Businesses seeking to build new diesel storage facilities now have access to $200 million worth of grants under the Australian Government’s fuel security package.
The grants are the keystone in the package of measures announced in September to shore up the country’s fuel security by increasing domestic storage and supporting local industry capabilities.
Through the Boosting Australia’s Diesel Storage Program, the government will provide up to $200 million in competitive grants over three years to support the construction of an additional 780 megalitres of onshore diesel storage.
Successful projects will receive grants of up to $33.3 million, with the government covering up to 50% of total eligible project expenditure. Projects are expected to commence construction from mid-2021 and be completed within three years.
The government seeks to target projects that enhance fuel security by being in a strategic regional location or that are connected to existing fuel infrastructure.
The program will also assist industry in meeting the new minimum stockholding obligation by 2024. The obligation will require industry to hold around 40 per cent more diesel than current levels.
Support for local refineries
The support for refineries announced in the 2020–21 Budget has been brought forward and commenced on 1 January 2021.
This involves the government paying the major domestic refineries a minimum one cent per litre of primary transport fuel (petrol, diesel, jet fuel) they produce.
To receive this production payment, refineries must agree to keep operating for the duration of the program.
The government will fund the first six months of the production payment at a cost of $83.5 million. Longer-term arrangements are being worked through and will come into effect no later than 1 July 2021.
Legislative change
Consultation is also ongoing on plans to modernise existing liquid fuel legislation.
To improve the government’s ability to respond to a future market disruption, the new legislation will bring together the Liquid Fuel Emergency Act 1984 and Petroleum and Other Fuels Reporting Act 2017.
It will also give effect to the minimum stockholding obligations, as well as other fuel security reporting requirements.
For more information on the Australian Government’s fuel security package visit the Department of Energy’s information page.
