Australia has released its National Bioenergy Feedstock Strategy, setting out how the country plans to develop a competitive domestic industry that could produce more than 12 billion liters of low-carbon liquid fuels annually by 2050.
The Department of Agriculture, Fisheries and Forestry published the strategy in 2026, responding to Australia’s heavy reliance on imported liquid fuels. More than 90% of the country’s liquid fuel is currently imported or derived from imported crude, costing over $50 billion annually. Liquid fuels also contribute about 32% of national greenhouse gas emissions.
The strategy focuses on agricultural and forestry feedstocks, including canola, tallow, crop residues and dedicated energy crops. Australia already produces and exports around $6 billion of feedstocks each year, particularly canola and tallow for global markets.
Industry welcomes government direction
GrainCorp Managing Director and CEO Robert Spurway said the strategy reinforces the important role Australian agriculture can play in strengthening the nation’s fuel resilience while creating new opportunities for growers and regional communities.
“More than 90% of Australia’s liquid fuel is imported or derived from imported crude, leaving our economy exposed to global disruption,” Spurway said. “Australia already has the feedstocks, agricultural capacity and supply chains to reduce that reliance. The opportunity now is to translate those strengths into greater domestic processing, manufacturing and fuel production.”
The strategy draws on GrainCorp’s From Paddock to Plane white paper released in June, which found that existing feedstocks including canola, used cooking oil and tallow could support sustainable aviation fuel volumes equivalent to 117% of Australia’s projected jet fuel demand in 2030, without compromising food production.
“We do not need to choose between food and fuel,” Spurway said. “Australian agriculture is highly productive and export-oriented, and the same supply chains can support food, animal feed and lower-carbon fuels. Processing more canola domestically creates value across the chain, producing oil for food and fuel markets alongside high-protein meal for Australia’s livestock sector.”
Growing global demand drives opportunity
Global investment in low-carbon liquid fuels reached $16 billion in 2025-26, supporting about 30 billion liters of annual production. Demand is projected to reach 43 billion liters by 2030, or about 8% of total transport fuel demand. Meeting this demand will require global feedstock supply to rise by almost 25% by 2030, reaching nearly 825 million tonnes annually.
The Australian government is backing domestic production through its $1.1 billion Cleaner Fuels Program, which provides production-linked incentives for projects targeting near-term production. The government also committed to work with industry on a market measure to drive demand for new Australian production.
The strategy estimates that by 2050, the feedstock component of Australia’s bioenergy value chain could be worth up to $15 billion annually, while a mature industry could support around 26,000 additional jobs.
Five priority areas for development
The strategy identifies five areas where coordinated effort is needed to build a competitive feedstock industry.
First, improving data quality and access. Stakeholders said current information is often too coarse and lacks the detail needed to support commercial assessment and investment decisions. The government plans to work toward nationally consistent, market-ready information.
Second, investing in innovation to advance feedstock readiness. Despite significant bioenergy research activity, stakeholders said investment remains skewed toward downstream processing technologies. More work is needed on feedstock production, including sustainably increasing yields, improving emissions intensity and reducing costs.
Third, developing regional supply chains. The strategy calls for regionally tailored approaches that match feedstock production with infrastructure, logistics and workforce capability. Production facilities alone are estimated to require between $25 billion and $30 billion in investment.
Fourth, strengthening sustainability and certification frameworks. Certification of feedstock attributes is increasingly required for market access and value creation. The government is expanding its Guarantee of Origin Scheme to incorporate emissions intensity measurement for low-carbon liquid fuels.
Fifth, building sector capability through better coordination, information flow and workforce planning. The government is supporting this through initiatives including a national low-carbon liquid fuel knowledge hub that will provide a central platform for validated information, case studies and technical guidance.
Projects already underway
GrainCorp is working with Ampol and IFM Investors to explore development of an integrated Australian renewable fuels supply chain, including a proposed canola processing facility and a renewable fuels manufacturing facility at Ampol’s Lytton Refinery in Queensland. The refinery would have the potential to produce up to 750 million liters of sustainable aviation fuel and renewable diesel annually using Australian feedstocks.
“The strategy provides a strong foundation and a shared direction for government and industry,” Spurway said. “The next step is ensuring an integrated policy framework that connects feedstock development with the Cleaner Fuels Program, well-designed demand measures and credible sustainability frameworks that give industry the confidence to invest and scale.”
The government developed the strategy through extensive consultation, receiving over 90 submissions from government, industry, research and academic stakeholders, and the broader community.
