The Federal Government has unveiled the design of a $5 billion Net Zero Fund, offering some of the most competitive decarbonisation finance in the world to Australian industry.
The fund, a key part of the National Reconstruction Fund (NRF) and the Industry Sector Plan, aims to reduce energy costs and emissions at large industrial facilities, while supporting domestic manufacturing of low-emission technologies.
Minister for Climate Change and Energy Chris Bowen said the initiative targets Australia’s hardest-to-abate industries, helping them invest in clean energy upgrades and modernise operations. “By lowering the cost of finance for clean energy upgrades, the Net Zero Fund helps big energy users invest sooner, use energy more efficiently and reduce the risks of volatile fossil fuel prices,” he said. “This Fund backs Australian workers and regional communities that rely on these industries.”
The fund will operate as a sub-fund of the NRF, offering highly concessional finance with a lower rate of return on investment, set at the five-year Australian government bond rate minus one per cent. This approach allows it to take on more risk than commercial finance, encouraging private capital to follow public investment.
Minister for Industry and Innovation and Minister for Science Tim Ayres said the fund would help secure low-emission technologies while creating new manufacturing jobs. “Globally competitive financing from the NRF’s Net Zero Fund will make sure public investment in decarbonisation crowds in billions of dollars in private capital and drives down industrial energy costs and emissions,” he said.
The fund is central to the Albanese Government’s Future Made in Australia plan, which seeks to turn climate and energy challenges into opportunities for domestic manufacturers and investors. The initiative is expected to be operational by mid-2026.
Ayres highlighted other NRF investments to demonstrate the government’s commitment to Australian innovation, citing recent support for Alpha HPA in Gladstone and Diraq’s quantum technology. Bowen added that practical support like this allows manufacturers to invest with confidence, grow supply chains, and reduce emissions.
The Net Zero Fund marks a significant step in Australia’s efforts to capture opportunities from the global energy transition while supporting regional jobs and industrial competitiveness.
