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Australian science and industry are partnering to build the biofuels industry in Australia.

We have an abundance of biomass and feedstock to support production. Australian research organisations are exploring new ways to use this feedstock to produce sustainable aviation fuel (SAF), biodiesel and bioethanol. 

Investment opportunities in biofuels are based on:

  • a large reservoir of agricultural feedstock

  • existing refinery infrastructure that can be repurposed

  • national and state strategies to develop biofuels, including SAF

  • targeted support, including from the Clean Energy Finance Corporation (CEFC), and the Australian Renewable Energy Agency (ARENA)

  • an active ecosystem of researchers and scientists

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Australia's ability to satisfy local jet fuel demand from biogenic feedstocks:

60% by 2025
90% by 2050

Source: CSIRO, Sustainable Aviation Fuel Roadmap 2023.

Crops for fuel
Australian crops that can be used to make SAF:

Carbohydrates: sugarcane, bagasse, sorghum

Oilseeds: canola, cottonseed, sunflower

Source: CSIRO, Sustainable Aviation Fuel Roadmap 2023.

Australia’s competitive advantage

  • Australia is a major producer of feedstock for bioethanol. Molasses, a byproduct of sugarcane, contributes 22% to world ethanol production. Australia is the world’s third largest sugarcane producer.

  • As a major agrifood exporter, Australia also has capacity to deliver feedstock for biodiesel production. This includes canola, tallow and forestry residue.

  • Australian is recognised internationally for its low-emission canola production (Source: Australian Oilseed Federation: Australian Canola and the EU Biodiesel Market 2022 (PDF 1.8MB). Australia exports canola worth A$5–$6 billion p.a. to the EU for processing into biofuel.

  • Enthusiastic collaboration between science, academia and industry to turn agricultural expertise into industrial biofuel capabilities. This includes Australia’s lead science agency, the Commonwealth Science and Industrial Research Organisation (CSIRO).

  • Financial support for biofuels projects from national and state-based agencies. This includes support for a sustainable aviation fuel (SAF) industry in Queensland.

The growth of biofuels in Australia

Production of biofuels is increasing rapidly in Australia. In 2000, Australia produced zero quantities of commercial biofuel.

Lead agencies and research into biofuels

  • Bioenergy Australia promotes the development of a sustainable bioenergy industry in Australia. The organisation works with industry, government and research institutions to promote the use of bioenergy technologies, including biofuels.

  • The Australian Renewable Agency’s (ARENA) Bioenergy division supports the rapid commercialisation of bioenergy and energy-from-waste projects.

  • CSIRO is engaged in multiple projects to develop biofuels. Projects include:

  • Universities in Australia conduct research into biofuels, including the University of Queensland and Monash University. This research includes the development of new biofuels, as well as the optimisation of existing biofuel production processes.

Sustainable aviation fuel

Aviation contributes 2.5% of the world’s total carbon emissions. In June 2023, the Australian Government announced the establishment of the Australian Jet Zero Council. The council brings together stakeholders from across the aviation sector and its supply chains to lead efforts to deliver net zero aviation in Australia, including SAF.

  • In 2023, CSIRO joined forces with Boeing Australia to develop a Sustainable Aviation Fuel Roadmap for Australia and New Zealand. SAF can reduce emissions by 80%. The Roadmap says:

    • Australia is in prime position to contribute to the SAF industry in the Asia-Pacific region.

    • Australia’s feedstock can supply almost five billion liters of SAF production in Australia by 2025 and up to 14 billion liters by 2050.

    • Australia will have enough feedstocks to produce 60% of local jet fuel demand using biogenic feedstocks by 2025 and 90% by 2050 as biogenic sources grow and hydrogen production ramps up.

    • Australia’s SAF opportunity could be worth A$10 billion by 2025 and A$19 billion by 2050.

  • Australian feedstock for SAF includes:

    • Carbohydrates: sugarcane, bagasse, sorghum

    • Oilseeds: canola, cottonseed, other oilseeds

    • Power to liquids: hydrogen, carbon dioxide

    • Residues and cropping: agricultural residues, sawmill residues, oil mallees

    • Wastes: tallow, used cooking oil, municipal solid waste.

  • The Queensland Government supports the development of SAF:

    • Australia’s first alcohol-to-jet SAF plant is being built in Queensland.

    • The new SAF plant is a collaboration between Australia’s Jet Zero and US-based Lanzajet. It includes Qantas, Airbus and the Queensland Government.

    • Queensland is a large-scale producer of SAF feedstock, including sugarcane, tallow and pongamia.

Incentives, grants and support

The Australian Government wants to accelerate the development of a biofuels industry in Australia. The Aviation White Paper sets out long-term policies to guide the next generation of growth and aviation innovation. State governments also support investment.

  • CEFC co-funds clean energy projects. It leads decarbonisation investment in Australia. It has access to around A$30 billion of Australian Government funding. So far, CEFC has committed more than A$12.7 billion on 300 large-scale projects. It publishes analysis of biofuels in Australia.

  • ARENA funds renewable energy and sustainable transport projects. It has provided funding for multiple biofuels projects including A$23 million for the A$696 million Kwinana Waste-to-Energy Project in Western Australia.

  • ARENA has also supported the Sustainable Aviation Fuel Funding Initiative. This A$30 million initiative supported the development of a domestic SAF industry with production from renewable feedstocks in Australia.

  • The Queensland Government has established multiple funds for biofuels, including a A$5 million Biofutures Industry Development Fund, a A$5 million Commercialisation Fund, and a A$4 million Biofutures Acceleration Program.

  • The Australian Taxation Office’s New Investment Engagement Service gives tailored guidance on tax issues to businesses planning significant new investments in Australia.

  • The National Reconstruction Fund has earmarked A$3 billion for the renewables and low-emission technologies stream, which applies to SAF projects.

  • The A$1.9 billion Powering the Regions Fund supports the decarbonisation of existing industries and creation of new clean energy industries and jobs.

  • The Sustainable Aviation Fuel Alliance of Australia and New Zealand (SAFAANZ) is a working group that will advance sustainable aviation fuel production, policy, education and marketing in Australia and New Zealand.

Contact an Austrade specialist as an investor as a buyer