Grants, Gaps and Gigatons: Australia's CCUS Round 2

Australia's carbon capture program expands to engineered CDR, backing direct air capture, biochar and mineral carbonation

25 Mar 2026

Australia's second Carbon Capture Technologies Program funding round isn't just a new grant cycle. It's a statement about what the government now considers serious climate technology.

Direct air capture, enhanced rock weathering, biomass carbon removal and storage, and mineral carbonation are all explicitly eligible. Nature-based approaches without technological intervention are out entirely. The distinction matters: this round pushes applicants toward engineered, verifiable solutions rather than land-use offsets dressed up as decarbonization.

The first round showed what that looks like in practice. MCi Carbon's Newcastle facility converts captured CO2 and industrial waste into concrete and plasterboard. Calix built a process that turns CO2 from cement production into methanol. Round 2 widens the aperture further, adding biochar sequestration to an already ambitious list.

The target is industries where electrification alone won't cut it. Hard-to-abate sectors account for 20 percent of Australia's annual greenhouse gas emissions, driven by process heat, embedded carbon, and chemical reactions that don't yield easily to a clean energy transition. Pilot and demonstration projects must show verifiable, permanent sequestration, not modeled projections.

Individual grants of up to $10 million are on offer, with applications closing May 6, 2026. For developers sitting at the edge of commercial viability, this round offers something more than funding. It offers alignment with the verification standards that export markets in Japan and Europe are increasingly demanding, and a structured path from lab to deployment.