Australia Biofuel Market: Renewable Energy, Low-Carbon Mobility & the Future of Sustainable Fuel Production
How climate goals, cleaner transport solutions and agricultural innovation are accelerating Australia’s biofuel industry
In 2024, the Australia biofuel market was valued at USD 2.79 Billion. By 2033, the market is projected to surge to around USD 9.29 Billion, at a CAGR of 12.8% during 2025–2033. This strong forecast reflects growing momentum behind renewable fuels — driven by regulatory support, environmental goals, and expanding demand across transport, industry, and energy sectors.
Why is the Australia Biofuel Market Growing?
Supportive Government Policy & Funding Initiatives
The Australian government has recently committed substantial funds to boost biofuel production and cleaner-fuel adoption. For example, in 2025 it announced a major incentive package aimed at renewable diesel and sustainable aviation fuel (SAF) production — a clear sign of policy-driven commitment to fossil-fuel alternatives.
Rising Environmental Awareness & Emissions Reduction Goals
As Australia and its trade partners commit to net-zero targets and stricter emissions regulations, biofuels offer a lower-carbon substitute to traditional fossil fuels. Cleaner transport fuels help reduce greenhouse-gas emissions from road, marine, and aviation transport — pushing demand for biodiesel, renewable diesel, bioethanol and SAF.
Development of Sustainable Feedstocks & Renewable Agriculture
Biofuel producers are increasingly turning to sustainable feedstocks — including waste oils, residual biomass, and non-food crops. There’s growing interest in oilseed crops like Pongamia (a native or adapted tree species) as a biofuel feedstock, offering a promising route to renewable diesel without compromising food crops or land used for food agriculture.
Demand from Hard-to-Decarbonise Sectors (Transport, Shipping, Aviation, Heavy Industry)
Some sectors — aviation, shipping, heavy-haul transport, and large industrial users — are difficult to electrify. Biofuels (especially biodiesel, renewable diesel, SAF) offer a viable pathway to reduce emissions in these sectors. As global and domestic pressure mounts to cut carbon emissions, these segments are increasingly turning toward biofuels.
Rising Interest in Circular Economy & Waste-to-Fuel Models
As part of broader environmental strategy, Australia is leveraging waste streams (used cooking oil, agricultural residues, forestry waste) to produce biofuels — reducing landfill load, creating value from waste, and promoting circular-economy principles. This not only supports sustainability but also provides an economically attractive, locally-sourced fuel supply chain.
Market Structure & Segmentation:
Fuel Type: Biodiesel, Bioethanol, Renewable Diesel, Sustainable Aviation Fuel (and other advanced biofuels)
Feedstock Source: Vegetable oils, waste oils (used cooking oil, tallow), non-food oilseeds (e.g. dedicated energy crops), agricultural residues, biomass waste.
End Use / Application: Transportation fuels (road diesel/petrol blending, aviation fuel), industrial energy, heating, possibly electricity generation / cogeneration.
Delivery Mode: Blended fuels, standalone biofuel supply (for regulated fleets, industries), renewable diesel, SAF for aviation, and fleet-based supply for transport/shipping sectors.
Key Players & Industry Dynamics
Australia’s biofuel landscape includes renewable-diesel producers, biodiesel refiners, feedstock suppliers (agricultural producers, used-oil collectors), fuel distributors, logistics firms, and increasingly — renewable-energy and waste-management firms entering biofuel production.
Because biofuels straddle both the agriculture and energy sectors, the market dynamics involve cooperation between farmers (crop/oilseed producers), waste-oil suppliers (restaurants, food processors), and energy companies. This complexity, combined with evolving regulation, feedstock supply variability, and global demand for cleaner fuels, shapes how companies approach investment, technology adoption, and production scaling.
September 2025: The Australian government announced a major biofuel-production incentive program — committing A$1.1 billion (≈ USD 740 million) over 10 years to support renewable diesel, SAF, and sustainable biofuel projects. This policy boost significantly raises investor confidence and accelerates green-fuel infrastructure build-out.
June 2025: A report highlighted growing interest in renewable feedstocks such as Pongamia oilseed for clean-diesel production, especially among large agriculture and mining firms exploring sustainable fuel for heavy machinery. This move signals the beginning of more homegrown biofuel supply chains in Australia, reducing dependence on imported oilseeds or waste oils.
November 2025: Industry trade-press coverage noted rising global demand for sustainable aviation fuel, with Australian biofuel refineries evaluating expansion or retrofitting plants to produce SAF. As aviation stakeholders and regulators push for lower-carbon flights, Australia is positioning itself to contribute to global SAF supply — boosting long-term market outlook.
Why Should You Know About the Australia Biofuel Market?
Because biofuels are central to Australia’s transition toward energy security, net-zero emissions, and sustainable industry — and the market is on track for rapid growth. With a forecasted leap from USD 2.79 Billion in 2024 to USD 9.29 Billion by 2033, biofuels represent one of the most dynamic segments in the country’s clean-energy transition.
For investors and energy companies: Biofuels offer robust growth potential, especially with rising demand from transport, industrial sectors, and sustainable aviation fuel markets.
For agriculture and waste-management stakeholders: The push for renewable feedstock and waste-to-fuel models can create new revenue streams and value-chain opportunities.
For policy makers and regulators: Biofuels provide a flexible, scalable pathway toward emissions reduction, energy diversification and fuel security — especially in sectors difficult to electrify.
For society and environment: Transitioning to biofuels helps reduce reliance on fossil fuels, cut greenhouse-gas emissions, and support sustainable resource use and circular-economy principles.
About the Creator
Kevin Cooper
Hi, I'm Kavin Cooper — a tech enthusiast who loves exploring the latest innovations, gadgets, and trends. Passionate about technology and always curious to learn and share insights with the world!
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