Australia Pledges $735 Million to Kickstart Biofuels Industry

(Bloomberg) -- Australia will spend A$1.1 billion ($735 million) over a decade to assist growth in a local sustainable fuel sector, an announcement likely to be welcomed by the grains industry, which has been seeking a boost from Canberra for years.

The funds will stimulate private investment to allow the first domestic production of cleaner fuels as soon as 2029, Treasurer Jim Chalmers said in an emailed statement on Wednesday. Australia had all the elements required to make biofuels in abundance, including canola and sorghum, he added.

“Low-carbon liquid fuels are an enormous economic opportunity for Australia,” Chalmers said.

While many other major agricultural exporters, including the US and Brazil, have shifted toward production of sustainable fuels using produce to boost margins and cut emissions, Australia has often lagged, to the frustration of the sector. 

Australian commodities trader GrainCorp welcomed the government’s announcement. Its head of agri-energy, Jesse Scott, said in a separate statement that about 70% of the nation’s canola is exported unprocessed before being used overseas in renewable fuel production.

“We want to bring that value-add home and turn our canola into renewable fuels, to ensure there’s a future made in Australia,” Scott said.

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