s agricultural groups.
The funding package is designed to spur private investment in sustainable aviation fuel (SAF) and biodiesel, positioning Australia to become a major player in the global biofuels market.
“Australia has an enviable opportunity to produce cleaner and low-carbon liquid fuels for jets, vessels, construction machines, and heavy trucks to achieve net zero,” the government said in a statement, citing the nation’s advanced farming techniques and access to affordable renewable energy.
Finance Minister Jim Chalmers described the initiative as a down payment on a “completely new industry in Australia.” He added: “It’s about making Australians, and our economy, big beneficiaries of the global net zero transformation.”
Australia, already one of the world’s largest producers of biofuel feedstocks such as sugarcane, canola, and sorghum, exports much of its production while importing the bulk of its gasoline. Canola, in particular, has become a critical feedstock for Europe’s biodiesel industry.
Farmers have long lobbied for government backing, arguing that without support, a domestic biofuels industry would struggle to take off.
“This isn’t just about cleaner fuels,” said Su McCluskey, interim CEO of the National Farmers’ Federation. “It’s also about creating jobs and diversifying farm businesses.”
The government’s commitment comes as global demand for sustainable fuels accelerates, driven by both climate targets and efforts by industries such as aviation and shipping to cut emissions.
