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Climate Solutions Fund > How it works > Explore project types > Industrial equipment upgrades projects

Industrial equipment upgrades projects

The benefits

An industrial equipment upgrades project reduces emissions by improving the energy efficiency of industrial equipment. This earns Australian carbon credit units (carbon credits) in return for reducing greenhouse gas emissions.

Reducing emissions has a number of benefits for industrial businesses or owners of industrial equipment:


Diversify revenue

Carbon credits provide another income stream for your property.


Lower electricity bills

Improving the energy efficiency of your equipment lowers your energy bills.


Future proofing

Cost savings and efficiency improvements help grow your business.


Environmental action

Be recognised for your contribution to Australia's emissions reductions.

Help with these projects

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The basics

Introduction to industrial equipment upgrade projects, how they work and their eligibility requirements.

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I want more information

Further information and resources on industrial equipment upgrade projects under the Emissions Reduction Fund.


How these projects work

Industrial equipment upgrades can be applied to a wide range of equipment, from compressed air systems to process heating or refrigeration.

Project upgrades need to have been recommended in an energy savings report or audit conducted within the last two years. You measure and verify your pre- and post-upgrade emissions and earn carbon credits for calculated reductions in the rate of your emissions.

Project activities

You can improve your energy efficiency by undertaking a range of activities, such as:

  • Modifying, removing or replacing equipment.
  • Changing how equipment is controlled or operated.
  • Installing additional equipment, such as waste heat recovery systems.
  • Changing the energy sources used by equipment - for example, switching from diesel to electricity as your fuel source.

Eligibility requirements

To be eligible you must:

  • Identify eligible equipment - each piece of equipment that will be upgraded needs to have been in use before the project started, consume less than 500,000 gigajoules of energy per year, and operate on a regular basis.
  • Identify eligible upgrades - upgrades need to be recommended in an energy savings report or an audit and cannot increase a piece of equipment's power rating by more than 20 per cent. The upgrades cannot be part of regular maintenance.
  • Ensure project activities are not required to be carried out under a Commonwealth, state or territory law.
  • Ensure your upgrades do not also receive benefits from a Commonwealth, state or territory energy efficiency scheme (for example, under the New South Wales Energy Savings Scheme).
  • Establish legal right (the right to run your project and claim carbon credits) - for example, by having operational control of the business.
  • Make sure your project is new - you cannot start project activities until after we register your project.

Running and reporting on your project

You will need to have a measurement and verification professional (MVP) declare, pre- and post-upgrades, that your upgrades, emissions data and calculations were undertaken correctly and accurately.

There are operating, monitoring, reporting and audit obligations in running an industrial equipment upgrade project. You will need to report on your project at least once every two years. You receive carbon credits each time you report calculated emissions reductions over a period of seven years.

Relevant legislation and resources

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