The Australian Government has committed $1.1 billion to support the production of low carbon liquid fuels (LCLF) in Australia.
LCLF - such as renewable diesel, sustainable aviation fuel and e-fuels - can help reduce emissions in hard-to-abate industries.
Hard-to-abate industries can include:
- aviation
- heavy freight
- mining.
LCLF can be produced sustainably from:
- waste materials
- biomass
- by combining renewable hydrogen with captured carbon dioxide.
These fuels will play an important role to deliver on Australia's Net Zero commitments.
The Cleaner Fuels Program will offer grants to domestic producers of LCLF. It builds on the government's support for the development of an Australian LCLF industry, including:
- $43.5 million under the Sustainable Aviation Fuel Funding Initiative
- $250 million through the Future Made in Australia Innovation Fund
- establishment of fuel quality standards to support renewable diesel
- expansion of the Guarantee of Origin Scheme to track and verify emissions from Australian produced LCLF.
The Cleaner Fuels Program will attract investment in LCLF projects in Australia. It will help projects to establish and compete with existing LCLF production overseas.
Detailed design of the program will be undertaken later this year in consultation with industry.
Government plans to finalise details of the scheme in mid-2026, ahead of opening applications in 2026-27.
