Biofuels could ease our energy woes. But the industry says it needs a mandate

The industry says ethanol is the easiest biofuel to use as it is already in the Australian market. (ABC News: John Gunn) Biofuels could extend or replace some of Australia's crude oil consumption, using organic matter to create fuel with lower emissions. There has not been consistent demand for the fuels, as until recently, imported fuel has been cheaper. Advocates want a biofuels mandate for the nation's fuel supply to promote the industry's growth, which they say will lower emissions and fuel prices. Link copiedShareShare articleBillions of dollars worth of investment will flow if the federal government mandates a percentage of biofuels be added to the nation's fuel supply, major investors say. If the government makes a definitive decision on biofuels, superannuation investor Danny Elia told ABC News he could raise funds immediately to build a refinery, starting a process to lower fuel prices for Australian consumers. "I would turn up to my investment committee tomorrow, asking for the support to invest in what would be our first plant, which would produce 8 per cent equivalent of the country's aviation fuel," the head of infrastructure assets at IFM Investors said. "We would look to invest in the order of about $3 billion for the first plant, and we hope the second would be [built] shortly after that.' Danny Elia helps look after $266 billion in investments on behalf of super funds and their members. (ABC News: Darryl Torpy) Fuel security has been in the spotlight since the Middle East war sent shockwaves through global oil markets and raised questions about potential shortages in Australia. Biofuels, made from organic matter, have been positioned as a renewable alternative to fossil fuels that could be made here, bolstering fuel supply. On Wednesday, the prime minister announced more than $10 billion would be spent on bolstering Australia's fuel security, including expanding onshore reserves and exploring the feasibility of more local refining. This week's announcement focused on getting and storing more crude-oil-based fuels, however last September, the government also announced $1.1 billion in grants to promote the expansion of biofuel production. Australia currently imports 77 per cent of its refined fuel needs. The rest is refined here, but largely from crude oil imports. In February, only nine barrels of every 100 used here were actually pumped out of the ground in Australia or its waters. We want to know what issues matter to you ahead of the federal budget. Have your say. Agricultural groups have positioned themselves as the short and long-term solution to our fuel sovereignty problem, while building a biofuels industry that adds value to crops Australia already ships out. "Farmers already supply products that power biofuel industries overseas," said National Farmers' Federation chief executive officer Mike Guerin. Australia has the ingredients to make biofuels, but what has held them back is the lack of consistent demand that would allow big investments. IFM is the investment manager for Australia's enormous industry superannuation funds. It had $266.1 billion in funds under management at the end of last year, so Mr Elia is not kidding around. The plant would be built next to Ampol's refinery in Lytton, a suburb of Brisbane, and be ready to go in five years. Crop giant GrainCorp is involved as well, and is set to build a plant to crush canola for the new refinery. Canola crops are a key component of biofuels. (ABC South East SA: Elsie Adamo) It shows the potential scale of biofuels, but also demonstrates the reason Australia's biofuel industry is so small, despite having vast amounts of land, ingredients and potential. Mr Elia said the market needed strong signals about demand to trigger the kind of long-term investment required. More than $10 billion will be spent bolstering Australia's fuel security, as the federal government attempts to shield the nation from the long-term consequences of the Iran war. If it got them, Australia could produce a billion litres of low-carbon fuel by 2030 or 2032 and "grow exponentially from there", Mr Elia said. "If you spread that across aviation and broader transport, like diesel, probably something in the order of about 30 per cent to 40 per cent of [liquid fuel] by 2040." Biofuels like sustainable aviation fuel (SAF) and biodiesel are more expensive to produce in Australia than imported fossil fuels like crude oil. Australia exports billions of dollars worth of canola seed to make sustainable jet fuel that is sold back to us. This is what it will take to make it here. With global prices for liquid fuels currently elevated by the conflict in the Middle East, they are competitive. But that has not always been the case, and it is not expected to persist if the situation stabilises and global crude oil prices fall. In this scenario, locally produced fuel would become more expensive than imported products, which currently satisfy c

Biofuels could ease our energy woes. But the industry says it needs a mandate

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