Low-carbon liquid fuels industry gets funding boost

The Australian Government is providing $250 million to accelerate the pace of the country’s growing domestic low-carbon liquid fuels (LCLF) industry.

This funding, administered by the Australian Renewable Energy Agency (ARENA), is part of the $1.7 billion Future Made in Australia Innovation Fund and will be provided as grants to support pre-commercial innovation, demonstration and deployment.

Low-carbon liquid fuels can be produced sustainably from waste, biomass such as agricultural feedstocks, or renewable hydrogen. Australia’s domestic LCLF industry will focus on supplying sustainable aviation fuel and renewable diesel in liquid fuel-reliant sectors, including transport (aviation, heavy vehicle, rail and maritime), mining, agriculture and construction.

Minister for Climate Change and Energy Chris Bowen said, “The Australian Government is backing clean, green low-carbon liquid fuels as an important part of our move towards net zero and long-term fuel security.

“Australia has the know-how and skills to meet the crucial task of decarbonising hard-to-abate sectors such as aviation, heavy transport and mining that rely on liquid fuels.”

The development of low-carbon fuels is said to drive economic growth and jobs in regional areas, including supporting diversification in agriculture, and making good use of excess feedstock from crops, sugarcane and waste products such as tallow.

The CSIRO projects that the LCLF industry could contribute between $6 billion and $12 billion annually in direct economic benefits, with greater gains from regional co-benefits including diversified income streams for farmers and regional communities.

“Investing in a future made in Australia means delivering the industries that will provide high-end jobs, many in the regions, for future generations,” Bowen said.

Alongside the $250 million for low-carbon liquid fuels, the Future Made in Australia Innovation Fund is providing $500 million for clean energy technology manufacturing capabilities including electrolysers, batteries and wind towers.

The investment in a wider domestic LCLF industry is said to build on the momentum of the Sustainable Aviation Fuel Funding Initiative. This initiative has seen the federal government invest $33.5 million across five projects to date, including LCLF production facilities in Bundaberg and Townsville, and enabling the supply of sustainable aviation fuel at Brisbane Airport.

“We know that industries vital to our national prosperity, like the transportation of people and goods across our vast land, are carbon intensive and hard to abate,” said Minister for Infrastructure, Transport, Regional Development and Local Government Catherine King. “That’s why we’re investing hundreds of millions of dollars to develop — right here in Australia — the low-carbon liquid fuels of the future that will reduce their environmental impact without preventing their operation or expansion.”

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