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New ARENA fund targets SME industrial emissions reductions

09 Jul, 2026



A new $10 million co-investment fund has launched to help Australian small and medium-sized manufacturers reduce emissions, improve energy efficiency, and transition away from fossil fuel-based industrial processes.

Funded by the Australian Renewable Energy Agency (ARENA) as part of the organisation’s Advancing Renewables Program and delivered by the Advanced Manufacturing Growth Centre (AMGC), the SME Industrial Decarbonisation Fund provides matched funding to support practical emissions reduction and operational modernisation.

The Fund will support manufacturers to implement electrification and other low emissions technologies in place of existing fossil fuel processes, deliver projects with clear pathways to commercial viability and measurable emissions reductions, share knowledge and lessons learned to help scale successful approaches across the wider manufacturing industry, and build workforce capability to operate new equipment and meet certification, safety and compliance requirements.

The Fund prioritises three areas where Australian manufacturers have decarbonisation potential. These are surface treatment, including powder coating, galvanising and metallic finishing; process steam, including sterilisation, drying and cooking; and metals processing, including extraction, fabrication, refinement and transformation.

ARENA Chief Executive Officer Darren Miller said decarbonising manufacturing is essential to Australia’s energy transition and that targeted support can help smaller businesses take practical steps to cut emissions.

“Australia cannot reach net zero without transforming how we make the materials and goods that underpin our economy,” said Miller.

“This funding extends ARENA’s work in industrial decarbonisation to reach small and medium-sized manufacturers, helping them deploy practical solutions and demonstrate approaches that can be replicated across the industry.”

Eligible companies can apply for co-investment for projects valued between $400,000 and $1 million, with lead manufacturers contributing 50 per cent of eligible project costs on a dollar-for-dollar basis. To qualify, manufacturers must currently employ fewer than 200 staff, be Australian owned, and operate in Australia.

AMGC Managing Director Dr Jens Goennemann said the Fund strengthens both competitiveness and sustainability for Australian manufacturers.

“This important initiative supports manufacturers across a range of industrial sectors, from food and beverage to surface finishing and metal processing, to improve efficiency and future-proof their operations,” said Dr Goennemann.

“To advance Australia’s industrial capability, all areas of manufacturing must be engaged.

“This Fund supports skills development, operational transition to lower-emissions, and sharing knowledge to accelerate industry-wide progress.”

Applications open July 2026 and will be assessed on a continuous basis until 31 December 2027, or until funding is fully allocated.

Over the past 10 years, AMGC has facilitated more than 500 national collaborations and co-funded over 170 industry projects, creating more than 4,400 jobs across the country.

It has invested over $137 million of combined industry and government funding into manufacturing projects, generating an estimated $1.72 billion in additional national revenue.

The program is now open for applications and will remain open until funds are allocated, with all projects to be completed before 31 March 2028.

Further details, including eligibility criteria and application guidelines, are available now at www.amgc.org.au/decarbonisation-fund.

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