Australia will invest USD 740 million over 10 years to boost domestic production of low-carbon liquid fuels such as renewable diesel and sustainable aviation fuel, the government announced on Wednesday.
The Cleaner Fuels Program aims to attract private investment and build a resilient supply chain for fuel alternatives derived from feedstocks such as canola, sorghum and sugar. First production of “drop-in” cleaner fuels that can be directly substituted for current fossil fuels is expected by 2029.
Production-linked grants will be awarded under the scheme through a competitive process to stimulate investments. The programme expands on the Sustainable Aviation Fuel Funding Initiative and complements the Future Made in Australia fund.
“Across the nation, we have 2 billion litres worth of projects in the pipeline, many of which are ready to scale up production. A new thriving domestic industry is within our reach,” said Minister for Climate Change and Energy Chris Bowen.
Liquid fuels account for about half of Australia’s domestic energy consumption, and the country exports about USD 2.7 billion in clean fuel feedstocks such as canola and tallow each year.
Australian state-owned climate investor and green bank Clean Energy Finance Corporation estimates a domestic low-carbon liquid fuel industry could be worth USD 24 billion and reduce carbon dioxide emissions by 230 million tonnes per year by 2050.
A larger domestic supply of cleaner fuels would help reduce emissions in hard-to-abate sectors such as transportation, which is expected to be Australia’s largest single source of carbon dioxide emissions by 2030, and mining.
Source: Theenergyyear.com