Joint Media Release: Building Australia's Fuel Security with Strategic Fuel Reserves and Low Carbon Liquid Fuels

September 01, 2026

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(Australia Department of Climate Change, Energy, the Environment and Water) The Albanese Government's $14.8 billion Fuel Security and Resilience Package will protect Australians from global fuel shocks, put downward pressure on costs and accelerate the transition to our own home-grown, sovereign fuels.

Today (August 18, 2026), the Government is releasing two consultation papers that will help shape the next phase of Australia's fuel security agenda, ensuring the nation has the supplies it needs when they matter most while building a stronger domestic fuel industry for the future.

Announced in the 2026-27 Budget, the Fuel Security and Resilience Package is Australia's most significant investment in fuel security, strengthening the nation's resilience against international disruptions while creating new economic opportunities for Australian industry and regional communities.

The Strengthening Australia's Fuel Security and Resilience Consultation Paper seeks feedback on key design features of three major measures that underpin the Government's approach to fuel security:

establishing the Australian Fuel Security Reserve
increasing the Minimum Stockholding Obligation backed by co-investment in fuel storage
supporting the continued operation of Australia's two remaining domestic refineries beyond 2030.

The Government is investing $3.2 billion to establish the Australian Fuel Security Reserve, creating a government-owned strategic reserve of one billion litres of diesel and jet fuel.

The reserve will provide an additional safeguard against international supply disruptions and fuel market volatility, helping ensure Australians have access to the fuel they need when global markets come under pressure.

The Government has also committed to increasing mandatory industry fuel stockholding requirements by an additional 10 days for diesel, petrol and jet fuel by 2030.

By requiring higher fuel stockholdings, we will be better positioned to withstand supply disruptions and maintain reliable access to fuel for households, businesses and critical industries.

The consultation also seeks views on options to support Australia's two remaining domestic refineries to continue operating beyond 2030, recognising the important role domestic refining plays in strengthening fuel security and sovereign capability.

The Securing Australia's Cleaner Fuels Industry Consultation Paper seeks feedback on options to grow Australia's domestic Low Carbon Liquid Fuels (LCLF) industry and reduce reliance on imported fuels.

The consultation is seeking views on a potential demand mechanism, including the level of ambition and how it could be implemented, impacts for businesses and consumers and the evidence required to inform key policy decisions.

A stronger domestic low carbon liquid fuels industry represents a significant opportunity for Australia to diversify supply and produce more of the fuels we need here at home, creating jobs, attracting investment and strengthening regional economies.

It will also play an important role in reducing emissions in sectors where electrification is difficult, including aviation, heavy transport, mining and agriculture, supporting Australia's transition to net zero while maintaining economic competitiveness.

Together, these measures will help secure Australia's fuel future by ensuring reliable supplies, supporting domestic industry and building the cleaner fuels needed to drive future growth.

The consultation papers are available on the Department of Climate Change, Energy, the Environment and Water's Have Your Say platform.

The Securing Australia's Cleaner Fuels Industry Consultation Paper can be found here: https://consult.dcceew.gov.au/securing-australias-cleaner-fuels-industry-consultation

The Strengthening Australia's Fuel Security and Resilience Consultation Paper can be found here: https://consult.dcceew.gov.au/australias-fuel-security-and-resilience-package

Quotes attributable to Minister for Climate Change and Energy Chris Bowen:

“Australia cannot afford to be vulnerable to fuel supply disruptions beyond our shores. That's why we’re making a historic investment to strengthen fuel security, support domestic refining and build the cleaner fuels industries of the future.

“We're strengthening Australia's resilience by building larger fuel reserves, increasing stockholdings and backing domestic industry to produce more of the fuels we need here at home.

“By strengthening fuel security today and building cleaner fuel industries for tomorrow, we're delivering practical economic and environmental benefits for Australian households, businesses and communities.”

Quotes attributable to Minister for Infrastructure, Transport, Regional Development and Local Government Catherine King:

“We are investing in the fuels our aviation, maritime and freight industries need.

“Currently, we export up to $6 billion of feedstocks each year, including canola and tallow, for global markets.

“By building a low carbon liquid fuels industry right here, we will create more jobs, build regional economies, strengthen our fuel security and future-proof our transport industries.”

Quotes attributable to Minister for Agriculture, Fisheries and Forestry, Julie Collins:

“Fuel security is about making sure Australian communities, families, businesses and industries can rely on the supplies they need – including our farmers and producers.

“This investment will help strengthen our resilience to global disruptions and provide Australia with critical and reliable fuel to keep our food production strong

“Building more domestic fuel production creates an exciting opportunity to add value to Australian feedstocks bringing more opportunities for our farmers and foresters.” READ MORE

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Australia seeks input on how to support low carbon liquid fuel industry (Ethanol Producer Magazine)

Excerpt from Ethanol Producer Magazine: Specifically, the consultation seeks input on potential demand policy mechanisms, including a volumetric mandate that would require a specified amount of LCLF to be supplied to the market, or a carbon-intensity standard that would set targets for the average carbon intensity (CI) of fuel supplied to he market.

Interested parties are asked to comment on how those demand policy mechanisms could be implemented and what volumetric or CI reduction goals should be set, as well as potential impacts on businesses and consumers.

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Additional information is available on the government of Australia website. READ MORE