Overview
Help shape the future of Australia's cleaner fuels industry
The Australian Government has identified low carbon liquid fuels (LCLF) as a priority industry and, in the 2026-27 Budget, it committed to working with industry on a market measure to drive demand and reduce our reliance on imported fuels.
LCLF can help strengthen Australia's long-term fuel security, support new industries and jobs, and reduce emissions in sectors that are difficult to electrify, including aviation, heavy transport, mining, agriculture and defence.
We've heard from industry and other stakeholders that supply-side support alone is unlikely to attract the investment needed to grow a domestic LCLF industry. A stronger demand signal is also needed to support industry growth and unlock these benefits.
We're seeking feedback on a conceptual framework for a mechanism to increase the uptake of LCLF in Australia. The consultation paper outlines the proposed framework and key design features, including how the mechanism could work, its potential impacts and implementation considerations.
No decisions have been made on the final design of a demand mechanism. We are seeking feedback from a broad range of stakeholders across the LCLF supply chain, fuel producers and suppliers, fuel users, investors, community groups, researchers and governments. The evidence, data and practical experience provided through this consultation will help us better understand the opportunities, impacts and challenges associated with increasing LCLF uptake and inform future government decisions.
