The Labor Government’s May-2023 budget is a positive step in the right direction for Australia’s efforts to reduce its greenhouse gas emissions and scale up our renewable energy capacity to transform our electricity grid and support the development of green hydrogen. ‘Efficiency and electrification with renewables’ is our key takeaway from the announced measures. In addition to headline initiatives like Hydrogen Headstart and the Capacity Investment Scheme, the budget builds on the recently released National Electric Vehicle Strategy with further funding to enable the EV transition, provides significant incentives for households and small business to invest in energy efficiency and electrification upgrades, and provides added funding to strengthen energy efficiency standards and associated rating schemes. Improved governance of carbon credit schemes and greenwashing by business are also welcome initiatives, as are commitments to support clean energy sector apprenticeships and future skills needs.
100% Renewables has summarised many of the announced funding and enabling measures below. We will track progress of each announcement and update our clients on opportunities they can access to support their net zero journey.
| Initiative | Targeted at… | Funding Commitment | What the funding will support |
|---|---|---|---|
| Renewable Hydrogen (Hydrogen Headstart) | Industry & Energy | $2 billion ($156 million over next 4 years) | Production incentives for renewable hydrogen to leverage private investment and help two or three large renewable hydrogen projects bridge the gap to commercial viability |
| Guarantee of Origin | Industry & Energy | $38.2 million | Scheme to certify renewable energy and green hydrogen production |
| Capacity Investment Scheme | Energy | $12 billion | To help unlock over $10 billion of investment in firmed renewable energy projects in the NEM, including for Renewable Energy Zones, offshore wind and crucial transmission infrastructure |
| Powering the Regions Fund | Industry | $1.9 billion | Assisting trade-exposed safeguard facilities, energy-intensive minerals processing, regional industrial facilities and new clean energy industries through the Powering the Regions Fund, including the Safeguard Transformation Stream, Critical Inputs to Clean Energy Industries stream, and the Industrial Transformation Stream (administered by ARENA) |
| Powering Australia Industry Growth Centre | Industry | $14.8 million | Establish the Powering Australia Industry Growth Centre, which will support Australian businesses looking to manufacture, commercialise and adopt renewable energy technologies |
| Energy Price Relief Plan | Households and small business | Up to $3 billion | Federal, state and territory governments partnership to deliver up to $3 billion of electricity bill relief for eligible households (up to $500) and small businesses (up to $650) |
| CEFC Green Finance (Energy Savings Plan) | Households | $1 billion | Household energy upgrades fund to provide green finance for 110,000 residential home electrification and energy upgrades like double glazing, solar panels, including provision for landlords to support rental housing |
| Social Housing (Energy Savings Plan) | Households | $300 million + $600 million co-funding from States | Upgrade 60,000 social housing properties to save up to one third of their energy costs |
| Small Business Energy Incentive (Energy Savings Plan) | Small business | $310 million | 20% tax deductions for businesses that invest in renewable energy, batteries and energy efficiency. Up to $100,000 will be eligible, with the maximum bonus tax deduction per business of $20,000 |
| EV - Transport and Infrastructure Net Zero Roadmap and Action Plan | Transport | $7.8 million over four years (of $20.9 million total package) | Development of the Transport and Infrastructure Net Zero Roadmap and Action Plan |
| Fuel Efficiency Standards | Transport | $7.4 million over four years | Development of Fuel Efficiency Standards (annual tailpipe CO2 caps on car brands) |
| EV – charging infrastructure | Transport | $5.2 million over four years | Development of a national charging infrastructure mapping tool |
| EV – charging infrastructure | Transport | Part of the $20.9 million total package) | Research on retrofitting multi-residential buildings with EV charging |
| Sovereign Green Bond Fund | Sustainable Finance | Mechanism to allow super funds and banks to finance public projects aimed at getting Australia to net zero | |
| Clean building Managed Investment Trust | Commercial Buildings | From 1 July 2025 | Extend the clean building MIT withholding tax concession to eligible data centres and warehouses. Buildings will need to satisfy higher energy efficiency standards to qualify for the concession |
| Greenwashing by business | All sectors | $4.3 million | Added surveillance and enforcement powers for ASIC to crack down on greenwashing by businesses |
| Energy Apprenticeships program | All sectors | $100 million | 10,000 new clean energy sector apprenticeships and a Clean Energy Capacity Study to explore future workforce needs and opportunities |
| Efficiency standards | All sectors | $36.7 million over four years | Updating the Greenhouse and Energy Minimum Standards (GEMS) program and Nationwide House Energy Rating Scheme (NatHERS) |
| Net Zero Authority | All sectors | $23 million initial funding | Managing the energy transition and ensuring the workers, industries and communities are supported and to help investors and companies to engage with net zero transformation opportunities |
| Clean Energy Superpower Masterplan | All sectors | $5.6 million | DCCEEW to conduct rapid analysis and action to ensure Australia's clean energy competitiveness, including securing supply chains, building the highly skilled workforce required and realising our competitive advantages in critical minerals and green manufacturing |
| National Climate Risk Assessment and a National Adaptation Plan | All sectors | $28 million over two years | Development of the National Climate Risk Assessment and National Adaptation Plan |
| Future Gas Strategy | All sectors | $6.7 million | The Strategy will support Australia's energy system to reach 82 per cent renewables by 2030 |
| Independent Review of Carbon Credits | All sectors | $18.1 million | Reforms and auditing arising from the independent review |
| Australia’s National Greenhouse Accounts | All sectors | $21.8 million over three years | To improve the NGA’s capability to publish better emissions data and track progress against emissions reduction targets |
While these measures are welcome and will help to reduce Australia’s emissions, there remains much to be done. As some industry stakeholders have already noted, if the 116 new fossil fuel projects on the Government’s Resource & Energy Major Project list were to proceed, the gains being made with renewables, efficiency and electrification may be to no avail in the context of trying to limit global heating to 1.5°C. A Future Gas Strategy that addresses key barriers and sets out a pathway for a shift away from gas would be a welcome step. Faster progress to electrification and efficiency with renewables in future budgets will also be needed to meet our near term and long term goals.
If you have any questions about how your organisation might benefit from the new budget initiatives, please do not hesitate to get in touch.
If you need help developing a net zero strategy, contact us today to learn how we can support your transition. Reach out to Barbara or Patrick for more information.
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