Biodiesel is used in Australia mainly as a blended transport fuel for trucks, buses, mining equipment, agricultural machinery, and some marine applications. It is still a relatively small part of Australia’s fuel mix, but interest is growing because of fuel security concerns and emissions reduction targets.
Key points about biodiesel use in Australia:
- Australia commonly uses blends such as B5 (5% biodiesel) and B20 (20% biodiesel). The national diesel fuel standard allows up to 5% biodiesel in regular pump diesel without special labelling.
- Biodiesel is produced from:
- used cooking oil
- animal fats (tallow)
- vegetable oils such as canola or soybean oil.
- The fuel is mainly used in sectors that are difficult to electrify quickly, especially:
- freight transport
- agriculture
- mining
- construction.
Australia’s biofuel policy is mostly state-based rather than national:
- Queensland has a biodiesel mandate requiring fuel wholesalers to ensure that 0.5% of diesel sales are biobased diesel.
- New South Wales has promoted biofuels through transport and agricultural programs.
There is also increasing focus on renewable diesel (HVO), which is different from conventional biodiesel:
- Renewable diesel is chemically closer to petroleum diesel and can often be used directly in modern engines.
- Australia approved new paraffinic diesel standards in 2025, helping open the market for renewable diesel products such as Neste MY Renewable Diesel.
Current trends in Australia include:
- Mining and heavy industry
- Companies such as Rio Tinto are testing renewable diesel feedstocks for heavy equipment where battery-electric systems are still difficult.
- Fuel security
- Recent geopolitical fuel supply concerns have increased political support for domestic biodiesel production.
- Agriculture
- Farmers are interested in biodiesel because it can reduce dependence on imported diesel and may create additional markets for oilseed crops and waste products.
Main limitations:
- Australia does not currently produce enough feedstock to replace a large share of diesel demand.
- Some newer diesel engines can have compatibility or maintenance issues with high biodiesel blends.
- Domestic production capacity remains limited compared with total diesel consumption.
Overall, biodiesel in Australia is viewed as a transition fuel — especially valuable for heavy transport, farming, mining, and remote operations where full electrification is harder in the near term.