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The Australian Government is manufacturing a new future for our nation. Manufacturing is critical to a modern Australian economy—a key part of almost every supply chain that adds significant value to all sectors. The Modern Manufacturing Strategy (MMS) is led by industry, for industry, to help our manufacturers scale-up, become more competitive and build more resilient supply chains. The Australian Government will be a strategic investor in this, notably through the 6 national manufacturing priority sectors, in order to drive productivity and create jobs for Australians, both now and for generations to come.

On 1 October 2020, the Australian Government announced a $1.5 billion investment in the MMS to help Australian manufacturers be more competitive, resilient and build scale in the global market. The 6 key areas are:

Through the MMS, the Government wants to support projects from industry that will transform manufacturing in Australia. The Recycling and Clean Energy National Manufacturing Priority road map will help inform investment decisions that both Government and industry make over the next 10 years to support projects that will:

  • develop world-leading product solutions that offer clear value to growing green markets
  • support domestic manufacturers to benefit from opportunities created by large energy projects and changing consumer expectations
  • mobilise large-scale investment in new ways of using energy and materials, by bringing together collaborations across supply chains to tackle barriers together.

Co-investment is critical for each step of this solution pathway. It will complement a broader policy environment supportive of manufacturers in both recycling and clean energy. The MMS outlines the whole-of-government agenda to help grow Australian manufacturing and ensure our manufacturers can harness global opportunities and achieve scale and competitiveness. It is built on 4 pillars.

Getting the economic conditions right

Getting the economic conditions right is the first pillar of the Strategy, noting affordable and reliable energy, lower taxes, industrial relations, training and skills, and cutting red tape are key determinants of success for our manufacturing businesses.

The Australian Government is working hard on getting the economic conditions right for manufacturers, paving the way for growth and improved competitiveness in all sectors. 

The Government is focused on making and sustaining jobs through the JobMaker scheme. Temporary full expensing and temporary loss carry back measures will unlock investment and expand the productive capacity of the nation.

Manufacturers need a pipeline of skilled workers as they transform and scale. The Government is investing $7 billion this financial year to keep apprentices in jobs, to help jobseekers re-skill and to promote vocational training. We are working to ensure that we are creating the jobs of the future and that we have a pipeline of skilled workers to support new and emerging industries, including in the recycling and clean energy manufacturing sector. The Government’s reforms to higher education will boost the number of graduates in areas of employment growth—including STEM. 

The National Waste Policy aims to reduce waste where possible and make productive use of waste where it is generated. The National Waste Policy Action Plan, Recycling and Waste Reduction Act 2020, and National Product Stewardship Investment Fund will increase material recovery rates, ban the export of key waste streams, support product stewardship initiatives, and boost the role of government as a procurer of recovered materials.

A gas-fired recovery will ensure Australian gas is working for our businesses and manufacturers, with a 13-point plan and supporting investments to unlock supply.[1] This complements the Government’s initiatives to reduce electricity prices, boost liquid fuel security and invest in low emissions energy technology through the Technology Investment Roadmap. Australia’s Future Fuels Strategy will enable consumer choice and support the uptake of new vehicle and fuel technologies.

Recycling and clean energy complementary strategies

This roadmap will assist manufacturers to bring recycling and clean energy products to market, complementing these initiatives and delivering economic value and jobs for Australia:

  • National Waste Policy Action Plan Priority Action areas:
    • Waste Export Ban
    • Improve resource recovery rates
    • Increase use of recycled content
  • Technology Investment Roadmap—First Low Emissions Technology Statement Priority Technologies:
    • Clean hydrogen
    • Energy storage
    • Low carbon materials (steel and aluminium)
  • Other related strategies
    • National Hydrogen Strategy
    • Long Term Emissions Reduction Strategy
    • National Food Waste Strategy.

Focusing on areas of advantage

The third pillar of the Strategy is to set National Manufacturing Priorities, develop road maps for action, and back projects through the Modern Manufacturing Initiative (MMI) which support the transformation of manufacturing in these sectors. 

Road maps are being developed with industry to set out plans for both industry and Government to strengthen Australia’s manufacturing capability. The road maps have been led by industry taskforces to identify and set a future vision for priority areas with clear goals, opportunities and actions over the next 2, 5 and 10 years. 

The road maps are designed to be dynamic. As the MMS is implemented, we will continue to work with industry to ensure the road map evolves over its life. This will take account of emerging opportunities and actions to support the sector to scale-up, become increasingly competitive and for businesses to integrate their commercial solutions with global supply chains and markets. See Road map in context for more details on the road map process. 

The MMI aims to support manufacturers to more quickly bring their products to market and invest to scale their manufacturing operations in Australia. The road map will support industry to overcome late-stage commercialisation barriers and help government identify high impact projects. The role of the MMI complements other government programs to support the development of the recycling and clean energy sector.

Modern Manufacturing Initiative in context: Recycling

Text version of infographic is provided after image.

This diagram illustrates which areas of the recycling production chain that the Modern Manufacturing Initiative (MMI) covers, in relation to other funding mechanisms in the recycling sector.

From left to right, the diagram is broken into pre-production, production and post-production. Underneath these headings, from left to right, the pre-production section includes the activities: R&D, Demonstration and Design.

The Production section includes the activities: Sorting, Processing and Remanufacturing.

The Post-production section includes the activities: Reuse, market development and End-of-life services.

Underneath this row of activities, the MMI is shown to cover all activities from Design through to End-of-life services.

CSIRO, Universities, Australian Research Council (ARC), and Cooperative Research Centres (CRC) cover all 3 activities in the pre-production phase. The Recycling Modernisation Fund (commonwealth, state and territory grants) covers all phases in the production phase. The Australian Recycling Investment Fund (debt or equity finance via CEFC) covers all activities from sorting through to reuse. The Product Stewardship Fund covers market development and end-of-life services.

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Modern Manufacturing Initiative in context: Clean Energy (adapted from Mission Innovation)

Text version of infographic is provided after image.

This diagram illustrates which areas of the clean energy innovation chain that the Modern Manufacturing Initiative (MMI) covers, in relation to other funding mechanisms in the clean energy sector.

From left to right, the various stages of the innovation chain identified are:

  • Early R&D
  • Applied R&D
  • Market demonstration
  • Deployment and commercialization
  • Market accumulation
  • Diffusion.

The MMI Collaboration Stream covers the last 3 stages. The MMI Integration Stream covers Market accumulation, and overlaps slightly with the MMI Translation Stream. The MMI Translation Stream covers Deployment and commercialization, and part of Market accumulation.

ARENA covers all stages from Early R&D to Deployment and Commercialisation. CSIRO, Universities and the Australia Research Council (ARC) cover the Early and Applied R&D stages. The Clean Energy Innovation Fund covers Market demonstration, while CEFC covers the Deployment and commercialisation, and Market accumulation stages.

The Emissions Reduction Fund and the Renewable Energy Target Cover the Diffusion and part of the market accumulation stage.

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Other pillars of the Strategy

The MMS includes two other pillars which will also be important to focusing government investments to support the competitiveness and scale of Australian manufacturing.

Making science and technology work for industry

Australia’s science, research and innovation capabilities are critical enablers of transformation in manufacturing. There is an opportunity to improve the uptake of digital technology, processes and practices by manufacturers. These support business competitiveness and will have positive spill-overs across our economy. 

This work will focus our industry, science and technology investments, including through the work of the CSIRO, to support our National Manufacturing Priorities. This will help our manufacturers supercharge their operations and harness emerging opportunities.

It will also complement Government actions to harness opportunities from emerging technologies, build business digital capability and grow the cyber security resilience of Australian business. 

Building national resilience for a stronger economy

The Supply Chain Resilience Initiative will strengthen Australia’s ability to access critical necessities, part of positioning Australia to respond to future supply chain disruptions to make us stronger and more resilient. It will build on government and industry efforts to rapidly address critical supply issues revealed during supply chain disruptions due to COVID-19. 

Funding available

The Modern Manufacturing Initiative is now open for recycling and clean energy manufacturing projects that meet eligibility under its Translation and Integration streams.


1 Minister Pitt (2020) Minister welcomes Narrabri approval

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