By Byron Raal, CAS Founder-Editor · Last updated 5 August 2026 · About the author
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.
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: every scheme that can fund compressed air work, what it covers, and its status on the day we last checked. Schemes last verified: 5 August 2026 (each scheme was re-checked against its own official program page on that 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 the one federal round open right now, aimed at larger regional facilities.
- Almost every scheme wants the same evidence first: a measured demand profile, a leak survey with a dollar figure, and a costed upgrade case. That is what an energy audit produces, so audit first and apply second.
- 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 re-checked against its own official government page on 5 August 2026. 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, and several schemes effectively require one. Audit first, apply second.
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
One federal pathway is open right now. 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.
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 engage an ACP before you buy anything, because the certificates must be created against an approved baseline. 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 and the Northern Territory had no current compressed-air-relevant scheme identified at review. The ACT Sustainable Business Program offers eligible commercial premises rebates and free advice for energy and water efficiency upgrades (up to around $13,000), which can cover a compressor or system upgrade recommended as an efficiency measure. That can change with a budget cycle; this page is re-verified quarterly.
Scheme status table (each scheme verified 5 August 2026)
| Jurisdiction | Scheme | Mechanism | Compressed air angle | Status at 5 August 2026 |
|---|---|---|---|---|
| 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 |
| 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 |
| NSW | Energy Savings Scheme (IPART) | Certificates via ACP | Controls, heat recovery, system upgrades | Live, continuous |
| VIC | Victorian Energy Upgrades | Certificates, project-based activities | Custom industrial projects on measured savings | Live, confirm pathway per project |
| QLD | Transforming Queensland Manufacturing Grants | Matched grants to $1.5M | Energy-efficient equipment eligible within advanced-manufacturing scope (R1) | R1 closed; R2 open soon |
| 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 |
| SA | Green Industries SA programs | Support and programs | Efficiency and sustainability projects | Check current offerings |
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?
As at 5 August 2026: 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. 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 with no new round announced.
Do I need an energy audit before applying?
In practice yes. Certificate schemes need a measured baseline before the upgrade, and competitive grants score applications on evidence. A demand profile, a leak survey and a costed upgrade case is the package every scheme wants to see, and it 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
Want help turning a grant round into a funded upgrade? We connect you with an independent specialist who can scope the audit and build the application evidence. Free, no obligation. Size the saving first with the leak cost calculator, then tell us your state, your compressor setup and which scheme you are targeting.
General information disclaimer. The information on this page is general in nature and provided for educational purposes only. Scheme details, amounts, eligibility and status change between rounds and must be confirmed against the official program page and your own advisers before you act. Compressed Air Solutions is a publisher and referral service; we administer no scheme and sell no equipment, and we accept no liability for decisions made on the basis of this content.