Australia Low Carbon Fuels

Australia is weighing low carbon liquid fuels as a way to cut emissions in hard-to-abate transport and industry while rebuilding a sovereign fuel supply.

The Liquid Fuel Problem

Liquid fuels account for more than half of the final energy Australians use and around 30 percent of national emissions. Australia imports more than 50 billion litres of refined petroleum products a year, about 60 percent of it diesel, while domestic production meets only about 20 percent of demand, and the country uses more energy from diesel alone than from electricity. That exposure leaves it vulnerable to global supply shocks.

Drop-In Pathways

Two broad routes are in focus. Biogenic fuels convert biomass and waste, such as forestry residues, agricultural waste and urban waste streams, into drop-in fuels like renewable diesel and sustainable aviation fuel, and are regarded as the pathway that can deliver abatement sooner. Power-to-liquid, or e-fuels, instead combine hydrogen with captured carbon dioxide to make synthetic jet fuel, methanol or diesel, playing to Australia’s abundant renewable energy potential.

Scale And Emissions Potential

Modelling tied to the CSIRO and Boeing Sustainable Aviation Fuel Roadmap points to material abatement, with pathway-level emission reductions ranging from roughly 20 percent to 90 percent depending on feedstock and process. Applied across fuel products, an estimated fuel potential of up to 8 billion litres could translate to emissions savings of between roughly 5 and 25 million tonnes of CO2-equivalent.

Building Consensus

That roadmap, developed with more than 40 organisations, is building momentum around an Australian SAF industry, while recent federal engagement, including the Australian Jet Zero Council, signals a stronger commitment to low carbon liquid fuels within the national decarbonisation plan. The analysis also flags feedstock uncertainty and competition for land and water as challenges that must be managed as the sector scales.