Carbon Innovation Grants Program

The program includes two grant funding streams to reflect the different stages of technology development that may require government support. These streams are:

Feasibility Studies

Supporting technologies and methods to progress from concept to real-world trials.

Feasibility studies have a minimum funding limit of $50,000 and a maximum funding limit of $500,000, which must be no more than 50 per cent of eligible project costs. 

Pilot Projects and Capital Works

Supporting real-world testing of innovative technologies and methods from pilot stage through to full-scale deployment.

Pilot projects and capital works have a minimum funding limit of $100,000 and a maximum funding limit of $1.5 million, which must be no more than 25 per cent of eligible project costs.

The first funding round closed on 16 December 2022 with 22 applications received from a range of industries, all operating in Western Australia.

Each application was carefully considered against rigorous selection criteria. Nine of the project proposals were found to have exceptional merit and have been offered funding to help them realise their potential.

A total of $4.24 million has been allocated in this first grant round. This will enable projects estimated at a total value of $26 million to be delivered by the recipients.

If these feasibility studies and pilot projects progress to full-scale deployment, they have the potential to reduce lifetime emissions from industrial processes by more than 74 million tonnes, steering Western Australia in the right direction towards net zero.

The nine recipients of the Round 1 Carbon Innovation Grants are:

• Aurizon Operations Limited: $1 million for a pilot project to decarbonise heavy rail transport by installing high-capacity charging infrastructure for battery electric locomotives
• CSBP Limited: $500,000 for a pilot project to reduce industrial process emissions from the production of nitric acid and ammonium nitrate through the installation of tertiary abatement technology
• CSIRO: $300,000 for a feasibility study of direct air carbon capture technology from a Wesfarmers industrial manufacturing process
• Airbridge Pty Ltd: $422,565 for a feasibility study to assess patented technology for carbon capture and storage
• First Mode Pty Ltd: $500,000 to assess the feasibility of a hybrid diesel-battery powerplant for retrofitting diesel locomotives
• Australia VRFB ESS Company Pty Ltd: $469,109 to test the feasibility of using vanadium redox flow batteries to store solar energy and replace diesel power generation at mine sites
• Wallis Drilling Pty Ltd: $500,000 for a feasibility study to assess the viability of an electrified air core drill rig solely powered through battery storage, eliminating the use of diesel fuel
• Tronox Limited: $50,000 for a feasibility study to identify reductants that can replace coal in processing ilmenite into synthetic rutile for use in the manufacture of pigments
• Sea-Quester Offshore Pty Ltd: $500,000 to assess the feasibility of an offshore carbon dioxide sequestration hub to support decarbonisation of the Kwinana heavy industry precinct.

You may find these frequently asked questions useful. Note that they will be updated periodically.

Can I apply for this grant if I am receiving another grant from the Department of Water and Environmental Regulation? 

Yes,  the Carbon Innovation Grants Program allows for up to 50 per cent of the eligible costs for a Feasibility Project and 25 per cent of the eligible costs for a Pilot and Capital Works Project to be to be funded from WA Government grant sources.

Who is eligible for the Carbon Innovation Grants Program (CIGP) grant? 

Applicants that: 

• have an Australian Business Number (ABN) and are registered for GST
• meet one or more eligibility criteria that are listed in the CIGP Applicant Guidelines 
• have members of the management team who are all fit and proper persons as defined in the CIGP Applicant Guidelines  
• if intending to generate Australian Carbon Credit Units, demonstrate the ability to meet the eligibility criteria relevant to the proposed carbon crediting method.  

In addition, an applicant’s project must: 

• be located in Western Australia or involve feasibility studies specific to sites or locations in Western Australia 
• seek funding within the published funding range and other nominated financial commitment thresholds   
• demonstrate clear alignment to the CIGP objectives, including that the project must be new, involve carbon abatement or sequestration, progress technologies or methods along the pathway to commercial viability, include at least one industrial business partner, and be permissible by law 
• be able to commence and be completed within the minimum and maximum timeframes outlined in the CIGP Applicant Guidelines. 

How much funding is available? 

Approximately $4 million per round over three grant rounds. The amount of funding ultimately awarded per round is at the discretion of the Minister for Climate Action.  

What types of projects can be funded? 

Examples of the types of activities that could be funded include but are not limited to: 

Feasibility Studies 

• Concept design, field and or lab testing and economic analysis of industrial process technologies that reduce emissions
• Carbon capture and or use and or storage 
• Industrial process feedstock swapping  
• Analysis of deploying new, or existing, Australian Carbon Credit Unit methods with current low market utilisation 
• Applying innovative approaches to existing Australian Carbon Credit Unit methods to increase credit volume or reduce costs. 

Pilot Projects and Capital Works 

• Trials of new technology and or novel modifications to industrial processes 
• Field trails of industrial process feedstock swapping
• Field testing of carbon capture, and or use, and or storage methods 
• Deploying existing and or new Australian Carbon Credit Unit methods with current low utilisation at pilot trial or full scale 
• Applying innovation to existing Australian Carbon Credit Unit methods at pilot trial or full scale to increase credit volume and/or reduce operating costs. 

How will the Department of Water and Environmental Regulation support the application process? 

The Program Manager – Carbon Innovation Grants is available to support administrative queries relating to the application process and can be contacted on 08 6364 6970 or email at carbongrants@dwer.wa.gov.au. We will provide online information sessions to support applicants to meet the requirements in the CIGP Applicant Guidelines.  

What are the two streams of funding? 

The first funding stream is for Feasibility Studies with a minimum funding limit of $50,000 and a maximum funding limit of $500,000, which must be no more than 50 per cent of eligible project costs. 

The second funding stream is for Pilot Projects and Capital Works with a minimum funding limit of $100,000 and a maximum funding limit of $1.5 million, which must be no more than 25 per cent of eligible project costs.

Can I apply for both streams?

Yes. Applicants may make multiple applications to either or both funding streams if they have multiple eligible project proposals.  

What projects would not meet the eligibility criteria? 

Ineligible project types include but are not limited to: 

• existing projects that are already underway 
• ceasing operation of a business to reduce emissions 
• business as usual activities, that is normal operation of an existing business or venture  
• renewable energy generation that is not directly supplying heavy industry processes on the same site (these types of projects may be funded by the Clean Energy Future Fund)  
• broad or generic research that is not specific to a heavy industry facility or facilities  
• projects not involving specific sites or locations in Western Australia   
• projects without an industrial business partner providing a cash or eligible in-kind contribution to the project 
• projects intending to generate carbon credits outside of Western Australia and/or projects using crediting methods that are not eligible for use under the Climate Active Carbon Neutral Standard.  

Does the definition of an industrial business in the Applicant Guidelines limit eligibility only to those businesses that are involved in the production of goods or industrial processing of materials?

No, that definition is intended to be general in nature, designed to ensure proposed projects are likely to be taken up and used by industrial businesses, the focus of the program being the reduction of greenhouse gas emissions emanating from industrial processes that are directly or indirectly related to production from raw materials.

Are a project’s Net Present Value and cost per tonne of CO2e avoided important metrics as to a project’s viability?

Both the Net Present Value and Cost Per tonne of CO2e avoided are important as indicators that the project is likely to be financially viable and therefore has a good potential for broader industry investment and uptake. This links to the program objectives, which seek to identify projects that could be widely adopted and contribute to broader industry decarbonisation.

If a project does not generate a revenue stream or cost reduction but delivers significant abatement of carbon emissions, can a shadow carbon price be used to represent the value of that project?

If the project doesn’t currently produce either a cost saving or revenue stream, then a shadow carbon price could be used, provided evidence or justification is included of how the benefits of the project could be applied more broadly to industry in future. This could, for example, include evidence to demonstrate that there is a likelihood that a methodology would be developed to generate carbon credits from the project, or to reduce a liability under the federal Safeguard Mechanism.

These documents are provided for the Round 2 application process:

Applicant Guidelines

Feasibility Studies Financial Model case study

Feasibility Studies Financial Model template

Pilot Projects and Capital Works Financial Model case study

Pilot Projects and Capital Works Financial Model template

Risk register template

Western Australian Climate Policy

Sample funding agreement template for feasibility study

Sample funding agreement template for pilot projects

If you have queries about the program, contact us on 08 6364 6970 or email carbongrants@dwer.wa.gov.au

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