AUSTRALIA could see a bioenergy boom if the government gets its legislation right, industry advocates say.
The federal government believes the untapped energy source could play a big role in the nation's emissions reduction strategy, and has asked the Australian Renewable Energy Agency to develop a bioenergy strategy.
Nuffield scholar and a fourth generation farmer Steven Hobbs said if the federal government got the bioenergy strategy right, the industry could be "quite phenomenal".
He began experimenting with alternative fuel sources nearly 20 years ago, after becoming inspired by one his grandfather's farming photographs of a horse-drawn plough.
"It dawned on me my grandad used to grow fuel for his 'organic tractors' - oats to feed his horses," he said.
"It got me thinking quite serious that as farmers, should we be looking at harnessing our own energy?"
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He bought a small processing plant in the 90s and experimented for more than decade. Indian mustard, the grandparent of canola, "worked really well".
However, during that time he saw several regulation changes that eventually made the venture too difficult to continue.
"The biggest issue we face in Australia is, we don't have the right legislation in place to encourage it," he said.
"We don't have certainty for people to invest."
Mr Hobbs said the bioenergy industry just needed the right fertile grounds to blossom.
"It's been proven it can work - look at Europe for example, it's shown what the industry can become when you put in place the right legislation," he said.
"They've legislated national targets, that ensure a certain amount of their fuel mix is biofuel. That gives investment certainty."
For rural economies, bioenergy could be "a real golden goose".
"You can provide new markets and new opportunities for farmers to supplement their income," Mr Hobbs said.
"It's not a simple matter of growing crops for fuel. There's value adding opportunities, using the waste to feed animal or to create biogas for electricity.
"I really do see it as a once in a lifetime opportunity to have a serious discussion."
Should the government get the legislation right, biofuels could be "a small part of almost any operation".
"A back-of-an-envelope calculation shows you could dedicate five per cent of your cropping rotation to biofuel and provide enough fuel for your whole operation," Mr Hobbs said.
"There could be regionally-based processing plants, so farmers have the ability to deliver crops and take back fuel."
ARENA is calling for public submissions to help it develop the industry growth strategy.