When most people think about emissions reduction, their minds immediately leap to electric vehicles, rooftop solar, or wind farms dotting the countryside. But for enterprises operating in, or with, sectors like freight transport, mining, and agriculture, the decarbonisation conversation looks very different.
We simply can’t electrify a road train hauling 80 tonnes of grain across the Nullarbor. Nor can we afford downtime in a remote mine site or on a harvest-ready farm waiting for unproven technology to catch up. That’s why, for heavy-duty and off-road industries, low carbon liquid fuels are quickly emerging as one of the most practical, near-term solutions to reducing emissions — and we should all be paying attention.
The real-world conversion of this opportunity, in accordance with Australia’s Net Zero 2050 aspirations, will require an unprecedented level of cooperation between the Australia fuel industry, vehicle manufacturers (and machinery providers), and the key industry sectors that represent the end-users of this fuel in the future (i.e. Mining, Agriculture, and Road Freight).
This issue will be one of the key conversations to be explored at the 2025 Asia Pacific Fuel Industry Forum (APFIF25) – under the overall conference theme of Success through Synergy – to be convened at The Star Gold Coast between 16 and 18 September 2025.
Why Low Carbon Liquid Fuels Matter…
Australia currently uses around 32 billion litres of diesel every year — and a large chunk of that goes into vehicles and machines in sectors where electrification simply isn’t viable in the short to medium term. If we’re serious about reaching national and industry decarbonisation goals without compromising productivity, we need a transition fuel — something that works with existing equipment, supply chains, and infrastructure.
That’s exactly where low carbon liquid diesel—especially renewable diesel and e-fuels—comes into the picture. These fuels burn cleaner, reduce net emissions, and can often be used in the very same engines that run on regular diesel today. For sectors like trucking, mining, and agriculture, this is a game-changer.
What’s the Difference Between Renewable Diesel and E-Fuels?
Renewable diesel is made by refining plant oils or animal fats using hydrogen, creating a fuel that’s chemically almost identical to conventional diesel. It’s drop-in ready — meaning you can pour it straight into your diesel tank with no modifications. It can reduce emissions by anywhere from 60% to 95% compared to fossil diesel, depending on the feedstock and process used. This stuff is real, available, and already being used in global markets like California and Scandinavia.
E-fuels, on the other hand, are synthetic. They’re made by combining green hydrogen (made from renewable electricity) with captured carbon dioxide. The result? A fuel that’s carbon-neutral over its lifecycle — but not without challenges. E-fuels are still in the early stages of development and, quite frankly, they’re expensive — often three to five times the cost of conventional diesel. Think of e-fuels as a longer-term option, while renewable diesel is something we can scale up today.
So, What’s Happening in Australia?
Australia hasn’t traditionally been a front-runner in alternative fuels — but that’s starting to change.
Earlier this year, the federal government took a big step by formally recognising paraffinic diesel (which includes renewable diesel) under national fuel quality standards. It might sound dry, but this opens the door for wider commercial use — and allows local producers and importers to begin scaling up supply with regulatory certainty.
At the same time, the government’s “Future Made in Australia” initiative is putting real money on the table. There’s $250 million set aside for the development of low carbon liquid fuels under this policy banner. The goal? To build up local production capacity for renewable diesel and sustainable aviation fuels — and position Australia as more than just a fuel importer.
And this isn’t just about emissions. According to the CSIRO, developing a domestic low carbon fuels industry could add between $6 and $12 billion a year to our economy by 2035. That’s serious economic upside — particularly for regional areas that could play a key role in both feedstock production and fuel processing.
What About the Rest of the World?
We’re not alone in this. Globally, investment in low carbon fuels is gaining momentum — albeit with some turbulence. In Europe, Shell has paused construction of one of the continent’s biggest biofuel plants amid economic pressures, highlighting the need for clear policy direction and stable demand signals. Meanwhile, countries like the United States are doubling down, with tax credits and incentives making renewable diesel commercially viable for many producers.
Even in the synthetic fuels space, we’re seeing the first green shoots. Denmark just opened the world’s first commercial-scale e-methanol plant, and Saudi Aramco is heavily backing e-fuels as a way to extend the life of combustion engines in global markets.
Australia can — and should — tap into this momentum. With our agricultural base, renewable energy resources, and strong industrial capacity, we’re well-positioned to lead the region in low carbon fuel production.
What Does This Mean for Heavy Industry?
If you’re in the business of mining, farming, or moving freight, this matters to you.
The key advantage of renewable diesel is that it can be used in your existing equipment. That means no waiting around for electric machinery that doesn’t yet exist — or doesn’t yet work in your environment. You don’t need to overhaul your fuel infrastructure. You just need access to the fuel.
For mining companies and farmers, who operate on thin margins and in remote regions, this is one of the most cost-effective and operationally sensible ways to cut emissions in the near term. And for freight operators running long-haul routes? Renewable diesel gives you a decarbonisation pathway without the range anxiety and refuelling complexity of EVs or hydrogen.
The Elephant in the Room (Cost premium)
Renewable diesel is more expensive than fossil diesel in most markets. Depending on where and how it’s produced, the premium can range from 30% to over 100%. E-fuels are pricier still — around $3.50 AUD per litre in some early facilities.
But these costs are coming down — and relatively fast.
With the right policy levers (such as concessional fuel tax arrangements for end-users), production scale, and public-private partnerships, these fuels can compete. The key is providing demand certainty and supply chain confidence, especially in hard-to-electrify sectors that need realistic decarbonisation pathways today, not tomorrow.
Success through Synergy – the theme of APFIF 2025
Australia has an opportunity to turn its diesel dependence into a clean energy advantage. With the right mix of policy, investment, and industry leadership, low carbon liquid fuels could be our secret weapon in cutting emissions — without cutting productivity.
The key to realising this opportunity is for our industry to collaborate with end-customers in the Mining, Agricultural and Road Freight industries – and all Australian Governments – as we journey towards the practical realisation of Australia’s Net Zero 2050 ambitions.
Join in the conversation by registering for the 2025 APFI Forum to be held at The Star Casino Gold Coast between 16 and 18 September 2025.
Early Bird tickets are on sale now and can be purchased via the event website at www.apfiforum.com
ACAPMA
