The Federal Government has been quiet since its re-election in May on its roadmap for the future of low carbon liquid fuels (LCLF) in the Australian energy and mobility market.
In the 2024-25 Federal Budget, the Government announced it is undertaking targeted consultations to identify the best form of production incentives and other measures to support the establishment of a made in Australia LCLF industry. In June and July last year the Department of Infrastructure and Transport issued a Consultation Paper entitled: Low Carbon Liquid Fuels – A future Made in Australia: Unlocking Australia’s low carbon liquid fuel opportunity.
ACAPMA made a submission to the Consultation Paper arguing the support of LCLF should be guided by five principles. These included;
- Low carbon policy (and regulation) must focus on emissions performance – as opposed to picking technology ‘winners’.
- Government policies targeting low carbon mobility must support an economically viable and socially just transition to Net Zero 2050.
- Advanced (or early) investment in low carbon mobility infrastructure should be supported by public funding until such time as market demand supports wholesale private sector investment.
- Progress on low carbon mobility to support Net Zero 2050 should not come at the expense of Australia’s national fuel security goals.
- Development of a low carbon mobility market (including low carbon liquid fuels) should ensure competition neutrality.
ACAPMA argued at the time that there is a significant cost disadvantage of renewable diesel (150% of average diesel price), and synthetic diesel (250% of average diesel price) means there will need to be market incentivisation by both market push and market pull policy mechanisms.
Progress was made when in February this year Australia formally adopted new national standards enabling and regulating paraffinic diesel, including renewable diesel making it compatible with existing engines and improving emissions.
The government’s Future Made in Australia Innovation Fund has allocated $250 million specifically to accelerate the LCLF sector—covering renewable diesel and Synthetic Aviation Fuels (SAF) via grants for pre-commercial innovation, demonstration, and deployment.
While the Federal Government has made some good progress establishing the regulatory framework for LCLFs, it’s time they sketched in greater detail the plan to accelerate the adoption of LCLFs.
ACAPMA
