Powering the Regions: Industrial Transformation Stream

Purpose and Program Overview

Powering the Regions – Industrial Transformation Stream (ITS) is an Australian government initiative administered by the Australian Renewable Energy Agency (ARENA). Its core purpose is to accelerate the decarbonisation of Australia’s regional industrial facilities. The program provides financial support to businesses engaged in industrial activities, enabling them to reduce their Scope 1 and/or Scope 2 emissions.

Industrial Transformation Stream (ITS) plays a crucial role in supporting Australia’s broader net-zero ambitions by driving innovation and advancing the commercial deployment of clean energy technologies. It aims to address significant collective sources of emissions across various industrial sectors, enabling high-impact decarbonisation solutions that are replicable across the industry in the short to medium term. The program specifically targets solutions where there is a funding gap and a clear market need.

Key Grant Details

• Grant Amount or Funding Range: Grants typically average $500,000. While there’s no strict maximum, ARENA provides the necessary level of grant for a project to proceed. The total funding allocated to ITS is $400 million, with $70 million specifically allocated to Round 2.
• Application Open and Close Dates: Applications for Expressions of Interest (EOI) are open until 15 July 2025, or until all funding is allocated.
• Eligible Industries or Business Types: Existing industrial entities in regional Australia that aim to reduce emissions, including Australian entities incorporated under the Corporations Act 2001 (Cth), Australian state or territory-owned corporations, or Australian local governments/councils.
• Required Co-contributions: A minimum of a 1:1 (matched) co-contribution is required. Higher co-funding may be necessary depending on project scale and complexity.
• Location/State/Territory Applicability: The program specifically targets existing industrial facilities located in regional Australia (non-metropolitan regions and Kwinana, WA).

Priority Sectors

The program targets existing industrial facilities in regional Australia, focusing on projects that accelerate emissions reduction across diverse industrial sectors. This includes support for:

• The program also provides support for Renewable Energy Technology, which encompasses hybrid and enabling technologies.
• Electrification Technology, which uses electricity to replace or facilitate the replacement of fossil-fuel-based systems.
• Energy efficiency technology encompasses energy conservation and demand management.

Funding Scope

Powering the Regions – Industrial Transformation Stream (ITS) supports various stages of industrial decarbonisation projects:

• Minimum Grant Amount: $500,000.
• Categories of Support:
  • The categories of support include feasibility studies and front-end engineering and design (FEED).
  • The support also includes trials and demonstrations of new or unproven technologies.
  • Industrial decarbonisation technologies are being commercially deployed.
• Project Focus: Projects must aim to address the Scope 1 and Scope 2 emissions of an existing industrial activity. Projects consisting solely of research (TRL 1-3) are not eligible, but research elements can be included as part of broader development or deployment activities.
• Eligible Funding Duration: Not explicitly stated, but projects would align with the stages of feasibility, demonstration, or deployment.

Eligibility Criteria

• Business Structure: Must hold an Australian Business Number (ABN) and be an Australian entity incorporated under the Corporations Act 2001 (Cth), an Australian state or territory-owned corporation (or subsidiary), or an Australian local government/council.
• Project Focus: The proposed project must address Scope 1 and Scope 2 emissions of an existing industrial activity.
• Technology Readiness Level (TRL): Must not consist solely of research (TRL 1-3); research components must be part of a broader development or deployment.
• Funding Exclusions: The project must not have received, nor be under assessment for, funding from other specific Powering the Regions Fund streams (Safeguard Transformation Stream, CICEI Primary Steel, CICEI Cement/Lime/Alumina/Aluminium Stream).
• ARENA Act Compliance: The project’s technology must be one that ARENA can lawfully fund under the ARENA Act (Renewable Energy Technology, Electrification Technology, or Energy Efficiency Technology).

Eligible Activities and Expenses

The program supports activities aimed at accelerating emissions reduction and deploying decarbonisation technologies:

• Developing, demonstrating, deploying, or commercialising renewable energy technologies.
• The program also supports the implementation of electrification technologies to replace fossil fuel systems.
• Adopting energy efficiency technologies, including energy conservation and demand management.
• These activities focus on addressing the significant collective sources of emissions across various industrial sectors.
• We provide solutions to bridge the funding gap and meet market demands.

Assessment Process

• Nature of the Grant: Competitive.
• Evaluation Criteria: Applications are assessed by a judging panel. Key criteria include:
  • Emissions Impact: The scale of potential carbon abatement and alignment with net-zero goals.
  • Program Contribution: The project’s potential to contribute to program objectives (accelerating emissions reduction, improving technology readiness, encouraging demonstration, fostering collaboration, and knowledge sharing).
  • Technical Feasibility and Innovation: Readiness level, uniqueness, and capacity to advance industrial decarbonisation.
  • Commercial Viability and Financial Strength: Adequacy of the budget, co-funding commitments, and replicability across other facilities.
  • Knowledge Sharing: The ability to share insights gained from the project.

Recent Program Updates

The Industrial Transformation Stream (ITS) is part of the broader $1.9 billion Powering the Regions Fund. ARENA allocated $70 million to the ITS Round 2, which opened for Expressions of Interest in March 2025. This round specifically focuses on “Innovation in Industrial Decarbonisation” and “Advancing Commercial Deployment.” The EOI period for Round 2 is set to close on 15 July 2025. The program operates in rounds, with Round 1 ($150 million) now closed. The overall ITS program is budgeted to run until 2027 or until funds are exhausted.

Application Tips

• Ensure your project clearly targets Scope 1 and Scope 2 emissions reductions at an existing industrial facility in regional Australia.
• Prepare a strong business case that outlines the technical feasibility, commercial viability, and potential for significant emissions impact.
• Demonstrate how your project aligns with ARENA’s funding mandate (renewable energy, electrification, or energy efficiency technologies).
• Highlight the broader benefits, such as job creation, supply chain resilience, and knowledge sharing.
• Secure your minimum 1:1 co-contribution, as higher co-funding may strengthen your application.

Where to Get Help

Consider consulting with a professional grant specialist like Pattens Group. We offer initial assessments to review your business’s eligibility and evaluate how well your project aligns with the grant’s objectives. You can also visit relevant government websites for application templates and further guidance.