ARENA Cleaner Fuels Program

Purpose and Program Overview

The Australian Renewable Energy Agency (ARENA) has been appointed as the delivery agency for the Australian Government’s Cleaner Fuels Program, a $1.1 billion initiative designed to accelerate the establishment of a domestic low carbon liquid fuels (LCLF) industry. Announced in September 2025, the Program aims to reduce Australia’s reliance on imported fuels by supporting the domestic production of LCLF, with a particular emphasis on sectors where electrification is not yet a viable decarbonisation pathway, such as aviation.

The Cleaner Fuels Program provides production-linked financial incentives over a 10-year period, targeting LCLF projects that are advanced in development and progressing toward a final investment decision (FID). The Program prioritises projects with strong potential to reach commercial production in the near term, thereby contributing to both fuel security and Australia’s broader emissions reduction objectives.

In addition to the Cleaner Fuels Program, ARENA administers the Future Made in Australia Innovation Fund, which includes a dedicated LCLF stream with $250 million available to support earlier-stage industry development. ARENA has also previously committed $33.5 million across five projects through its Sustainable Aviation Fuels Funding Initiative, reflecting its ongoing focus on building a sustainable domestic LCLF sector.

Key Grant Details

• Grant Amount: Total program funding: $1.1 billion
• Delivered by: Australian Renewable Energy Agency (ARENA)
• Program announced: September 2025
• Applications: Not yet open — interested parties are encouraged to register for updates via the ARENA funding page
• Incentive structure: Production-linked incentives paid over a 10-year period
• Applicable location: Australia-wide (all states and territories)
• Co-contribution: Not explicitly specified; further details to be confirmed upon application opening

Priority Sectors

The Cleaner Fuels Program explicitly targets hard-to-abate transport sectors where direct electrification is not yet a practical solution. The primary sector of focus is:

• Aviation — including sustainable aviation fuels (SAF) production

The Program also encompasses broader low carbon liquid fuels production applicable to other hard-to-abate transport sectors. Projects involving advanced feedstocks, biogenic feedstocks, and other approved LCLF production pathways are expected to be eligible, subject to the forthcoming program guidelines.

Funding Scope

The Cleaner Fuels Program operates as a single national program with the following funding structure:

• Total funding pool: Up to $1.1 billion in grant funding
• Incentive model: Production-linked incentives (i.e. payments tied to verified fuel production outputs, not upfront capital)
• Program duration: Incentives provided over a 10-year period per supported project
• Target projects: Those advanced in development, approaching a final investment decision (FID), and targeting near-term production

Specific per-project funding caps, minimum grant thresholds, and any tiered funding streams will be confirmed when application guidelines are formally released. Interested parties are encouraged to register via the ARENA funding page for program updates.

Eligibility Criteria

Full eligibility criteria are subject to the release of formal program guidelines. Based on currently available information, prospective applicants should note the following general parameters:

• Applicant type: Entities involved in LCLF project development, including project developers and LCLF producers
• Project stage: Projects must be at an advanced stage of development, progressing toward a final investment decision
• Production readiness: Projects must demonstrate a credible pathway to near-term commercial production of LCLF
• Geographic focus: Projects must relate to the development of domestic LCLF production capacity within Australia
• Fuel type: Projects must produce fuels that qualify as low carbon liquid fuels under the program’s definition, which is expected to align with policy guidelines developed by the Department of Infrastructure, Transport, Regional Development, Communications, Sports and the Arts (DITRDCSA)

Additional criteria relating to ABN registration, financial standing, insurance obligations, and co-investment requirements are expected to be confirmed upon application opening.

Eligible Activities and Expenses

As a production-linked incentive program, the Cleaner Fuels Program is anticipated to support activities directly related to the construction, commissioning, and operation of LCLF production facilities. Eligible activities are expected to include:

• Capital works associated with the construction or expansion of LCLF production facilities
• Technology integration, including advanced conversion technologies for LCLF production
• Feedstock procurement and supply chain development necessary for production
• Workforce-related expenditure tied to the operationalisation of production assets
• Compliance activities required to meet regulatory and certification requirements for LCLF

As this is a production-linked incentive, payments are expected to be made upon verified fuel production rather than as upfront capital grants. Final eligible expense categories will be confirmed in program guidelines.

Assessment Process

The Cleaner Fuels Program is a competitive grant program administered by ARENA. Projects will be assessed based on their alignment with program objectives and merit criteria. While formal assessment criteria are yet to be published, the following considerations are anticipated, consistent with ARENA’s standard assessment practices:

• Project merit — technical feasibility, production credibility, and readiness to proceed to FID
• Strategic alignment — contribution to Australia’s domestic LCLF industry development and net zero transition objectives
• Value for money — efficiency of the funding incentive relative to projected fuel output and economic benefit
• Fuel production potential — volume and timeline of anticipated LCLF production
• Stakeholder and supply chain capability — demonstrated capacity of the applicant and its partners to deliver the project

Policy design consultation was conducted by DITRDCSA in conjunction with ARENA in late 2025. Formal program guidelines and assessment criteria are expected to be published ahead of the application opening.

Recent Program Updates

• May 2026: ARENA was formally announced as the delivery agency for the Cleaner Fuels Program.
• September 2025: The Cleaner Fuels Program was announced by the Australian Government as part of its broader Future Made in Australia agenda.
• Late 2025: Policy design consultation was conducted jointly by DITRDCSA and ARENA, informing the program’s structure and eligibility parameters.
• Concurrent programs: ARENA is also administering the Future Made in Australia Innovation Fund (LCLF stream — $250 million available) and has previously funded five projects totalling $33.5 million under its Sustainable Aviation Fuels Funding Initiative.

Application Tips

Given that the Cleaner Fuels Program is not yet open for applications, prospective applicants should take the following preparatory steps:

• Register for updates via the ARENA Cleaner Fuels Program funding page to receive timely notification when guidelines and application processes are released.
• Review publicly available information from the policy design consultation published by DITRDCSA to understand the intended program scope and eligibility framework.
• Assess your project’s readiness against anticipated eligibility criteria, particularly in relation to development stage and proximity to a final investment decision.
• Prepare key documentation in advance, including project development timelines, technology descriptions, feedstock supply arrangements, and financial modelling.
• Align project objectives with the Australian Government’s stated priorities for domestic LCLF production, fuel security, and emissions reduction in hard-to-abate transport sectors.
• Engage early with supply chain partners, offtake counterparties, and technical advisors to strengthen project credibility and demonstrate production readiness.
• Consult the Future Made in Australia Innovation Fund (LCLF stream) as a potential complementary or alternative funding pathway for projects at an earlier development stage.

Where to Get Help

Navigating a competitive, large-scale grant program such as the Cleaner Fuels Program requires careful preparation and a thorough understanding of program requirements. Consider consulting a grant specialist like Pattens Group for a personalised eligibility assessment and expert assistance in preparing a strong, compliant, and competitive application. Contact us today and get connected with Australia’s best grant specialist, boasting over 35 years of experience in the industry and a 100% success rate.

For official guidelines, application details, templates, and further information, visit the official ARENA Cleaner Fuels Program funding page and other associated Australian Government websites.