Biofuel industry critical as Europe goes electric

A domestic biofuels industry will help to shield Australian growers from a decline in demand for oilseeds from overseas fuel markets as they transition to electric vehicles.

But the nation has a lot to do and a short timeframe to make it happen, according to industry experts, to match global efforts to increase the use of biofuels in the aviation and transport sectors via a domestically produced fuel.

Speaking at AgriFutures’ EvokeAG conference in Perth on Tuesday, Rabobank Raboresearch Australia and New Zealand general manager Stefan Vogel said the uptake of electric vehicles would ultimately hit Australian oilseed exports.

“A lot of our canola goes to the European biodiesel market,” he said.

“What we do see is the amount of diesel used after 2030 in Europe goes down.

“Europeans at some point in time will call up CBH and say we don’t need your stuff anymore.”

Mr Vogel was joined by representatives from CBH, Airbus and oilseed grower Brad Jones to discuss the state of the nation’s biofuels sector at the two-day agriculture conference.

Much of the  session focused on the need for government to incentivise the nascent sector, particularly to increase production and use of sustainable aviation fuel.

Early policy work to date has led to the foundation of the federal government's JetZero council which focuses on aviation decarbonisation, and a state bioeconomy strategy which is still on the drafting table.

Airbus Australia and New Zealand head of strategic development and sustainability Fanny Mattens said airlines needed government support to ensure airfares didn’t increase due to the use of biofuels until such a time as costs matched that of traditional fuel.

“We work in a very price sensitive industry and having airfares increasing will have an impact on everyone’s economies,” she said.

“At one point in time it will balance, this over-cost, but we need government to put in place grants to claim this premium so it creates a level playing field for all airlines.

“We have one-to-two years to take a decision for government to step in.”

Ms Mattens said until hydrogen planes could fly from Perth to Sydney – expected around 2050 – biofuel was the only short-term solution to decarbonise aviation.

The urgency for strong policy action was backed by CBH chief stakeholder relations, sustainability and strategy officer Brianna Peake, and Bungalla Farming director Brad Jones.

Ms Peake said investment into crushing and processing facilities was critical to build a domestic biofuels industry.

“Tax credits, low interest loans… anything to be able to stimulate that,” she said.

Mr Jones said government targets were akin to “New Year’s resolutions”, whereas biofuel mandates would give clear direction to the industry.

He also called for a process which could measure and track decarbonisation efforts through the whole supply chain to better recognise those putting in the effort to drive the net-zero transition.

Mr Vogel said farmers and customers were eager to grow the industry, and logistics operators appeared capable of getting product where it was needed.

The missing link, he said, was an environment which encouraged the large investments needed to build domestic biofuels plants.

Mr Vogel said companies such as BP Australia, which is building a $1 billion biorefinery in Kwinana, needed certainty they would have access to feedstock and customers to justify such investments.

He said at current levels, the entire Western Australian canola crop would be able to supply 10 per cent of the Australian aviation industry’s sustainable fuel needs.