Earth surrounded by manure forms natural fuel (4)
I believe the answer is:
peat
'natural fuel' is the definition.
'earth surrounded by manure' is the wordplay.
'earth' becomes 'e'.
'surrounded by' means one lot of letters goes inside another.
'manure' becomes 'pat' (as in a cowpat).
'e' placed inside 'pat' is 'PEAT'.
'forms' is the link.
(Other definitions for peat that I've seen before include "Partially carbonised vegetable matter used as a fuel when dried" , "Tape (anag.)" , "Form of fuel" , "load of stuff in the garden?" , "Dried plant material used as fuel" .)