Australian Government set to launch new incentive on low carbon liquid fuels (LCLF)
Australian Government set to launch new incentive on low carbon liquid fuels (LCLF)
The Australian Government has announced a $1.1 billion commitment for the renewable energy sector to accelerate domestic production of low carbon liquid fuels (LCLF), including renewable diesel, sustainable aviation fuel and e-fuels, to help deliver on Australia’s net zero commitments.
These fuels are critical to decarbonising hard-to-abate sectors such as:
- Aviation
- Heavy freight
- Mining.
LCLF can be produced sustainably from:
- Waste materials
- Biomass
- By combining renewable hydrogen with captured carbon dioxide.
Delivered through the Cleaner Fuels Program, the initiative will offer grants to Australian producers of LCLF. It builds on existing support measures, including:
- $33.5 million under the Sustainable Aviation Fuel Funding Initiative
- $250 million through the Future Made in Australia Innovation Fund
- Fuel quality standards for renewable diesel
- Expansion of the Guarantee of Origin Scheme to verify emissions from Australian-produced LCLF.
The program aims to attract investment, support project establishment, and improve competitiveness with international producers.
Applicant information
The Australian Government plans to finalise the details of the scheme mid-2026. Detailed design will be developed in consultation with industry, with applications expected to open in 2026–27.
We anticipate the application process will be complex, and we recommend that applications should be prepared in advance ahead of the funding round opening.
How BDO can help
BDO has successfully secured numerous government grants for a range of clients across many different industries. We assist with the preparation of applications and partner with you to help achieve the best possible outcome. If you have any questions regarding the LCLF incentive, or any other government grants, please contact the R&D and government incentives team.
