Government opens consultation on fuel strategy

“We are investing in the fuels our aviation, maritime and freight industries need,” said Transport Minister Catherine King.

“Currently, we export up to $6 billion of feedstocks each year, including canola and tallow, for global markets.

“By building a low carbon liquid fuels industry right here, we will create more jobs, build regional economies, strengthen our fuel security and future-proof our transport industries.”

Speaking to media in Canberra, King said it is “crazy” that Australia has not been taking the opportunity to develop a domestic SAF industry, pointing to our exposure to the international energy market and the difficulty of electrifying aviation.

“Transport is by far the largest user of liquid fuels in Australia, accounting for around three quarters of Australia’s total usage, and we remain highly dependent on imported fuels, as we’ve seen recently,” she said.

“We continue to rely on liquid fuels for some time, and I’ve said for a long time, developing a low-carbon liquid fuel industry here in Australia is in our national interest, both from a fuel security point of view, but also the opportunities it poses for those in the region, for our farmers in particular.

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“We already export around about $5 billion worth of feedstock, that is then turned into low-carbon liquid fuel internationally, and then sold back to Australian airlines, in particular at the moment, as many airlines are increasing their sustainable aviation fuel uptake.”

King also addressed concerns about potential high ticket prices resulting from SAF mandates, saying so far they have not had a significant impact elsewhere.

“It’s a consultation paper, and the final outcomes will depend on what model we have. But experience overseas is that they are very small; they are small impacts overall. But I guess the dynamic is: what do you do if you do nothing? What do you do if you do nothing?” she said.

“We are, you know, already so heavily reliant on imported fuel, and already, you know, already you’ve seen Qantas and Virgin, for example, start to look at sustainable aviation fuel. Our defence force is using it. The fact that we’re not producing here is a significant loss.”

The Australian Airports Association (AAA) has welcomed the news, with acting CEO Natalie Heazlewood saying the consultation process “recognises that fuel security and aviation decarbonisation can complement each other”.

“Australia’s reliance on international fuel supply chains leaves us exposed to disruptions beyond our shores, and aviation needs to be part of the conversation about how we strengthen national fuel resilience,” she said.

“SAF should be treated as a national strategic priority – not only because aviation is one of the hardest sectors to decarbonise, but because developing a domestic industry can strengthen fuel security, create new economic opportunities and support regional communities.

“A strong domestic SAF industry could support thousands of new jobs and attract investment across the supply chain, including in regional Australia where many of the feedstocks and production opportunities could be located.”

According to Heazlewood, airports need an “ambitious” but “achievable” pathway for the SAF transition.

“The key is getting the balance right so that demand grows alongside available supply and gives industry the confidence to invest.

“Any demand-side measure needs to be phased, developed closely with industry and avoid disproportionate impacts on regional air services and smaller airports.”

Fuel prices, including jet fuel, have jumped significantly since the outbreak of the Iran conflict earlier this year, causing higher costs for airlines and consumers.