For more than a decade, commentators, analysts and industry have warned Australian governments about fuel vulnerability. Yet little has changed. Despite repeated reviews and rising geopolitical tensions, there has been little concrete action to strengthen our sovereign fuel capability. As recent global conflicts—including the invasion of Ukraine, Houthi attacks on crude oil tankers in the Red Sea and Iranian threats to close the Strait of Hormuz—demonstrate, fuel supply is no longer a theoretical risk; it’s an active, accelerating threat.
Our continued reliance on imported refined fuels is a major blind spot, especially in northern Australia. The region is central to our defence posture and economic prosperity but is served by thin supply chains, single pipelines and just-in-time logistics. This fragility could become a strategic liability in any conflict or emergency.
Biofuels have long been championed as an alternative to fossil fuels and an enabler of the transition to clean energy, and rightly so. They offer emissions reductions, economic opportunities for farmers and regional manufacturing, and a pathway to decarbonising heavy transport. But biofuels alone cannot meet Australia’s liquid fuel demands, let alone guarantee fuel availability in times of crisis. Limited feedstocks, land constraints and scale limitations mean they can be only part of the solution.
Synthetic fuels—produced using renewable energy, captured carbon and water—offer a compelling complement. Unlike biofuels, they don’t rely on agricultural inputs and can be produced close to where they’re needed, including in remote or contested areas. This decentralised production potential is ideally suited to defence operations, humanitarian response, and disaster recovery, where fuel access is essential.
Northern Australia could be the proving ground for this transformation. With abundant renewable resources, carbon-capture potential and proximity to strategic infrastructure, the north could host a new generation of co-located defence, biofuel and synthetic fuel production hubs.
Despite this strategic potential, the government remains largely disengaged. While civilian sectors cautiously advance bio and synthetic fuel projects, government operations continue to rely almost entirely on imported fossil fuels. This is a missed opportunity. The government could play a catalytic role as a market-shaping buyer, helping to de-risk early-stage production, stimulate demand and establish sovereign supply chains for both bio and synthetic fuels. Targeted investment in synthetic fuel demonstrators at key defence sites, such as Darwin, RAAF Tindal and the Delamere Weapons Range, would send a clear signal to industry, while co-locating production near logistics and training hubs would create economies of scale. Importantly, procurement frameworks must recognise that resilience has a cost, and that cost should be treated not as a budgetary burden, but as a strategic investment in risk mitigation. In a contested or crisis scenario, the true cost is not the price of fuel but the price of not having it.
Twelve years ago, a landmark fuel security report warned that Australia treated fuel as a commodity, not a critical asset. That warning still stands. The 2023 Defence Strategic Review echoed it, calling for action on fuel vulnerabilities and single points of failure, but implementation remains elusive. The 2024 National Defence Strategy skirted the issue entirely.
Australia needs a whole-of-government fuel strategy that elevates energy security to a national security priority. We must value fuel not by its price but by its availability when it matters most. Sovereign fuels, both bio-based and synthetic, may cost more upfront, but they’re far cheaper than the cost of strategic delay or fuel denial.
This is not a call to abandon biofuels; it’s a call to go further. We need both biofuels and synthetic fuels to build a resilient, self-reliant and sustainable fuel future—one that supports regional jobs, drives decarbonisation and ensures Australia’s defence forces can operate when the unexpected hits.