A triumvirate of three major industry organisations has been formed to explore the establishment of an integrated renewable fuels industry in Australia.
Major Australian fuel and energy company, Ampol, has signed a three-way Memorandum of Understanding with industry super-owned global fund manager IFM Investors, and agribusiness and processing company GrainCorp to explore the establishment of a renewable fuels industry in this country.
The three companies say that as the initial priority under the they will progress the feasibility assessment for a renewable fuels facility at Ampol’s Lytton Refinery in Brisbane and work with GrainCorp to explore the supply of homegrown feedstocks, including additional crushing capacity to supply canola oil, to the future plant.
In the announcement the three say that it builds on the existing feasibility work conducted by each of them to develop feedstock supply and production capacity for renewable fuels, including sustainable aviation fuel (SAF) and renewable diesel in Australia.
They point out that there is growing recognition globally that renewable fuels can materially reduce transport sector emissions, but that currently Australia has no material production capacity to support the expected future demand.
In the press statement the three companies said that Australia has an advantage in producing and supplying the feedstocks needed to help develop a large and globally competitive renewable fuels industry, which they say will help drive decarbonisation in the hard-to-abate parts of the transport sector, including aviation as well as heavy and long-haul transport.
They say that momentum for a domestic SAF industry has grown this year, and that Ampol, GrainCorp and IFM all welcome the Federal Government’s range of measures to help support the production of renewable fuels, such as SAF, in Australia.
Managing director and CEO of Ampol, Matt Halliday, said Australia has a compelling competitive advantage in infrastructure, technical expertise and the availability of raw materials necessary to develop a renewable fuels capability.
“A combination of Ampol’s existing infrastructure and capabilities, such as the Lytton site and Ampol’s broader distribution network with established channels to market and strong customer relationships, can play a pivotal role in creating a national renewable fuels ecosystem,” Halliday said.
“The Australian-led team of Ampol, IFM and GrainCorp brings together expertise in complex infrastructure development, manufacturing and distribution, and supply chains.
“This foundational agreement is a significant step in establishing a renewable fuels industry in Queensland and Australia – creating benefits in energy security, supporting regional development and stimulating agriculture and manufacturing industries,” he added.
GrainCorp CEO and managing director,Robert Spurway, said GrainCorp is already a key supplier of high-quality feedstocks across Australia and New Zealand, including canola oil, tallow and used cooking oil.
“Australian growers produce millions of tonnes of feedstocks every year, the surplus of which is currently exported for refining into renewable fuels,” Spurway said.
“An Australian renewable fuel refining industry will build a valuable new domestic market for our nation’s growers and feedstock producers, with the benefits flowing on to regional communities and consumers,” he said.
Global head of asset management at IFM Investors, Danny Elia said that as a major investor in airports, IFM has a significant interest in facilitating cleaner flying by supporting development of a SAF industry in Australia.
“IFM’s long-term investment approach is key to this emerging industry – we bring the scale, skill and dependability needed to support our iconic Australian partners, GrainCorp and Ampol, to kickstart a new industry that will create new jobs and economic opportunity,” he said.
“Alongside our industry super partners, we have been working closely with the Government to identify ways to accelerate investment in Australia’s energy transition, and a local SAF industry driven by Australian businesses is crucial to that acceleration,” Ella added.
The announcement by the three companies followed the Federal Government’s Budget commitments in May which revealed a number of measures to support a domestic renewable fuels industry.
Part of the budget announcement included $1.7 billion to be invested over the next decade as part of the Future Made in Australia Innovation Fund, in a bid to promote and establish net-zero emission innovations, which includes low-carbon liquid fuels.
The Government has also announced $18.5 million in order to develop a certification scheme for these fuels as well as an added $1.5 million for an impact analysis in relation to demand-side issues.
The Commonwealth Government has also released a discussion paper recently called A Future Made In Australia: Unlocking Australia’s Low Carbon Liquid Fuel Opportunity, which seeks opinions on options to supply and demand-side measures in order to support a domestic industry.
Minister for infrastructure, transport, regional development and local government, Catherine King said that an Australian renewable fuels industry, including both sustainable aviation fuel and renewable diesel, will significantly reduce emissions and ultimately provide cheaper, cleaner and more secure fuel to the transport sector.
“It’s great to see companies like Ampol, GrainCorp and IFM also recognising the benefits and importance of supporting Australia’s very own industry,” Minister King said.
“As part of the Future Made in Australia plan, the Government is fast-tracking support for a local renewable fuels industry – from farm and feedstock to bowser – to help ensure our aviation, heavy vehicle, rail and maritime sectors are sustainable,” King added.
“I wish them all the best with their joint venture and look forward to advancing our own commitments to unlock Australia’s renewable fuels potential,” she said.
Climate change and energy Minister Chris Bowen said supporting a renewable fuels industry in Australia is about so much more than slashing transport sector emissions, and that it’s also about creating a new industry and jobs to ensure we continue to thrive in an ever-changing world.
“Today’s announcement from Ampol, GrainCorp and IFM is not only a vote of confidence for Australia forging its own renewable fuels industry, it’s incredible news for our transport sector, our national economy and for Brisbane,” Minister Bowen concluded.
