SME Industrial Decarbonisation Fund

Purpose and Program Overview

The SME Industrial Decarbonisation Fund is a co-investment program designed to help Australian small-to-medium manufacturers reduce direct greenhouse gas emissions. The fund supports the transition of eligible fossil fuel-powered manufacturing processes to renewable energy technologies, including electrification, with a specific focus on surface treatment, process steam and metals processing operations.

A total of $10 million (ex GST) is available under the program. Funding is delivered on a dollar-for-dollar co-investment basis, with the Advanced Manufacturing Growth Centre (AMGC) contributing up to 50 per cent of eligible project expenditure.

Beyond emissions reduction, the fund plays a broader role in strengthening the competitiveness of Australia’s manufacturing sector. Successful applicants are expected to demonstrate a pathway to commercial viability, deliver measurable emissions outcomes and contribute practical knowledge that other manufacturers can draw on as the sector transitions toward renewable energy technologies.

Key Grant Details

• Grant amount: AMGC co-investment from $200,000 to $500,000 per applicant, with total matched project funding generally expected between $400,000 and $1 million
• Applications open: Ongoing (assessed on a continuous basis)
• Applications close: 31 December 2027, or earlier if the funding pool is fully exhausted
• Eligible business types: Australian small-to-medium manufacturers with up to 200 employees
• Required co-contribution: At least 50 per cent of the eligible project expenditure in cash
• Location applicability: Australia-wide; project activities must take place in Australia

Priority Sectors

The fund is targeted at manufacturers operating in three specific process areas:

• Surface treatment (e.g. powder coating, galvanising)
• Process steam (e.g. sterilisation, drying, cooking)
• Metals processing (e.g. fabrication, refinement, transformation, extraction)

Applicants must be able to demonstrate current use of fossil fuels in one or more of these processes and propose a credible transition to renewable energy technology.

Funding Scope

• Minimum AMGC co-investment: $200,000 (lower amounts may be considered on a case-by-case basis)
• Maximum AMGC co-investment: $500,000
• Expected total project value: $400,000 to $1 million, combining AMGC co-investment with applicant cash contribution
• Funding structure: Dollar-for-dollar co-investment; AMGC contributes up to 50 per cent of eligible project expenditure
• Project timeline: All activities and expenditure must be completed before 31 March 2028

Eligibility Criteria

Applicants must:

• Be a small-to-medium enterprise with up to 200 employees
• Hold an Australian Company Number (ACN) and an Australian Business Number (ABN)
• Be non-tax-exempt and registered for GST
• Be incorporated in Australia, including start-ups and trading corporations, where trading activity is sufficiently significant
• Carry out the proposed project activities within Australia
• Currently uses fossil fuels for surface treatment, process steam or metals processing, with a proposed transition to renewable energy technologies
• Request AMGC co-investment within the $200,000–$500,000 range
• Contribute at least 50 per cent of the total eligible project expenditure in cash
• Be able to complete the project before 31 March 2028
• Provide evidence of financial capacity, including an accountant’s declaration
• Consent to program-related communications and media activity

Eligible Activities and Expenses

• Renewable energy assessments (up to 10 per cent of total project cost)
• Employee training, certification and assessment related to renewable energy technologies
• Power supply upgrades are required to increase the electricity capacity
• Regulatory compliance activities associated with power or facility upgrades
• Capital equipment enabling a transition from fossil fuel to renewable energy (up to 75 per cent of total project cost)
• Labour and on-costs associated with training and business changes required for equipment installation
• Contractor costs directly related to approved project activities, where properly evidenced

Assessment Process

The SME Industrial Decarbonisation Fund is competitive, not entitlement-based. Applications are assessed by a judging panel on an open and continuous basis, with funding allocated until the pool is exhausted. Key evaluation considerations include:

• Demonstrated pathway to commercial viability
• Measurable emissions reduction, supported by baseline and post-implementation data
• Contribution to broader industry learning and replicability
• Financial capacity to meet the required cash co-contribution

Recent Program Updates

The fund operates on a rolling, continuous assessment basis rather than fixed funding rounds. Applications remain open until 31 December 2027 or until the $10 million funding pool is fully allocated, whichever occurs first. Applicants are encouraged to confirm current fund status before applying, as remaining funding may be exhausted ahead of the published closing date.

Application Tips

• Confirm eligibility against all criteria before preparing an application, including business size, ABN/GST status and use of fossil fuels in an eligible process
• Prepare supporting financial documentation early, including an accountant’s declaration of financial capacity
• Clearly quantify expected emissions reductions using appropriate baseline and post-implementation measurement
• Align the proposal with the program’s focus on commercial viability and industry-wide knowledge sharing
• Since the fund is assessed on a rolling basis, applying earlier improves the likelihood of funding being available

Where to Get Help

Consider consulting a grant specialist like Pattens Group for a personalised eligibility assessment and expert assistance in preparing a strong, compliant and competitive application. Contact us today and get connected with Australia’s best grant specialist, boasting over 35 years of experience in the industry and a 100% success rate. For official guidelines, application details, templates, and further information, visit the official website of the SME Industrial Decarbonisation Fund and other associated Australian government websites.