The Energy You Can't Make Is Energy Someone Else Controls

Why sustainable aviation fuel and Australian batteries are a security decision first, and a climate decision second.

A country that imports its fuel and its storage imports its vulnerability with them.

For most of the past three decades that sounded like a think-tank warning, the kind of line that gets nodded at in a policy forum and forgotten by morning tea. In 2026 it stopped being theoretical.

The year the warning came true

When the conflict in the Gulf closed the Strait of Hormuz, Australia found out quickly what dependence costs. The strait carries about a fifth of the heavy sour crude that Asian refineries in China, South Korea, Singapore and Malaysia turn into jet fuel. Those are the refineries we rely on. Domestic airlines cut one in every twenty flights through May and June and cancelled further services, with jet fuel costs having doubled since February. Those cuts were later extended through September, and remote and regional communities, particularly in the Northern Territory and regional Queensland, faced intermittent shortages.

Jet fuel was the pressure point for a reason. Unlike petrol and diesel, it isn't held in large bulk volumes; it sits mostly in storage around airports, which makes it the first thing to hurt when supply is disrupted.

The response was fast and expensive. Fuel excise was halved, cutting 26 cents from every litre of petrol, and the government is establishing a $3.2 billion Australian Fuel Security Reserve holding around a billion litres of diesel and jet fuel, lifting reserves of both to 50 days. By mid-September, stocks were back above pre-conflict levels.

That's good crisis management. But look at the structure underneath it. Only two refineries remain in the country, Viva at Geelong and Ampol at Lytton, and Australia hasn't met its IEA 90-day reserve obligation since 2012. Those refineries supply around 20 per cent of national demand, and they still run on crude shipped in from offshore. Liquid fuels account for more than half of Australia's final energy demand. When the Geelong refinery fire hit, it showed how a domestic infrastructure failure can stack on top of import stress in ways nobody models well.

Reserves buy time. They don't buy independence. A stockpile is a countdown clock, and 50 days is still a countdown.

The same story, slower, in batteries

Batteries are following the same script. It's just unfolding more quietly.

China's export controls target the true chokepoints of the battery supply chain — anode and cathode materials, where options outside China are extremely limited. LFP chemistry, which China dominates, already makes up the majority of the energy storage market. The IEA's 2026 Critical Minerals Outlook estimates that reinstating controls on these materials could put $6.5 trillion a year of downstream production at risk. The controls introduced in October 2025 were suspended for one year, and that suspension expires in November 2026. That's two months away.

Now look at how Australia is positioned. We dig up the minerals and ship them out largely unprocessed. We then pay to bring them back as finished cells. The Cheaper Home Batteries programme retained $7.2 billion over the forward estimates. Meanwhile, the 2026 Budget cut the Battery Breakthrough Initiative to $142.32 million, and ARENA is no longer taking new applications.

We are funding the installation of batteries faster than ever while pulling back support for making them here. A grid firmed by imported storage is firm only while the imports keep arriving.

The quieter case

Most of the public argument for sustainable aviation fuel and domestic battery manufacturing is about emissions. That argument is real. It's also incomplete.

SAF is a drop-in fuel. It works in today's aircraft, today's pipelines and today's airport tanks. Australia has the feedstocks to make it, including canola, sorghum, sugar and waste. Yet SAF isn't currently produced in Australia, and globally it costs roughly two to five times as much as conventional jet fuel.

The policy signal is shifting. The ten-year Cleaner Fuels Program was launched to drive onshore production of renewable diesel and SAF, with the first drop-in fuels expected by 2029. In this year's Budget, that same $1.1 billion program sits inside the fuel security package, framed explicitly as diversifying away from imported fuels to make the economy more resilient to oil shocks. A program that began life as climate policy is now being described as security policy. That reframing is the whole argument in a sentence.

Battery sovereignty works the same way. Assembling imported cells into packs isn't sovereignty. The leverage sits upstream, in the anode and cathode materials. Whoever controls the carbon in the anode controls the battery.

Same investment, two dividends

This is where the two stories meet.

The biomass that becomes jet fuel can also become the engineered carbon inside a battery anode. An integrated biorefinery doesn't have to choose between fuel security and storage security. It can serve both from one feedstock stream, one site and one workforce, in regional Australia where the feedstock grows. The country gets lower emissions and deeper resilience. The project gets diversified revenue. The same capital does double duty.

The usual objection is price. SAF costs more per litre than fossil jet. Domestic cells cost more than imported ones. On a per-unit comparison in a calm market, that's true.

But 2026 showed us the other side of the ledger. It showed us what cancelled flights cost, and what a halved excise costs the budget. It showed us what a $3.2 billion strategic reserve costs to build, and what it costs when remote communities run short of diesel. Resilience has a value that never appears in a per-litre comparison until the day you need it.

Decarbonisation is the headline. Energy security is the foundation underneath it. Build the capacity at home and you get both, from the same investment.

The pathway to net zero and the pathway to energy sovereignty turn out to be the same road. The question isn't whether we can afford to build it here. It's whether we can afford not to. This year gave us a preview of the bill.

#EnergySecurity #SustainableAviationFuel #SAF #BatteryManufacturing #AustralianEnergy #NetZero #EnergyTransition #Sovereignty