Bioenergy and energy from waste
This Biofuels and Transport report provides useful insights into the industry’s potential and look forward to working further with biofuels project developers to accelerate Australia’s transition to affordable and reliable renewable energy sources as part of a lower emissions economy.
With Australia’s electricity sector undergoing a substantial transition to cleaner energy and lower emissions, it is appropriate to consider other areas of emissions reduction that will be essential for Australia to meet our emissions reductions commitments.
Transport is one such area of opportunity, particularly when supported by a robust domestic biofuels industry.
Together, the CEFC and ARENA commissioned new analysis to help the industry, investors and policy makers anticipate the potential pathway to a biofuels-rich transport sector. Market experts GHD bring a global view to this challenge, considering the experience of other markets and identifying opportunities for the nascent biofuels industry in Australia.
Globally, biofuels production is projected to increase 10-fold by 2060, making it a major player in decarbonisation of transport worldwide. However, for Australia to contribute its share of that output, we would need to experience a 40-fold expansion of our industry over the same period, to reach an annual production capacity of 20 gigalitres.
Advanced biofuels can derive energy from feedstocks that would otherwise be considered waste materials. They are also highly compatible with existing fuel infrastructure, which further increases their attractiveness for investment.
Australia’s existing experience in agriculture, forestry and engineering provides a solid foundation on which to build a thriving biofuels industry. And our heavy reliance on air travel, long-distance road freight and rail and marine freight, provide the potential demand for these lower emissions biofuels.
Developing this industry presents opportunities to provide new and ongoing industrial employment in regional areas. To meet a 20 gigalitre annual production target it is estimated up to 250,000 jobs could be created and the investment required by production facilities alone is estimated at between $25 billion and $30 billion. But support from a range of quarters is needed to achieve such an outcome and to drive down the cost of production so that biofuels are competitive with petroleum fuels.
To build this industry at the required scale, Australia will benefit from early investment in first-of-their-kind facilities to ensure training and skills development occur domestically. ARENA has the experience and capacity to provide funding to research and development and pilot models. The CEFC can further support developers with finance tailored to meet individual project needs.
We trust this report provides useful insights into the industry’s potential and look forward to working further with biofuels project developer to accelerate Australia’s transition to affordable and reliable renewable energy sources as part of a lower emissions economy.