Submission on Securing Australia’s Cleaner Fuels Industry: Consultation paper on a demand mechanism

Australian Industry Group welcomed the opportunity to provide short feedback on some of the issues raised by the proposed mechanisms and framework to drive Low Carbon Liquid Fuel (LCLF) growth and uptake.

Our members include businesses of all sizes in many sectors across Australia. For many, liquid fuels are an important direct input to their operations, as fuel for machinery, transport vehicles or reliable site power. The security of liquid fuels supply and its affordability are ultimately vital issues for all industries in Australia's interconnected economy. And there is a strong broad interest in the success of global and Australian efforts to limit climate change to well below 2 °C while growing prosperity.

Global upheaval in fuel supplies since the beginning of the US-Israel war with Iran has raised the salience of fuel security and highlighted both Australia's vulnerability, and our capacity to reduce that exposure through well-considered actions by governments and industry. The adoption of alternatives to petroleum fuels, including biofuels, e-fuels and electrification, will make Australia progressively more fuel-secure. These solutions will also reduce emissions. Our challenge is to chart an efficient and affordable course among them, given the higher costs of LCLFs and the long life of vehicles which slows the pace of electrification.