Australia's Farmers Have a Fuel Security Plan and It Grows in Paddocks

Next time you pull up to the bowser and reach for the green E10 nozzle, have a think about where that fuel started its life. Some of it grew in a Queensland cane paddock or a wheat field out past Dubbo. And if a powerful new alliance gets its way, a lot more of what goes into your tank is going to come from Aussie soil rather than a tanker parked off the coast of Singapore.

The fuel crisis that emptied servo storage tanks and sent prices through the roof earlier this year has done something interesting. It has dragged an old argument back into the spotlight, and this time the people making it are hard to ignore.

The unlikely alliance that just put its hand up

On 5 May, four of the biggest names in Australian agriculture and manufacturing did something they almost never do. They lined up together and made the same demand. The National Farmers' Federation, GrainGrowers, the Australian Sugar Manufacturers and CANEGROWERS jointly called on the federal government to bring in an immediate national mandate for ethanol and biodiesel.

Between them, these bodies speak for more than 150,000 farming businesses and over 16 sugar mills. That is not a fringe lobby group. That is a serious chunk of regional Australia putting its weight behind a single idea.

Their pitch is blunt. "Ethanol is one of the only supply side solutions available to the Government for the fuel crisis today," said Ash Salardini, chief executive of the Australian Sugar Manufacturers. CANEGROWERS boss Dan Galligan put it more plainly still. "After decades of advocacy, the time for action is now."

The numbers they are throwing around are big. Over thirty million tonnes of sugarcane gets harvested every year across Queensland and northern New South Wales, and the group reckons a properly backed local biofuels industry could eventually churn out more than three billion litres of fuel a year. That is fuel made here, from crops grown here, refined here, with the jobs staying here.

What ethanol actually is, and why it matters now

Here's the bit most people never think about. That E10 you have been buying for years is petrol with up to ten per cent ethanol blended in, and ethanol is basically alcohol distilled from plants. Sugarcane, wheat, sorghum, whatever has enough starch or sugar to ferment. It is the same chemistry that makes your beer, just pushed a lot further.

NFF chief Mike Guerin summed up the strategic logic with one line that stuck with me. "We cannot afford to be in this position again." He's talking about the months when Australia discovered, the hard way, just how exposed we are. We import the overwhelming majority of our refined fuel, mostly from a handful of refineries in Asia. When a conflict on the other side of the world chokes the supply lines, there is not much sitting in reserve to fall back on. Drivers found that out at the bowser in a hurry.

Growing your own fuel does not fix that overnight. But every litre of ethanol blended into the national pool is a litre that did not have to come off a ship. To put this in perspective, three billion litres is a meaningful dent in a country that burns through roughly twenty billion litres of petrol a year.

We've tried this before, and it didn't go to plan

Here's the fascinating backstory. Australia is not new to ethanol mandates. We actually had a crack at this nearly two decades ago and it went sideways in a way worth remembering.

New South Wales brought in the country's first biofuels mandate back in October 2007, requiring fuel wholesalers to make sure ethanol made up at least two per cent of the petrol sold across the state. The plan was ambitious. By 2011 the target was supposed to climb to six per cent, and the original legislation even imagined banning regular unleaded altogether by January 2012 to force the issue.

It never happened. The minimum sale targets have not been met once since the scheme started. Drivers were wary, retailers dragged their feet, and the dream of phasing out regular unleaded quietly died. Queensland runs its own mandate to this day, requiring four per cent of unleaded sales to be biobased, but a fresh bill to strengthen the state's biofuel rules failed to pass parliament in late 2023.

So when the farming groups say they have been at this for decades, they mean it. What's different now is the fuel crisis. An argument that used to be about climate and country jobs has suddenly become an argument about whether the bowser runs dry. That changes the politics entirely.

How the rest of the world does it

Compared to other countries, Australia has been timid. Brazil is the standout. They have mandated a blend of at least twenty seven per cent ethanol in their petrol since 2015, and last year the government pushed that up to thirty per cent. Most cars on Brazilian roads are built to run on it without blinking. Their sugarcane industry underpins the whole system.

The United States sits at ten per cent ethanol as the standard blend, the same E10 we know, with E15 and E85 slowly spreading. Even that modest American baseline is locked in nationally under their Renewable Fuel Standard.

Australia, for all our farmland and sunshine, has no national mandate at all. We rely on a patchwork of state schemes that mostly underperform. The farmers' point is hard to argue with. We grow the feedstock, we have the mills, and we are shipping in fuel while the raw ingredients to make our own sit in paddocks back home.

What this means for you at the bowser

Let's get practical. If a national mandate ever lands, the most visible change for most drivers would be more E10 prices showing up at more servos, and fewer stations quietly dropping it. E10 usually sits a couple of cents cheaper per litre than standard unleaded petrol prices, which is why plenty of Sydney and Brisbane drivers already reach for it.

The thing worth keeping in mind is that ethanol carries a little less energy than petrol, so a tank of E10 gets you very slightly fewer kilometres, roughly two to three per cent. For most people the price saving still comes out ahead, but it is not free money. Worth doing your own sums on the savings calculator if you want to know whether E10 actually pays off for your car and your driving.

One genuine caution. Not every vehicle is happy on ethanol blends. Most cars built after 2000 handle E10 fine, but some older engines and a few imports can have issues with fuel lines and seals. Check your owner's manual or the sticker inside the fuel flap before you switch. A higher national mandate would not force ethanol into your tank if your car can't take it, but it would make the blended stuff a lot harder to avoid.

The bigger picture

This push is landing at a moment when fuel security has gone from a dusty policy paper to a kitchen table worry. The temporary excise relief that softened the blow is winding down, refineries are juggling supply, and the country is staring at the second half of 2026 wondering what the next shock looks like.

A homegrown biofuels industry is not a silver bullet. It takes years to build the mills and lock in the supply chains, and ethanol has its own quiet costs around food prices and farmland use that deserve an honest hearing. But the strategic argument has rarely looked stronger. When the ships stop coming, a paddock that keeps growing is worth a lot.

Whether Canberra moves on it is another question. Decades of advocacy say don't hold your breath. But the politics have shifted, and this is the most serious push the idea has had in years.

What to take away from all this:

The fuel crisis exposed how much we rely on fuel arriving by sea. Don't be surprised if the answer politicians reach for ends up growing in a cane field. Keep an eye on this space.