HVIA joins call to establish local renewable diesel industry

HVIA has joined with leading cross-sector organisations in an appeal to the Australian Government for support in enabling an on-shore renewable diesel refining industry.

The letter to Minister for Climate Change and Energy, the Hon Chris Bowen MP points to the key role of renewable diesel in decarbonising a range of “hard-to-abate” sectors.

While readily available overseas, it is not commercially available in Australia.

“Renewable diesel is a critical transition fuel while other technologies, such as electrification and renewable hydrogen, gather pace,” the letter says.

“Access to domestically produced renewable diesel represents a significant and immediate decarbonisation opportunity across multiple sectors, including road transport, construction, maritime, mining, rail, agriculture and forestry.

“These sectors are the bedrock of the local economy and decarbonising these industries is critical to achieving the Australian Government’s emissions reduction target of 43 per cent by 2030 and net zero emissions by 2050.”

Representing 29%¹ of Australia’s economic output, these sectors consumed 27.5 billion litres² of diesel in 2019/20 yet are “hard to abate” – meaning alternative technologies to using diesel are not readily available.

Renewable diesel is an advanced biofuel made from animal fats, vegetable oils (HVO) including used cooking oil, and agricultural waste. It is chemically identical to conventional diesel, can be used as a 100% ‘drop-in’ fuel without machinery needing any modifications, and use is widely supported by Original Equipment Manufacturers.

“Renewable diesel offers an excellent, tested and readily available alternative to mineral diesel, with much as 75-95%⁴ reduction in life cycle emissions compared with mineral diesel,” the letter points out.

“Renewable diesel enables equipment and machinery to live out its working life while we wait for zero-emission technology to replace or where other options ultimately do not materialise.”

The letter appeals to the Australian Government to invest in the establishment and fast upscaling of a domestic renewable diesel industry.

“An integrated policy response inclusive of tax treatment, capital grants and incentives would be expected to reduce barriers inhibiting the development of an Australian renewable fuels industry⁵.

“With the right policy settings, renewable diesel provides a viable and cost-effective decarbonisation option for hard-to-abate sectors.”

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¹ Remplan Economy, Jobs and Business Insights https://app.remplan.com.au/eda-australia/economy/industries/output?state=PO1ghg!A9WwFjLd2FmvdOEi64bgehrHVf5rBhNbobei0nLnGfdfZYswfRIzz5JcAwy  
² Calculated from BioEnergy Australia Transitioning Australia’s Liquid Fuel Sector: The Role of Renewable Fuels (Deloitte 2023)
³ Calculated from BioEnergy Australia Transitioning Australia’s Liquid Fuel Sector: The Role of Renewable Fuels (Deloitte 2023)
4 Neste, Reduced emissions (viewed 25 May 2023)
5 BioEnergy Australia Transitioning Australia’s Liquid Fuel Sector: The Role of Renewable Fuels (Deloitte 2023)