Cleaner fuels demand mechanism

Summary of a 2026 submission on the Australian cleaner-fuels demand mechanism. The submission document is not published.

The submission supports a demand measure for renewable diesel and sustainable aviation fuel, and rejects the mechanism as drafted. A buy-out price with no floor caps what a producer can earn and gives obligated parties a cheap way to comply without buying fuel. Off-road diesel users reclaim fuel excise through the fuel tax credit, so there is no tax wedge left to make renewable diesel cheaper for mining and agriculture. The submission also argues that a mandate open to imports need not build a single domestic plant.

It asks for a bankable floor, with the buy-out sitting above that floor, and for the excise system to be designed with the mandate rather than beside it.

This is a summary. It is not the submission.