Green Industry Meets a Town in Transition

Many decarbonisation projects fail not because of technology, but because they lack social license.

To address this challenge, the NSW Decarbonisation Innovation Hub’s Land and Primary Industries Network funded research into how emerging low-carbon industries can build community support.

Lithgow, a medium-sized town in regional NSW, was chosen as the case study. Researchers explored the potential for a hemp building sector and how securing social license could help the community embrace a new industry.

According to Project Lead Professor Neil Perry, Centre for Western Sydney Chief Economist at Western Sydney University, the findings offer practical lessons for rolling out future decarbonisation initiatives across NSW.

Community at a crossroads

Lithgow is a town shaped by industry. For more than a century it has powered NSW through coal mining, energy generation and manufacturing. As these industries wind down, the question is not whether Lithgow will transition, but how.

The research team set out to understand social license not just for an individual project, but for establishing a new industry – in this case, industrial hemp.

Industrial hemp is already used internationally in construction, insulation and composite materials. It grows quickly, stores carbon and can be turned into products like hempcrete that improve building performance while reducing emissions.

Some of these uses already exist in Lithgow. The hempcrete Lithgow Women’s Shed sits in the centre of town as a visible example of what the material can do.

But scaling from demonstration projects to a viable regional industry is a different challenge.

Researchers combined a literature review with interviews and a full-day workshop involving growers, builders, researchers and industry experts from local, state and national contexts.

The discussions focused on what was already known about industrial hemp, what was holding the industry back and what might enable it to move forward.

The Lithgow Women’s Shed during construction – a local example of hempcrete in action.

Back to basics

Early findings showed Lithgow is not well suited to large-scale hemp farming. Farms are relatively small and the climate is not ideal. It is also too far from existing hemp farms to operate as a processor due to transport costs.

Instead, workshop participants saw Lithgow’s opportunity further down the supply chain. Its location between western NSW farms and Sydney’s construction market makes it a potential gateway for manufacturing building products.

However, despite strong community interest and clear technical potential, industry setbacks meant the initiative to establish a hemp building sector in Lithgow ultimately stalled.

Local manufacturers had tried hemp fibre in the past and found the product they trialled was incompatible with their existing equipment. That made them reluctant to try again.

“It shows the importance of having everything in place to give industry the best possible experience the first time,” Neil said. “Unfortunately, you don’t always know what the problems are going to be until you try.”

Experts at the workshop called for a centralised marketplace where specifications, standards and timing are clear across the entire supply chain. They also emphasised the need for standardised carbon accounting, lifecycle analysis and transparency at every stage of production.

“Getting the basics right is critical,” Neil explained. “We got very close, but without certainty across the supply chain, trust faltered and momentum slowed. It’s a lesson in how fragile social license can be if coordination isn’t embedded from the start.”

Beyond box ticking

While community opposition wasn’t the main barrier to establishing a hemp industry in Lithgow, some issues remain.

Industrial hemp aligns with the town’s industrial identity and draws on existing skills and histories, but alignment isn’t enough. Locals also need tangible benefits and a genuine say in how new industries develop.

“Social license isn’t a box-ticking exercise,” Neil said. “It’s about local ownership, local control and income staying in the region. Communities need a real say in their future.”

Lithgow’s history of multinational-controlled industries, with around 70 per cent of income leaving the area, continues to shape how new projects are received.

“Industries can’t simply impose a project, they need to engage with the region’s culture – what they value, their history and what they need,” he said. “This approach ensures projects are designed to integrate locals into manufacturing, maintenance and operation. That’s how you build trust and social license.”

Lessons for low-carbon adoption

While this project focused on hemp, its findings apply more broadly.

Emerging low-carbon industries need to think early about social license, not as a communications exercise but as a core part of viability. That means understanding regional culture, coordinating supply chains, sharing benefits locally and being honest about risks as well as opportunities.

“Social license isn’t just a nice-to-have – it’s the key to unlocking regional decarbonisation,” Neil said.

In Lithgow, this project showed how close a new industry can come, and how easily trust can be lost.

Those lessons may prove just as valuable as a successful industry launch.

This project was supported by the Land and Primary Industries Network’s Collaborative Projects Funding Program, which funds innovative research to advance low-carbon technologies, services and practices in the land sector and related industries. The program reflects the Hub’s mission to help NSW reach its 2035 and 2050 net zero targets, translating research into practical solutions that benefit the environment, communities and the economy.

Next steps

The researchers plan to investigate other low-carbon industries in Lithgow that face greater social and cultural barriers than industrial hemp. Building on insights from this project, studying these sectors is expected to deepen understanding of how to secure social license and overcome challenges in regional decarbonisation initiatives.

If this or other projects are of interest and you would like to connect with the Land and Primary Industries Network to explore decarbonisation opportunities, please contact Business Development Manager Fiona McCredie at fiona.mccredie@decarbhub.au.

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