$500m fund for low-emissions tech

Businesses will be able to dip into a new $500m fund to develop ‘innovative projects and technologies’ that will reduce carbon emissions.

Climate Change Minister Chris Bowen. Picture: NCA NewsWire / Gary Ramage

Businesses will be able to dip into a new $500m fund to develop “innovative projects and technologies” that will reduce carbon emissions, as Climate Change Minister Chris Bowen moves to accelerate Australia’s action on climate change as he bids to host a UN conference in 2026.

In parliament on Wednesday, the federal government will introduce legislation to create the Powering Australia Technology Fund to help companies aiming to commercialise low emissions technologies such as renewable energy and energy ­efficiency.

The $500m fund will be added to the remit of the Clean Energy Finance Corporation under amendments to the mandate of the green bank.

The government will aim to leverage another $500m of funds from the private sector and use the fund to provide equity investments in “clean energy technology businesses looking to expand”. Mr Bowen said the fund would allow businesses to “scale up creative projects using clean energy technologies”.

“The Albanese government is ensuring the world’s largest green bank can continue to support the commercialisation of innovative new technologies, such as energy-efficient smart city sensors and innovations in solar arrays and battery technologies,” he said. “While we excel in research, Australia has been losing out for too long when it comes to commercialisation.

“We need to continue developing innovative technologies that will help power Australia, and realise more of their economic benefits here.”

On Tuesday, the government gained the numbers in the Senate to provide tax breaks for electric vehicles after ceding to a Greens demand to exempt hybrid vehicles from benefits.

Under the policy, the exemption of the 5 per cent import tariff will provide a $2000 saving on a $50,000 car, while employers will save $9000 on fringe-benefits taxes. Workers will also save nearly $5000 buying an electric car through salary sacrifice.

However, free-trade agreements largely make the import tariff reduction redundant.

The government dropped its plan to include plug-in hybrids for the discount to win the support of the Greens and ACT senator David Pocock in the Senate.

Hybrids will be phased out of the discount from 2025, while plug-in hybrids will not be added to the commonwealth fleet “except in exceptional circumstances”.

Jim Chalmers said the government worked in “good faith” with the crossbench to ensure the bill could pass parliament.

“These changes are a win for motorists, a win for businesses and a win for climate action,” the Treasurer said.

“It’s disappointing but not surprising that the Opposition has chosen to vote against lower taxes for Australians and lower emissions.”

Greens leader Adam Bandt said the party had “fast-tracked electric vehicles”.

“The government fleet will go electric, and when these cars are sold second hand, it will help bring the cost down of EVs for everyday people,” he said.

“By limiting handouts to petrol cars and accelerating support for electric vehicles, the Greens in balance of power have pushed the government to go further and faster on climate.

“This shows the power of the Greens in pushing Labor to go further and faster on fossil fuels.”