Industry super-owned global fund manager IFM Investors, leading agribusiness and processing company GrainCorp and Australia’s largest transport energy provider Ampol today signed a three-way Memorandum of Understanding to explore the establishment of an integrated renewable fuels industry in Australia.
As the initial priority under the MOU, Ampol and IFM will progress the feasibility assessment of a renewable fuels facility at Ampol’s Lytton Refinery in Brisbane and work with GrainCorp to explore the supply of homegrown feedstocks, including additional crushing capacity to supply canola oil, to the future plant.
The announcement builds on the existing feasibility work conducted by each of the parties to develop feedstock supply and production capacity of renewable fuels, including sustainable aviation fuel (SAF) and renewable diesel in Australia.
There is growing recognition globally that renewable fuels can materially reduce transport sector emissions, but Australia currently has no material production capacity to support the expected future demand.
The three partners say Australia has an advantage in producing and supplying the feedstocks needed to help develop a large and globally competitive renewable fuels industry, helping drive decarbonisation in the hard-to-abate parts of the transport sector, including aviation as well as heavy and long-haul transport.
Momentum for a domestic SAF industry has grown in 2024, and Ampol, GrainCorp and IFM welcome the Federal Government’s range of measures to help support the production of renewable fuels, such as SAF, in Australia.
Matt Halliday, Managing Director and CEO of Ampol, says Australia has a compelling competitive advantage in infrastructure, technical expertise and the availability of raw materials necessary to develop a renewable fuels capability.
“A combination of Ampol’s existing infrastructure and capabilities, such as the Lytton site and Ampol’s broader distribution network with established channels to market and strong customer relationships, can play a pivotal role in creating a national renewable fuels ecosystem,” he says.
“The Australian-led team of Ampol, IFM and GrainCorp brings together expertise in complex infrastructure development, manufacturing and distribution, and supply chains.
“This foundational agreement is a significant step in establishing a renewable fuels industry in Queensland and Australia – creating benefits in energy security, supporting regional development and stimulating agriculture and manufacturing industries.”
Robert Spurway, Managing Director and CEO of GrainCorp, points out the company is already a key supplier of high-quality feedstocks across Australia and New Zealand, including canola oil, tallow and used cooking oil.
“Australian growers produce millions of tonnes of feedstocks every year, the surplus of which is currently exported for refining into renewable fuels.
“An Australian renewable fuel refining industry will build a valuable new domestic market for our nation’s growers and feedstock producers, with the benefits flowing on to regional communities and consumers,” he says.
Danny Elia, Global Head of Asset Management, IFM Investors, adds that as a major investor in airports, it has a significant interest in facilitating cleaner flying by supporting development of a SAF industry in Australia.
“IFM’s long-term investment approach is key to this emerging industry – we bring the scale, skill and dependability needed to support our iconic Australian partners, GrainCorp and Ampol, to kickstart a new industry that will create new jobs and economic opportunity,” he says.
“Alongside our industry super partners, we have been working closely with the Government to identify ways to accelerate investment in Australia’s energy transition, and a local SAF industry driven by Australian businesses is crucial to that acceleration.”
This industry announcement follows the Federal Government’s Budget commitments last May for a number of measures to support a domestic renewable fuels industry.
This includes investing $1.7 billion over the next decade in the Future Made in Australia Innovation Fund, to support net-zero innovations including low-carbon liquid fuels.
The Government also committed $18.5 million to develop a certification scheme for these fuels and $1.5 million for an impact analysis in relation to demand-side measures.
What’s more, the Government recently released a discussion paper titled A Future Made In Australia: Unlocking Australia’s Low Carbon Liquid Fuel Opportunity, which sought views on options for supply and demand-side measures to support a domestic industry to complement the impact analysis.
Infrastructure, Transport, Regional Development and Local Government Minister Catherine King says an Australian renewable fuels industry, which would include both sustainable aviation fuel and renewable diesel, will significantly reduce emissions and ultimately provide cheaper, cleaner and more secure fuel to the transport sector.
“It’s great to see companies like Ampol, GrainCorp and IFM also recognising the benefits and importance of supporting Australia’s very own industry,” she says.
“As part of the Future Made in Australia plan, the Government is fast-tracking support for a local renewable fuels industry – from farm and feedstock to bowser – to help ensure our aviation, heavy vehicle, rail and maritime sectors are sustainable.
“I wish them all the best with their joint venture and look forward to advancing our own commitments to unlock Australia’s renewable fuels potential.”
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