Federal authorities pronounces $1.1b plan to energy vehicles with low-carbon biofuel

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UPDATED 22/09/2025 4:45pm: The federal authorities’s division of local weather change and power has responded to our questions round its assertion that petrol and diesel will solely be utilized by “mild automobiles in very particular circumstances” as quickly as 2035. It mentioned the Cleaner Fuels Program is about creating low-carbon liquid fuels for aviation, delivery and specialist automobiles, not ending availability of conventional fuels for small automobiles like vehicles.

“The Web Zero Plan is a forecast of the place the market is headed, not a authorities mandate,” mentioned a spokesman for the division.” Australians will proceed to have alternative in regards to the vehicles they purchase and drive.

As extra individuals select electrical automobiles, the demand for petrol will naturally decline, however there’ll lengthy be particular makes use of – like older vehicles, specialist automobiles or leisure actions – the place fossil fuels are nonetheless a part of the combo.

We wish to be certain that Australians have entry to cheaper, cleaner vehicles and fuels. Which means supporting motorists with extra choices, not fewer.”

The Australian Authorities has introduced a 10-year Cleaner Fuels Program it says will promote personal funding in native manufacturing of low-carbon liquid fuels to exchange heavy gas oils in cargo ships, jet gas in airliners, diesel in heavy vehicles and – finally – diesel, petrol and liquified petroleum gasoline (LPG) in vehicles.

Federal minister for local weather change and power Chris Bowen mentioned the $1.1 billion program plans to foster the introduction of biofuels produced from feedstocks together with canola, sorghum, sugar and waste.

The primary of those ‘drop-in’ fuels is predicted to be publicly out there from 2029 to energy “jets, ships, development machines and heavy vehicles”, mentioned the federal government.

“Low-carbon liquid fuels are an unlimited financial alternative for Australia,” federal treasurer Jim Chalmers mentioned in an announcement. 

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“Growing this business has potential to make us an indispensable a part of rising international web zero provide chains.

“It is a downpayment on creating a wholly new business in Australia.”

The plan is a part of the federal government’s Transport and Infrastructure Web Zero Roadmap and Motion Plan, designed to scale back transport sector emissions. 

The federal authorities says the transport sector is at present chargeable for 22 per cent of Australia’s annual carbon dioxide emissions.

To satisfy the federal government’s dedication to realize a CO2 emissions discount of between 62 and 70 per cent from 2005 ranges by 2035, half of all new vehicles offered will have to be electrical throughout the subsequent 10 decade.