As Australians queue for fuel, they should ask themselves one question

Australians queuing this week to pay soaring prices for petrol and diesel should ask themselves a simple question: why has China spent the past 15 years building the world’s largest renewable energy system? Why has China poured trillions into manufacturing and exporting electric vehicles, solar panels, wind turbines, batteries and smart grids — to the point that as you sit in traffic in Australia, you are increasingly likely to be behind a Chinese-made BYD than a Tesla?

Here’s a hint: it’s not just — or even mainly — about climate change.

It’s about national security.

China’s leadership has long understood a basic strategic reality that many countries, including Australia, are only now confronting: in a world of intensifying geopolitical instability, foreign energy dependence is a massive strategic vulnerability. The ability to manufacture your own energy domestically and at scale is central to national security.

Renewables transform energy from something you import into something you make at home. Unlike fossil fuels, which must be continuously purchased from volatile global markets, renewable systems convert domestic resources — including sun, wind, agricultural wastes and fuel crops — into ongoing energy supply.

When you build renewable energy systems, you reduce exposure to price international shocks, supply disruptions and foreign coercion, while creating new sources of industrial and export dynamism and job creation — the keys to broader economic and social security.

This is why renewable energy is described as a national security multiplier

The current crisis in the Middle East is simply the latest reminder of this reality. Australia currently imports around 90 per cent of its refined liquid fuels: petrol, diesel and jet fuel. That is not just an economic exposure. It is a massive strategic vulnerability — one we’ve been warned of repeatedly for years.

And the risk runs deeper than petrol prices. Diesel underpins freight, mining and agriculture. Fertiliser — produced from ammonia — underpins food production. Critically, ammonia is made using natural gas as both a feedstock and energy source. When global gas markets tighten, fertiliser production falls and prices spike. Farmers in regional Australia will soon be paying $4 per litre for diesel and will have to wait in a queue to get it. We are about to find out how much our ability to buy food at home depends entirely on our ability to buy fuel from overseas

That same ammonia that is needed for agriculture is used to make urea for AdBlue — the diesel exhaust fluid essential to modern trucks and heavy machinery. Australia’s reliance on imported urea means gas shocks overseas can quickly cascade through food, freight and industry. These are not hypothetical risks. They are structural dependencies.

They also point to where the transition must now focus, because we cannot electrify everything overnight. Heavy transport, aviation, agriculture and key industrial processes will rely on liquid fuels for years to come.

This is where renewable diesel, sustainable aviation fuel (SAF), and green ammonia become central to national security. Australia has abundant plant biomass alongside world-class solar and wind resources. That combination creates a powerful opportunity: to produce low-carbon liquid fuels that can be used within existing engines, aircraft and infrastructure — reducing oil dependence without waiting decades for full electrification.

SAF is the clearest example. In the United States and Europe, mandates and incentives are driving rapid scale-up, airlines are locking in supply, and capital is flowing. SAF is becoming a strategic industry. Yet Australia, despite extraordinary potential, risks falling behind, importing these fuels rather than producing them for both domestic and export purposes.

The same logic applies to fertiliser. With sufficiently low-cost renewable electricity, Australia could produce green hydrogen and green ammonia at scale. This would reduce exposure to global gas shocks, strengthening domestic food and industrial security while laying the foundations for future economic vitality and export dynamism.

These are not niche opportunities. They are core elements of what a secure energy system andprosperous economy look like in the 21st century.

And they point to a broader shift in how we should understand the purpose of the energy transition and how to govern it effectively.

The purpose of the energy transition is to boost national security across multiple dimensions: energy, economic, environmental, social and geostrategic.

This goal demands green energy statecraft: the deliberate use of policy, finance and coordination tools to accelerate the build-out of clean energy systems and industries in ways that enhance national security across multiple domains.

Finding our own way

For Australia, as a trade-dependent middle power with limited fiscal headroom, this does not mean copying China’s scale or America’s subsidy model. It means designing targeted, high-leverage, outward-oriented policy instruments that crowd in private capital, anchor industrial capability, and deepen strategic partnerships across the Indo-Pacific.

At present, however, there is a gap between government ambition — which is real — and execution.

Australia speaks of a Future Made in Australia and of becoming a renewable energy superpower through the export of low carbon products. But delivery remains fragmented: driven by project-by-project investment, constrained by uncertain demand, high financing costs and weak coordination between energy and industry policy.

If national security is the objective, this is not enough. We need policy tools that actively shapemarkets — creating demand certainty, lowering risk and coordinating investment at scale, particularly in first-of-a-kind industries like SAF, renewable fuels and green iron.

This is where instruments like the Clean Commodities Trading Initiative (CCTI) and a national Scheme Finance Vehicle (SFV) become critical.

By acting as a sovereign offtaker, the CCTI can underwrite long-term demand for emerging exports,  including green fuels, green iron and other energy-intensive products, giving investors the confidence to start building, now. By ensuring supply, the CCTI also makes the introduction of mandates less risky for governments, industry and consumers.

A national SFV can aggregate industrial demand, standardise contracts and unlock financing for large-scale renewable supply linked directly to strategic sectors. This solution is already being applied to decarbonise and revive the Tomago aluminum smelter, and is a model with broad applicability.

Instruments like a Transition Tax Incentive are also critical to market-formation of electrified mining equipment through market signals to manufacturers, enabling the deployment of domestic renewable energy infrastructure at scale. These policies are vital to decoupling Australia’s largest economic sectors from over dependence and overexposure to volatile, inflationary global fuel markets.

We also need new investment in applied research such as the proposed Bioenergy Cooperative Research Centre that is bringing together key players from across the bioenergy supply chain to scale up the industry.

These are not inward-looking subsidy schemes. They are outward-oriented instruments of middle-power statecraft Their purpose is to position Australia as a reliable supplier of clean energy and clean commodities to key partners — including Japan, South Korea and countries across Southeast Asia — that are themselves seeking to decarbonise while enhancing their own energy security.

In this sense, green energy statecraft is about building resilient interdependence on new terms — not around fossil fuels, but around clean production, long-term supply agreements and shared strategic interests in a more stable regional order.

This is Australia’s opportunity. But it is also where the politics will become most contested.

For decades, Australia’s energy policy has been shaped by a political economy deeply entwined with fossil fuel interests. Coal and gas have not just been industries; they have been sources of influence — shaping narratives, slowing reform, and, at times, narrowing the scope of what is considered politically feasible.

As the shift to a new energy system accelerates, those pressures will not disappear. Parts of the political spectrum will continue to frame the transition as a cost, a risk, or an ideological project — rather than what it is: a strategic imperative.

But this is precisely where the debate needs to change.

Energy independence. Industrial capability. Resilient supply chains. Reduced exposure to global shocks. These are core national security objectives. And in the 21st century, they are increasingly achieved not through fossil fuel dependence, but through clean energy systems. That should be a conservative argument as much as a progressive one.

The energy transition, properly understood, is not a burden. It is a national security multiplier.

The question is not whether the energy transition will happen. The question is whether Australia will use the transition strategically to build national power, or continue to absorb shocks from a fossil fuel system it does not control.

This article was originally published by The Energy on 24 March 2026.