Industry Research and Development (Carbon Capture, Use and Storage Hubs and Technologies Program) Instrument 2021

The instrument introduces a small set of definitional and programmatic concepts and fixes them for the purposes of s 33 of the Act. Key concepts are the program, its funded activities, its purposes, the legislative powers authorising it, and the eligibility criteria.

Program definition and scope: The program is prescribed in s 5(1) and its scope is described in s 5(2). The activities in scope are threefold: research, development and commercialisation of projects and technologies for capture of carbon dioxide and subsequent use or storage (s 5(2)(a)(i)-(ii)); identification of suitable storage locations (s 5(2)(b)); and design and construction of shared infrastructure for transport and storage of carbon dioxide (s 5(2)(c)). The instrument ties together technological development (R&D and commercialisation), site identification, and shared infrastructure as an integrated program scope.

Purposes: Section 5(3) states three purposes. These are expressed in purposive terms rather than as operational rules. The purposes are: reducing greenhouse gas emissions to contribute to Australia’s emission reduction obligations (s 5(3)(a)); accelerating commercialisation of capture, use or storage technologies and supporting industry investment and collaboration in deploying those technologies (s 5(3)(b)); and encouraging and supporting development of prospective hubs related to the capture, use or storage of carbon dioxide in Australia (s 5(3)(c)). The instrument presents these as the objectives for the funding and activity the program supports.

Legislative bases: Section 6 supplies the specified legislative powers for the purposes of subsection 33(3) of the Act. That list includes federal powers concerning foreign corporations and trading or financial corporations (constitutional paragraph 51(xx)); external affairs in relation to the UNFCCC, the Kyoto Protocol and the Paris Agreement, with specific references to relevant treaty articles (s 6(b)(i)-(iii)); matters for which the Constitution makes provision until Parliament otherwise provides together with s 96 (s 6(c)); and the government of a Territory (s 6(d)). The instrument thereby records the bases on which the program is said to rest, linking domestic law to international instruments and specific heads of federal power.

Eligibility: Section 7 prescribes who is eligible to apply for funding under the program, as required by subsection 33(4) of the Act. The eligible applicants are defined in entity-type terms: a constitutional corporation; a State, or an agency, authority or instrumentality of a State; a Territory, or an agency, authority or instrumentality of a Territory; an authority of the Commonwealth (s 7(a)-(d)). The instrument therefore narrows eligible applicants to a closed list of entity categories.

Definitions and references: The instrument contains a definitions clause (s 4) that defines the Act, and identifies the UNFCCC, the Kyoto Protocol and the Paris Agreement with citations and notes directing the reader to the Australian Treaty Series entries and to AustLII as a location where those instruments could be viewed in 2021. The definition of program is referred to in s 4, with the instruction "see subsection 5(1)", thereby linking the defined term to the prescriptive provision.

Limitations of the instrument: The instrument does not set out financial sums, grant-making procedures, contractual terms, compliance mechanisms, monitoring or reporting requirements, or offences and penalties. It is a prescribing instrument that defines scope, purpose and eligibility for the program under the Act, and establishes the constitutional and treaty-linked bases relied upon. Those limitations shape how the program will be implemented administratively, because further instruments, grant guidelines or contractual documents will be required to operationalise the funding.

The instrument affects three principal actor groups directly: prospective applicants for program funding, the Commonwealth government as funder and decision-maker, and the categories of activities in the carbon capture, use and storage space that may be eligible for public support under this program. It also has indirect effects on states and territories, corporations engaged in relevant industrial activity, and entities concerned with shared infrastructure.

Prospective applicants: Section 7 sets the eligibility gate. Only entities of the following types may be applicants: a constitutional corporation; a State, or an agency, authority or instrumentality of a State; a Territory, or an agency, authority or instrumentality of a Territory; or an authority of the Commonwealth (s 7(a)-(d)). The instrument therefore excludes individuals, unincorporated associations, partnerships that are not constitutional corporations, small business entities that are not constitutional corporations, and other private entities unless they are a constitutional corporation within the meaning of the Constitution. The instrument makes eligibility an entity-type requirement rather than a sectoral, technological readiness-level, or area-specific test.

Industry participants and projects: The program scope in s 5(2) identifies the types of activity that funding may support: capture technologies and projects, use or storage of carbon dioxide, identification of storage locations, and design and construction of shared transport and storage infrastructure. Entities involved in these activities, if they fall within the eligible entity types, will be affected because they may be able to apply for funding and collaborate in projects supported by the program. States and Territory agencies may participate both as applicants and as partners in planning and infrastructure development, which is signalled by their inclusion in s 7.

Commonwealth decision-makers and administrators: The Commonwealth is the actor that prescribes and funds the program. The instrument does not detail processes, but by prescribing the program under the Act (s 5(1)) it creates a legal foundation for the Commonwealth to manage funding, set grant conditions and enter funding arrangements under the administrative powers of the Act and relevant Commonwealth financial framework. The instrument’s specification of legislative powers (s 6) makes explicit the constitutional and treaty-based rationales that the Commonwealth relies upon for acting, which is relevant to how the program is administered to states, territories and corporations.

International instruments and obligations: The instrument refers to Australia’s emission reduction obligations and identifies the UNFCCC, the Kyoto Protocol and the Paris Agreement (s 5(3)(a), s 4). It then enumerates external affairs powers in s 6(b) and links those powers to specified treaty articles. Entities engaged in activities funded under the program will be affected indirectly insofar as the program’s stated purpose is to contribute to meeting those international obligations.

Excluded groups and downstream effects: Because eligibility is limited to specified entity types, many individual inventors, sole traders, small unincorporated project teams and some private investors may be unable to apply directly. Such actors would need to partner with eligible entities to participate. The instrument does not address subcontracting, subcontractor eligibility or procurement, so the downstream effect on supply chains will depend on administrative instruments or grant contracts that are not contained in this text.

This instrument is primarily prescriptive about program scope, purpose and eligible applicants. It does not create a complex regime of duties, rights, obligations or sanctions within its text. The principal norms it establishes are eligibility conditions and program aims. The absence of express duties and rights in the instrument itself means that most operational duties and rights will arise from the Act, from any administrative instruments, grant guidelines, contracts or funding agreements made under the program, and from general administrative law principles applicable to Commonwealth decision-making.

Eligibility requirement as a normative condition: Section 7 prescribes who may apply. That is a binding eligibility criterion for the purposes of subsection 33(4) of the Act. Applicants must fall within one of the listed categories (constitutional corporation; State or State agency; Territory or Territory agency; Commonwealth authority). This functions as a necessary precondition to being an eligible applicant under the prescribed program. The instrument therefore imposes a de facto duty on grant administrators to accept applications only from entities meeting those criteria, unless other instruments vary that position.

Program-purpose alignment expectation: Section 5(2) and s 5(3) together define the activities in scope and the program purposes. While the instrument does not on its face state that funding approvals will require alignment with these purposes and activities, the fact that the program is prescribed for those purposes implies that funding decisions under the program will be expected to advance the stated objectives, namely emissions reduction consistent with Australia’s obligations, acceleration of commercialisation and support for development of hubs. In practice, this creates an operative expectation that applicants and funded projects will address the listed activities and purposes, and administrators will assess alignment, though the instrument does not itself set assessment criteria, performance metrics, or reporting requirements.

No statutory duties, offences or enforcement mechanics in the instrument: The instrument does not create statutory duties enforceable by specific penalties, nor does it establish offences, enforcement powers, audit regimes or revocation procedures. There are no express rights to compensation, no entitlement to funding, and no private right of action created by the instrument. Any duties, rights, conditions, reporting obligations, remedies or sanctions that will apply to recipients must therefore derive from the Act generally, or from subsequent grant instruments, funding agreements or administrative processes implemented by the Commonwealth.

Relational implications between grantor and grantee: By prescribing the program and its purposes, the instrument shapes the relationship between the Commonwealth and recipients, in the sense that funding will be provided to projects that meet the instrumental purposes and scope. The instrument does not itself specify whether funding will be contingent on co-contributions, matching funding, intellectual property arrangements, procurement rules, or infrastructure ownership and access conditions. Those matters are left to implementing instruments and agreements, which will define the operative duties and rights of recipients and the Commonwealth.

Constitutional and treaty-linked rights: The instrument lists external affairs and corporations powers as the constitutional bases (s 6). That statement does not itself create rights for any entity, but it signals how the Commonwealth grounds its legal authority to operate the program. Rights and duties that arise from those constitutional bases will typically be expressed in other instruments and legislation, not in this prescribing instrument.

The instrument contains no penalties, offence provisions, enforcement mechanisms or administrative sanctioning powers. It is a prescribing instrument under s 33 of the Industry Research and Development Act 1986 and limits itself to defining program scope, purpose and eligible applicants. There are several practical implications of that absence.

No statutory penalties in the instrument: Nowhere in the text does the instrument create breach-level offences, fines, or criminal penalties. There are no express administrative remedies, powers to suspend or terminate funding, or auditing and recovery procedures set out in this instrument.

Enforcement and compliance must come from elsewhere: If enforcement against recipients, recovery of funds, conditions attaching to grants, auditing rights, or termination powers are required, those must be supplied by the Act, by the general administrative powers exercised under the Act, or by separate grant guidelines, funding agreements or contractual arrangements. The instrument's silence on these matters means that practitioners cannot rely on this text alone to advise clients about the enforcement regime they will face if they receive funding under the program.

Dispute resolution and legal recourse: The instrument does not prescribe dispute resolution mechanisms or internal review rights. Administrative law remedies (for example merits review or judicial review) and contractual dispute processes will depend on the provisions of the Act, implementing instruments and the terms of any funding agreement. The instrument does not alter or set those dispute-resolution pathways.

Implications for applicants and recipients: From a compliance perspective, applicants and potential recipients must expect that acceptance into the program will be conditioned by separate documentation that sets out obligations and enforcement mechanisms. Legal advisers should therefore seek those implementing documents before advising on enforcement risk, clawback exposure or compliance regimes. The instrument creates eligibility and programme purpose boundaries but leaves enforcement detail to later instruments or contractual documents.

This instrument explicitly situates the prescribed program within the framework of the Industry Research and Development Act 1986, and connects the program to international climate instruments and particular heads of federal legislative power. The instrument does not itself amend other statutes or create cross-references beyond its own provisions, but it identifies legal relationships that determine how it will operate alongside other laws.

Statutory parentage: The instrument is made under section 33 of the Act (s 3). It prescribes the program for the purposes of s 33(1) and uses the s 33(3) and s 33(4) hooks to specify legislative powers and eligibility criteria respectively (s 5(1), s 6, s 7). The Act is therefore the statutory source that authorises the Minister to make the instrument and, in turn, enables the Commonwealth to undertake R&D funding under the program. Any operationalisation of the program must be consistent with the Act and any other legislative constraints that flow from it.

Constitutional power bases: Section 6 expressly enumerates the specified legislative powers relied upon for the purposes of subsection 33(3) of the Act. Those entries are: foreign corporations and trading or financial corporations formed within the limits of the Commonwealth (s 6(a)); external affairs as it relates to measures assisting Australia meet its obligations under the UNFCCC, the Kyoto Protocol and the Paris Agreement (s 6(b)); matters in respect of which the Constitution makes provision until Parliament otherwise provides, together with s 96 (s 6(c)); and the government of a Territory (s 6(d)). This declaration clarifies the Commonwealth’s stated legal foundations for funding arrangements that reach corporations, states and territories, and link domestic action to international obligations. The instrument does not, however, change constitutional law; it records which heads of power are relied upon for the program.

Interaction with international instruments: The instrument references the UNFCCC, the Kyoto Protocol and the Paris Agreement in definitional and purposive provisions (s 4; s 5(3)(a); s 6(b)). The references to specific treaty articles in s 6(b) indicate that external affairs power is invoked in respect of measures that would assist Australia to meet obligations under those instruments. The instrument itself does not implement treaty obligations directly, nor does it incorporate treaty provisions into domestic law beyond these references, but it links program purposes to international obligations as part of the legal rationale for Commonwealth funding.

State and Territory funding and federal financial relations: The instrument lists States, Territories and their agencies as eligible applicants (s 7). It also invokes s 96 in s 6(c) as part of the legislative bases, through reference to "matters in respect of which this Constitution makes provision until the Parliament otherwise provides (within the meaning of paragraph 51(xxxvi) of the Constitution), together with section 96 of the Constitution." These inclusions signal that the program is intended to operate in a federal context that may involve Commonwealth funding of State and Territory projects. The instrument itself does not set out federal financial assistance terms, conditionality, or the intergovernmental processes, but it anchors the program within relevant constitutional mechanisms.

Complementary Commonwealth law and administrative instruments: Because the instrument does not deal with grant processes, contractual terms, procurement rules, intellectual property arrangements, or environmental approvals, those interactions will be governed by other Commonwealth statutes, administrative instruments, and state and territory laws. For example, project construction and operation will be subject to environmental, planning and safety laws as applicable, but the instrument does not address these interactions. Practitioners will need to consult the Act, any grant guidelines, funding agreements, as well as relevant environmental and planning statutes and approvals processes to map the full legal interaction picture.

Notes and citations: The instrument offers notes directing users to the Australian Treaty Series entries for the Kyoto Protocol and the Paris Agreement and to AustLII as a location where those instruments could be viewed in 2021 (s 4 notes). Those notes are explanatory and are not operative legal provisions. They are, however, relevant to understanding the international documents the instrument references.

The instrument itself provides limited metadata about its creation and commencement, and does not record subsequent amendments within the text provided. The concrete items in the instrument relevant to amendment history are as follows.

Date and authorising signature: The instrument is dated 23 November 2021 and signed by Angus Taylor, Minister for Industry, Energy and Emissions Reduction (front matter). It is made under section 33 of the Industry Research and Development Act 1986 (s 3).

Commencement: The instrument contains a commencement table in s 2. The table states that "the whole of this instrument" commences on "the day after this instrument is registered" (s 2(1) Commencement table). The instrument also contains the standard note that the table relates only to the provisions of the instrument as originally made and will not be amended to deal with later amendments of the instrument (s 2 Note). The instrument includes a further note that any information in column 3 of the table is not part of the instrument and may be edited in published versions (s 2(2)).

No express amendment provisions: The instrument does not contain any clause providing for automatic amendment, sunset dates, review requirements, or other procedural amendment mechanisms. It does not state any transitional arrangements or savings clauses that would apply if it were later amended or repealed.

No recorded later amendments in the text: The text provided contains only the original instrument as made in November 2021. It contains no appended amendments, schedules or notes indicating subsequent variation. The instrument’s own note in the commencement table signals that later amendments, if any, would not be reflected in that table, but does not provide any details about how amendments would be made. Any amendment would occur by further instrument under the Act or by legislative change to the Act itself.

Practical implication for users: For practitioners advising clients, the key points from the amendment-history material in the instrument are that the instrument took effect immediately following registration in late 2021, and that there is no internal amendment history recorded in the provided text. To determine whether the instrument has been varied since the version supplied, practitioners should consult the Commonwealth Gazette, the register of legislative instruments and the consolidated or current version of instruments maintained by official sources. The instrument itself does not provide that subsequent history.

The instrument does not record any litigation, judicial consideration, or administrative review related to its making, operation, or interpretation. It contains no recitation of prior legal disputes, case law citations, or references to decisions. The text is silent on any litigation history.

What the instrument does record: The instrument identifies the legal bases invoked and the international instruments referenced (s 4, s 6). It does not refer to any court or tribunal decisions that interpret the Act, the external affairs power, or the operation of funding programs. There are no footnotes indicating judicial consideration of the program or the instrument, and no schedules that preface judicial material.

Implications of silence: Because this instrument is primarily a prescribing instrument that defines scope and eligibility for a program, disputes that might give rise to litigation are most likely to arise from implementing documents, funding agreements, procurement decisions, administrative decisions rejecting or approving grant applications, or from intergovernmental arrangements. Those operative documents and decisions are not included in this instrument. Therefore, any litigation in respect of program awards, grant conditions, or funding arrangements would be expected to refer to those operational instruments and the Act, rather than to this instrument alone.

Advisory note for practitioners: To establish whether litigation has arisen in relation to the program, or to review how courts have interpreted related issues such as the Commonwealth’s power to fund State projects or to enter grants related to international obligations, practitioners should inspect judicial and administrative tribunal records, and the consolidated legislative instrument history. The present instrument contains no material that evidences any past litigation connected to it.

The instrument is concise, but its brevity creates practical traps and areas where additional documentation will be necessary. The following points flag concrete issues that users should be aware of when advising clients or interacting with the program.

Eligibility is entity-type only and excludes many project participants: Section 7 restricts applicants to constitutional corporations, States and their agencies, Territories and their agencies, and Commonwealth authorities (s 7(a)-(d)). The instrument gives no express mechanism for individuals, sole traders, partnerships (unless they are constitutional corporations), unincorporated entities, or non-constitutional corporate forms to apply directly. Practically, smaller players will therefore need eligible partners, sponsors or lead applicants. The instrument does not discuss subcontractors, consortium members or downstream suppliers, leaving operational eligibility details to implementing instruments.

No funding quantum, no appropriation detail: The instrument states that the program "provides funding" for listed activities (s 5(2)), but it does not specify how much funding, funding rounds, budgets, co-contribution requirements, matching funds, or sources of funds. There is therefore uncertainty for potential applicants about the scale of opportunity and whether funding will be available for capital-intensive activities such as construction of shared infrastructure.

No procedural rules or application processes: The instrument sets out the program’s scope and purposes but does not include grant guidelines, assessment criteria, timing, application forms, or decision-making processes. Those operational details will typically be found in separate grant guidelines, terms and conditions or funding agreements. Until those documents are available, prospective applicants cannot reliably predict the criteria against which proposals will be judged.

No details on ownership, IP or access to shared infrastructure: The program scope includes "design and construction of shared infrastructure for the transport and storage of carbon dioxide" (s 5(2)(c)). The instrument does not allocate ownership, access rights, pricing arrangements, third-party access, or stewardship responsibilities for such infrastructure. Projects involving large infrastructure investments will need clarity on these points in implementing documents. Absent those details, investors face uncertainty about asset control, revenue streams and long-term commercial viability.

Link to international obligations without operationalisation: The instrument ties the program’s purpose to contributing to Australia's emission reduction obligations (s 5(3)(a)) and invokes external affairs power in relation to the UNFCCC, Kyoto Protocol and Paris Agreement (s 6(b)). However, it does not explain how program activities will be measured against, or reported for, treaty obligations, nor does it detail reporting lines or compliance mechanisms with international reporting regimes. Practitioners should not assume that funding under this instrument comes with automatic recognition under treaty reporting frameworks; the instrument itself does not set that out.

Ambiguity about what "constitutional corporation" encompasses: The instrument relies on the term "constitutional corporation" in s 7(a) but does not define it further. The legal meaning of that term depends on constitutional doctrine and case law outside this instrument. Advisers should therefore confirm an entity’s status as a constitutional corporation before assuming eligibility, and not rely on the instrument alone to settle that question.

No enforcement or remedies content: The instrument contains no penalties, clawback rules, audit powers or dispute-resolution procedures. Recipients should expect these to be supplied by the Act or by grant agreements. The absence of statutory remedies or enforcement measures in the instrument itself makes it essential to obtain the terms of any funding agreement before committing significant resources.

Possible coordination and approvals gaps: Projects involving identification of storage locations and construction of transport and storage infrastructure will likely require regulatory approvals, land access, planning and environmental consents. The instrument does not address those approvals or the interplay with state and territory regulatory regimes. Applicants should not assume that program funding will substitute for statutory approvals or remove the need to comply with other regulatory regimes.

Notes are explanatory, not operative: The instrument includes notes referring to the Australian Treaty Series entries and AustLII (s 4 notes). Those notes are intended as references, not as operative incorporations of external texts. Practitioners must verify treaty texts and any subsequent changes independently rather than rely on the instrument's footnote alone.

Because the instrument sets out program scope and a closed list of eligible applicants but leaves operational detail to implementing instruments and agreements, compliance for prospective applicants is primarily about meeting entity-type eligibility, aligning proposed activities with the programme scope and purposes, and preparing to meet the terms that will be set out in grant guidelines and funding contracts. The following practical steps follow directly from the instrument’s text.

Confirm entity status: Before preparing an application, confirm that the applicant is one of the eligible entity types listed in s 7: a constitutional corporation; a State or a State agency, authority or instrumentality; a Territory or a Territory agency, authority or instrumentality; or an authority of the Commonwealth (s 7(a)-(d)). If the prospective project involves partnerships, consortia or subcontractors, ensure that the lead applicant meets these requirements and that contractual arrangements enable the lead to apply on behalf of others. The instrument makes entity-type eligibility a primary gate.

Frame proposals to the program scope: Ensure that the project activities fall within the program’s stated scope (s 5(2)). Acceptable activities include research, development and commercialisation of projects and technologies for capture of carbon dioxide for subsequent use or storage (s 5(2)(a)(i)-(ii)); identification of suitable locations for storage (s 5(2)(b)); and design and construction of shared infrastructure for transport and storage of carbon dioxide (s 5(2)(c)). Applications should clearly map project outputs and milestones to those categories.

Address program purposes in submissions: The purposes in s 5(3) set out the objectives the program is intended to pursue: reducing greenhouse gas emissions in ways that contribute to Australia’s emission reduction obligations (s 5(3)(a)); accelerating commercialisation and supporting industry investment and collaboration (s 5(3)(b)); and encouraging development of prospective hubs for capture, use or storage (s 5(3)(c)). Applications should articulate how the project will advance one or more of these purposes, and include measurable or evidence-based pathways to do so, because administrators will likely assess applications for alignment with these stated purposes.

Anticipate further terms and conditions: The instrument does not include grant conditions, reporting, audit or IP clauses. Expect implementing grant guidelines and funding agreements to set out conditions, including possible co-contribution requirements, reporting obligations, audit access, intellectual property arrangements, performance milestones and financial accountability. Before incurring significant costs, seek sight of the draft funding agreement and grant guidelines and negotiate or advise clients based on those operational documents.

Prepare for approvals and regulatory compliance: Projects that involve identification of storage locations and infrastructure design and construction will likely require statutory approvals under planning, environmental, safety and other regulatory regimes. The instrument does not relieve applicants of those obligations. Include in project planning the time and resources necessary to secure requisite consents from relevant State, Territory or Commonwealth authorities and to comply with applicable laws.

Structure consortiums and contracts to reflect eligibility: Given the eligibility gate is entity-type based, structure consortium arrangements so that an eligible entity acts as the applicant and can accept funding and contractual obligations. Ensure subcontracting and consortium agreements clarify risk allocation, IP ownership, access to shared infrastructure, revenue sharing and termination modalities, because these matters may not be addressed in the instrument itself but will be critical in funding agreements.

Document links to international commitments prudently: If a project purports to assist Australia in meeting obligations under the UNFCCC, Kyoto Protocol or Paris Agreement, document the specific contribution and the chain of accountability, because the instrument ties program purposes to international obligations (s 4, s 5(3)(a), s 6(b)). Do not assume that program funding automatically translates into compliance credit under international reporting regimes; that relationship will be determined by reporting frameworks and relevant policy settings.

Verify timing and commencement: The instrument commenced the day after registration (s 2). Verify the actual registration date when advising on eligibility for particular funding rounds, because the instrument itself makes timing explicit rather than leaving it ambiguous.

Seek implementing documents and legal advice early: Because enforcement, remedies, performance conditions, IP arrangements and detailed eligibility beyond entity type are not in the instrument, obtain grant guidelines, funding deed drafts and any related administrative instruments before committing to capital expenditure or making public project commitments. Legal advice should address potential clawback exposure, audit rights, intellectual property treatment and the interplay with other statutory approvals.

Recordkeeping and transparency: Although the instrument does not set reporting requirements, be prepared for recordkeeping obligations that implementing documents will likely impose. Maintain traceable records of project expenditure, technical milestones, and collaboration agreements so that if the Commonwealth requires audits or progress reports under subsequent agreements, the recipient can comply.

In short, compliance under this instrument begins with entity eligibility and alignment of project scope and purpose to the program definitions in s 5 and s 7, and then depends heavily on the terms set out in subsequent implementing documents and funding agreements which will create the operative duties and rights not present in the instrument itself.