Treasurer Josh Frydenberg could face his toughest electoral battle since entering Parliament, with the man who headed the government's Clean Energy Finance Corporation, Oliver Yates, standing against him and vowing to target voters worried about the environment.

Mr Yates, a long-time Liberal Party member, said it was time to directly challenge climate change denialists within the government by taking on Mr Frydenberg in his blue-ribbon seat of Kooyong, in Melbourne's eastern suburbs.

Oliver Yates will run against the Treasurer as an independent in the upcoming federal election. Credit:Eddie Jim

Appointed by the ALP to head the $10 billion CEFC in 2012, Mr Yates has been a sharp critic of elements in the Liberal Party and its approach to climate change. This included walking out on a $10,000-a-table fundraiser in 2017 after a mock lump of brown coal was presented to then treasurer Scott Morrison.

Mr Yates, who is resigning as a Liberal member, will run as an independent. The fund manager ended his tenure at the CEFC in 2017.