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The fossil fuels are now considered as one of the most environmentally unsustainable energy resources though they are the major energy source for transport sectors and other industries. Increased demand of fuel consumption can lead to the threat of energy supply instability and the consequences of energy uses and emission on both environment and economy are significant concerns of most of the countries. This article reviews the vulnerability of Australian fuel supply chain and a brief description on how biofuels can turn into significant alternative resources of fossil fuel. It has been observed that the prospective applications of biofuel can assist in abating both the greenhouse gas (GHG) emissions and fossil fuel vulnerabilities. Currently, Australia imports about 37% of the total crude oil demand managing a diverse supply chain system. The local refining capacities are not utilized properly. No more technically advanced projects are under consideration to achieve self-sufficiency to make the best use of domestic crudes in order to reduce the fuel imports. Though Australia possesses abundant facility of producing inedible biofuel feedstocks, high costs for feedstock processing has caused shut down of 68% of the existing biofuel refineries. But, biofuels can reduce over 60% of the GHG emissions caused by the same amount of fossil fuels. Though the Government has granted an excise of flat tax on biofuels until 2021 to promote the commercial growth in this sector, the lack of infrastructure investment from the Government has been slowed the progress of this industry since its inception. Establishment of regional biofuels refineries can reduce both the distribution transport cost and import load of the fossil fuels. Being alternative resources, biofuel production can effectively make the best use of deserted or unused lands, creating employment opportunities and reducing both fossil fuel market instability and environment pollutions. (C) 2015 The Authors. Published by Elsevier Ltd.