The Australian federal government has unveiled the design of its AU$5 billion Net Zero Fund aimed at reducing energy costs and carbon emissions at large industrial facilities.
The fund, which was announced in 2025 as part of the government’s Industry Sector Plan, is central to the government’s efforts to drive decarbonisation, unlock new manufacturing investment, and improve energy affordability in hard-to-abate sectors.
The Net Zero Fund will provide concessional finance that helps large industrial firms decarbonise the most energy-intensive parts of their operations, as well as support investment in the scale-up of domestic manufacturing of low emissions technologies.
Minister for Industry and Innovation and Minister for Science Tim Ayres said: “Backing Australian heavy industry and manufacturing to reduce its emissions and lower energy costs is a big national challenge that demands leadership, planning and an appetite for risk.
“Globally competitive financing from the NRF’s Net Zero Fund will make sure public investment in decarbonisation crowds in billions of dollars in private capital and drives down industrial energy costs and emissions, while supporting new manufacturing jobs in the regions.”
The fund will target a rate of return equivalent on its investment equivalent to the five-year Australian government bond rate minus 1 per cent, allowing the fund to take on higher risk than commercial lenders.
This competitively priced structure also gives investors, manufacturers and other communities confidence that the government is committed to business and to capturing the opportunities of the global energy transformation.
Minister for Climate Change and Energy Chris Bowen said: “This is about getting energy costs down for Australian industry.
“By lowering the cost of finance for clean energy upgrades, the Net Zero Fund helps big energy users invest sooner, use energy more efficiently and reduce the risks of volatile fossil fuel prices.
“If we want a Future Made in Australia, we must help our hardest-to-abate industries modernise and stay globally competitive.
“This Fund helps back the next wave of clean industrial investment, and it backs Australian workers and regional communities that rely on these industries.”
