Australia will be exposed to environmental, economic and energy security risks if governments fail to foster a domestic renewable fuels sector, according to a new report from Bioenergy Australia.

The report, Transitioning Australia’s Liquid Fuel Sector: The Role of Renewable Fuels, addresses how to reduce emissions in the liquid fuel space, where electrification is impractical.

The report says the immense task of decarbonising Australia’s economy will be made even more difficult without the urgent development and deployment of the liquid renewable fuels that the nation’s transport, mining, agriculture and construction sectors require to lower emissions – sectors that contribute close to half of Australia’s energy consumption in liquid fuels.

For these sectors, electrification is not the easy answer.

The report also warns of a missed economic opportunity that is well and truly being grasped by other nations, with Australia’s bioenergy roadmap claiming that AU$10 billion in GDP per annum could be added over the next decade with the development of a mature bioenergy sector, along with 26,200 new jobs.

And given the energy crisis that is currently gripping nations like Australia, the report shines the light on an emerging threat: The next energy security battle, as nations fight for feedstock, and refined renewable fuels to aid decarbonisation.

The report shows 45% of Australia’s total energy use comes from liquid fuels, providing the following opportunities:

• Replacing just 6% of petrol with bioethanol, based on targets, would be the equivalent of taking 730,000 vehicles off the road.
• Replacing 2% of diesel with biodiesel or renewable diesel, based on current targets, would be the equivalent of taking 29,000 rigid trucks off the road.
• Replacing 10% of jet fuel with Sustainable Aviation Fuel, based on airline targets, would be the equivalent of around 220,000,000km flown annually by a Boeing 747.

Bioenergy Australia CEO Shahana McKenzie said renewable fuels are the missing piece of the puzzle when it comes to emissions reduction in Australia.

“While electrification is essential for significant pillars of the energy system it is only part of the answer to reducing emissions,” McKenzie said.

“Australia’s economy is reliant on liquid fuels, our heavy industries, aviation, marine, agriculture, and mining need affordable and immediate decarbonisation options. Touting electrification as the only solution is naïve and delaying a robust discussion about how we achieve decarbonisation of these hard-to-abate sectors,” she said.

“The full-throttled pursuit of electrification is going to be a handbrake on Australia’s pursuit of its emissions reduction targets, leaving significant sectors in our economy unable to decarbonise in an affordable, reliable way.

“We must give businesses in these critical sectors the unimpeded ability to reduce their emissions and not simply leave them to their own devices, or their own demise.

“Renewable fuel is their answer. We just need to provide it, affordably and at scale.”

The report says global investment in liquid renewable fuels more than doubled in 2021, reaching approximately US$8 billion. But it remains clear that Australia is lagging behind countries like the US, UK, Canada, Brazil, Germany, Sweden and New Zealand.

“Every day we fall further behind in the race for renewable fuels,” McKenzie said.

“We are being beaten to the punch on what looms as an incredible economic and environmental opportunity.

“Many other nations are embracing fuel carbon intensity standards, concessional loans, tax treatments, waste levies and grants, but we are yet to see a strategic approach to the decarbonisation of liquid fuel reliant sectors in recent policy announcements,” she said.

The market is looking for a strong regulatory signal from Australian governments; the necessary green light for investors, producers and refiners.”

The report showcases how a thriving renewable fuel industry would turbocharge regional development, improve waste management, boost export growth and promote domestic fuel security.

And alarmingly, it suggests the world’s rapidly increasing appetite for renewable fuels could lead to a future energy shock that Australia simply isn’t prepared for.

“Without a domestic renewable fuels sector, Australia is exposing itself to the world’s next energy supply shock and the higher prices that would accompany such a crisis,’’ McKenzie said.

The report lands at an opportune moment, with the Federal Government set to launch its Jet Council that will oversee the aviation sector’s transition to Sustainable Aviation Fuel, working with all levels of government and industry.

“Without adequate government support, the report concludes, an Australian renewable fuels industry may fail to materialise, ensuring Australia’s transport, mining, agriculture and construction sectors will continue to depend on incumbent fossil fuels, leading to continued greenhouse gas emissions.”