Biofuel in Australia is available both as biodiesel and as ethanol fuel, which can be produced from sugarcane, sorghum or grains. There are currently three commercial producers of fuel ethanol in Australia, all on the East Coast.
Legislation imposes a 10% cap on the concentration of fuel ethanol blends, except those marketed as having a higher concentration such as E85. Blends of 90% unleaded petrol and 10% fuel ethanol are commonly referred to as E10, which is available through service stations operating under the BP, Caltex, Shell and United brands as well as those of a number of smaller independents. Not surprisingly, E10 is most widely available closer to the sources of production in Queensland and New South Wales. The Australian Government has set a target for the sale of 350 million litres of E10 fuel each year by 2010.
Recently[when?] BP Australia celebrated a milestone with over 100 million litres of the new BP Unleaded with renewable ethanol being sold to Queensland motorists. In partnership with the Queensland Government, the Canegrowers organisation launched a regional billboard campaign in March 2007 to promote the renewable fuels industry.
Australia is drafting new biodiesel legislation in 2008.
In 2014 the average total annual production of biofuels in Australia is approximately 800 million litres. This includes new ventures into biodiesel and algae-based biofuels. The cultivation of West African oil palms in the South East Asian jungles was first tabled by Australian botanists in the 1930s, but only in recent decades has there been cultivation of West African oil palms in South East Asian jungles. It is hoped that there will be robotic cultivation of these oil palms and that they will be used to make biofuels.
Legislation imposes a 10% cap on the concentration of fuel ethanol blends. Blends of 90% unleaded petrol and 10% fuel ethanol are commonly referred to as E10. There is also a requirement that retailers label blends containing fuel ethanol on the dispenser.
Federal government regulations apply to the quality of petrol and diesel fuel in Australia. The Fuel Quality Standards Act 2000 provides a legislative framework for setting national fuel quality and fuel quality information standards. Fuel quality standards apply to petrol, diesel, biodiesel, autogas and ethanol E85.
Domestically produced fuel ethanol is currently effectively exempt from excise tax until 30 June 2021 (an excise of 38.143 cents per litre is payable on petrol).
Federal Government support for fuel ethanol includes a voluntary industry biofuels target (encompassing ethanol, biodiesel, and other biofuels) of 350 million litres per annum by 2010, capital grants to current and prospective producers, fuel excise relief, and an effective tariff on imported ethanol until 1 July 2011.
In 2006, the Premiers of both New South Wales and Queensland proposed mandating the blending of ethanol into petrol.
E10 is available through service stations operating under the BP, Caltex, Shell and United brands as well as those of a number of smaller independents. Not surprisingly, E10 is most widely available closer to the sources of production in Queensland and New South Wales. E10 is most commonly blended with 91 RON "regular unleaded" fuel.
BP has been marketing ethanol blended fuel in Queensland since 2001 and will soon commence the rollout to BP branded service stations in New South Wales, with the fuel to be available at about 50 additional locations by the end of the year. Over the next few years BP’s planned expansion of ethanol blended fuel in New South Wales will see this number of service stations doubling.
Since the introduction of the Series 2 Holden Commodore VE, all models are flex-fuel compatible and able to run on general petrol or E85 ethanol technology due to upgraded engines from Buick and Chevrolet.