The Queensland Government announced it will invest $25 million to support the production of renewable diesel at Ampol’s Lytton refinery, in a move it says will strengthen the state’s fuel security and local refining capability.
In a media release, the government said the project would enable what it described as Australia’s first sustainable domestic production of second-generation low carbon liquid fuels, using biogenic feedstocks such as waste oils, plant oils and animal fats alongside conventional diesel.
The initiative has been declared a Prescribed Project by Deputy Premier and Minister for State Development Jarrod Bleijie, allowing the Coordinator-General to streamline approvals.
Construction is expected to begin by mid-2027, with initial production of up to 20 million litres of renewable diesel per year targeted from 2028.
According to the Queensland Government, the funding will support modifications to Ampol’s existing diesel hydrotreater, as well as associated infrastructure including storage tanks, blending systems and a truck handling gantry.
The project is expected to process between 15 and 20 kilotonnes of feedstock annually in its initial phase and create 46 jobs, including 40 during construction and six ongoing operational roles.
Premier David Crisafulli said the investment formed part of a broader strategy to improve fuel security.
“Fuel security means restoring Queensland’s ability to drill, refine and store – and this project means more fuel produced locally, for Queenslanders,” he said.
“These projects are important to ensure we are never again left at the mercy of foreign nations, at the end of a global supply chain.”
The government said the renewable diesel project complements other measures, including progressing oil production from the Taroom Trough, expanding refinery capability and increasing fuel storage capacity, as part of a wider plan to secure supply in the short, medium and long term.
Bleijie said the project was the first to receive funding under the state’s $180.6 million Sovereign Industry Development Fund, which prioritises sectors including biofuels, biomedical and defence.
“Long before this national fuel crisis, the Crisafulli Government had already identified the biofuels sector as a credible, viable and important industry to invest in and secure our fuel future,” he said.
“Within a few short years, Queensland will be producing hundreds of millions of litres of liquid gold because the right investments were made, and the right partnerships were forged.”
He also criticised the previous government’s approach to fuel security and industry policy, saying the current administration was taking a “disciplined, evidence-based approach” to drive investment, jobs and sovereign capability.
The government said the current project could also provide a pathway for future expansion, with potential to produce up to 750 million litres of sustainable aviation fuel and renewable diesel annually by the early 2030s.
