Alternative transport fuels can provide significant benefits to Australia as they have the potential to reduce vehicle emissions, improve air quality, provide alternative sources of supply to supplement mainstream fuels and reduce reliance on imported fuel.
Petrol and diesel comprise the large majority of fuel sales in Australia - well over 93 per cent. Automotive liquefied petroleum gas (LPG) market share is currently steady around 6 per cent and is anticipated to increase overtime as more new and converted LPG vehicles are added to the vehicle fleet.
In 2007-08, petrol had a 48 per cent share of road transport fuel sales, diesel had 46 per cent and automotive LPG captured around 6 per cent of sales.
Biofuels
At present there are two biofuels with commercial prospects in Australia: ethanol and biodiesel. In 2007-08, production of biofuels was 199 million litres (ML), of which ethanol comprised 149ML and biodiesel 50ML.
Almost all existing and proposed biofuel plants are located close to feedstock supplies in regional areas across Australia. Australia’s ethanol is currently produced from wheat, sorghum and C grade molasses. Australia’s biodiesel is mainly produced from processed waste (primarily used cooking oil) and tallow.
On 27 February 2008, the Prime Minister requested that the Minister for Resources and Energy and the Minister for Agriculture, Fisheries and Forestry undertake an internal government review of existing Australian biofuels programs and policies. The review is currently under consideration by the Government. Additionally, the outcomes of a number of other Government policy reviews and initiatives (for example the implementation of the proposed Carbon Pollution Reduction Scheme, the Review of Australia's Future Tax System which is due to be completed in 2009 and the preparation of an Energy White Paper which is due to be completed by the end of 2009) could have implications for the Government's future policy directions for alternative fuels.
More information on alternative fuels currently in use in Australia and/or which have the potential to be a future alternative fuel can be found via the links below:
Alternative fuels programs
The Australian Government is committed to supporting the development of alternative fuel sources and technologies to ensure that as a nation we do not become heavily reliant on imported oil and to reduce our greenhouse gas emissions from the transport sector. As a result, the Government is fully committed to investigating a range of alternative transport fuel options, especially those that draw upon our unique resources and competitive advantages such as second generation biofuels, natural gas and synthetic fuels from coal and gas. In particular, the Government has committed to:
- encourage the development of gas-to-liquids (GTL) and coal to liquids (CTL) projects that can convert some of our vast coal and gas reserves into liquid fuels
- support the research and development of new biofuel technologies, including the production of ethanol from cellulose. This includes the $15 million second generation (Gen2) biofuels research and development program which supports research, development and demonstration of new biofuel technologies. Gen 2 aims to provide matching grants, ranging from $1 million to $5 million, for eligible projects and broaden the range of feedstocks for biofuels production.
- a $1.3 billion Green Car Innovation Fund which will provide assistance over ten years to design, develop and manufacture low-emission, fuel-efficient cars and components in Australia
- include projections of future liquid fuel supply and demand in a regular National Energy Security Assessment to better inform industry about the probable use of liquid fuels in the future
- invest $150 million in critical clean energy technology research under a new Energy Innovation Fund including $50 million for general clean energy research and development on energy efficiency, energy storage technologies and hydrogen transport fuels
There are also a number of existing programs in place to encourage the production and use of alternative fuels. Further detail can be found on the Alternative Fuels Programs webpage.