NSW Net Zero Manufacturing Initiative – Low Carbon Product Manufacturing

What is eligible for funding?

The construction ready stream supports projects aimed at establishing new or expanded manufacturing facilities within NSW.

These facilities are required to produce low carbon products on a commercial scale from categories such as building materials (e.g., cement, steel, aluminium, cross-laminated timber), ‘green’ chemicals (e.g., ammonia, methanol), biofuels (e.g., derived from biomass or animal waste), power fuels (e.g., produced with renewable energy like hydrogen), and inputs for agricultural production (e.g., fertilisers, animal feeds). To be eligible, the project must demonstrate the production of a low carbon product with lower lifetime carbon dioxide equivalent (CO2e) emissions compared to equivalent conventional products. Additionally, the project must be in NSW, completed within four years of the funding agreement execution (by 30 June 2032 at the latest), financially sustainable without ongoing government investment, demonstrate that it would not occur in NSW within the same timeframe without government support, and have a viable commercial strategy.

Funding can be utilised for capital expenses (CAPEX) and other project-related costs, which are eligible only after both parties have signed a funding agreement. These costs encompass purchasing land (if essential and suitable alternatives for renting are unavailable), acquiring, constructing, installing, or commissioning new plant, equipment, or machinery, establishing new facilities, buildings, or hubs, procuring necessary technology and intellectual property (IP), upgrading existing facilities, buildings, plant, equipment, or technology where required for project delivery, and covering external project management and administration expenses (up to 10% of the project cost).

The project development stream supports initiatives aiming to secure a financial investment decision for constructing a commercial-scale manufacturing facility in NSW for low carbon products.

Organisations intending to commercially manufacture their low carbon products can seek funding for four types of project development activities. These activities should facilitate a financial investment decision to establish a new or expanded manufacturing facility. If an applicant plans to undertake multiple eligible projects, separate applications are required for each category.

Eligible project categories include front-end engineering design, product carbon footprint assessment, product compliance and certification studies to scale manufacturing, and manufacturing facility development approval. The project aims to facilitate the attainment of a financial investment decision for constructing a commercial-scale manufacturing facility for various low carbon products in NSW, encompassing building materials (e.g., cement, steel, aluminium, cross-laminated timber), ‘green’ chemicals (e.g., ammonia, methanol), biofuels derived from biomass or animal waste, power fuels produced with renewable energy (e.g., hydrogen and hydrogen-derived fuels), and inputs for agricultural production (such as fertilisers, animal feeds, etc.). Additionally, the project must align with one of the four outlined categories, demonstrate a necessity for government support to proceed within the designated timeframe, and be completed within 18 months of the funding agreement execution.

Funding can cover expenses directly associated with project delivery, but only after both parties have signed a funding agreement. Eligible costs comprise payments to contractors or consultants managing the project or executing specific project components, expenditures for hiring essential project staff, excluding labour costs for existing positions handling other tasks within the organisation, and administrative costs directly linked to the project, capped at 10% of the project’s total cost.