At the Australia Renewable Fuels Summit in Sydney, Fraser Thompson joined policymakers, investors and industry leaders as the US-Israel strikes on Iran transformed fuel security from abstract risk into national emergency. The Strait of Hormuz, through which one fifth of global oil flows daily, has closed to commercial traffic for the first time in history.
The Summit brought together perspectives from Matt Kean and Rupert Maloney on Australia’s exposure, Fiona Messent from Qantas and Scott Charlton from Sydney Airport on aviation’s decarbonisation challenge, Brigadier Mark Baldock on Defence fuel priorities, and project leaders from Licella, Jet Zero and Sky Renewables on what it will take to build a domestic industry.
A Vulnerability That’s No Longer Theoretical
Australia holds just 36 days of petrol, 34 days of diesel, and 32 days of jet fuel in reserve, and imports over 80% of its fuels. But the exposure runs deeper. Over 90% of our refined petroleum products come from Asian refineries that themselves depend on Middle Eastern crude. We’re two steps upstream in a supply chain that is now severed. Airfares on some international routes have tripled in a week, and major suppliers have halted spot sales.
The Economic Case for SAF
Cyan Ventures’ research shows that sustainable aviation fuel is low-cost insurance for Australia. If SAF safeguards just 1.2% of inbound tourists whose travel choices are influenced by sustainability, the economic benefits to the tourism sector would outweigh the predicted costs of higher fuel prices. And those costs are modest, a 5% SAF mandate would add less than the price of a coffee to most domestic routes, a price point Sydney Airport’s research confirms consumers are willing to pay.
Three Barriers to Investment
Despite Australia’s natural advantages: land, sunshine, logistics, agricultural expertise. No SAF project has yet reached final investment decision. The Summit highlighted three core barriers:
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- No demand signal. Unlike Indonesia and Singapore, Australia has no mandate or levy for SAF. International investors made clear they won’t prioritise Australia without one.
- Feedstock uncertainty. Projects need diversified, secure supply, from woody waste (1.5 million tonnes currently going to landfill) to new plant species suited to degraded land. Farmer engagement models that deliver genuine upside will be critical.
- Counterparty risk. Airlines need short-term flexibility; projects need long-term bankable offtake. Government mechanisms like contracts for difference, as used in the UK, could reduce financing costs by up to 5 percentage points.
From Conversation to Commitment
The Strait of Hormuz has featured in energy security discussions for decades. This week it stopped being hypothetical. The case for a domestic renewable fuels industry is no longer about climate ambition alone. It’s about national resilience. The policy settings to unlock investment are well understood. What’s needed now is committed action.
