NSW Renewable Fuel Strategy

The NSW Renewable Fuel Strategy sets a clear and achievable pathway to grow the NSW renewable fuel industry and help reduce emissions in sectors that are hard to decarbonise. 

It supports our vision for a sustainable future by accelerating the production and uptake of affordable renewable fuels in NSW, including sustainable aviation fuel, renewable diesel, biomethane and hydrogen. 

A strong renewable fuels sector in NSW will build new industries in our regions and strengthen the future success of existing industries. It can also accelerate a low carbon transition that benefits NSW communities, to help achieve our 4 key objectives.

Contribute to NSW's emission reduction targets	Support decarbonisation in hard-to-abate sectors	Drive economic development in regional NSW	Improve fuel security for NSW's net zero future

The strategy delivers 20 actions across 6 focus areas

Key actions include:

• expanding Renewable Fuel Scheme support to biomethane
• providing up to $130 million funding through the Net Zero Manufacturing Initiative to support commercial-scale production of renewable fuels from emerging technologies
• providing up to $40 million in the Industrial Decarbonisation Initiative to accelerate biomethane production
• funding renewable diesel trials for transport, construction, mining and agriculture sectors
• providing $1.5 million to fund research and innovation for improved industry capability
• funding crop research and development trials to test and demonstrate biomass production opportunities in partnership with primary producers
• supporting the expansion of GreenPower certification to additional renewable fuels and co-products.

Renewable fuels explained

Renewable fuels are used directly as fuel, or feedstock (inputs) in industrial processes. They are generally gaseous or liquid and produced from either:

• sustainable biomass (organic material) such as agriculture and food wastes, known as biogenic fuels, or
• hydrogen generated using renewable electricity and water, known as e-fuels.

Renewable fuels will play a pivotal role in decarbonising our hard-to-abate sectors, which account for about 19% of NSW’s total emissions. Manufacturing, primary industries and transport, for example, may face challenges to electrification due to chemical, technical, or practical limitations. Renewable fuels can provide a short-term decarbonisation option where electrification is not yet available or serve as a long-term solution.

As an emerging industry, renewable fuels are not yet cost-competitive with fossil fuels or produced at the scale required to enable full decarbonisation of our hard-to-abate sectors in NSW. Unless renewable fuels are available at a reasonable cost and sufficient scale, these sectors will fall behind in the transition to net zero.

That’s why we are working with businesses and industry to foster a thriving renewable fuels sector that will support economic growth, create jobs and enhance energy security across the state.

The strategy supports the Net Zero Plan Stage 1: 2020-2030 and our legislated goal to cut emissions by 50% by 2030, 70% by 2035 and net zero by 2050.

Stay updated

Sign up to receive the latest news about the strategy and future funding opportunities.