It’s been a challenging year for the biofuels industry in Australia – consumer confidence remains low and the sector retreated.

Biofuels are fuels derived from organic matter or waste and are considered a form of renewable energy. Two such examples, and the key biofuels in Australia, are ethanol and biodiesel.


Biofuel demand falls in Australia

A report commissioned by APAC Biofuel Consultants found biofuel demand in Australia fell in 12 months.

Demand dropped 3.8 per cent year and was only 0.4 per cent of Australia’s transport liquid and gaseous fuel consumption.

The consultancy noted Australian motorists were continuing to be cautious about using biofuels in their car.

Ethanol copped a particularly strong battering in 2020. In June, Queensland’s Dalby Bio-Refinery closed, consequently eliminating 17 per cent of Australia’s aggregate production.

The biodiesel market actually expanded in the last 12 months from 15ML to 45ML.

But the industry is small by world standards and a significant portion was shipped to Europe, which is considered a more profitable market.

The report also found that current actions taken by governments are for the most part, not working.

Queensland and New South Wales have mandated targets for ethanol and biodiesel and both states have failed to reach these targets in 2019-20.

While the federal government does give ethanol and biodiesel produced and sold in Australia excise advantage, this too has failed to spakr any uptick in production.


What to do?

APAC joint chief executive, Michael Cochran, said it was time for government biofuels policy to be reshaped.

He noted there have been no new biofuel projects in 10 years.

Conversely the global industry and Australia’s other renewable energy segments (such as hydrogen and solar) were advancing.

“We are at a point the industry needs to regroup and replace outdated current policies with new initiatives delivering a biofuel future for Australia,” Cochran said.

“The current development of the Bioenergy Roadmap offers a unique opportunity for the Federal Government to review Australian biofuel support schemes.”

The Bioenergy Roadmap began at behest of the Australian Renewable Energy Agency (ARENA) in April to inform the next steps for bioenergy in Australia.

The project was due for completion in the second half of this year.