Liquid biofuel as a replacement for fossil fuel

Page last updated: Thursday, 7 March 2024 - 8:56am

Please note: This content may be out of date and is currently under review.

Nearly all biofuel systems (mainly biodiesel and bioethanol) produce fewer greenhouse gas emissions than fossil fuels (diesel and petrol derived from fossil oil).

The Department of Primary Industries and Regional Development provides the following information to support land manager decisions about investing in carbon farming.


Producing and using biofuel as a replacement for fossil fuels is an opportunity for farmers to diversify income, reduce costs, and assist in reducing global greenhouse gas emissions – mainly carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O). Nearly all biofuel systems produce less greenhouse gas emissions where they replace fossil-based energy.

Additional greenhouse gases can be prevented from entering the atmosphere–biosphere by:

  • reducing the use of fossil fuels by introducing biofuels
  • reducing the use of fossil fuels by shifting to less carbon-intensive fossil fuels.

Benefits from biofuels

Carbon benefit of using biofuels is fewer greenhouse gas emissions from production practices requiring fuel consumption.

Co-benefits of using biofuels are:

  • production of biodiesel feedstock for own use
  • biodiesel processing equipment is cheap, mobile and readily available
  • the by-product (oilcake) can be used for animal feed
  • canola can be used as a break-crop for weed control
  • security of own fuel supply, thereby avoiding ‘peak oil’ which could limit or interrupt supply
  • rural development, job creation, and support to agriculture.

Farmers have opportunities to produce biofuel feedstock in most of the Western Australian grainbelt, and in the wet tropics or areas with sustainable irrigation potential (e.g. aquifers) in the rangelands. Commercial production of biodiesel feedstock offers diversification options, with the potential to stabilise price volatility of crops.

Risks in producing biofuels

  • Variations in world fossil oil price may create an unstable market for biofuels.
  • Price of biodiesel feedstock (raw materials) increases to a point where biodiesel production is not economically viable.