Government finalises Net Zero Fund design

The Department of Industry, Science and Resources has announced that the design of the federal government’s $5 billion Net Zero Fund has been finalised.

The government says the Net Zero Fund is essential to help deliver the government’s Net Zero Plans, including the Industry Sector Plan. As a sub-fund of the National Reconstruction Fund (NRF), the Net Zero Fund will draw from the NRF’s existing $15 billion allocation. This replaces the existing target funding level of up to $3 billion for investment in the renewables and low emissions technologies priority area.

The NRF Corporation (NRFC) will be responsible for the fund’s delivery and can invest in debt, equity and can give guarantees, and the fund will be implemented by mid‍-‍2026.

The Net Zero Fund will deliver targeted investments to support the transition to less carbon‍-‍intensive manufacturing and production processes. It will focus on supporting large-scale industrial facilities to decarbonise, improve energy efficiency and transition to net zero. The Net Zero Fund will support the Industry Sector Plan, which identifies the subsectors that represent the greatest opportunity and need for decarbonisation, and those most impacted by the economy’s transition.

The fund will also deliver investments to support the scaling up of domestic manufacturing of renewable and low emissions technologies. Eligibility may include opportunities like advanced manufacturing projects. It can also cover businesses involved in related manufacturing of products for use in or in connection with:

• renewable energy generation, transmission, distribution or storage
• energy efficiency
• recycling
• waste reduction.
   

Examples could include manufacturing components of:

• wind turbines
• batteries
• solar panels
• hydrogen electrolysers.
   

Eligibility for debt, equity and guarantee opportunities include proposals that are solely or mainly Australian-based and align with a priority area.

The Net Zero Fund’s design was based on an online consultation process that received over 120 written submissions. Respondents included industrial manufacturing and energy sector organisations, unions, researchers, think tanks and representative bodies. The minister also led an industry forum, attended by over 60 executive-level representatives.

Consultation feedback showed strong support for initiatives that target large-scale industrial decarbonisation, especially for hard-to-abate sectors, and advanced manufacturing projects.

A summary of online consultation is now available here.

Image credit: iStock.com/pamspix