The news follows a 2013 proposal by Gas Energy Australian and the VACC, announced after Ford, Holden and Toyota revealed they would exit the Australian manufacturing scene by the end of 2017.
By utilising the leftovers from the respective plants in Broadmeadows, Geelong, Elizabeth (SA), Fisherman’s Bend and Altona, the proposal suggested Australia could become a world leader in LPG conversion.
Australia’s abundance of gas fuels was cited as a major motivator, and Ford’s Geelong engine plant has since become the main focus for establishing the facility.
The previous state government in Victoria had already expressed its support for the proposal, and now Victoria’s new state government has followed its predecessor by tipping in some extra cash.
If established, the facility would convert new cars to run on LPG as soon as they arrived in Australia without voiding the carmaker’s warranty, along with researching advancements in LPG technology.
The plant could also absorb some of the employees set to be displaced by Ford, softening the blow that is set to see Geelong’s unemployment figure soar at the end of next year.
Aside from the establishment of such a facility, the study will also assess the overall picture of the LPG industry in Australia in the face of fading popularity.
Following the end of the Federal Government’s LPG incentive scheme, sales of new cars with dual-fuel or dedicated LPG running gear from the factory are almost non-existent in some market segments.
This is partly due to falling petrol and diesel prices in recent months, and partly due to limited choice - as the Holden Commodore and Caprice along with Ford’s Falcon are the only models available in Australia with dedicated LPG engines.
Just 20 private buyers in the passenger and commercial segments combined chose the LPG option for their new cars last month, while non-private sales totalled a slightly healthier 154.
“Developing LPG manufacturing and conversion facilities and a centre of excellence would secure the automotive industry and jobs in Geelong,” Treasurer of Victoria, Tim Pallas, said.
“We’re keeping our promise and doing the study. It will tell us whether or not the proposal will work.”
The feasibility study is expected to take four months.
MORE: Victoria - State Budget Outlines Public Transport, Roads Spending
MORE News & Reviews: LPG | Victoria | Industry