The Powering the Regions Fund, introduced as part of the 2022 Powering Australia Plan, is a significant Federal Government initiative aimed at propelling Australia towards its renewable energy aspirations. Administered by the Department of Climate Change, Energy, the Environment and Water, the primary objectives of the Powering the Regions Fund are threefold: to support decarbonisation efforts within industries, bolster regional economies and workforces during the transition to net zero by 2050, and continue the purchase of Australian Carbon Credit Units (ACCUs) by the Commonwealth.
This fund comprises four distinct funding streams, each targeting specific sectors critical to achieving the country’s netzero ambitions. These streams are:
- Safeguard Transformation stream (STS),
- Industrial Transformation stream (ITS),
- Critical Inputs to Clean Energy Industries – Primary Steel Production Sector (CICEI – PSPS)
- Critical Inputs to Clean Energy Industries – Cement and Lime and Alumina and Aluminium Sectors (CICEI – CLAAS).
The $600 million ‘Safeguard Transformation Stream (STS)’ opens for applications on the 7th of August 2023 and closes on the 01st September. Read on to understand more about the priorities under this stream and how to effectively prepare and submit a compelling, competitive application.
OVERVIEW OF THE POWERING THE REGIONS FUND, STS STREAM:
The specific aims of the STS stream are to support trade exposed facilities covered by the Safeguard Mechanism in reducing their emissions, contributing to Australia’s 2030 and 2050 emissions reduction targets. By doing so, the program aims to mitigate the risk of carbon leakage, which occurs when businesses relocate emissions-intensive production to countries with less stringent policies. Additionally, the grant opportunity seeks to provide skills development opportunities for the existing industrial workforce, focusing on new equipment or processes that help reduce scope one emissions. Trade exposed is defined as ‘Industries that are constrained in their ability to pass through carbon costs due to actual or potential international competition.
FUNDING AMOUNT AND PROJECT PERIOD:
For the initial round of the STS, a total pool of $300 million is available and funded projects can span a four-year period. The grant amount per project ranges from a minimum of $500,000 to a maximum of $50 million. Applicants can expect the grant to cover up to 50% of eligible expenditure and to be responsible for providing the financial contribution for the remaining 50%. Funding from other sources, including loans and grants from state, territory, and local governments, is acceptable for this purpose, but if your project receives funding from another
Commonwealth government grant program, it cannot be funded under the Powering the Regions Fund.
To be eligible for a grant, firstly, you must be the owner or operator of a trade-exposed safeguard mechanism facility, excluding new or expanded coal or gas production facilities. An Australian Business Number (ABN) is a requirement; eligible companies must be incorporated in Australia, limited by guarantee or an incorporated association.
Joint applications from consortia are acceptable, but they require a lead organisation that meets the eligibility criteria.
Applicants must also obtain board (or CEO or equivalent’s) support for the project, providing evidence of a funding strategy, securing consent from the facility owner or representative to undertake the project, committing to provide a final project report, and submitting all mandatory attachments.
The Department will not waive these criteria under any circumstances. It’s best to contact them directly if you are unsure about you or your project’s eligibility for funding.
ELIGIBLE USES OF AWARD FUNDING:
Projects in the Powering the Regions Fund must have at least $1 million in eligible expenditure. Examples of eligible activities include on-site decarbonisation projects, such as
- Energy efficiency upgrades
- Fuel switching
- Equipment upgrades for lower carbon fuel usage
- Fugitive emissions reduction
- On-site carbon capture and storage
Off-site shared user infrastructure projects that reduce emissions at one or more trade-exposed Safeguard facilities, including hydrogen and bioenergy production and transport, off-grid electricity production and storage, and carbon capture and storage projects are also eligible.
Examples of ineligible expenditure include costs related to new or expanding fossil fuel projects, purchase of ACCUs or credits in other carbon crediting schemes, equipment or supplies already supported by other sources, costs incurred prior to submission application (retroactive projects), financing costs, capital expenditure for assets like office furniture and equipment, costs of software and hardware unrelated to the project, rental, renovation, and utility costs, non-project-related staff training, insurance costs and debt financing.
ICT and technology expenses are eligible, but they must be directly related to/in support of the project activities and not business-as-usual (BAU) activities. Additionally, the grant funding will not cover costs of ICT expenditure that require ‘ongoing’ maintenance or upkeep (e.g., funding for subscriptions/software licences).
There are three assessment criteria that you must form compelling responses to as part of this application:
- Assessment criterion one focuses on demonstrating how the project aligns with Australia’s emissions reduction targets for 2030 and 2050. Applicants must outline their project’s emissions abatement potential, corporate and/or facility emission reduction plans, and how the project supports or accelerates existing commitments.
- Assessment criterion two assesses the capacity, capability, and resources available to deliver the project. This includes describing the resources, personnel, and infrastructure that will be utilized, as well as providing a comprehensive project plan that outlines project management, risk mitigation strategies, and regulatory compliance.
- Assessment criterion three analyses the broader regional, social, economic, and environmental benefits of the project, focusing on workforce development, sectoral transformation, regional development, and value for money.
Applicants should present evidence supporting these aspects.
This grant is a game-changing opportunity for high-emitting industries and businesses in need of capital injection to accelerate a transition to a renewable energy and lower emissions targets. $600 million allocated to the Safeguard Transformation Stream alone represents substantial support for projects aimed at reducing emissions, supporting regional economies, and driving clean energy production.
TIPS FOR SUCCESS:
Firstly, bookmark this URL: https://business.gov.au/grants-and-programs/powering-theregions-fund-safeguard-transformation-stream-round-1. Make sure to check this page for updates regularly and subscribe to receive email updates from the Department, as guidelines can be updated and changed prior to the deadline date.
Next, read the guidelines and then re-read them. It is critical to thoroughly understand the program’s objectives and criteria and to tailor your application to address them effectively. Clearly demonstrate how your project contributes to emissions reduction targets and presents value for money.
Ensure your project plan is robust, showcasing your capacity, capability, and resources to deliver on the proposed objectives. Highlight the broader benefits of your project, including workforce development, industry collaboration/consultation and regional transformation. These factors are often muted within grant submissions to programs of this magnitude, but they can be crucial to success.
Finally, adhere to the guidelines and eligibility requirements strictly, providing all necessary supporting documentation. Don’t miss a required attachment, or your chances of success will suffer immensely.
We’re keen to see which projects get funded under this opportunity here at Grants Office and can’t wait to read about the successful applicants and projects. Embrace this opportunity to drive change, reduce emissions, and propel your industry and region towards a sustainable and prosperous future.
Applications open 7th August and close 1st September 2023, so get started now!