Renewable fuel investors abandoned

Posted Gavin Hughes BAA in the news, Industry News, Media Releases

The Biofuels Association of Australia (BAA) is deeply disappointed at the government’s decision to abandon the commitments made to retain the effective excise free status of renewable biofuels until 2021. While supportive of the government’s stance to save funds by removing subsidies for imported biodiesel that have already been subsidised in their country of origin, the BAA is most concerned how a complete U‐turn in policy will be interpreted by investors in any sector of the economy.

In 2011, the Labor government proposed an amendment to the Alternative Fuels Act that enshrined biofuels with effective excise free status until 2021. This bill was passed with bipartisan support with one of the stated aims to provide the industry with certainty. Obviously, our industry members are very disappointed at the decision, given that since 2011 over $100M has been invested into the industry based on the policies in place. We feel strongly for investors in the renewables sector as Australia has always been seen in the past, as a country of low sovereign risk, this thinking obviously will now change.

The Biofuels Association of Australia still believe biofuels still represent a genuine opportunity for Australia to diversify its liquid fuel supply. The BAA recently commissioned a report from Deloitte Access Economics which found that the industry net of subsidies generates over $466M dollars to the economy and leverages over 3,300 jobs. Although the industry is still small, it has strong foundations with our current biofuel players focussed on adding value to waste streams and non‐ staple food crops. From this base we have the ability to continue to add value to our agricultural resources and grow new high value regional jobs in an emerging bio‐economy.

Whilst everyone recognises that a strong economy is important for our future, just focusing on cutting costs will not get us there. We also have to invest in sustainable industries of the future. Our challenge to the federal government is that they rethink their position and attitudes towards renewable fuels and that together with industry they take a whole of government look at the benefits that this industry can deliver over the next generations.