The government’s $32 billion green bank says Labor’s net zero targets will be put out of reach in sectors such as aviation and long-haul trucking unless the government turbocharges investment in locally made low-carbon fuels.

The Clean Energy Finance Corporation, a multibillion-dollar government-backed green investment bank, says the creation of a domestic low-carbon fuel industry would provide a ready-made emissions reduction solution for hard-to-decarbonise sectors with no clear path to electrification.