The federal government is hastily seeking feedback from the transport and agriculture sectors on ways to kickstart a home-grown low carbon liquid fuel industry using crops such as canola and sugar cane.
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CSIRO research has already suggested that 4.5 million tonnes of canola could yield about 2m tonnes of low carbon sustainable aviation fuel (SAF) in Australia.
That's roughly what Australia now exports every year.
It would be enough to fuel about 250,000 return flights between Sydney and Melbourne (the route is one of the world's five busiest, accommodating 55,000 flights annually).
With Australian canola production at 5.8m tonnes this financial year and almost 8m in 2022-23, grain handling and processing kingpin, GrainCorp, already plans to expand its canola crushing efforts with a $500 million-plus investment to service the fuel industry.
The eastern states grain business has welcomed Canberra's consultation opportunities to look at incentives needed to get Australia's renewable fuel sector firing.
According to CSIRO's sustainable aviation fuel roadmap, local SAF production would prove the most obvious gateway to open up production of other replacements to fossil fuels such as renewable diesel and lubricants.
Infrastructure, Transport and Regional Development Minister, Catherine King, noted Australia already exported significant amounts of canola and tallow used to produce biofuels in Europe, but it could be refined here.
Sustainable fuels were set to play an important role as global economies moved to net zero emissions.
The federal government's $22.7 billion Future Made in Australia package aimed to help unlock local investment in the biofuel sector.
Low carbon fuel initiatives would be a priority sector in the package.
SAF and renewable diesel would be compatible with existing fuel infrastructure and could be produced from various feedstocks ranging from municipal solid wastes to agricultural crops.
Canberra is seeking feedback, by July 18, about options for production incentives and other measures to assist the growth of the industry.
GrainCorp, which currently exports canola, tallow and vegetable oils to biofuel processors, backed the launch of the consultation process, hosting Ms King at its Newcastle grain export terminal.
Managing director, Robert Spurway, said the consultation was further recognition from the government of the crucial role renewable fuels could play in decarbonising transport, and provide farmers, domestic feedstock supply chains and refiners with the confidence to build capacity.
Aside from the aviation sector, Canberra is looking at sustainable fuels to support emissions reductions in the heavy vehicle, rail and maritime sectors.
Last month's Federal Budget included $18.5m in funding over four years to develop a certification scheme for a low carbon liquid fuels industry and $1.5m for a two year impact analysis of the costs and benefits of demand for sustainable fuels.
It also complemented the sustainable fuels push with $63.8m in funding to support agriculture and land sector emission reductions efforts.
Climate Change and Energy Minister, Chris Bowen, noted liquid fuels represented about half Australia's final energy use, and were especially vital in hard to electrify sectors like aviation, shipping and construction machinery.
"Making low carbon liquid fuel on our own shores, from Australian renewables and Australian feedstock, will make our future fuel supply cleaner, stronger and more secure," he said.
GrainCorp's Mr Spurway noted Qantas had a goal of 10 per cent SAF usage by 2030.
"We think the Flying Kangaroo should be able to source that fuel in Australia," he said.
Singapore has just set aviation decarbonisation targets of 1pc SAF content in all jet fuel at its Changi and Seletar airports by 2026, jumping to 5pc by 2030
As Australia's largest oilseed crusher and edible oil processor with plants in Victoria and West Australia, GrainCorp was up to the challenge of servicing the SAF sector's raw ingredient needs.
With the right incentives in place, a local SAF industry would onshore a valuable market for canola growers and feedstock producers, who are already exporting our surplus homegrown materials overseas for refining into biofuels
- Robert Spurway, GrainCorp
Mr Spurway said growing demand for renewable fuel feedstocks presented a unique opportunity to make the most of Australia's comparative advantage in agricultural capability, sustainable farming practices and land availability.
"With the right incentives in place, a local SAF industry would onshore a valuable market for canola growers and feedstock producers, who are already exporting our surplus homegrown materials overseas for refining into biofuels," he said.
"As a leading supplier of feedstocks like tallow, vegetable oils and used cooking oils we'll contribute our expertise to this consultation, as we look to expand our canola seed crush capacity to support this industry's growth."
Last year GrainCorp teamed up with institutional investment services group, IFM Investors, to do a feasibility study into domestic crop-based fuel production, including the policy frameworks required to establish this exciting new opportunity for growers.
No site has been selected for the company's own plant, although WA was flagged as the intended location.
Rival WA grain giant, CBH, is also understood to have a similar crushing plant agenda.
Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
