Loan Backing Scheme Timely As Under-Pressure Businesses Transition Away From Natural Gas

25 May 2026, 15:21 by EMA · SCOOP

The Government’s decision to introduce the Gas Transition Loan Guarantee Scheme, a loan backing scheme to help businesses transition away from natural gas energy, will be a welcome and timely option for under-pressure businesses, says the EMA.

Alan McDonald, EMA’s Head of Advocacy, says that in the past 12-18 months, several EMA members have been just weeks away from no longer having access to a gas supply contract and were seriously considering closing or moving their businesses offshore.

"Just recently, I was talking to a member who is one of our major gas users, and they had yet to secure supply beyond the end of June. Late last year, another was just three weeks away from the end of their supply and looking to move all manufacturing to Australia," says McDonald.

"The Government’s plan to back 80% of a bank loan to help businesses transition away from dwindling natural gas supplies will help de-risk some of the funding decisions necessary to make a forced and rapid transition away from natural gas.

"Importantly, the scheme should also improve access to more affordable finance, with the Government guarantee expected to support lower interest rates for borrowers."

The additional $5.9 million for ECCA will also help them to explore alternatives to gas.

The new scheme will make $1.2 billion available to back loans, up to a maximum of $48 million set aside in 2026. The scheme is fuel neutral.

"For many businesses, that may well assist their decisions to move to full electrification, but for others that require very high process heat temperatures, they may need to look at other fuel sources before electrification is a viable alternative," says McDonald.

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"It may also increase the attractiveness of geothermal as a fuel source and could encourage some businesses to relocate closer to geothermal energy sources, if that becomes a viable economic decision.

"Again, I’ve been talking to a business recently where this kind of scheme could be the difference in converting from gas to geothermal energy. They are a significant regional employer, but the decision to convert was coming down to costs and the economics behind convincing the overseas-based owner to make that investment.

"This scheme could make a real difference to a number of manufacturers and help arrest the recent trend of deindustrialisation we’ve all been witnessing."

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