Gavin Hughes: CEO Biofuels Association of Australia

After investing more than $100 million into renewable energy, the Australian biofuel industry has been dealt a blow by the Federal Government’s decision to abandon the commitment made to retain the effective excise free status of renewable biofuels until 2021.

While the impact of the withdrawal of this support is still being assessed, Prime Mover spoke to industry spokesman, Gavin Hughes.

Q: Gavin, please talk us through what exactly happened.
A: The short, succinct story is that we were in a position where it was confirmed for the period between 2011 and 2021 that biodiesel would remain essentially excise free. After that, they would review it. Based on that decision and on previous arrangements, people invested more than $100 million into plants and equipment. The industry made this investment based on what it thought was to be a guaranteed return because it was set in legislation.

Then, all of a sudden, the message to Australian industry is that you can’t rely upon legislation anymore. Australia has always been seen as a safe place to invest because it has a stable political framework and now that’s all been thrown into question. In addition we see a lot of product coming in from Argentina and Indonesia that is subsidised very heavily… which means local producers have been unable to compete over the past 12 months or so. A lot of that biodiesel is being brought in by some large miners.

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