Future Industries
Renewables, Climate and Future Industries Tasmania
Department of State Growth
GPO Box 536, HOBART TAS 7001
To the Future Industries team,
Re: Future Clean Fuels Strategy Consultation Draft
The Australian Hydrogen Council (AHC) welcomes the opportunity to provide input to the development of Tasmania’s Future Clean Fuels Strategy.
The AHC is the peak body for the hydrogen industry and our membership includes companies from across the value chain. Our members are at the forefront of Australia’s hydrogen industry, developing the technology, skills and partnerships necessary to ensure that hydrogen, its derivatives and flow on industries play a meaningful role in decarbonising and strengthening Australian industry.
Beyond hydrogen’s role in decarbonising the hard to electrify sectors of the economy that will need molecules, it is also vital to Australia’s national security and ongoing prosperity. It is a key input for the fuel sources that are expected to also play a transitionary or long term role in our energy mix, such as sustainable aviation fuel (where hydrogen is the main component of e-SAF and also needed to process SAF made from biogenic feedstock), future marine fuels (where ammonia and methanol both require hydrogen), and renewable diesel (where hydrogen is required in order to process this drop-in fuel to a saleable quality at commercial scale).
Hydrogen and its derivatives also provide a molecular means of energy storage that can stand in for diesel for a range of purposes, including defence needs.
It’s important to note that Australia imports approximately 80% of its total liquid fuel consumption, with over 90% of refined petroleum sourced from Asia. It has been reported that for October 2024, Australia held just 22 days’ worth of diesel coverage, 29 days of petrol, and 17 days of jet fuel. [1] The International Energy Agency (IEA) sets a benchmark of at least 90 days’ worth of net oil imports, or total imports minus exports, but Australia held just 48 days in October.[2] While this has been increasing, it is still well below the IEA requirement.
In today’s tricky geopolitical environment, there is significant value in protecting Australia’s energy and fuel security. Hydrogen has a vital role to support doing this at scale.
AHC is pleased to see the Tasmanian Government focusing on this and building on national opportunities, processes and strategies. It is great to see Tasmania choosing priority areas and working to address key challenges in decarbonising local industries. AHC is supportive of the development of a Tasmanian Future Clean Fuels Strategy, and provide the below insights to assist in its progress.
In the first instance, please note that AHC has been very engaged in this area, and suggest reviewing some of our in-depth positions for what is required, including how states can take leadership.[3]
Aligning a renewable fuels industry to benefit Tasmania’s vision
To develop a clear intent for the strategy, we would make the following recommendations on the design and execution of the policy mix:
- Commit to establishing demand drivers for the uptake of clean fuels. A significant challenge in establishing a renewable fuels industry is on the demand side, where the Tasmanian Government should have a role in driving fuel switching for local industry. The Tasmanian Government could investigate the utilisation of its government procurement and purchasing requirement levers, such as through TT-Line. By committing to being the first customer, the government creates demand, supports the order book of nascent Australian companies, and reduces risk and uncertainty for subsequent buyers and investors. It is great to see the Metro Tasmania Renewable Hydrogen Bus Trial facilitating deployment and demand, proving up the total cost of ownership for fuel cell electric buses, however, as a short term trial it does not provide long term certainty. Further initiatives addressing demand should be long term, transparent, sequenced based on modelling, and incentivised based on emissions reduction. This could be through mandates, purchase targets, or low carbon fuel standards, but should be based on feedstock and utilisation modelling, Tasmanian sectoral analysis and strategic intent. However, many of the available policies would be optimally designed for a nationally harmonised approach, so should be discussed in conjunction with colleagues in the states, territories and Australian Government.
- Align with the Sustainable Finance Taxonomy’s categorisation. While we are supportive of a strategy and a diverse range of fuels will have a role to play in decarbonisation, it is important to note that each has a different timeline and emissions abatement. As Tasmania develops the policy framework surrounding the chosen renewable fuels, we ask that the incentives and sequencing considerations with the Australian Sustainable Finance Institute’s Sustainable Finance Taxonomy.[4] This work has been recently completed and categorises investment opportunities as either transitionary or green. The objective here is to avoid greenwashing, utilising the short-term options alongside long-term, net zero solutions, but phase out the transitionary option so that it doesn’t negatively impact full decarbonisation.
- Design and scale incentives based on their relative decarbonisation potential. If Tasmania is aligning this fuel strategy with its commitment of ongoing net zero from 2030, transitionary and future state parameters will need to be built into the framework. This will translate to any incentive for a transitionary fuel requiring a sunset clause, mandatory review date or phased reductions, so they do not unnecessarily delay the full decarbonisation of industries. Furthermore, any incentives could be scaled corresponding to the emissions abatement value, much like how low carbon fuel standards are designed.
- Collaborate on a national feedstock and utilisation strategy. To develop the optimal policy pathway, we agree that Australia needs a stronger understanding of what fuels are expected to be necessary to offset carbon emissions, at what volumes and by when. Each jurisdiction should work with the Australian Government to model the capabilities, needs and timelines. This includes masterplanning for the inflection point where biofuels will be expected to switch to e-fuels, and how this will be managed through policy. We understand that some jurisdictions are underway on this work,[5] but this needs to have a national and coordinated lens, and ensure no double counting.
Recommendations:
- Commit to establishing demand drivers for the uptake of clean fuels.
- Align the renewable fuel strategy with the Sustainable Finance Taxonomy’s categorisation of transitionary and future state pathways.
- Design and scale incentives based on their relative decarbonisation potential.
- Collaborate on a national feedstock and utilisation strategy with the Australian Government.
The AHC supports the development of the Tasmanian Future Clean Fuels Strategy and hope to see it best utilise and grow initiatives, industry and common use infrastructure. We welcome the opportunity to engage and look forward to supplementary actions being announced to support the success of the strategy, such as demand drivers.
If you wish to discuss any element of this submission in further detail, please contact me at [email protected].
Kind Regards,
Natasha Cerexhe
Policy Manager
Australian Hydrogen Council
You can download the full PDF here.
[1] Sutton, M. (2025) ‘Australia’s fuel security falling short as ‘war-game’ report, released under FOI, reveals vulnerabilities’, ABC News, 7 January, https://www.abc.net.au/news/2025-01-07/australia-fuel-security-falling-short-foi-war-game-report/104745210. See also: Department of Climate Change, Energy, the Environment and Water (2025) Australian Petroleum Statistics 2025, Australian Government, https://www.energy.gov.au/publications/australian-petroleum-statistics-2025.
[2] IEA (2025) Oil Stocks of IEA Countries, https://www.iea.org/data-and-statistics/data-tools/oil-stocks-of-iea-countries.
[3] AHC (2024) Re: Opportunities for a renewable fuel industry in NSW, submission, 30 August, https://aidc.org.au/wp-content/uploads/2024/09/240830-NSW-renewable-fuels-AHC-submission.pdf ; AHC (2025) 2025-26 Pre-budget submission, submission, January, https://aidc.org.au/wp-content/uploads/2025/02/25-26-AHC-Pre-budget-submission.pdf ; AHC (2024) AHC submission to transport sector plan and LCLF, submission, July, https://aidc.org.au/wp-content/uploads/2024/07/240726-AHC-submission-to-transport-sector-plan-and-LCLF-1.pdf
[4] Australian Sustainable Finance Institute (2025) The Australian Sustainable Finance Taxonomy, https://www.asfi.org.au/australian-taxonomy.
[5] For example: Collins, J. (2025) Feeding Australia: Albanese Labor Government’s plan to secure our food future, media release, Australian Government, 4 March, https://minister.agriculture.gov.au/collins/media-releases/feeding-australia ; State Department, Infrastructure and Planning (2021) Queensland biomass mapping and data, Queensland Government, https://www.statedevelopment.qld.gov.au/strategic-industries/key-industries/biofutures/queensland-biomass-mapping-and-data.