Manufacturing businesses will be eligible for grants to switch to clean technology, under a scheme put forward by the Federal Government. The Clean Technology Investment Program will earmark $800 million in Federal funding to help businesses to invest in energy efficient capital equipment and low pollution technologies.
In the past, companies may have avoided the transition to environmentally sound practices due to financial constraints. The costs in upgrading to low emissions technology may have exceeded the benefits to be gained in reduced power bills. What the Clean Technology Investment Program proposes to do is to remove some of this burden from businesses, with the Commonwealth pledging to contribute funding to projects being undertaken to improve energy efficiency.
Projects that can be supported by grants under this program include switching to less carbon intensive energy sources and installing new manufacturing equipment.
An applicant for a grant under the program must be:
An applicant for a grant under the program must also have met one of the prescribed energy or emissions thresholds in the 12 month period before submitting an application. These thresholds require that the applicant has:
An applicant that is directly liable under the carbon pricing mechanism will also be eligible to apply for grants under the program.
For a project to be eligible under the program it must be relevant to manufacturing activities and it must create carbon or energy savings. Such a project could include:
An example of a project that would be eligible for funding under the program is a manufacturing company replacing high energy consumption machines in its factory for equivalent low energy consumption machines.
A project will not be eligible for a grant under the proposal if:
The costs of preparatory pre-project activities can be covered by a grant under the program provided it is done in the 12 months prior to submitting an application. Examples of eligible pre-project activities are energy audits, feasibility studies and the initial selection of a suitable emissions reduction project.
Similarly, the costs of post-project activities can be covered by a grant under the program provided it is done within 15 months of the project completion date. Examples of eligible post-project activities are financial audits, engineering calculations and other verification activities.
The maximum project duration is two years from the project commencement date. If a project will take longer than two years it will not be eligible for funding under the program.
The form of a grant under the program
There is no designated maximum for the size of a grant under the program. The minimum permitted size of a grant under the program is $25,000.
The nature of funding under the program is that of shared contribution to projects by the applicant and the Commonwealth. The prescribed funding ratios are:
The assessment process
Application assessment is conducted by Innovation Australia, an independent statutory body made up of private sector experts. Applications for grants of $10 million or more must also be referred to Federal Cabinet.
A merits-based approach is taken to assessment of applications for grants under the program. For an application to be recommended for funding under the program, it must score highly against the merit criteria provided by the Federal Government. The merit criteria which apply to all applications are:
Applications for grants of $1.5 million or more must also be assessed against a fourth criterion, which is:
With this fourth criterion, applications for grants of $1.5 million or more are assessed with a merits score out of 120, as opposed to 100.
Applying for a clean technology grant
To apply for a grant under the Clean Technology Investment Program the applicant must meet all of the eligibility criteria. Whether an applicant meets the criteria will not always be clear on the surface. Some notable 'grey areas' in the eligibility criteria are whether a company is a 'manufacturing company' and whether a project will meet the necessary energy use outcomes.
Although applications for grants under the Clean Technology Investment Program are ultimately made online, various materials must be prepared before making an application, including:
A successful applicant must enter into a contractual funding arrangement with the Commonwealth. Funds provided under a grant will be released to the successful applicant periodically upon the completion of agreed project milestones. Grant payments are typically treated as assessable income for taxation purposes and will be subject to GST.
The Clean Technology Investment Program is already underway, meaning that an application for a grant under the program can be prepared immediately. The program is scheduled to run until 2017/2018, but the amount of funds available for grants is capped at $800 million.
If your company would benefit in applying for a grant, or if you would like to know more about the Clean Technology Investment Program generally, please contact:
|(08) 9288 6828