Trucks could be run on low-carbon fuel recycled from local waste, under plans for a $500 million upcycling precinct proposed in Victoria’s Gippsland region.
The proposed Gippsland Sustainable Fuels Precinct would recycle red bin and organic waste to produce low-carbon fuels for trucks, buses and data centres, creating a new domestic fuel source.
Under the ambitious plan, five refuelling stations would connect Gippsland to Melbourne (at Bairnsdale, near Sale, Morwell, Warragul and Dandenong South), establishing Australia’s first road transport green corridor – a model repeatable across Australia and New Zealand to enhance fuel security.
Australian Sovereign Fuels Director Craig Allen says the project addresses four key challenges: recycling residual waste; building Australian-made, low-carbon fuel capacity; making affordable fuels for transport; and reducing waste and fuel greenhouse gas emissions.
“Australia currently pays to bury a resource that could help produce the fuels needed to keep our economy moving and if recycled could reduce one-third of our diesel imports,” he says.
“What we’re working towards in Gippsland is the ability to collect waste generated locally, recycle it into low-carbon fuel to maximise its value, and use that fuel to cut emissions in moving freight and supporting industry.
“Utilising methanol, an efficient hydrogen carrier, and reforming that when needed to hydrogen overcomes many of the issues that have confronted the electrolysis hydrogen sector in recent years.
“The significance of this project goes well beyond diverting waste from landfill. It is about demonstrating that Australia has the resources and capability to produce more of its own fuels, while creating new industries and investment opportunities in a region that has powered Victoria for generations.”
The project is being developed by Gippsland Sustainable Fuels, a joint venture involving Australian Sovereign Fuels and Zerogen, at a proposed location near Sale.
The precinct is expected to produce 48,000 tons of low-carbon methanol per annum in phases one and two – enough fuel for 4,000+ trucks and buses, with growth expansion potential to 192,000 tonnes per annum.
The development utilises proven Hydrogen by Plasma Assisted Gasification (HPAG) technology to separate and recover molecules in waste to produce hydrogen, methanol and other low-carbon fuels, rather than simply burying the material or burning it to generate electricity.
“HPAG is exciting, expanding technology being developed in projects internationally. It makes over five times more hydrogen from the same renewable power as electrolysis, bringing down the cost of hydrogen, a key input to affordable low-carbon methanol,” Allen says.
The waste-to-fuels distinction comes amid growing debate over traditional waste-to-energy projects. A recent Smart Energy Council report concluded that incinerating waste to generate electricity should not be considered renewable or ‘clean energy’. Last week, the European Commission proposed that incinerator’s high level of CO2e emissions be included as part of the EU Emissions Trading Scheme in a further effort towards net zero in the EU.
“The Gippsland Sustainable Fuels project is not an incinerator. The process recycles waste into low-carbon fuels rather than burning it to produce electricity,” Allen says.
“It also avoids the residual ash and PFAS issues related to incineration, while capturing carbon dioxide and other emissions as part of the fuel production process rather than releasing it directly into the atmosphere. For these reasons HPAG technology has been excluded from the EU ETS reforms announced last week.”
Zerogen Director Scott McArdle, who is based in Gippsland, says the project presents an opportunity for the region as part of the broader energy transition.
“Gippsland is one of Australia’s great agricultural regions, but getting what we produce from farm to supermarket shelves relies heavily on trucks,” he says.
“This project enables a milk tanker or truck leaving a Gippsland farm carrying our fresh produce to Woolworths, Coles or Aldi to be powered by low-carbon fuel produced right here in the region. That’s sustainability from farm to plate, extending right through the supply chain.
“The project will create opportunities for regional businesses and help support the transition to lower-emissions transport. This is about creating jobs, keeping value in the region and giving local industry a practical fuel pathway for the future.”
Subject to approvals and securing investment funding currently underway, construction is expected to take approximately 18 months, with production targeted for early 2029.