Funding up to $500,000 to help Australian SME manufacturers replace fossil-fuelled industrial processes with renewable energy technologies, reducing emissions, improving efficiency and supporting decarbonisation goals.
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What is the SME Industrial Decarbonisation Fund (SME IDF)?
The SME Industrial Decarbonisation Fund is a $10 million co-investment fund administered by the Advanced Manufacturing Growth Centre (AMGC).
The Fund aims to accelerate industrial decarbonisation by supporting Australian small and medium-sized manufacturers to reduce Scope 1 emissions from fossil fuel use through renewable energy technologies, including electrification.
The Fund particularly targets energy-intensive manufacturing processes across three areas:
- Surface treatment, including powder coating, galvanising and metallic finishes.
- Process steam, including sterilisation, drying and cooking.
- Metals processing, including fabrication, refinement, transformation and extraction.
Examples of potential projects include replacing gas-fired curing ovens with electric infrared or induction systems, replacing natural gas boilers with electric boilers or heat pumps, and replacing gas-fired furnaces with electric induction systems.
The Fund is open, continuous and competitive, with applications assessed on a first-come, first-served and merit basis until available funding is exhausted.
SME Industrial Decarbonisation Fund level of support
Funding Amount
- Total funding pool: $10 million.
- Minimum AMGC co-investment: $200,000.
- Maximum AMGC co-investment: $500,000.
- Requests below $200,000 may be considered by AMGC on a case-by-case basis.
- AMGC funding can cover up to 50% of total eligible project expenditure.
Co-contribution
A mandatory co-contribution is required.
- Applicants must contribute at least 50% of total eligible project expenditure in cash.
- The Fund must therefore be matched dollar-for-dollar, at minimum, by industry cash contributions.
- Applicants may contribute more than 50%.
- In-kind contributions may be made in addition to the required cash contribution but are not eligible expenditure under the Fund.
- Applicants are responsible for all ineligible project expenditure.
- Other Commonwealth, State, Territory or local government funding cannot be used to meet the applicant’s required contribution.
Fund management fees
Successful applicants should also account for AMGC’s project management fees:
- A 3% commencement fee applies at the beginning of the project.
- The commencement fee is calculated on the industry’s contribution amount.
- A further 3% management fee applies proportionally across the project’s milestone payments from industry over the duration of the project.
- These fees support AMGC governance, program oversight and acquittals.
SME Industrial Decarbonisation Fund important dates
- Last date for applications: 31 December 2027, unless funds are exhausted earlier.
- Applications received after 31 December 2027 may only be managed on a case-by-case basis.
- Project activities and expenditure must be completed by 31 March 2028.
- Fund closing date: 31 March 2028.
- Applications are considered on a first-come, first-served basis until available funding is exhausted.
Indicative assessment timing includes:
- Initial support and assessment: approximately 5 weeks.
- Review Committee process: approximately 3 weeks.
- Board and final approval: approximately 1 week.
- Project agreement negotiations: approximately 2 weeks.
- Earliest project start: after AMGC Board approval notification and execution of the Project Agreement.
- Register your interest with GrantHelper.
SME Industrial Decarbonisation Fund objectives
The Fund aims to:
- Accelerate industrial decarbonisation within Australia’s SME manufacturing sector.
- Help SME manufacturers reduce Scope 1 emissions from fossil fuel use.
- Increase the adoption of renewable energy technologies, including electrification.
- Support the transition of energy-intensive surface treatment processes away from fossil fuels.
- Support the transition of process steam applications away from fossil fuels.
- Support the transition of metals processing activities away from fossil fuels.
- Improve manufacturers’ energy efficiency, competitiveness and resilience.
- Invest in worker upskilling associated with industrial decarbonisation.
- Support technology upgrades required for decarbonisation processes.
- Encourage replication of successful energy-transition solutions throughout the manufacturing sector.
- Increase the wider impact of funded projects through knowledge sharing.
- Reduce barriers to renewable energy technology adoption across Australian manufacturing.
Projects and expenditure eligible for SME Industrial Decarbonisation Fund support
Eligible projects must focus on installation, deployment and/or recertification and transition relevant fossil-fuelled manufacturing processes to renewable energy technologies.
Projects must:
- Take place in Australia.
- Address fossil fuel use in surface treatment, process steam or metals processing.
- Transition the relevant process towards renewable energy technologies, including electrification.
- Increase the use of renewable energy technologies and contribute to the applicant’s decarbonisation strategy.
- Demonstrate a pathway towards commercial viability.
- Deliver measurable emissions reductions.
- Be capable of completion before 31 March 2028.
- Have an eligible AMGC co-investment request generally between $200,000 and $500,000.
- Be supported by at least a 50% cash contribution from the applicant.
Potential project examples include:
- Replacing gas-fired powder-coating ovens with electric infrared curing systems.
- Introducing induction curing technologies for paints or hardened coatings.
- Replacing solvent-based surface finishing with lower-emissions powder-coating technologies.
- Replacing gas boilers with electric boilers.
- Introducing heat pumps for food-processing or industrial-cleaning applications.
- Electrifying furnaces and kilns.
- Introducing electric arc or induction melting systems.
- Replacing fossil-fuelled heat-treatment processes with lower-emissions alternatives.
- Replacing fossil-fuelled forging processes with lower-emissions alternatives.
Eligible expenditure
Eligible expenditure may include:
- Renewable energy assessment consultants, up to 10% of total project cost.
- Labour and on-costs for employees undertaking eligible renewable energy training, certification and assessment.
- Upgrades to power supplies required to increase electricity capacity.
- Regulatory compliance associated with power or facility upgrades.
- Capital equipment enabling transition from fossil fuels to renewable energy or electrification, up to 75% of total project cost.
- Labour and on-costs associated with equipment training and business changes required to install new renewable energy equipment.
- Eligible contracted project activities.
- Required project audit activities.
Eligible labour expenditure:
- Must relate directly to employees working on core project activities.
- Can include an employee’s remuneration package.
- Is capped at an annual salary of $175,000 per employee, director or shareholder for Fund claim purposes.
- Must be proportionally reduced where the relevant project period is less than a full financial year.
- May include an additional 30% allowance for eligible on-costs such as superannuation, payroll tax and workers compensation insurance.
- Must be supported by evidence such as timesheets, PAYG documentation, payslips and employment contracts.
Ineligible projects and expenditure
The Fund will not support projects that:
- Do not incorporate eligible renewable energy technologies.
- Focus on carbon capture, storage and utilisation.
- Involve incineration of non-putrescible waste.
- Predominantly deploy established technologies or business models already commercially proven in Australia.
- Primarily involve grid-connected or behind-the-meter deployment of commercially proven renewable energy supply.
- Focus on procurement of power purchase agreements.
- Primarily involve deployment of conventional solar PV, wind turbines, rooftop solar or battery energy storage systems.
- Focus on stand-alone software technology that does not form an integral part of the manufacturing decarbonisation process.
Ineligible expenditure includes:
- Activities, equipment or supplies already supported by other government funding.
- Costs incurred before AMGC notifies the applicant that the AMGC Board has approved the application.
- In-kind contributions.
- Financing costs and interest.
- Debt financing.
- Interest on loans or other costs associated with obtaining project resources.
- Office furniture and equipment.
- Motor vehicles.
- Computers, printers and photocopiers.
- Rental costs.
- Renovations and utilities.
- Non-project-related staff training and development.
- Insurance costs.
- Depreciation of plant and equipment.
- Maintenance costs.
- Opportunity costs.
- Routine operational expenses.
- Communications expenses.
- Travel and accommodation.
- Office computing facilities.
- Printing and stationery.
- Postage.
- Legal and accounting fees.
- Bank charges.
- Other expenditure AMGC determines does not directly support the project’s planned outcomes or is inconsistent with the Fund’s objectives.
Other SME Industrial Decarbonisation Fund important details that you will need to know
Organisations eligible for SME Industrial Decarbonisation Fund support
Applicants must satisfy all eligibility requirements.
Eligible applicants must:
- Be an SME with up to 200 employees.
- Hold an Australian Company Number (ACN).
- Hold an Australian Business Number (ABN).
- Be non-tax-exempt.
- Be registered for GST.
- Be incorporated in Australia.
- Be a trading corporation where trading activities form a sufficiently significant proportion of the organisation’s overall activities.
- Have an eligible project undertaken in Australia.
- Have the capacity to contribute at least 50% of total eligible project costs in cash.
- Provide evidence of the ability to fund their contribution and all ineligible expenditure.
- Be able to complete the project before 31 March 2028.
- Consent to required communications and media activity.
Eligible incorporated entities may include start-ups where all other requirements are satisfied.
The following cannot apply:
- Individuals.
- Partnerships.
- Trusts, although an incorporated trustee may apply on behalf of a trust subject to further documentation and case-by-case consideration.
- Commonwealth Government bodies.
- State or Territory government bodies.
- Local government bodies.
- Government business enterprises.
Eligibility requirements cannot be waived by AMGC.
SME Industrial Decarbonisation Fund assessment criteria
Applicants must address all five Merit Criteria.
Each criterion is worth 20 points, for a total possible score of 100 points.
Applications must achieve a cumulative score of at least 50 out of 100 to be considered for funding. AMGC may verify information to a technical and commercial standard and can reject applications where information cannot be satisfactorily verified.
Criterion A: Contributes to the Fund’s outcomes – 20 points
Applicants should demonstrate:
- How the project will increase the use of renewable energy technologies.
- Whether the proposed technology or industry use case is novel or innovative.
- The value of adopting renewable energy technologies within the business.
- How the project will improve efficiency, competitiveness and resilience.
- Where applicable, how adoption of novel renewable energy technology could support commercialisation or broader adoption.
- How the project reduces or removes barriers to renewable energy technology uptake.
- How addressing these barriers could support broader industry adoption.
- Whether project learnings could help inform policy decisions.
- Expected emissions reductions.
- Expected increases in workforce skills and organisational capability.
- Knowledge benefits generated through the project.
- Relevant recertification and accreditation outcomes.
Criterion B: Applicant capability and capacity – 20 points
Applicants should demonstrate:
- Appropriate management capability.
- Appropriate commercial expertise.
- Appropriate technical expertise.
- Relevant qualifications and experience of key personnel.
- Organisational capacity to successfully deliver the project.
- A track record of delivering similar projects.
- Appropriate project-management capability.
- Relevant technical skills.
- Relevant accreditations.
- Necessary approvals.
- Appropriate quality standards.
- Previous project-delivery experience.
Criterion C: Activity design, methodology, risk and compliance – 20 points
Applicants should demonstrate:
- A well-substantiated project plan.
- Clear project objectives.
- A clearly defined methodology.
- Appropriate management of personnel.
- Appropriate management of collaboration partners, where relevant.
- Consideration of consent authorities, where relevant.
- A clear Risk Management Plan.
- Appropriate risk-mitigation strategies.
- Technical designs or schematics for renewable energy deployment.
- Sufficient supporting information and evidence to substantiate the proposed project.
Criterion D: Financial viability and co-funding commitment – 20 points
Applicants should demonstrate:
- Sufficient evidence of business financial viability.
- A completed Accountant Declaration.
- Access to sufficient funds for the required cash co-investment.
- Evidence that the project would not proceed without Fund support.
- A detailed payment schedule.
- A detailed project budget.
- Details of necessary equipment expenditure.
- Clearly defined project milestones.
- Details of any in-kind contributions.
- Details of contributions from collaboration partners, where applicable.
Criterion E: Knowledge Sharing – 20 points
Applicants should demonstrate:
- Willingness to share project insights with AMGC and ARENA.
- Understanding that consolidated Fund learnings may be publicly disseminated to encourage replication across industry.
- Appropriate identification and management of sensitive and confidential information.
- A clear approach to intellectual property generation.
- Appropriate strategies for protecting intellectual property.
- Willingness to share non-confidential insights with AMGC and ARENA.
- Willingness to share relevant non-confidential learnings with the broader manufacturing industry.
- How knowledge sharing could support replication of successful decarbonisation approaches and continuous improvement of the Fund.
In addition to the Merit Criteria, AMGC’s Review Committee will consider:
- How well the application meets the Merit Criteria.
- How the application compares with other eligible applications.
- Overall value for money.
- Whether the project meets appropriate technical standards.
- Whether the project meets appropriate commercial standards.
- Advice from independent technical experts where required.
- Availability of Fund resources.
How do I get the SME Industrial Decarbonisation Fund support?
To maximise the likelihood of receiving funding, applicants should demonstrate:
- A clear and measurable reduction in Scope 1 emissions from fossil fuel use.
- A genuine transition towards eligible renewable energy technologies or electrification.
- Strong alignment with surface treatment, process steam or metals processing.
- A compelling case for why the proposed technology or application is novel, innovative or valuable to the sector.
- Quantified anticipated CO2 reductions and energy cost savings.
- Clear improvements in business efficiency, competitiveness and resilience.
- A credible pathway towards commercial viability.
- Evidence that the project would not proceed without Fund support.
- A well-developed project plan with clear objectives, methodology, milestones and responsibilities.
- Strong technical designs or schematics supporting the proposed renewable energy deployment.
- A comprehensive Risk Management Plan with practical mitigation measures.
- Appropriate management, commercial and technical capability.
- A proven track record of delivering comparable projects.
- Relevant qualifications, accreditations, approvals and quality standards.
- Strong financial viability and confirmed access to the required cash co-investment.
- Capacity to meet all ineligible project costs.
- A detailed, credible and value-for-money project budget.
- Clearly identified suppliers and equipment requirements.
- A realistic delivery schedule that ensures completion before 31 March 2028.
- Potential to scale the solution within the applicant’s operations or replicate it elsewhere in Australian manufacturing.
- A clear strategy for protecting intellectual property while enabling non-confidential knowledge sharing.
- Commitment to sharing relevant project learnings with AMGC, ARENA and the broader industry.
- Evidence supporting all significant technical, financial and commercial claims made in the application.
Because applications are assessed on a first-come, first-served basis and funding is limited, eligible applicants should also aim to prepare a complete, evidence-based application as early as practical.
Information to prepare for the SME Industrial Decarbonisation Fund support
Applicants should prepare:
- Details confirming SME status and employee numbers.
- ACN and ABN details.
- GST registration information.
- Evidence of Australian incorporation and eligible trading-corporation status.
- A detailed description of the existing fossil-fuelled manufacturing process.
- A detailed description of the proposed renewable energy technology or electrification solution.
- Evidence showing how the project supports the organisation’s decarbonisation strategy.
- Quantified anticipated CO2 emissions savings.
- Quantified anticipated energy cost savings where available.
- Evidence demonstrating the project’s commercial viability.
- A detailed project plan.
- Project objectives and methodology.
- Technical designs or schematics.
- Project milestones and delivery dates.
- Details of suppliers.
- A detailed project budget and payment schedule.
- Recent quotes for major expenditure where available or requested.
- Details of eligible and ineligible expenditure.
- Details of the applicant’s cash co-contribution.
- Details of any additional in-kind contributions.
- Details of collaboration partners and their contributions, where applicable.
- The required Accountant Declaration confirming financial viability and capacity to fund the applicant’s contribution and ineligible costs.
- Evidence of access to sufficient capital.
- A Risk Management Plan with mitigation strategies.
- Details of management, commercial and technical expertise.
- Relevant qualifications and experience of key project personnel.
- Evidence of previous similar project-delivery experience.
- Relevant accreditations, approvals and quality standards.
- An intellectual property strategy.
- Details explaining the project’s scalability or potential for industry replication.
- A knowledge-sharing approach.
- All other supporting documentation specifically requested in the online application form.
Applicants should only attach documents requested by AMGC, as AMGC advises that it cannot consider information contained in unsolicited attachments.
Applying for the SME Industrial Decarbonisation Fund support
Applications are submitted online through the Good Grants portal, accessed via the “Apply Here” link on AMGC’s SME Industrial Decarbonisation Fund webpage.
Register your interest with GrantHelper to explore your alignment with this grant and how we can assist you to increase your chances of success.
SME Industrial Decarbonisation Fund resources
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