Powering the Regions Fund - Safeguard Transformation Stream Round 2 is a grant from the Australian Government, administered by ARENA, that funds emissions reduction projects at trade-exposed industrial facilities. Up to 50 million dollars is available in Round 2, with individual grants ranging from 500,000 to 50,000,000 dollars covering up to 50 percent of eligible project expenditure.

Eligible applicants are owners or operators of trade-exposed Safeguard Mechanism facilities, excluding new or expanded coal or gas production. The program supports industrial decarbonisation innovation and commercial deployment across electrification, fuel switching, and clean energy integration. Applications are assessed in three batches through May 2027, with Batch 1 closing in May 2026.

The broader Safeguard Transformation Stream has 600 million dollars committed over the life of the program.

Powering the Regions Fund – Safeguard Transformation Stream Round 2 | business. gov.au Powering the Regions Fund – Safeguard Transformation Stream Round 2 The Powering the Regions Fund – Safeguard Transformation Stream Round 2 grant opportunity will provide up to $50 million to trade exposed facilities to reduce their emissions and contribute to meeting Australia’s emissions reduction targets.

Thursday 6 May 2027 5:00pm AEST Thu 6 May 2027 5:00pm AEST Australian Eastern Standard Time (AEST) Australian Central Standard Time (ACST) Australian Western Standard Time (AWST) Australian Eastern Standard Time Australian Central Standard Time Australian Western Standard Time Application detail: Applications will be assessed in batches: Batch 1 : 5 February 2026 - 5 May 2026 Batch 2 : 6 May 2026 - 5 November 2026 Batch 3 : 6 November 2026 - 6 May 2027.

A grant of $500,000 to $50,000,000 to cover up to 50% of eligible project expenditure. Owners or operators of a trade-exposed Safeguard Mechanism facility that is not a new or expanded coal or gas production facility. This grant opportunity was announced in January 2023 as part of Government’s Safeguard Mechanism Reforms to support the Government’s ambition for Australia to become a renewable energy superpower.

The Australian Government has announced a total of $600 million over the life of the program in recognition of the specific challenges faced by trade exposed facilities. For this second round of the Powering the Regions Fund - Safeguard Transformation Stream approximately $321 million is available from 2025-26 to 2032-33.

The objectives of the grant opportunity are to: support trade-exposed facilities covered by the Safeguard Mechanism to reduce their emissions and contribute to meeting Australia’s 2030, 2035 and 2050 emissions reduction targets reduce the risk of carbon leakage, which occurs when a business responds to emissions reduction policies by moving emissions-intensive production to a country with less stringent policies provide skills development to existing industrial workforce in new equipment or processes that contribute to the reduction of scope 1 emissions.

The intended outcome of this grant opportunity is a reduction of emissions at trade exposed Safeguard facilities consistent with their obligations under the Safeguard Mechanism . You can apply if you meet the eligibility criteria. The eligibility criteria are a set of rules that describe who we can consider for this grant.

You can apply if you: have eligible expenditure. The rules are in the grant opportunity guidelines. are an owner or operator of a trade-exposed safeguard mechanism facility that is not a new or expanded gas or coal facility have an Australian business number (ABN) And are one of the following entities: an entity incorporated in Australia company limited by guarantee incorporated association.

You can’t apply if you are: the owner of a trade-exposed Safeguard facility that is also a new or expanded coal or gas facility an organisation, or your project partner is an organisation, included on the National Redress Scheme’s list of Institutions that have not joined or signified their intent to join the Scheme an employer of 100 or more employees that has not complied with the Workplace Gender Equality Act (2012) Partner with other organisations You can partner with one or more other organisations that also meet the eligibility criteria.

But you must decide who the lead organisation is. The lead organisation must fill out the application form. If we give your group the grant, the lead organisation: signs the grant agreement is responsible for making sure your group follows the rules in the grant agreement.

You must complete your project by 31 March 2033. The maximum project period is 60 months. be aimed at contributing to Australia’s emissions reduction targets.

Your project must be delivered in one of the following locations: on-site at any eligible facility, or shared infrastructure, with practical connection to an eligible facility and the grantee, located in Regional Australia (defined as any area outside a Greater Capital City but including Kwinana). You can apply for a grant between $500,000 and $50,000,000.

You can use this grant funding for: newly purchased or pre-existing plant and equipment labour expenditure and on-costs staff training that directly supports the achievement of project outcomes decommissioning old equipment See the grant opportunity guidelines for more information.

To be eligible, expenditure must: be incurred by you, or your project partners (if applicable) within the project period be a direct cost of the project be incurred by you, or your project partners (if applicable) to undertake required project audit activities (where applicable) meet the eligible expenditure guidelines.

Check if you’re ready to apply for a grant Finding a suitable grant opportunity is just the start of the process to get funding. The application process can take time and effort. Understanding the entire process will help you be grant ready and may improve your chances of getting funding.

Use our checklist to find out what it takes to apply for a grant . When you're ready to apply When the online form is available, you'll need to apply using our online portal: Follow the instructions to complete your application. Submit your application before the close date.

Make sure you include enough detail and supporting evidence in your application to help us decide whether to award you the grant. Don’t submit the application until it’s complete. You can’t correct a mistake.

How we assess applications 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.

Apply for the Powering the Regions Fund - Safeguard Transformation Stream Round 2 now. Before you apply, make sure you: read and understand the grant opportunity guidelines. 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. See our customer portal's frequently asked questions to help with your queries. If you can't find your answer, contact us for assistance.

Correct a mistake on your application 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. This opportunity is part of the Powering the Regions Fund.

Current and past rounds of Powering the Regions Fund Powering the Regions Fund – Safeguard Transformation Stream Round 2 (Current page) Powering the Regions Fund - Safeguard Transformation Stream Round 1 Powering the Regions Fund – Critical Inputs to Clean Energy Industries – Cement, Lime, Alumina and Aluminium Sectors grant opportunity Let us answer your question over the phone, email or live chat.

Monday to Friday, 8am to 8pm across Australia The following Frequently Asked Questions (FAQs) summarises the requirements set out in the grant opportunity guidelines in plain English while also addressing queries submitted by potential applicants. Please note that the grant opportunity guidelines are the primary authority to understand eligibility, assessment criteria and grant process under the Safeguard Transformation Stream (STS).

In the event of any inconsistency between the FAQs and the published guidelines, you should always follow the guidelines. Download a copy of the FAQs Frequently Asked Questions (FAQs) What’s changed since STS Round 1? Projects can now be completed over a maximum of 60 months (5 years), and by 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: increased by 5% or more annual coal or gas production compared to pre-30 June 2023 annual production levels 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 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: increase annual coal or gas production by 5% or more compared to pre-30 June 2023 annual production levels 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 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.

Trade-exposed production variables in section 2 of Schedule 2 of the National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015 mention ‘run-of-mine’ metal ores. Where can I find the definition of ‘run-of-mine’ metal ore? The definition of ‘run-of-mine’ metal ores can be found in section 24 of Schedule 1 of the National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015 .

Further detail is provided in the guidance document Safeguard Mechanism: Prescribed production variables and default emissions intensities , also known as the Safeguard Mechanism document. We are a non-safeguard facility with a project that supports renewable energy, can we apply? In order to apply, you must meet all eligibility requirements.

As a non-safeguard facility, you would need to partner with a safeguard facility who is willing to take the lead applicant role, who meets the other eligibility requirements and the project can demonstrate a reduction in scope 1 emissions at that facility. 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. Are Carbon Capture and Storage projects within the scope of the STS? Yes.

Carbon Capture and Storage projects are eligible projects, provided they are reducing a Safeguard facility’s Scope 1 (direct) emissions, and the proponent can demonstrate that their emissions are able to be sequestered in a permanent way. 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 are the part of the eligible project expenditure not covered by the grant. 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 leasing costs for plant and equipment be claimed as eligible expenditure?

Yes, you can claim leasing costs for plant and equipment via a finance lease or an operating lease under certain conditions. Please refer to A2 of the grant opportunity guidelines for more specific information on the eligibility of leasing costs. 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. On-site projects at eligible facilities can be undertaken anywhere in Australia. Shared infrastructure projects with a connection to an eligible facility must be undertaken in Regional Australia.

This is defined in the guidelines as any area outside a Greater Capital City but includes Kwinana. Where can I find the definition of Greater Capital City so I can work out if my shared infrastructure project is eligible? The definition used here is from the Australian Bureau of Statistics, and the reference is to the Greater Capital City Statistical Area.

You can use ABS Maps - use the 2021 Greater Capital City Statistical Area filter, and enter the project address. Note: Kwinana is within the Perth Greater Capital City Statistical Area, but is an eligible location for shared infrastructure projects. 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: Your project’s contribution to Australia’s emissions reductions targets by 2030, 2035 and 2050 (50 points) Your capacity, capability, and resources to deliver the project (10 points) 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 Assessment Criterion 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: 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 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 will result in scope 1, 2 and/or 3 emission reductions. How will these be assessed, especially if scope 1 reduction options are constrained?

The objective of STS is to help eligible facilities reduce scope 1 emissions. Your response to Assessment Criterion 1 (section 6. 1 of the guidelines) should focus on the direct emission reductions (e.g. scope 1) to be delivered by your project.

Scope 2 and 3 emission changes to be delivered by your project are also relevant to Assessment Criterion 1. They may also potentially be relevant to 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. If my facility will cease operations in the future, but the exact date is unknown, how should I record this in my application?

You should detail the current plans for the relevant facility and note the main factors that may influence continued operations or early closure. For example, is there a publicly announced closure date or a planned decision point at a specified time. To support the assessment of your application please report the expected or most likely closure date for your facility.

You can also include a range of possible dates if the closure date will occur within a set time period, such as 2035 – 2040.

Key dates (may be subject to change) 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 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 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 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