Unlike other industries, which can be developed through sequential stages, advanced biofuels require concurrent development of all stages in the supply chain.

The report states that, at present, insufficient feedstock is being produced. This paucity of feedstock is holding up the development and advancement of refinery infrastructure in terms of capacity and conversion technology.

The study also indicates that there are technical and economic limitations in the ability of domestic refineries to process green crude, as existing refineries often lack appropriate infrastructure or a willingness to process green crude.

There are numerous feedstock and technology combinations that can produce advanced biofuels (ABF). According to the study, the combinations, or ‘pathways’, which will be most prospective are the ones which produce drop-in fuels, being those compatible with existing distribution infrastructure and engine technologies, and methods that utilise Australia’s strong comparative advantages; agricultural science, abundance of flat land and sunlight, and a suitable climate and environment.

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The report identifies a number of promising feedstock and technology pathways, as well as key challenges that will need to be addressed if Australia is to lay the foundation for a sustainable ABF industry of scale.

The study also outlines twenty specific actions for the Federal Government to undertake in order to sustain the ABF industry for the next five years.

Recommended steps towards a biofueled future

The Advanced Biofuels Study commissioned by the Federal Department of Resources, Energy and Tourism outlines twenty actions for the Federal Government to undertake in order to sustain the advanced biofuels industry for the next five years. Listed are a number of the report's recommendations

Short term (0-2 years)

  • Establish independent advisory body: Ensure there is an independent body to act as a trusted advisor to the Australian Renewable Energy Agency, government and industry, building on existing structures.
  • Deploy available funding: Deploy available funding (via ABRI and other agencies and programs) to support advanced biofuels research and development and particularly pilot and pre-commercial stage activity. This will provide a boost to companies that are developing solutions within the preferred ABF portfolio of pathways. This may also include investment in flagship projects that could catalyse industry activity.
  • Undertake feedstock mapping: Commission detailed mapping of feedstock resources, leveraging existing information (e.g. via ABARES or CSIRO). This will help to identify the best areas for feedstock and downstream industry investment.
  • Facilitate industry collaborations: Facilitate collaboration across the ABF value chain domestically and internationally. This will help industry participants form collaborations and benefit from knowledge sharing.
  • Target areas of comparative advantage: Further identify areas of the advanced biofuels value chain where Australia should aspire to take a leadership role (e.g. agronomy, algae pond design). This will help Australia to position itself for lasting comparative advantage.
  • Encourage industry led initiatives: Encourage appropriate industry led initiatives to drive biofuels activity and uptake (e.g. Sustainable Aviation Fuel Users Group). This will help industry efficiently drive the biofuels agenda.
  • Evaluate domestic green crude refining: Assess barriers to local green crude refining and the case for government intervention. This evaluation will be necessary if domestic refining capacity is to be built.
  • Attract international players: Explore opportunities to attract key international ABF players to Australia. This will provide Australia with access to best practice technologies and expertise, and help position Australia within the global ABF value chain.

Medium term (2–5 Years)

  • Update ABF market knowledge: Provide a regular (e.g. biennial) update on ABF economics and technologies to inform the market and government priorities. This is necessary due to the high level of uncertainty around feedstock and technology development.
  • Leverage/expand funding structures: Leverage and potentially expand existing initiatives and structures to ensure ARENA, CEFC and other clean energy funding vehicles can explicitly support ABF development, including: Investment in a portfolio of ABF R&D activity, capital funding assistance for ABF demonstration and pilot projects (e.g. grants, loans, loan guarantees), commercialisation support as new elements of the ABF industry are established.
  • Minimise exclusions from carbon legislation: Consider the case for minimising exclusions from carbon legislation, to create a more level playing field. This will provide incentives to adopt lower carbon emissions consistently across all end user industries.

Long term (5 years plus)

  • Leverage existing procurement channels: Consider opportunities to leverage Government procurement where consistent with cost and strategic requirements (e.g. through Defence). This will help to create pull through ABF demand.
  • Consider export-oriented assistance: Consider the need for export-oriented facilitation and assistance, in the absence of domestic green crude refining capability. This will need to be consistent with existing Government policies and trade obligations, and may help support the upstream local industry until sufficient volume of output is developed to support downstream investment in refining infrastructure.