- Author
- Byron Raal, CAS Founder-Editor About the author
- Date last checked
- 17 August 2026
Yes, government money for compressed air upgrades exists in Australia. As at August 2026: NSW pays incentives through the Energy Savings Scheme, Victoria covers custom industrial projects through Victorian Energy Upgrades project-based activities, Queensland is funding manufacturers through a $79.1 million grants program, WA’s $153.3 million energy investment program for manufacturers is not yet open, and ARENA’s Powering the Regions fund has an open, ongoing round for regional industrial facilities, and the Clean Energy Regulator’s ACCU Scheme pays tradeable carbon credits for eligible industrial equipment upgrades, compressed air systems included.
Schemes open and close faster than most plants plan capital, and the information sits scattered across business.gov.au, six state sites and a pile of consultant blogs. This page is the independent map of the major current schemes that can fund compressed air work: what each covers, and its status on the day we last checked. Schemes last verified: 5 August 2026, with the Tasmanian entry verified 10 August 2026 and the federal Safeguard Transformation Stream, ACCU Scheme and ACT entries verified 17 August 2026 (each scheme was checked against its own official program page on its stated date; see the dated status table below). Always confirm the current round on the official page before you commit a project to it.
Key takeaways
- There is no single national compressed air grant. Support runs through separate federal and state schemes, each with its own rules, rounds and application process.
- Queensland and the federal SME grants are the ones that have funded compressed air work most directly; NSW and Victoria run continuous certificate schemes that pay an incentive rather than a cash grant. ARENA’s Powering the Regions Industrial Transformation Stream is open for larger regional facilities, and the Powering the Regions Fund Safeguard Transformation Stream Round 2 is open as well, though only for trade-exposed Safeguard Mechanism facilities. The Clean Energy Regulator’s ACCU Scheme runs continuously and pays in tradeable carbon credits rather than cash.
- Most schemes want the same evidence: a measured demand profile, a leak survey with a dollar figure, and a costed upgrade case. Where the audit fits differs by scheme. Some fund the audit itself: Tasmania’s PowerSmart does now, and the closed federal SME round did. Others require a recent independent audit up front, as the ACCU Scheme method does.
- Scheme status changes fast. New NSW Energy Savings Scheme and Peak Demand Reduction Scheme rules commenced on 1 July 2026, and several grant rounds open and close within a single quarter, so always confirm the current position on the official page.
- Each scheme below carries the date we last checked it against its own official page. We re-verify this page every quarter because grant data stales faster than most other content.
How current is this page? Every scheme below was checked against its own official government page on the date shown in its own entry: 5 August 2026 for most of them, 10 August 2026 for Tasmania, and 17 August 2026 for the federal Safeguard Transformation Stream, the ACCU Scheme and the ACT. We treat this as the fastest-staling page on the site and re-verify it at least once a quarter, on top of the standard review cycle, because a grants page that lists a closed scheme as open is worse than no page at all. Where a scheme has closed or changed, we say so and date it. Always confirm the current round on the official page before you commit a project to it.
How these schemes work
Three different mechanisms get called grants, and they behave differently. Grants hand you money against an approved project, usually matched funding with a competitive application round. Certificate schemes (NSW ESS, Victorian Energy Upgrades) pay an incentive in exchange for the energy-savings certificates your upgrade creates; an accredited provider handles the paperwork and the incentive typically lands as a discount on the project. Loan programs lend at concessional rates for energy projects that bank on the savings.
One thing is common to all three: the application is built on evidence. A demand profile, a leak survey and a costed upgrade case is exactly what an independent compressed air energy audit produces. Where it fits differs by scheme: some schemes fund the audit itself (Tasmania’s PowerSmart pays up to $1,000 toward one, and the closed federal SME round funded audits as eligible expenditure), while others require a recent independent audit before you register the project. The ACCU Scheme Industrial Equipment Upgrades method requires the relevant recommendation to be less than two years old and to have existed before project registration, not merely before physical work starts. Check the sequencing on the official program page before you spend.
The schemes at a glance
Federal and state programs that can help fund compressed air efficiency, side by side.
Energy Efficiency Grantsfor SMEs (EEG-SME)
- Scheme level
- Federal
- Support type
- Grant
- Compressed air named?
- Eligible equipment
- Status
- Round based
TQMGPmanufacturing grant
- Scheme level
- QLD
- Support type
- Grant
- Compressed air named?
- No, broad eligibility
- Status
- Round based
ESS + PDRSenergy + peak demand
- Scheme level
- NSW
- Support type
- Certificates
- Compressed air named?
- No, activity based
- Status
- Ongoing
VEUupgrade program
- Scheme level
- VIC
- Support type
- Certificates
- Compressed air named?
- No, activity based
- Status
- Ongoing
MEAIPmanufacturing investment
- Scheme level
- WA
- Support type
- Grant
- Compressed air named?
- No, broad eligibility
- Status
- Round based
Source: CAS summary of Australian federal and state energy schemes; confirm current terms with each program.
Federal: Energy Efficiency Grants for SMEs
The federal Energy Efficiency Grants for Small and Medium Enterprises program funded energy-efficient equipment purchases of $10,000 to $25,000 per business. Compressed air work is squarely in scope: the Department of Climate Change, Energy, the Environment and Water reported compressed air system improvements among funded Round 1 projects. Round 2 ($41.2 million) is closed to applications as at August 2026 and no further round has been announced. Treat this one as a watch item: if a new round opens, compressed air equipment has an established eligibility track record. Last verified 5 August 2026 against business.gov.au.
Federal: Powering the Regions Industrial Transformation Stream
This federal round is open right now, and so is the Safeguard Transformation Stream covered next. The Powering the Regions Fund Industrial Transformation Stream, administered by ARENA, is a $400 million program supporting emissions reduction at existing industrial facilities in regional Australia, and improving the energy efficiency of an industrial process sits explicitly among its objectives. Round 3 opened in September 2025 with the remaining $180 million and is an open, ongoing round: ARENA keeps accepting applications until the funding is exhausted. It can fund work from feasibility and front-end engineering and design (FEED) studies through to trials, demonstrations and full deployment, under two Round 3 focus areas: innovation in industrial decarbonisation, and advancing commercial deployment.
Compressed air is not a named activity, so read the fine print before building a project on this one. A compressed air efficiency project would enter as an industrial process energy efficiency project and has to fit the Round 3 focus areas and the September 2025 Program Guidelines. The eligibility bar suits larger regional sites: the project must be in regional Australia (the guidelines define this as outside the greater capital city statistical areas, with the Kwinana Industrial Area included), the facility must be under the operational control of an entity that meets a National Greenhouse and Energy Reporting (NGER) reporting threshold, and applicants are expected to at least match the grant funding sought, in-kind contributions included. The process starts with an enquiry through ARENA’s Funding Advice form, then an expression of interest, then a full application. Talk to ARENA through the funding advice channel before committing a project to this pathway. Last verified 5 August 2026 against arena.gov.au and the September 2025 ITS Program Guidelines.
Federal: Powering the Regions Fund Safeguard Transformation Stream Round 2
The second open federal round is the Powering the Regions Fund Safeguard Transformation Stream Round 2, which closes at 5:00pm AEST on 6 May 2027. It pays grants of $500,000 to $50,000,000 covering up to 50 per cent of eligible project expenditure, and roughly $321 million is available across 2025-26 to 2032-33. Applications are assessed in batches: 5 February to 5 May 2026, 6 May to 5 November 2026, and 6 November 2026 to 6 May 2027.
Check the scope before you get your hopes up, because it is narrow. This one is for owners or operators of a trade-exposed Safeguard Mechanism facility that is not a new or expanded coal or gas production facility, and the project has to deliver the Scope 1 emissions reduction the stream is buying. Compressed air plant or equipment can be funded here only where it forms part of an eligible project that meets those requirements and contributes to that reduction, not as a standalone compressor efficiency grant. If your site is not a Safeguard facility, this is not your round. Last verified 17 August 2026 against business.gov.au.
Federal: ACCU Scheme Industrial Equipment Upgrades method
The ACCU Scheme’s Industrial Equipment Upgrades method, administered by the Clean Energy Regulator, names compressed air systems first on its list of suitable upgrades. It pays differently from everything else on this page: an eligible project earns Australian carbon credit units (ACCUs), a tradeable credit you sell rather than a grant or rebate, so the return depends on the carbon market, not a fixed dollar amount.
The eligibility gates matter. The equipment must already be in use and operating regularly (new installations are excluded), it must consume less than 500,000 gigajoules of energy a year, and the upgrade must have been recommended in an energy savings report or audit from the last two years by an independent professional energy services contractor or consultant. No recent independent report, no project, which is one more reason the audit comes first here. The sequencing is just as strict at the other end. Under the newness requirement the Clean Energy Regulator says you can’t start project activities until the project is registered, so get the project registered before anyone lifts a spanner, not just before you buy. Disposal rules for replaced equipment and ongoing measurement obligations apply, so read the method before committing. Last verified 17 August 2026 against cer.gov.au.
New South Wales: Energy Savings Scheme
The Energy Savings Scheme is a certificate scheme administered by IPART, not a grant round, which means it does not close: it runs continuously. Business energy upgrades, including compressed air work such as demand-matched controls and compressor heat recovery, generate energy-savings certificates that an Accredited Certificate Provider converts into a project incentive. The practical path: get your upgrade scoped, then contact an Accredited Certificate Provider and review IPART’s scheme requirements before any work starts, because activities must be undertaken by an ACP or their representative to be eligible to create certificates. NSW also publishes a dedicated compressed air technology guide for businesses. Last verified 5 August 2026 against the IPART Energy Security Safeguard scheme site.
Victoria: Victorian Energy Upgrades
Victorian Energy Upgrades has no prescribed compressed air activity on its standard list. What it does have is a project-based activities pathway for large and custom business projects: savings are measured before and after, and the verified result earns certificates. An industrial compressed air project (VSD conversion, heat recovery, system redesign) can qualify on its measured merits. Confirm the pathway per project with an accredited provider before committing; measurement and verification adds lead time and cost that small projects may not carry. Last verified 5 August 2026 against the Essential Services Commission VEU program pages.
Queensland: manufacturing grants are the live centrepiece
The Transforming Queensland Manufacturing Grants Program offers $79.1 million over 3 years across 6 competitive rounds, with a new round opening every 6 months. Round 1 ($12.5 million, matched grants up to $1.5 million) closed in April 2026; Round 2 is flagged to open soon with its own guidelines. The Round 1 guidelines listed energy-efficient equipment within the eligible advanced-manufacturing and Industry 4.0 project costs, so a compressed air upgrade can qualify where it forms part of an advanced-manufacturing or integration project rather than a routine like-for-like replacement; confirm against the Round 2 guidelines when they publish.
For the record, Queensland has closed its earlier schemes: the Manufacturing Energy Efficiency Grant explicitly funded compressed air upgrades but was structured for two rounds only, both closed, with no further rounds announced; QBEST (up to $12,500) is closed; and Business Energy Savers now sits under previous programs. Do not build a project plan on any of those three. Last verified 5 August 2026 against business.qld.gov.au.
Western Australia: $153.3 million program being finalised
WA is establishing the Made in WA Energy Affordability Investment Program: $153.3 million for the manufacturing sector across two streams, Energy Efficiency and Advanced Manufacturing, enabling investment in energy-efficient equipment and advanced manufacturing technology, with loans of up to $15 million. As at 5 August 2026 the program is still being finalised: the design-input survey closed on 3 July 2026 and the application process is not yet open, so no application window is confirmed. Watch the official WA program page for the guidelines and opening dates. If you are a WA manufacturer, this is one to prepare for now. WA’s Clean Energy Future Fund Round 4 closed in April 2026. Last verified 5 August 2026 against the WA Government MEAIP program page, last updated 3 July 2026.
South Australia, Tasmania, NT and ACT
South Australia has no direct equipment grant we could identify at review. Green Industries SA supports business sustainability and resource-efficiency work, and co-built the Independent Brewers Association benchmarking tool, so it is the right first call for SA sites. Tasmania now has a live pathway: PowerSmart for Small Business, run by ReCFIT with Business Tasmania, pays small businesses with 1 to 19 full-time-equivalent staff up to $1,000 toward a professional energy audit, and applications close 30 June 2028. That audit is exactly the evidence a compressed air upgrade case is built on. The Northern Territory had no current compressed-air-relevant scheme identified at review. The ACT Sustainable Business Program (Climate Choices) has two gates and it pays to keep them apart. Joining the program is open to any business operating in the ACT from an eligible commercial premises, and that gets you free advice and a technical assessment. The financial rebates are narrower. Section 4 of the program terms and conditions limits them to small and medium businesses where operations at the eligible premises generate electricity bills of no more than $40,000 a year including GST, and/or no more than 20 full-time-equivalent employees work at or from the premises. Clear that gate and energy and water rebates are capped at $10,000 in total: inefficient-electric to efficient-electric upgrades are rebated at 50 per cent of cost up to $5,000, and gas to efficient-electric upgrades at 75 per cent up to $10,000, always with a business co-contribution and pre-approval before you accept a quote or start work. Compressed air is not named in the ACT program terms, so a compressor or system upgrade would need to be picked up in the Energy and Water Action Plan the program writes for your site. All of this can change with a budget cycle; this page is re-verified quarterly. Tasmanian entry verified 10 August 2026 against recfit.tas.gov.au and business.gov.au; ACT entry verified 17 August 2026 against climatechoices.act.gov.au and the program terms and conditions.
Scheme status table (each row carries its own verification date)
| Jurisdiction | Scheme | Mechanism | Compressed air angle | Status at last verification date | Verified |
|---|---|---|---|---|---|
| Federal | Energy Efficiency Grants for SMEs | Grant, $10,000 to $25,000 | Compressed air improvements funded in Round 1 | Round 2 closed; watch for new rounds | 5 August 2026 |
| Federal | Powering the Regions Industrial Transformation Stream (ARENA) | Grant, at least 1:1 co-contribution expected | Industrial process energy efficiency at eligible regional facilities | Round 3 open, ongoing since September 2025 | 5 August 2026 |
| Federal | Powering the Regions Fund Safeguard Transformation Stream Round 2 | Grant, $500,000 to $50,000,000, up to 50 per cent of eligible expenditure | Only as part of an eligible project at a trade-exposed Safeguard facility that cuts Scope 1 emissions | Open; assessed in batches, closes 6 May 2027 | 17 August 2026 |
| NSW | Energy Savings Scheme (IPART) | Certificates via ACP | Controls, heat recovery, system upgrades | Live, continuous | 5 August 2026 |
| VIC | Victorian Energy Upgrades | Certificates, project-based activities | Custom industrial projects on measured savings | Live, confirm pathway per project | 5 August 2026 |
| QLD | Transforming Queensland Manufacturing Grants | Matched grants to $1.5M | Energy-efficient equipment eligible within advanced-manufacturing scope (R1) | R1 closed; R2 open soon | 5 August 2026 |
| WA | Made in WA Energy Affordability Investment Program | Loans to $15M ($153.3M program) | Energy efficiency and advanced manufacturing streams | Being finalised; survey closed 3 July 2026, applications not yet open | 5 August 2026 |
| SA | Green Industries SA programs | Support and programs | Efficiency and sustainability projects | Check current offerings | 5 August 2026 |
| Federal | ACCU Scheme Industrial Equipment Upgrades method (CER) | Tradeable carbon credits (ACCUs) | Compressed air systems named as suitable upgrades; recent independent energy report or audit required, and the project must be registered before activities start | Live, continuous | 17 August 2026 |
| TAS | PowerSmart for Small Business (ReCFIT) | Audit grant, up to $1,000 | Funds the energy audit that builds the upgrade case | Open; applications close 30 June 2028 | 10 August 2026 |
| ACT | Sustainable Business Program | Rebates to $10,000 with co-contribution | Efficiency upgrades recommended by the program assessment; rebates limited to smaller businesses | Open | 17 August 2026 |
How to be ready when a round opens
Grant rounds reward the prepared. The winning applications arrive with evidence, not intentions: a metered demand profile, a leak survey with a dollar figure on it, and a costed upgrade case with payback. Start with the leak cost calculator to size the waste, then commission an independent energy audit so the numbers in the application are measured, not estimated. If the project adds or upsizes a receiver, fold the pressure vessel registration position into the project plan while you are at it. When a round opens, that package is an application that nearly writes itself.
Frequently asked questions
Can I get a government grant for a compressed air upgrade in Australia?
Often yes, depending on your state and the current round. NSW and Victoria run continuous certificate schemes that can fund compressed air controls, heat recovery and custom projects. Queensland is funding manufacturers through competitive matched grants. WA is standing up a $153.3 million program for manufacturers that is not yet open. ARENA’s Powering the Regions stream is open, ongoing for larger regional facilities. The federal SME grants are between rounds. Verify the official page before planning.
Which schemes are actually open right now?
Rechecked on 17 August 2026 for the Safeguard Transformation Stream, the ACCU Scheme and the ACT, and on 5 or 10 August 2026 for the rest, as dated in the status table above. The NSW Energy Savings Scheme and Victorian Energy Upgrades run continuously, and ARENA’s Powering the Regions Industrial Transformation Stream Round 3 is open and ongoing for eligible regional industrial facilities. The Powering the Regions Fund Safeguard Transformation Stream Round 2 is also open, assessed in batches until 6 May 2027, but only for trade-exposed Safeguard Mechanism facilities. Queensland Transforming Queensland Manufacturing Grants Round 2 is flagged to open soon. The WA Made in WA program is being finalised; its design-input survey closed on 3 July 2026 and applications are not yet open. The federal Energy Efficiency Grants for SMEs Round 2 is closed and no new round has been announced. The ACCU Scheme Industrial Equipment Upgrades method runs continuously, Tasmania’s PowerSmart audit grant is open until 30 June 2028, and the ACT Sustainable Business Program is open, though its rebates are limited to smaller businesses.
Do I need an energy audit before applying?
It depends on the scheme. Certificate schemes need a measured baseline before the upgrade, competitive grants score applications on evidence, and the ACCU Scheme method requires an energy savings report or audit from the last two years. Some schemes fund the audit itself: Tasmania’s PowerSmart pays up to $1,000 toward one, and the closed federal SME round funded audits as eligible expenditure. A demand profile, a leak survey and a costed upgrade case is exactly what an independent compressed air energy audit produces.
Are the NSW and Victorian schemes grants?
No. They are certificate schemes. Your upgrade creates energy-savings certificates and an accredited provider converts them into a project incentive, usually a discount on the installed cost. There is no application round to miss, but the provider must be engaged before the work is done, not after.
Who applies, me or my supplier?
For grants, the business applies and the supplier provides the quotes and specifications. For certificate schemes, an accredited provider runs the certificate process on your behalf. Either way the operator owns the evidence: demand data, audit findings and the upgrade case. CAS can match you with an independent specialist to build that evidence.
Turn a grant round into a funded upgrade
Considering a grant-supported upgrade? Describe your state, compressor setup and the scheme you are considering. A provider would need to confirm the project scope, scheme requirements and evidence before you rely on funding. You can explore assumptions with the leak cost calculator. We can review your brief and discuss a suitable Australian provider if one is available. We ask for your written permission before an introduction and explain any referral payment arrangement. There is no cost to enquire.
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