Big investors call for FIRB, super reforms to keep rivers of foreign gold flowing into clean energy

The Clean Energy Investor Group (CEIG), a lobby group representing major investors, wants foreign investment rules to be tidied up to ensure that offshore capital can continue to flow into Australian renewable energy projects. 

About 70 per cent of the funds needed to pay for future clean energy projects are expected to come from overseas investors, and the CEIG is worried the rivers of gold are at risk if key changes aren’t made. 

“Policy and regulatory barriers, particularly in foreign investment, taxation, and superannuation, are limiting capital flows into sectors critical to long-term productivity and economic resilience,” the CEIG’s Marilyne Crestias wrote in a submission to the federal productivity roundtable.

She says the EU and China have “more transparent, efficient, and coordinated” foreign investment rules than Australia.

“Renewable energy projects often face stricter thresholds and more frequent [Foreign Investment Review Board] reviews than comparable investments in other sectors,” she wrote. 

“The case-by-case nature of assessments introduces uncertainty and makes deal structuring more difficult. Some foreign investors, particularly those from Asia and the Middle East, face additional scrutiny or informal limitations due to geopolitical concerns.”

The CEIG’s 2025 Clean Energy Outlook ranked Australia as “somewhat attractive” for clean energy investment.

However, this was not due to foreign investment rules but transmission delays, slow planning processes, costly and slow grid connections and lengthy environmental assessments.

Fixing FIRB

A big problem for foreign investors in Australia is that they often use agricultural land, which means federal review is needed for land packages worth more than $15 million for the majority of investors. 

For vacant commercial land, that threshold is set at $0 meaning all deals must go through the Foreign Investors Review Board (FIRB). 

The CEIG wants these land thresholds updated for clean energy projects, and assessments of these “streamlined” when they meet national objectives.

In what may be a controversial move, given the consistent refrain that renewables projects represent the “loss of productive land” by people opposed to or worried about them, the CEIG would like to see developed renewable energy sites classified as infrastructure rather than agricultural or commercial land, for FIRB purposes.

And it’s also suggesting that renewable energy projects get an exemption to rules banning foreign investors from buying established residential houses – for example farms with dwellings on them for a solar or wind farm. 

Be more like Europe with CGT

A revived move this year to broaden what counts as a capital gains asset also struck at the heart of what the CEIG considers reasonable. 

Currently, foreign-based investors in renewable energy projects don’t need to pay capital gains tax when they sell. 

The federal government is proposing to expand the definition of “close economic connection” to the land to include installed infrastructure – including wind turbines, solar panels, batteries and substations. 

In the submission, The CEIG claims that foreign resident capital gains tax changes are causing global investors to “consider Australia to have sovereign risk because of the quantity and quick pace of reforms”.

Sovereign risk is when a government may not be able to pay its debts, as opposed to the perceived risk to commercial interests when governments implement budget measures.

The CEIG says Canada, Germany, the Netherlands, the US and the UK have exempted clean energy infrastructure from foreign capital gains taxes.

The solution is to make land used for clean energy infrastructure a type of personal property, for tax purposes, in order to “bolster Australia’s business case in the competition for global capital”, the CEIG says. 

Sup up clean energy in super

The lobby group’s final recommendation was a tweak for local investors – super funds, to be specific. 

Under the Your Future, Your Super (YFYS) performance test, super funds must report their investment performance and compare it to the benchmark.

High emissions funds are measured against those with climate goals – and often the former comes out on top. 

“The test uses outdated benchmarks based on historically strong-performing legacy infrastructure, often dominated by fossil fuel assets,” the CEIG submission says.

“This creates a bias that penalises investment in newer, unlisted asset classes like renewables, even if they are strategically sound and aligned with long-term member interests. 

“As a result, super funds are often disincentivised from investing in clean energy to avoid failing the test.”

A way to include clean energy investing into this test is to integrate the Australian Prudential Regulation Authority’s (APRA) heatmaps, which show how well funds are performing in different areas, as well as creating a clean energy infrastructure asset class.