Fuel for Thought: Key Players Say New Rules Back Local Refineries to Produce Lower Carbon Fuels

(Cleanaway) Viva Energy and Cleanaway have welcomed the Australian Government’s latest reform to the National Greenhouse and Energy Reporting scheme (NGERs) which will recognise low carbon liquid fuels, including renewable diesel, LPG and kerosene made via co-processing at local refineries.

Under the change, customers may report the certified renewable content in eligible co-processed fuels as having zero Scope 1 carbon dioxide emissions under NGERs, while the fossil portion continues to attract the applicable fossil emission factor.

It also allows ISCC PLUS certificates issued by International Sustainability and Carbon Certification to be used for the next two years to track biogenic content through the supply chain, while the Government develops its Guarantee of Origin framework for these fuels.

The reform is a practical and important step towards building a domestic supply chain and market for locally produced low carbon liquid fuels in Australia.

Viva Energy Chief Executive Officer Scott Wyatt said the decision showed how the right policy settings could help unlock investment in new fuel options for Australia.

“This is a big step forward for Australia’s low carbon fuels industry,” Mr Wyatt said. “For the first time, customers will have a regulatory pathway to recognise the emissions benefits of eligible co-processed diesel, LPG and kerosene in their NGERs reporting. That gives customers greater incentive to use these fuels and gives us the certainty to invest in the refinery and feedstock supply chains. Co-processing is important because it can help build Australia’s low carbon liquid fuels industry faster than waiting for the development of dedicated plants. It also helps support local feedstock markets and uses existing fuel infrastructure to get lower carbon products to customers.”

Viva Energy is progressing plans to produce co-processed diesel through its Geelong Refinery using eligible waste-derived and renewable feedstocks in existing refinery infrastructure. The NGERs change is expected to increase customer demand and support commercial scale production.

The reforms are already leading to tangible action with Viva Energy commencing the sourcing of used cooking oil (UCO) from Cleanaway to be processed into co-processed renewable fuels at its Geelong refinery. For the first time, Australian businesses can use this type of renewable fuel to lower their scope 1 emissions.

“Australia already has valuable sustainable feedstocks such as used cooking oil and vegetable oils,” Mr Wyatt said. “Too often, those materials are exported overseas to be turned into renewable fuels for other countries. This reform helps create the commercial landscape to keep more of that value here in Australia — collecting it, processing it, adding value and reusing it to produce lower carbon fuel for Australian industry.”

The reform is also expected to support the production of co-processed renewable diesel and LPG using existing refinery assets in Australia. Fuels such as co-processed renewable diesel can help decarbonise domestic hard-to-abate industries such as heavy vehicle transport and co-processed LPG can be used in high-temperature applications such as firing kilns or other industrial functions.

Cleanaway Chief Executive Officer Mark Schubert said the change would help close the domestic circularity loop for waste and renewable feedstocks such as used cooking oil that are already being collected across the country.

“This is a smart reform because it connects waste collection, local manufacturing and lower carbon fuel use,” Mr Schubert said. “By putting a value on the carbon abatement associated with co-processed fuels, the Government has created a stronger reason to keep materials such as used cooking oil in Australia, where they can be collected, processed and turned into fuels that help local businesses reduce emissions.”

Viva Energy and Cleanaway will continue working with government, customers and industry partners to support the development of a domestic low carbon liquid fuels market and progress opportunities to supply co-processed renewable diesel and LPG in Australia.

About Viva Energy

Viva Energy (ASX: VEA) is a leading convenience retailer, commercial services provider and energy infrastructure business, with a history spanning more than 120 years in Australia. The Group operates a retail convenience and fuel network of over 1,280 stores across the country and supplies fuels and lubricants to a network of nearly 1,550 service stations.

Viva Energy owns and operates the Geelong Refinery in Victoria, and operates bulk fuels, aviation, bitumen, marine, chemicals, polymers and lubricants businesses supported by an extensive national infrastructure network including more than 25 terminals and 98 airports and airfields across the country. www.vivaenergy.com.au

About Cleanaway

Cleanaway Waste Management Limited is Australia’s leading sustainable waste management, industrial and environmental services company. Our team of approximately 10,000 people operates across more than 350 locations in Australia, New Zealand and the Middle East. We manage Australia’s largest waste and industrial services fleet, with over 6,400 vehicles, and are supported by an extensive network of recycling facilities, transfer stations, engineered landfills, liquid treatment plants and refineries. Alongside our customers, communities, governments, regulators and industry partners, we are committed to delivering on our purpose: making a sustainable future possible together. READ MORE