Regional NSW to drive clean fuel future under new state strategy
Regional NSW stands to benefit from new investment and industry opportunities as the state government launches its Renewable Fuel Strategy, a plan to scale up clean fuel production and create a stronger, lower-emissions economy.
Regional NSW is expected to be a key part of the state’s energy transformation, with the NSW Government announcing its new Renewable Fuel Strategy — a plan to speed up the production and use of low-carbon fuels such as hydrogen, biomethane, renewable diesel and sustainable aviation fuel.
The Strategy sets out 20 actions to help regional industries cut emissions, grow new jobs and improve the state’s fuel security. It includes up to $170 million in funding for renewable fuel and biomethane production, crop and biomass research, and infrastructure to support industry growth.
Minister for Climate Change and Energy Penny Sharpe said the plan aims to make renewable fuels a core part of NSW’s energy mix.
“This is a win-win-win opportunity: a win for jobs, a win for fuel security and a win for the planet,” Ms Sharpe said.
The Strategy will expand the Renewable Fuel Scheme to include biomethane and broaden GreenPower certification to cover renewable fuels and their co-products. Funding will also support trials with regional farmers and researchers to explore how biomass crops and agricultural by-products can supply feedstock for renewable fuel industries.
The approach builds on the NSW Hydrogen Strategy, recognising hydrogen’s central role in producing renewable fuels at scale through renewable electricity. Hydrogen, when combined with carbon from waste or biomass, can create synthetic fuels for transport, industry and aviation — offering a pathway to decarbonise sectors that are difficult to electrify.
The Australian Hydrogen Council (AHC) welcomed the government’s direction, saying that collaboration across supply chains will be key to building a strong renewable fuel market.
“Hydrogen is the molecule that can enable many renewable fuels, from ammonia and methanol, through to sustainable aviation fuel,” said AHC CEO Dr Fiona Simon.
“This calls for greater collaboration across supply chains to ensure hydrogen molecules are available for when they are needed – whether that be as feedstock or in industrial processes.”
The NSW Government said renewable fuels can deliver short-term emissions reductions while supporting longer-term decarbonisation goals, particularly for heavy transport, aviation, manufacturing and primary industries — all major employers across regional NSW.
To help industry, councils and businesses understand how to participate, the NSW Government will host a webinar on Wednesday 3 December 2025. The session will outline the Strategy’s key actions, funding programs and opportunities for regional engagement.
For regional communities looking to diversify their economies and build clean industries for the future, the Renewable Fuel Strategy represents a coordinated effort to make renewable fuels a practical part of daily life and business across NSW.
