Airlines face potential biofuel mandates under new government plan

Labor is mulling biofuel mandates for airlines as part of a suite of possible measures aimed at nurturing Australia’s fledgling sustainable aviation fuel industry and guarding against havoc in the global supply chain.

The Albanese government on Tuesday released two discussion papers outlining “the next steps” in bolstering fuel security after months of global turmoil spurred by the war with Iran.

The first covers how it would make good on its pledge to “establish an Australian strategic fuel reserve” as well as “increase the minimum stock obligation of the fuel that has to be held in Australia by Australian companies”, Energy Minister Chris Bowen told a press conference.

The second discussion paper covers the Albanese government’s “two pronged approach” to boost both traditional fuels and Australian-made greener fuels, such as biodiesel.

Standing alongside her ministry colleague, Ms King flagged possible SAF mandates for airlines but said “no decisions” had been made.

She accepted that prices had increased in countries where mandates were in place but said that “experience overseas is that they are very small”.

“We are … already so heavily reliant on imported fuel, and … already you’ve seen Qantas and Virgin, for example, start to look at sustainable aviation fuel.

“Our defence force is using it. The fact that we’re not producing here is a significant loss.”

SAF mandates have been rolled out across Europe, with the UK and EU introducing 2 per cent obligations last year.

Those obligations are tipped to scale up to 10 per cent in the UK and 6 per cent in the EU by 2030.

Modelling from the Brussels-based Transport and Environment peak body found that ticket price and competitiveness concerns “are largely overstated” and that airfares in the EU would on average increase 4 per cent by the decade’s end.

Originally published as Airlines face potential biofuel mandates under new government plan