Funding for trade exposed Safeguard facilities to reduce emissions

First we check that your application meets the eligibility criteria. Eligible applications are then assessed against the assessment criteria.

Each criterion is allocated a specific number of points, and your total score determines your ranking.

• Assessment criterion 1: Describe how your project will contribute to Australia’s emissions reduction target to 2030, 2035 and 2050 (50 points).
• Assessment criterion 2: Capacity, capability and resources to deliver the project (10 points).
• Assessment criterion 3: Impact of the grant funding on your project (40 points).

The amount of detail and supporting evidence you provide should be relative to the project size, complexity and grant amount requested.

When deciding which applications to award, the following considerations are made:

• the overall objective/s of the grant opportunity
• the evidence provided to demonstrate how your project contributes to meeting those objectives
• the relative value of the grant sought
• the timing of emissions reductions
• extent to which the geographic location of the project matches identified priorities.

The Minister makes the final decision.

Sample applications

The best way to understand what information you need to provide is to start an application. We have also provided a version to download at the bottom of this page.

Technical help

See our customer portal's frequently asked questions to help with your queries. If you can't find your answer, contact us for assistance.

If you submit your application before the close date you can retrieve it any time to make changes. But you must submit it again before the close date.

After submitting your application, we can contact you for clarification if we find an error or any missing information, including evidence that supports your eligibility/merit. Whether we can accept the additional information you provide after you have submitted your application is at the discretion of the program delegate. Additional information should not materially change your application at the time it was submitted. We may refuse any additional information we deem to be purely supplementary.

We can’t consider the application you submit after the close date under any circumstances.

• Projects can be completed over a maximum of 5 years, out to 31 March 2033.
• Front-end engineering and design (FEED) studies may only be claimed as eligible expenditure up to 10 per cent of the total grant funding, up to $5 million, where your annual turnover in the most recently completed financial year is $3 billion or less.
• Definitions of new and expanded coal and gas facilities have been updated.
• Applicants are required to identify the trade-exposed production variable at the Safeguard facility that is the lead or only applicant.
• Relevant documents that convey information about the project that aren’t captured in the mandatory document set can now be considered by the expert assessment panel.
• File size limit for the total of all attachments has increased to 50MB.

Who is eligible to apply for the STS?

To be eligible you must be an owner or operator of a trade-exposed safeguard mechanism facility that is not a new or expanded coal or gas production facility (eligible facility) .

The definition of a trade-exposed facility is a facility that produces a trade-exposed production variable listed in section 1 or 2 of Schedule 2 of the National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015.

Section 4 of the guidelines provides full details about who is and is not eligible to apply.

Are applications lodged by the entity or facility? Are joint or multiple applications allowed?

It is a matter for each eligible entity as to how you prepare your application. To be eligible under the STS you must be an eligible entity with an eligible facility.

Each application should relate to a single project. A single project may include:

• a single eligible facility owned or operated by an eligible entity
• multiple eligible facilities owned or operated by an eligible entity. For example, shared infrastructure to supply clean energy to multiple eligible facilities.
• multiple eligible facilities owned or operated by multiple eligible entities. This is considered a joint (consortia) proposal and has additional requirements that are provided at section 7.2 of the guidelines.

Eligible entities are welcome to submit multiple applications. Applicants should put forward their best possible proposals. The STS is a competitive grant program and higher scoring projects are more likely to be recommended for funding by the Powering the Regions Expert Advisory Panel (PRF EAP) a committee comprised of senior government officials and external experts which will assess and score applications.

Each application is assessed as a stand-alone project and any reliance or reference to another application will not be taken into consideration during the assessment.

Can I partner with a non-eligible entity to deliver a project?

We recognise that some organisations may want to join as a group to deliver a project. In these circumstances, you must appoint a lead organisation to make an application and (if successful) enter into a grant agreement with the Commonwealth, on the group’s behalf. The lead organisation must be an eligible entity. However, non-eligible entities may be project partners.

Project partners must comply with the National Redress Scheme, and if they employ 100 or more employees, they must also comply with the Workplace Gender Equality Act (2012).

Information about joint (consortia) applications are in section 7.2 of the guidelines.

Are all coal and gas facilities excluded?

No, not all coal and gas facilities are excluded. However, section 4.3 of the guidelines states that new or expanded coal or gas facilities are ineligible to apply for STS grant funding. This eligibility requirement is intended to ensure STS grant funding decisions are consistent with the policy objectives of the Safeguard Mechanism reforms.

Potential applicants are responsible for demonstrating eligibility. In the case of an existing coal or gas facility, for example, it will be necessary to demonstrate that the facility has not materially expanded, and does not plan to materially expand, its coal or gas production compared to production levels before 30 June 2023.

How is “new or expanded coal or gas facility” defined?

The guidelines define a “new or expanded coal or gas facility” as:

"A trade-exposed Safeguard Mechanism facility that produces coal or gas as a production variable and either commenced operation, materially expanded production, or plans to materially expand production after 30 June 2023." 

This definition should be read with reference to the STS program objectives (set out in section 2 of the guidelines) and considering the Safeguard Mechanism reforms.

What is meant by ‘materially expanded’ coal or gas facility?

The guidelines define “materially expanded” as:

• a trade-exposed Safeguard Mechanism facility that produces coal or gas as a production variable is considered to have materially expanded production if it has done one or more of the following:
  1. increased by 5% or more annual coal or gas production compared to pre-30 June 2023 annual production levels
  2. if the facility produces coal as a production variable, commenced extracting coal from an area that is not covered by an environmental approval provided before 30 June 2023
  3. if the facility produces gas, commenced liquefaction of gas from a new gas field within the meaning of the Safeguard Rules (see section 35 and section 35A(4) of Schedule 1).

The guidelines also define “plans to materially expand” as:

• a trade-exposed Safeguard Mechanism facility that produces coal or gas as a production variable is considered to have plans to materially expand production if it plans to do one or more of the following:
  1. increase annual coal or gas production by 5% or more compared to pre-30 June 2023 annual production levels
  2. if the facility produces coal as a production variable, extract coal from an area that is not covered by an environmental approval provided before 30 June 2023
  3. if the facility produces gas, commence liquefaction of gas from a new gas field within the meaning of the Safeguard Rules (see section 35 and section 35A(4) of Schedule 1).

For the purposes of (b) and (c) any application with a federal, state or territory environmental agency for expansion, including draft, pending and paused applications will be considered evidence of plans to materially expand production.

The evidence required to demonstrate eligibility will vary depending on site specific factors. In general, it would be appropriate for coal or gas producers to provide historical production data for the four years before 2023 and any subsequent periods for which data is available, their forecast production figures, and a statement from senior representatives (e.g., CEO or CFO) that there are no plans to materially expand production at the relevant facility.

Noting that production may naturally vary year to year due to geological and operational issues, if the production forecast is an increase of 5% or more in annual production compared to production before 30 June 2023, then the entity should provide a justification supporting any forecast or provide contextual information about the market to substantiate why the fluctuation should not be characterised as a material expansion.

Is there a list of eligible activities?

The STS is a technology neutral program. Section 5 of the guidelines sets out the requirements for projects to be eligible (including activities, expenditure and location requirements). Some examples of the types of activities that could be eligible are described on page 10 and 11 of the guidelines. This includes direct abatement of scope 1 emissions (on-site projects), and common use infrastructure (off-site projects).

Are research, or feasibility studies within the scope of the STS?

Research or feasibility analysis eligibility is limited to Front-End Engineering and Design (FEED) studies, which is eligible only if the following conditions are met. First, the FEED study is linked to capital works to be delivered as part of the project proposal. Second, the FEED studies comprise no more than 10% of the total grant funding sought. Third, the applicant’s annual turnover in the most recently completed financial year is equivalent to AUD$3 billion or less. 

Should you wish to include research or feasibility analysis in your application, you will need to satisfy the Commonwealth that the research or feasibilities analysis directly support the achievement of the planned outcomes for the project and the objectives of the program.

Further evidence is recommended to illustrate emissions abatement potential of trial projects.

Research or feasibility studies (except for FEED studies as discussed above) are ineligible for funding, including:

• research not directly supporting eligible activities, including pre-feasibility and feasibility studies
• costs associated with reaching or undertaking a Final Investment Decision (FID).

When responding to assessment criteria 2, it is important to note that including FEED in your grant application means you may not score as highly as a similar project that has already passed FID without a strong response with supporting evidence.

Section 5 of the guidelines sets out requirements for your project to be eligible for funding, including eligible activities, locations, and expenditure. Further details on eligible and ineligible expenditures are in appendix A and B of the guidelines.

Can I buy Australian Carbon Credits Units (ACCUs) with grant funding?

No, the purchase of ACCUs or any credits in any other carbon crediting scheme is an ineligible expenditure.

The STS aims to fund new capital investments at trade-exposed Safeguard Mechanism facilities (or in common user infrastructure that supports those facilities) that reduce scope 1 emissions. As a result, these types of projects are not eligible in line with appendix B of the guidelines.

How much funding is available?

Information about the grants available is in section 3 of the guidelines.

The STS is a $600m grant program. The second round of the PRF STS has approximately $321 million available through to 31 March 2033.

The minimum grant amount is $500,000 and the maximum grant amount is $50,000,000.

How much of my project will the grant cover?

The grant amount may cover only up to 50% of eligible expenditure. This is the maximum contribution and if successful, you may be offered less than 50% of your project cost.

You are responsible for the remaining eligible and ineligible project costs.

What do I need to know about my co-contributions?

Co-contributions to your project must be in cash (that is, not ‘in kind’ contributions).

Co-contributions may be from any source including parent company transfers, private loans, direct funds provided by joint partners or consortia (where relevant) with a limit of 40% of your co-contribution being funded from government sources, including loans, concessional financing, and grants from state, territory and local government.

Can I apply for funding under the STS and other grants?

While you can apply for funding for the same project under more than one Commonwealth program, we cannot fund your project if it receives funding from another Commonwealth grant program. Therefore, should your application be successful, you must choose either the PRF STS grant or the other Commonwealth grant.

You can receive State, Territory or Local Government grant funding up to 40% of your contribution component, including joint funding or other funding arrangements such as concessional or other loans. We will require an independent certification that you have the funds available to support your part of the project.

Information about additional funding sources is set out in section 3 of the guidelines.

Can I apply for more than one project?

You may apply more than once in Round 2, including submitting multiple applications in a single batch. However, each application must be for a different project and activities.

Do I have to undertake my project in a specific location?

Your project must be delivered in Australia and must deliver scope 1 emissions reduction at an eligible Safeguard facility. Projects themselves do not need to take place within the eligible facility, for example where a project constructs common user infrastructure such as a hydrogen or biofuel plant to reduce emissions at an eligible facility. Section 5.2 of the guidelines details the locations where your project must be delivered.

Are there specific funding allocations by region?

Funding will be allocated on a competitive basis and not by specific regions, although the PRF EAP will also take into consideration the geographic spread of successful projects in its assessment in accordance with section 8.1 of the guidelines.

How long do I have to do my project?

Section 3.2 of the guidelines states the maximum project period is 60 months.

You must complete your project by 31 March 2033. 

Where a decarbonisation project for an eligible facility would run beyond 31 March 2033, a specific component (sub-project) of the project which is able to be completed before this date could be considered an eligible project, subject to the other requirements in the guidelines.

What are you looking for in a project?

STS is open to a range of projects in relation to trade-exposed facilities that reduce scope 1 emissions (see section 4 and 5 of the guidelines).

How will applications be assessed?

Eligible applications will be assessed on three weighted assessment criteria:

1. Your project’s contribution to Australia’s emissions reductions targets by 2030, 2035 and 2050 (50 points)
2. Your capacity, capability, and resources to deliver the project (10 points)
3. The impact of grant funding (40 points)

Applications will be assessed as a whole proposal including consideration of value with relevant money (section 14 - glossary, page 31 provides a definition). As such, applicants should submit the most attractive proposal possible, ensuring all assessment criteria (including all indicators and dot points as outlined in section 6 of the guidelines) are addressed, including evidence (see section 6 and 7 of the guidelines).

How much information should I provide?

The amount of detail and supporting evidence you provide in your application should be relative to the project size, complexity and grant amount requested.

We encourage applicants to provide as much information as necessary for the PRF EAP to understand your project and how it will deliver on program objectives.

Do I have to address all the assessment criteria?

Yes, applications will be assessed against each point and sub-point identified in the assessment criteria in section 6 of the guidelines. The weighting of each criteria should be considered a guide as to where you should focus your application.

How will emissions abatement be measured?

You must identify your project’s emissions abatement potential (focusing on scope 1 emissions) and provide your corporate and/or facility emission reduction plan. Section 6.1 (Assessment Criterion 1) of the guidelines states you must demonstrate this through identifying your: 

1. project’s emissions abatement potential. This must detail: 
   • the potential scope 1 emissions reductions from trade-exposed Safeguard facilities to be delivered by the project in tonnes of carbon dioxide equivalent per annum (tCO2-e p.a.). You must include the basis for your calculations with sufficient detail for them to be replicated and validated
   • the expected timing for delivery of any emission reductions and the impact of grant funding in reducing this (if relevant)
   • how the project relates to any other projects or upgrades planned for the facility
2. corporate and/or facility emission reduction plans. This should include: 
   • a summary of any existing corporate or facility emission reduction commitments
   • a summary of your obligations under the Safeguard Mechanism
   • an explanation of how this project supports or accelerates your plans to meet relevant corporate and regional commitments. 

When calculating ‘emissions abatement potential’ please consider and factor in considerations like the risk of non-delivery, as some technologies and processes may be more reliable than others. 

Figures, especially expected abatement or emission reduction figures, should be clearly stated and easy to locate within your application. They should also be consistent across the application and project plan with calculations and justifications provided, as appropriate.

You should demonstrate how your project and plans align with the Government’s targets, any corporate or facility targets, and how that may impact your compliance with the Safeguard Mechanism. For example, do you expect to produce Safeguard Mechanism credit units (SMCs) as a result of the investment.

Assessments of other metrics for emissions abatement to support your case can be noted in your application as part of your overall or facility emission reduction plans. Your application will be assessed as a whole proposal against the three assessment criteria.

Is there a set carbon price or emission target expected of projects?

No. But your project will be competitively assessed against other eligible applications for value for money.

My project reduces indirect (scope 2 and 3) emissions. How will these be assessed?

The objective of STS is to help trade-exposed facilities covered by the Safeguard Mechanism reduce scope 1 emissions. Your response to Assessment Criterion 1 (section 6.1 of the guidelines) should focus on this aspect.

You may note any additional potential scope 2 or 3 emission increases or reductions obtained by this project as these may be taken into account as part of your overall corporate and/or facility emission reduction plans. 

Information about scope 2 and 3 emission reductions may be relevant to both Assessment Criterion 1 and Assessment Criterion 3 (section 6 of the guidelines). For example, where they will support decarbonisation by other businesses or consumers in your region.

Are new or demonstration projects eligible for STS?

New, innovative, or demonstration projects are eligible under the STS.

When detailing the emissions abatement potential as outlined in section 6.1.a of the guidelines, you should factor in considerations like the risk of non-delivery. For trials or demonstration projects, it will be helpful if you can detail the length of time you expect your trial or demonstration project to be operational and how replicable the project could be at other locations. In the event that your estimated emission reductions are not achieved, the lessons learnt and shared in your project completion report will be valuable to knowledge sharing and this may be relevant to Assessment Criterion 3.

For demonstration projects, you may also want to consider the Powering the Regions Fund Industrial Transformation Stream run by ARENA.

What about joint applications?

Joint applications are welcomed. The lead applicant must be the Safeguard facility at which scope 1 emissions are reduced, and you must include formal arrangements and letter of support. See section 7.2 of the guidelines.

Can we build shared infrastructure?

Shared infrastructure projects are also welcomed. Shared, or common-use infrastructure projects should have a practical link to the lead applicant’s Safeguard facility and should reduce scope 1 emissions at the lead applicant’s facility and/or other Safeguard facilities.

Key dates (may be subject to change)

Overall

• Guidelines released: 5 February 2026
• Project completion deadline: 60 months (5 years) from the date the grant agreement is executed, or 31 March 2033, whichever occurs first (applies to all batches)
• End of Round 2 (Batch 3 cut-off): 6 May 2027

Batch 1

• Applications open: 5 February 2026
• Application closing date: 5 May 2026
• Assessment of applications: May – July 2026
• Successful applicants announced: July 2026
• Grant agreements negotiated and finalised: August – September 2026
• Earliest expected start date for projects: September 2026

Batch 2:

• Applications open: 6 May 2026
• Application closing date:5 November 2026
• Assessment of applications: November 2026 – January 2027
• Successful applicants announced: January - February 2027
• Grant agreements negotiated and finalised: February – March 2027
• Earliest expected start date for projects: March 2027

Batch 3:

• Applications open: 6 November 2026 
• Application closing date: 6 May 2027
• Assessment of applications: May- July 2027
• Successful applicants announced: July – August 2027
• Grant agreements negotiated and finalised: August – September 2027
• Earliest expected start date for projects: September 2027

When can I submit an application? And when will they be assessed?

Round 2 of the STS opened to applications on 5 February 2026 and remains open until 6 May 2027.

Eligible applications will be assessed in batches, with the applicable timeframes listed above. We expect the assessment process will be finalised and announced within 3-5 months of the listed application closing date, and grant agreement negotiations will commence at this time.

What happens if I miss the cut off for the first assessments on 5 May 2026?

Any applications received after 5 May 2026, will be considered in the next batch closing on 5 November 2026.

Likewise, any applications received after 5 November 2026 will be considered in the final batch closing on 6 May 2027.

Will I miss out on funding if I don’t apply in the first batch?

The available funding is split between the batches. Up to 50% of available funding will be offered in Batch 1, and up to 25% of available funding will be offered in Batch 2 and 3. If funding is not fully allocated within the Batch, the remaining funding will be made available in the next batch.

Who is assessing my application and how will my application be assessed?

The grant selection process is explained in section 8 of the guidelines.

Your application will be assessed by the Business Grants Hub in the Department of Industry, Science and Resources against the eligibility criteria (as set out in section 4 of the guidelines).

The independent PRF EAP will assess and score eligible applications against the assessment criteria (set out in section 6 of the guidelines), supported by independent technical experts.

The PRF EAP will consider your application as a whole and on its merits, comparing against other eligible applications in the relevant batch before making a recommendation to the Minister for Climate Change and Energy.

The Minister for Climate Change and Energy decides which grants to approve taking into account the recommendations of the PRF EAP and the availability of funds.

What if I don’t currently have a project?

Round 2 will remain open until 6 May 2027. Further rounds are not anticipated at this time, however other Commonwealth grant opportunities may be available for your project. You can view the current grant opportunities at GrantConnect.

How do I provide additional information to support my application?

Section 7.1 of the guidelines sets out the documents you must provide with your application. You must provide supporting documentation to the application form in line with the instructions in the form and the guidelines in order for your application to be eligible and complete.

You can choose to provide additional documents, listed as “may also provide” in section 7.1. The inclusion, or absence, of these additional “may also provide” documents does not influence the completeness of your application, however can be used to expand on and explain your application, allowing you to focus on the key assessment criteria in your application.

Project partners are required to provide a letter of support and their details must be entered into the application to generate the upload button for each one. Additional letters of support provided by non-project partners are non-mandatory attachments, and they can be included as additional supporting information.

The total of all attachments cannot exceed 50MB. This limit is applied to every application. This helps to ensure fairness and ensure that every application can be assessed and scored in a reasonable timeframe.

Should you have issues uploading your attachments, please contact us for advice on alternative submission methods.

When can I start work on my project? Will my project costs be covered?

You must not start any activities related to the project until a grant agreement is executed if you intend to claim the expenditure against the grant. We are not responsible for any expenditure you incur and cannot make any payments until a grant agreement is executed.

Any preliminary or planning work undertaken to prepare your application or project before your grant agreement is executed is considered ineligible expenditure.

Should you wish to seek funding for a component of a longer-term project, this should be clearly articulated in your application. Only eligible costs associated with that component incurred after the grant execution and before the grant agreement’s nominated project end date will be considered eligible for funding.

What do I have to do before I can execute my grant agreement and receive funding?

Once your project has been selected for funding, you will receive an email to complete a Commonwealth Australian Industry Participation Plan (AIP) if applicable. Refer to section 10, page 19 of the guidelines for more information. If completing an AIP applies to you, you must have this AIP approved before your grant agreement can be executed.

Am I still eligible if my emissions fall below the Safeguard Mechanism threshold during a project?

Eligibility requirements are assessed at the time of application and when entering into the grant agreement. If your emissions fall below the Safeguard Mechanism threshold during delivery of your project, this alone would not be grounds for termination of the grant.

How are grants treated for taxation purposes?

The Australian Taxation Office is best placed to give advice on the tax treatment of a grant. The grant amount you are awarded is GST exclusive, and where applicable, we will add GST to your grant payment and provide you with a recipient created tax invoice. You will need to notify us if your GST registration status changes during the project period.

Refer to section 10.5 of the guidelines for further information on grant payments and GST.

Can I confirm my facility or project is eligible?

We are unable to provide advice on whether specific entities, facilities or projects are eligible under the STS.

Please refer to section 4 and 5 of the guidelines for full eligibility criteria.

What level of detail is required in the application?

This is a matter for applicants. Applicants should put forward their best possible proposals, and to do so, it is recommended that applications be as detailed as possible subject to the limits that apply in application forms and to the total attachment size. This will assist the PRF EAP understand and accurately assess proposals.

Make sure that you address all of the assessment criteria, where applicable to your project. Take note of the weighting of each criterion, and use this as a guide for the amount of effort you should expend on each section.

Take advantage of the option to provide additional documentation subject to file size limits. This can include PowerPoint presentations, process flow charts, supporting calculations. If references are freely available on the internet, a weblink will suffice, the referenced articles do not need to be provided.

Can you suggest financial or technical support to help prepare my application? Can you help connect me with co-investors to apply for a project?

We are unable to recommend any professional services provider for the purpose of assisting in the preparation of grant applications.

What time do grant applications close?

Grant applications close at 5pm Australian Eastern Standard Time. The exact timing may be impacted if daylight savings is observed in your state, and we recommend you submit early to avoid issues.

What happens next if I am successful in applying for funding?

Section 9 onwards in the guidelines provides further information on the next steps once application outcomes have been announced.

Section 10 outlines the legally binding grant agreement that must be entered into with the Commonwealth should your application be successful. You can download a sample grant agreement under key documents.

The grant agreement will include details of your reporting requirements, including record keeping for mandatory evidence. There are also expectations to comply with relevant legislation, policies and industry standards, building and construction requirements, work health and safety, and Australian Industry Participation (if relevant).

Section 11 outlines information that may be published in relation to successful grants and where this information will appear.

Section 12 and 13 also outlines expectations for how we will monitor your grant activity, the various reports that you will be required to submit, and the Probity measures in place to help ensure a transparent and fair grant process.

Can I reapply if my application is unsuccessful?

Unsuccessful applicants are welcome to reapply in further batches in this round. This is not an automatic process, and you will need to resubmit your application. In these instances, it would be worth highlighting the areas of the application that have changed since the original application.

This may be for the same, revised, similar or completely different project. Written feedback will be provided to unsuccessful applicants and you may request further feedback. Any future applications for the same projects should address the feedback provided.

Resubmitted applications that do not address feedback or demonstrate improvement may not be considered by the PRF EAP.

Applicants are responsible for ensuring they put forward the best possible application and should refer to the grant opportunity guidelines.