Australian government aims to unlock path to SAF in 2024-25 budget announce

From Australia comes news via our friends at Bioenergy Australia of the Australian Federal Government’s Future Made in Australia initiative. An investment has been outlined of $1.7 billion over the next decade in the Future Made in Australia Innovation Fund, to support the Australian Renewable Energy Agency to commercialize net zero innovations including low-carbon liquid fuels. 

Investment Highlights

• $18.5 million over four years from 2024-25 to develop a certification scheme for low-carbon liquid fuels, including Sustainable Aviation Fuels and renewable diesel, in the transport sector by expanding the Guarantee of Origin scheme.

• $1.5 million over two years from 2024-25 to undertake a regulatory impact analysis of the costs and benefits of introducing mandates or other demand-side measures for low carbon liquid fuels.

• The Government will be undertaking targeted consultation to identify options for production incentives to support the establishment of a made in Australia low carbon liquid fuel industry.

Australia’s roadmap backstory

Australia’s Bioenergy Roadmap (released by ARENA in November 2021) highlighted that $10 billion in GDP per annum could be added to the economy over the next decade with the development of mature renewable liquid fuels and gas sectors, along with 26,200 new jobs. The development of an Australian SAF industry alone could contribute more than 7400 jobs and an additional $2.8 billion to GDP annually by 2030, as highlighted in the Airlines for Australia and New Zealand’s Australian Roadmap to Sustainable Flying. By 2050, this could grow to more than 15,600 jobs and an additional $7.6 billion in GDP.

The Government has previously established the Australian Jet Zero Council, along with the development of the Transport and Infrastructure Net Zero Roadmap and Action Plan, and the previously announced ARENA’s $30m Sustainable Aviation Fuel Funding initiative.

Reaction from the Stakeholders

Shahana McKenzie, CEO of Bioenergy Australia, said “The allocation of $1.7 billion over the next decade in the Future Made in Australia Innovation Fund, to support the Australian Renewable Energy Agency to commercialise net zero innovations including low-carbon liquid fuels is essential. This will enable the crucial first step in standing up this new industry. It will send the signal to global project developers and investors that Australia is the place to do business. We are already considered a global hotspot given our vast agricultural might and industrial base, with the CSIRO reporting that Australia will have enough feedstock in 2025 to replace 60 percent of local jet fuel with SAF, growing to 90 per cent by 2050.’’

Tourism & Transport Forum CEO Margy Osmond says supporting the development of a local SAF industry is essential to safeguarding the future of Australia’s critical tourism and aviation sectors. “Other nations, from the USA and Canada, to Europe, Singapore and Japan, are prioritising both policies to support SAF and direct investment and Australia cannot afford to fall behind, especially as a long-haul destination,” said Ms Osmond.

Emma Wilson from the Airlines for Australia and New Zealand says Sustainable Aviation Fuel (SAF) will be the single largest facilitator of the Australian aviation sector reaching net zero by 2050. “A local SAF industry will capitalise on Australia’s natural advantage, and provide a reliable and secure domestic fuel supply for Australia’s aviation and defence sectors – supporting Australia’s sovereign manufacturing capability, and unlocking high-paying, highly-skilled, sustainable jobs,” said Ms Wilson.