The green fuel community has thrown its support behind a $1.1 billion dollar investment to be formally announced today by the Federal Government to boost the supply of low-carbon liquid fuels.
The Low Carbon Fuels Alliance of Australia and New Zealand (LCFAANZ), representing more than 300 stakeholders from feedstock and fuel producers to project developers, customers and researchers, says the investment signals to the world that Australia is serious about the deployment of low-carbon fuels.
The investment follows the release of Bioenergy Australia’s Securing our Fuel Future report which found that even with electrification Australia would still require about 30 billion litres of liquid fuel by 2050.
It brings low-carbon liquid fuel online as a key pillar of the government’s Net Zero strategy, enabling hard-to-abate sectors such as aviation, marine, manufacturing, transport, mining, and construction to reduce emissions without major disruption or high costs.
Bioenergy Australia CEO and LCFAANZ founder Shahana McKenzie says the announcement is good news for the alternative fuels industry.
“This investment changes the game for Australia’s homegrown low-carbon fuel industry and our energy security,” McKenzie says.
“It sets the foundation for a cleaner, more resilient economy – supporting jobs, sparking innovation and providing hard-to-abate sectors with the affordable, sustainable fuels they need to reach net zero.
“It sends a clear signal to global investors that Australia is open for business in the development and deployment of Low Carbon Fuels”
“For industry, this is more than a funding announcement – it is a turning point. It gives companies the confidence to invest, innovate and build here in Australia, using our enormous feedstock potential to build a clean energy future.”
McKenzie says demand for low-carbon fuels is rising both in Australia and overseas, and this investment would help Australia to meet that need.
“With our vast agricultural and industrial base, CSIRO reports that by 2025 Australia will have enough feedstock to replace 60 percent of local jet fuel with SAF, growing to 90 percent by 2050,” McKenzie says.
“Low carbon liquid fuels will create jobs in regional Australia, boost economic growth, strengthen energy security, and future-proof our tourism and transport industries.
“The LCFAANZ looks forward to working with the Australian Government on informing the details of this funding package through the public consultation and design work taking place this financial year.”
Part of the investment program will be the launch of a new ten-year Cleaner Fuels Program to attract investment for domestic fuel production, and funding that backs Australian innovation, from the farm to the fuel bowser.
Outlining the need for investment into low-carbon liquid fuels, such as Sustainable Aviation Fuel (SAF), renewable diesel, biodiesel, biomethanol, and ethanol, LCFAANZ drew on the findings of two key reports – Bioenergy Australia’s Securing Our Fuel Future: Resilience Through Low Carbon Liquid Fuels report by Deloitte (March 2025) and analysis from the CEFC (July 2025).
These reports show that Australia now imports 80 per cent of its fuels, with 65 per cent coming from just three countries.
They also indicate that current low-carbon liquid fuel projects could produce 2 billion litres, with the potential to displace 19 per cent of imports by 2040 and 47 per cent by 2050 if matched with investment in refining and infrastructure.
With demand for low-carbon fuels high, a joint CEFC and Deloitte report, found developing a low-carbon liquid fuel industry could generate $36 billion in economic activity, reduce emissions by 230 million tonnes by 2050, and strengthen national fuel security.
It also found that Australia already exports $6 billion in feedstocks and produces 175 million litres of biofuels annually, with capacity for 546 million litres from existing facilities operating below potential.
In terms of investment return, Australia’s Bioenergy Roadmap (ARENA, November 2021) highlighted that $10 billion in GDP per annum could be added over the next decade with the development of mature renewable liquid fuels and gas sectors, along with 26,200 new jobs.
It says the development of an Australian SAF industry alone could contribute more than 7,400 jobs and an additional $2.8 billion to GDP annually by 2030, growing to 15,600 jobs and $7.6 billion by 2050.
Bioenergy Australia has launched a new website, www.cleanfuels.org.au, providing clear, accessible information on how these fuels work, their benefits, and their role in achieving a net-zero future.