Linkedin
Facebook
Email
more
AUTHOR
Agriculture both contributes to and is impacted by climate change, making emissions reduction a critical challenge for the sector.
With typically 10 to 15% of on-farm greenhouse gas emissions derived from the use of diesel in machinery and power generation, tackling this can have a material impact on an enterprise’s carbon footprint whilst also providing potential new revenue streams.
Low carbon liquid fuel (LCLF) is an umbrella term covering a range of fuels produced through different conversion pathways leveraging either biomass feedstocks, such as straw and tallow, or non-biomass inputs, such as used tyres. LCLFs can reduce CO2 emissions by up to 80% compared to fossil fuel diesel.
Agriculture can be both a participant in and a beneficiary of a future Australian LCLF industry by producing the required biomass feedstocks and leveraging the resultant LCLFs on farm. 
A recent report by Bioenergy Australia estimated that Australia consumes 56.5 billion litres of liquid fuel per annum with demand remaining at 30 billion litres in 2050 even if electrification trends are maintained.
Australia’s agricultural sector already produces the required biomass feedstocks used in LCLFs but much of this is exported to refineries overseas. The report goes on to highlight modelling by the CSIRO that suggests that Australia has the feedstock production potential to support 13 billion litres of LCLF by 2050.
However, current domestic LCLF production is estimated at a modest 175 million litres. Expanding refining and production capacity onshore will require significant investment and be key to capturing this opportunity.
Governments around Australia are focussing their attention on this emerging sector with both the provision of funding and policy to aid its development.
At a Federal level, the Future Made in Australia Innovation Fund will provide up to $1.5 billion in grant funding to support the development of renewable and low emissions technologies. Of the total pool, $250 million is allocated to Low Carbon Liquid Fuels. This program is anticipated to open in the second half of 2025.
At a state-level, the newly returned WA Government has committed $1.2 million to the development of an Advanced Biofuels Strategy. The strategy will explore the comparative advantage of Western Australia’s agricultural sector to participate in this emerging industry and the role that government can play to support and attract renewable fuels projects. 
Whilst not directly related to LCLFs, in late 2024, the Queensland Government announced the $30 million Sowing the Seeds of Farming Innovation Fund. It is designed to support industry and university collaborations to unearth and commercialise farming innovations.
These initiatives will build on ARENA’s Sustainable Aviation Fuel Funding Initiative which provided $33.5 million in funding to five projects developing sustainable aviation fuel from renewable feedstocks in Australia.
Government funding is a changing and evolving landscape driven by election and budgetary cycles at both the federal and state levels. Competition for funding is fierce with only the best applications making the cut. Success will be enjoyed by those that can craft a compelling, fact-based narrative around their project to demonstrate strong alignment to government objectives.
RSM’s team of specialist Government Grant professionals are the experts that you need in your corner throughout the grant lifecycle to help you to stay across funding opportunities and prepare compelling applications. Contact our advisers today to maximise your chances of securing funding.
FOR MORE INFORMATION
For more information, don’t hesitate to get in touch with your local RSM Agribusiness Specialist.
This article was first published by ACM Farm Weekly.
