ARENA mandated to deliver $1.1bn cleaner fuel program

The Australian Renewable Energy Agency (ARENA) was named by the government as the delivery agency for the $1.1 billion Cleaner Fuels Program, which provides support to the domestic low carbon liquid fuels (LCLF) industry.

Announced in September 2025, the Cleaner Fuels Program is a key part to help building fuel resilience while reducing emissions in hard-to-abate transport sectors such as aviation, ARENA said.

ARENA chief executive Darren Miller said this program is an important step in supporting Australia's transition to net zero while strengthening fuel resilience.

"Australia is well-positioned to become a key producer of low carbon liquid fuels, backed by our renewable resources and innovation capability. Through this program, ARENA will support advanced projects that could lead to fuel production, helping to lower emissions and build Australia's resilience to fuel shocks", Miller said.

The Cleaner Fuels Program will provide production-linked incentives over 10 years and target support toward LCLF projects that are likely to reach production soon.

Simultaneously, ARENA has also announced the shortlisted projects for Round 2 of the Hydrogen Headstart Program, following the revised funding allocated to the program to $1 billion in the 2026 Federal Budget.

ARENA will now invite shortlisted projects to submit full applications, which includes a rigorous assessment process and detailed due diligence, and only those that meet a high merit threshold will be considered for funding.

Miller said the level of engagement in Round 2 of Hydrogen Headstart demonstrates that industry remains committed to building a renewable hydrogen sector in Australia.

"Renewable hydrogen presents Australia with a significant economic and decarbonisation opportunity. Its potential to develop low-emission fuels for aviation and shipping, as well as key inputs for fertiliser could also help improve the nation's energy resilience in the longer term," he said.

"Renewable hydrogen is a complex, capital-intensive industry and progress takes time, but it is a critical enabler of industrial decarbonisation, particularly for hard-to-abate sectors. What we're seeing are expressions of interest that are considered and well aligned to future market demand."

Shortlisted applicants have until early September 2026 to submit their full application.

The shortlisted applicants were Bell Bay Powerfuels; European Energy Australia; HAMR Energy; HIF Asia Pacific; Murchison Hydrogen Renewables; Perdaman Commercial Developments; and Summit Hydro.