The Australian federal government will invest AU$14.8 billion in a Fuel Security and Resilience Package that will protect the nation from global fuel shocks and establish a sovereign low-carbon fuel industry.
The landmark funding package represents Australia’s most significant investment in fuel resilience to date.
Central to the plan is the release of two major consultation papers, mapping out Australia’s long-term energy independence.
A core component is a AU$3.2 billion investment to establish the government-owned Australian Fuel Security Reserve. This reserve will hold one billion litres of diesel and jet fuel, providing a critical buffer during international supply disruptions.
The reserve will provide an additional safeguard against international supply disruptions and fuel market volatility.
In addition, the government will mandate an extra 10 days of fuel stockholding requirements for private fuel suppliers across petrol, diesel, and jet fuel by 2030, alongside providing continued support for Australia’s two remaining domestic refineries.
“Australia cannot afford to be vulnerable to fuel supply disruptions beyond our shores,” Minister for Climate Change and Energy Chris Bowen said.
“We’re strengthening Australia’s resilience by building larger fuel reserves, increasing stockholdings, and backing domestic industry to produce more of the fuels we need here at home.”
The government is also targeting long-term energy independence through the Securing Australia’s Cleaner Fuels Industry Consultation Paper. The paper seeks industry feedback on establishing a demand-side mechanism to kickstart a domestic low-carbon liquid fuels (LCLF) industry, focusing on sustainable aviation fuel (SAF) and renewable diesel.
Currently, Australia exports roughly AU$5 billion to AU$6 billion worth of feedstocks annually, including canola, tallow, and agricultural waste, which are processed overseas and bought back as refined clean fuels.
Creating local processing capability is projected to build a AU$15 billion domestic industry, delivering substantial economic opportunities for Australian farmers and regional economies.
Minister for Infrastructure, Transport, Regional Development and Local Government Catherin King emphasised the necessity of developing domestic refining capabilities, particularly for heavy transport, aviation, maritime, and mining sectors that are difficult to electrify.
“It is crazy that we are not taking the opportunity to develop this industry here,” King said.
“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.”
Public submissions on both consultation papers are now open, with the government aiming to finalize the design of the demand mechanisms, strategic reserve locations, and stockholding frameworks in the coming months.