Future Made In Australia

I rise in support of the Future Made in Australia (Production Tax Credits and Other Measures) Bill 2024. However, my support is not without some qualification because, as I said in the debate last year, we need to focus on some key technologies that will assist us to lower emissions, support existing and new industries, and protect our national security. For that reason, I was surprised to see that low-carbon liquid fuels, LCLFs, were not included in this bill as a recipient of those tax credits, especially when many of our international competitors are incentivising their industries to be leaders.

You might ask why I was surprised. There are several reasons. First, low-carbon fuels were included in the priority sectors that made up the key focus areas of Future Made in Australia in the National Interest Framework that went with it, the framework that we agreed to in this place last year. It is in that framework because, as the National Interest Framework states:

Australia is likely to have a comparative advantage in the production of some feedstocks used to produce LCLFs—

low-carbon fuels—

or in the production of LCLFs, or both.

I belief both are vitally important for our country.

Other countries—such as the United States, Brazil and Singapore, amongst others—have all seen the potential that low-carbon liquid fuels offer, and they are moving quickly to reap the benefits. We are in a race to build a whole new industry in Australia, which should be a part of the long vaunted green economy or, as is often sold to us, the creation of a clean energy superpower. It's a noble ambition, but we've to put some effort and some funding into it. We have clear advantages, but we are not the only ones. While countries like Singapore don't have the advantage of our feedstocks, nor the great amounts of renewable energy that will be needed to make low-carbon liquid fuels, they certainly know how to make big bets on nation-building industries.

Low-carbon fuels, which including sustainable aviation fuel and renewable diesel, need to be in this bill as recipients of production tax credits. If they are left out then what we are saying is that we are comfortable for our future to be made in Singapore or some other country but not here. This defeats the most important benefits of producing low carbon fuels here—that is, fuel security, which is vital to our national security. Not only that; we would pass up the estimated 18,000 new direct jobs that are predicted to come from standing up a sustainable aviation fuel production industry, plus the estimated $13 billion that would be added to our GDP. We would effectively load all of these benefits onto ships heading to Singapore, with all the feedstock we would be sending them, and Singapore would benefit as they export it to the rest of the world. As we waste time debating the merits of including low-carbon liquid fuels and building an industry here in Australia, the world will race ahead, leaving us behind. This, I believe, would be unacceptable to most Australians.

The truth is that low-carbon fuels are an indispensable tool to lowering Australians' carbon emissions. A study by Airbus shows that, on average, sustainable aviation fuels can reduce carbon emissions by 80 per cent compared to traditional jet fuel. This is particularly important when we consider that worldwide the aviation industry accounts for up to three per cent of human induced greenhouse gas emissions. Low-carbon liquid fuels are important, as they will play a role in decarbonising the hard to abate transport sector. Unlike hydrogen, which is also important, we have immediate uses for sustainable aviation fuel and biodiesel. We don't need to build masses of new infrastructure such as refrigeration, storage and new transport to get it into use once we're producing it. Our trucks and planes can use it immediately, so, as soon as we build it and we are producing it, it is getting used. It is also worth noting that low-carbon liquid fuels need hydrogen as one of the feedstocks, so standing up a sustainable aviation fuel industry not only builds that industry but also provides an uptake opportunity for our hydrogen production industry, which is in this bill. Instead, to be prepared for the future means we must commit to clear and specific incentives that will ensure this crucial but nascent low-carbon liquid fuel industry flourishes.

But the benefits of the LCLFs are not just limited to emissions reduction. Low-carbon liquid fuels will also support our farmers who will grow the feedstocks that will enable us to develop a strong supply chain and help us build a sovereign fuel capacity. With the prospect of an interregional war drawing ever closer and traditional allies such as United States potentially—and I stress potentially—turning inwards, now is the time more than ever to set the stage for a strong and independent Australia that produces its own fuels and can stand on its own two legs. That won't happen without a sovereign fuel manufacturing capacity, not as long as 91 per cent of our fuel is imported from overseas and we hold only 54 days of strategic fuel reserves, which is barely half of the recommended amount suggested by the International Energy Agency. This is only worsened by the fact that this strategic reserve would have to be shared between both our military and civilian sectors. This would have a devastating effect on our economy during a conflict. If we cannot protect our sea lanes of communication that traditional fuels come in on, how do we keep running the economy? While we remain deeply vulnerable to a blockade, which would cut off most of our fuel, supporting fuel security, in my view, is completely non-negotiable, and helping to support and start an independent low-carbon liquid fuel industry would go a long way to ensuring that we secure our sovereignty and our economy at the same time.

With all of that said, I do support and am a keen advocate for hydrogen production, which is given tax offsets in this bill. But we also need to bear in mind that it will take years to contribute to our economy and our emission reductions, whereas, as I said earlier, sustainable aviation fuel and biodiesel have ready-to-go markets right here within Australia, right now. While important, establishing and supporting a strong hydrogen industry would take longer and need enormous investment, much more investment than low-carbon fuels, plus commitments to infrastructure developments before it can be used to add value to our economy. As such, to ensure Australia remains competitive on the global stage, we must commit to and incentivise our low-carbon fuel industry.

Currently, Singapore, which will likely be the dominant producer in our region, is setting the standard for SAF production. To level the playing field for Australian producers, we must aim to produce SAF at a cost close to Singapore's benchmark; however, achieving that alone will not make our industry globally competitive. The goal must be to close the gap between what is called jet A1 fuel and sustainable aviation fuel. To do this we need to bring the cost of low-carbon fuels, and that is why I will be introducing an amendment to include production tax credits for low-carbon fuels in this bill.