FMA Innovation Fund Priority: Low Carbon Liquid Fuels

Purpose and Program Overview

The Future Made in Australia (FMA) Innovation Fund — Low Carbon Liquid Fuels (LCLF) Priority is a federal grant program delivered by the Australian Renewable Energy Agency (ARENA). ARENA has allocated up to $250 million to support pre-commercial innovation, demonstration, and deployment of renewable energy and low-emission technologies across the LCLF Priority.

The LCLF Technology Focus Area seeks to accelerate the development and deployment of a domestic LCLF supply chain. The program targets hard-to-abate sectors where liquid fuels remain the most practical decarbonisation option, including aviation, heavy road freight, and maritime transport. It supports projects across three focus areas: commercial-scale domestic production, pre-commercial technology demonstration, and feedstock and supply chain enablement.

The program sits within the “Net Zero Transformation” stream under the Future Made in Australia National Interest Framework. It is designated as Future Made in Australia support under the Future Made in Australia Act 2024. It is delivered by ARENA and governed by the FMA Innovation Fund Program Guidelines.

Key Grant Details

• Total funding allocation: up to $250 million for the LCLF Priority.
• Grant amounts vary by focus area — see Funding Scope section for specific ranges.
• Program launch date: 16 December 2025. The program is currently open.
• No fixed closing date — the FMA Innovation Fund is an open, ongoing program that will remain open until funding is exhausted or ARENA closes it.
• Eligible applicants: Australian entities, including corporations, research institutions, universities, project developers, fuel suppliers, technology OEMs, and consortia.
• All projects must primarily take place in Australia.
• Co-contributions: A minimum 50% co-contribution is typically expected; higher co-contributions are treated as higher merit. For development projects under Focus Area 1, grant requests are expected to be no more than 50% of external costs.

Priority Sectors

Priority Sectors under the 2025 Technology Focus Areas are:

• Aviation
• Long-haul road freight and other heavy road use cases are not suited to electrification.
• Off-road transport and mobile plant, such as mining vehicles
• Maritime
• Construction and agricultural mobile plant and equipment
• Rail

ARENA may consider non-priority sectors for high-merit projects at its sole discretion. Priority Fuel types are Sustainable Aviation Fuel (SAF), Renewable Diesel (RD), and Methanol may consider non-priority fuels for high-merit projects at its discretion.

Funding Scope

The program operates under two streams — Innovation and Deployment — and three Technology Focus Areas, each with distinct funding expectations.

Technology Focus Area 1 — Accelerate Commercial-Scale Domestic Production

ARENA expects to fund grants of $5 million to $15 million for development projects, and $20 million to $50 million for deployment projects under Technology Focus Area 1. However, it may consider grant requests outside this range for high-merit projects.

Grant funding covers development costs such as pre-FEED and FEED activities, with grant requests expected to be no more than 50% of external costs, and deployment costs such as capital equipment, with funding determined by the minimum investment hurdle rate to support a financial investment decision.

Technology Focus Area 2 — Pre-Commercial Technology Demonstration

ARENA expects to fund grants between $2 million and $10 million under Technology Focus Area 2, but may consider grant requests outside this range for high-merit projects.

Grant funding covers project development costs, including engineering design, technology and commercial development, equipment and infrastructure costs for pilots and demonstrations, and testing and certification costs.

Technology Focus Area 3 — Feedstock and Supply Chain Enablement

ARENA expects to fund grants between $1 million and $10 million under Technology Focus Area 3, but may consider grant requests outside this range for high-merit projects.

Grant funding covers costs related to biogenic feedstock production, processing, development and deployment, equipment and infrastructure, and supply chain innovation.

Eligibility Criteria

To be eligible, applicants must hold an Australian Business Number (ABN) and be one of the following:

• An Australian entity incorporated under the Corporations Act 2001
• A corporate Commonwealth entity, Commonwealth company, or government business enterprise
• A body corporate owned or established by an Australian State or Territory
• An Australian local government, council, or representative organisation
• An Australian university or research institution
• An entity operating a Cooperative Research Centre (CRC)

Additional requirements:

• Projects must primarily take place in Australia and involve technology at Technology Readiness Level (TRL) 3 or above.
• Applications must be based on the use of Renewable Feedstocks, being feedstocks of a biogenic origin and/or replenishable in nature. Feedstocks predominantly of fossil origin are not considered under the 2025 LCLF Technology Focus Areas.
• Applicants must comply with the Workplace Gender Equality Act 2012 (Cth).
• Applicants must not be listed as a designated terrorist organisation and must not have contravened Australian Sanctions Laws.
• Applicants must warrant ownership of, or access to, the intellectual property necessary to carry out the project.
• Applicants must not appear on the National Redress Scheme’s list of non-participating institutions.

Eligible Activities and Expenses

Eligible expenditure types include:

• Development costs such as pre-FEED and FEED activities, engineering design, and the technical and commercial development
• Capital equipment purchasing, installation, and deployment costs
• Equipment and infrastructure costs for pilots, demonstrations, and supply chain facilities
• Testing and certification costs for LCLF production pathways against relevant standards, such as ASTM, for the aviation industry
• Costs related to biogenic feedstock production, processing, aggregation, and pre-treatment
• Labour expenditure, including salaries, wages, and on-costs for personnel employed directly on the project
• Administrative expenses directly related to the project (travel, communications, computing, printing)
• Legal, audit, and accounting costs related directly to the project
• Licence fees or intellectual property purchase costs necessary to undertake the project
• Expenditure related to knowledge sharing activities, including reports, databases, and websites

Ineligible expenses include general business operations, land acquisition, interest on loans, membership fees, donations, and activities not directly tied to project completion.

Assessment Process

The program is competitive. Applications must first meet all eligibility criteria before proceeding to merit assessment. The five equally weighted merit criteria drawn from the FMA Innovation Fund Program Guidelines are:

• Merit Criterion A: Contribution to Technology Focus Area objectives and outcomes, including commercialisation pathway and alignment with Community Benefit Principles.
• Merit Criterion B: Applicant capability and capacity, including track record, key personnel expertise, and resource planning.
• Merit Criterion C: Project design, methodology, risk management, and compliance, including regulatory approvals, sustainability requirements, and community engagement.
• Merit Criterion D: Financial viability and co-funding commitment, including budget quality, financial capacity, cost accuracy, and co-contribution level. Higher co-contributions are treated as higher merit.
• Merit Criterion E: Knowledge sharing approach and commitment to making data and lessons learned publicly available.

Applications for projects expected to result in revenue must provide a financial model including a comprehensive assumptions book and relevant metrics such as the levelised cost of fuel (/L)andtheeffectivecostofabatement(/L) and the effective cost of abatement ( /L), and the effective cost of abatement (/t CO2-e).

ARENA takes a portfolio approach to project selection. An otherwise meritorious project may not receive funding if its outcomes are similar to a previously funded or intended-to-be-funded project. Assessment decisions are final.

Recent Program Updates

• The program launched on 16 December 2025.
• The program is designated as Future Made in Australia support under the Future Made in Australia Act 2024 (Cth). Community Benefit Principles apply and are assessed as part of the merit criteria.
• The Guarantee of Origin (GO) Scheme, an emissions certification framework to verify the emissions intensity of LCLFs, is being developed at the time of publication of the 2025 LCLF Technology Focus Areas. Commercial-scale deployment facilities funded under the program will be required to meet the applicable requirements of the GO scheme when it comes into force.
• The LCLF Technology Focus Areas document may be updated during the program. Applicants should check the ARENA website regularly for any revisions.

Application Tips

The following practical steps support a strong application:

• Contact ARENA before submitting an EOI to obtain endorsement. Applications submitted without prior ARENA endorsement will not be assessed.
• Read both the Program Guidelines and the LCLF Technology Focus Area document in full before preparing materials. These two documents must be read together.
• Create an account on the ARENANet Portal and select “FMA Innovation Fund — Expression of Interest Application” to begin.
• Prepare a detailed Project Plan addressing all five merit criteria. Submissions that do not address the criteria to a reasonable professional standard risk being assessed as obviously low merit.
• Include evidence of work to date. For example, an application for FEED work is expected to include a completed feasibility study, and a pilot or demonstration application is expected to have evidence of an existing prototype at a reasonable scale.
• Confirm that the proposed feedstock qualifies as a Renewable Feedstock and that the proposed fuel type aligns with a Priority Fuel. Contact ARENA early if there is any doubt.
• Address all sustainability requirements, including a preliminary life cycle analysis, identification of a sustainability framework, land use impacts, and competing feedstock considerations.
• Demonstrate a clear commercialisation pathway and explain why the project would not proceed without ARENA funding (additionality).
• Secure letters of support or MOUs from key project partners before the EOI stage. At the Full Application stage, more formalised evidence, such as term sheets or executed contracts, is expected.

Where to Get Help

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, with 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 website at arena.gov.au/funding/fma-innovation-fund-priority-low-carbon-liquid-fuels and other associated Australian Government websites.