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Sustainable fuels in Queensland

Around half of Queensland’s total energy consumption comes from oil and gas and Queensland’s economy relies on these fuels, particularly diesel, to power industry and community.

While electrification will provide a suitable alternative to some of the fuels we currently use, key industries such as heavy transport, mining, construction, shipping, agriculture and aviation will be challenging or impossible to electrify, and sustainable fuel solutions will be needed to support these industries to decarbonise.

A sustainable fuel can be either liquid or gas. They come from renewable or low-carbon sources that help reduce greenhouse gas emissions. Some produce little to no emissions when they are used, while others are made from plants which absorb carbon dioxide when they grow, balancing out emissions from their use.

Sustainable liquid fuels and gases will be critical to support decarbonisation of a range of industries and applications, particularly where high heat is required. Most of these fuels and gases have the potential to be produced locally. Growing specific crops for use as feedstocks for sustainable fuel production has the potential to support Queensland farmers to diversify, while agricultural and forestry waste (such as bagasse from sugar making or lignin from paper production) can also be converted into a sustainable fuel, creating greater efficiency in the way we manage waste.

There are multiple sustainable fuels which play a role to support Queensland’s energy transition, including:

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Ethanol-based fuel (E10) contains up to 10% ethanol and 90% petrol, helping to lower emissions and reduce fossil fuel consumption. It is widely used in petrol engines without modifications. Other blends with higher ethanol can also be used for other applications. In Queensland, the Liquid Fuel Supply Act 1984 sets a mandate for liable fuel retailers which requires that 4% of the total volume of regular unleaded petrol sales and regular petrol-biobased petrol blend sales is biobased petrol (ethanol). Since the introduction of the biofuels mandate, the availability of E10 has significantly increased, resulting in almost 3 out of every 10 motorists in Queensland choosing that fuel over regular unleaded petrol.

Renewable diesel is an advanced generation diesel fuel made from sustainable sources, like waste oils and fats or energy crops, to reduce greenhouse gas emissions. It is refined to be chemically identical to petroleum diesel. Unlike biodiesel, it requires no blending and works seamlessly as a drop-in alternative to petroleum diesel in existing diesel engines and infrastructure.

Sustainable Aviation Fuel (SAF) is a low-carbon alternative to conventional jet fuel, produced from feedstocks like waste oils, biomass, or captured CO₂. It significantly reduces aviation emissions while being fully compatible with existing aircrafts and fuelling systems.

Bio-methanol is a renewable methanol fuel produced from biomass sources like forestry residues, agricultural waste, or biogas and combined with hydrogen. It can be used as a cleaner-burning alternative to fossil methanol in transport, marine, and industrial applications.

Biomethane is a purified form of biogas, derived from organic waste through anaerobic digestion or gasification, making it a renewable alternative to natural gas. It can be used in electricity production, injected into gas grids, or power industrial processes with lower carbon emissions.

E-methane, or synthetic methane, is produced by combining renewable hydrogen with captured CO₂ through a process called methanation. It is a carbon-neutral gas that can replace natural gas in existing infrastructure without modifications.

Hydrogen is a versatile energy carrier that can be produced in various ways. It is used in fuel cells, to make industrial products like fertilisers, industrial processes, and as a substitute for coal and natural gas in certain applications. Renewable hydrogen is produced using water electrolysis powered by renewable energy, and is a low carbon alternative to hydrogen derived from natural gas. Hydrogen is a building block for a range of liquids and gases which may play a role in lowering carbon emissions – particularly of heavy industry and applications that require high energy or high heat such as mining and metals production.

Queensland has the potential to be a leading location for private sector investment in renewable hydrogen. A range of hydrogen projects are at various stages of development and information for the hydrogen industry to understand the potential is available online.

Learn more about hydrogen investment activity in Queensland on CSIRO’s HyResource website.

Ammonia is a hydrogen-rich molecule which is the primary ingredient for nitrogen-based fertilisers such as ammonium nitrate and urea, which are essential for agriculture, and a building block for explosives used in the mining sector. Ammonia can be produced using low emissions hydrogen, and is also being explored for its potential in shipping, power generation, energy storage and industrial use.

Methylcyclohexane is a liquid organic hydrogen carrier that stores hydrogen in a stable form for easier transport.  It enables hydrogen to be moved using existing fuel infrastructure before being converted back to hydrogen when needed.  MCH is a chemical feedstock used in a variety of applications worldwide.

Liquid hydrogen is hydrogen cooled to -253°C, turning it into a dense liquid for easier storage and transport, similar to the liquid natural gas process. It is used in aerospace, hydrogen refuelling stations, and emerging energy applications.

E-methanol, or electro-methanol, is a synthetic fuel produced by combining green hydrogen (from renewable electricity) with captured carbon dioxide. It is a carbon-neutral alternative to fossil methanol, used in shipping, industry, and as a feedstock for sustainable chemicals.

Last updated
07 March 2025
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