Minister's foreword




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COMMON INVESTMENT PROGRAM ELEMENTS




ACTIVITIES SUPPORTED



Each application for a grant will show what the project money will be used for and when.


Eligible Projects


To be eligible for support a project:

  • must be carried out in Australia;

  • must have a minimum eligible project expenditure of $100,000;

  • must be completed within 2 years;

  • must result in the permanent reduction of the energy input or carbon output:

    • of manufacturing processes occurring in Australia;

    • of manufacturing facilities located in Australia; and/or

    • of products manufactured in Australia during their in service life;

  • can have multiple project parts (i.e. re-engineering of production processes and replacement of capital equipment); and

  • can involve improvements and/or replacement of existing manufacturing capability including facilities, plant and equipment and processes (except as noted in the “Ineligible activities” section).


Collaborative projects involving more than one company are encouraged, provided that an eligible lead company is willing and able to commit to the legal and financial obligations arising from a funding agreement.


Examples of Eligible Project Activities


Eligible activities can include, but are not limited to:

  • the adoption and deployment of technologies to reduce energy use and/or carbon emissions at manufacturing facilities, including technologies for measuring energy efficiency and monitoring emissions (e.g. replacement of boilers or compressors and re-skilling of staff in use of new equipment);

  • establishing new facilities that replace existing eligible manufacturing facilities;

  • process re-engineering involving the adoption of energy or carbon efficient manufacturing plant and equipment including technologies that reduce water use or waste production, thereby reducing the energy consumed;

  • product re-engineering that reduces the inputs – energy, materials, processed water content – and therefore the carbon intensity of a product;

  • manufacturing supply chain projects to improve energy efficiency and/or reduce emissions;

  • retooling production facilities or processes to produce a more energy and/or carbon efficient product during its in-service life;

  • supporting the conversion of the manufacturing facilities to a less carbon intensive fuel source;

  • investing in cogeneration and tri-generation plants; and/or

  • assistance with the implementation of energy efficiency opportunities.


Ineligible activities


The following activities* are ineligible for support:

  • activities that are related to business functions supported under the Jobs and Competitiveness Program (i.e. permits for emissions-intensive, trade-exposed activities), coal, energy security assistance or other targeted assistance such as the Steel Transformation Plan;

  • activities that would be eligible under the Clean Technology Innovation Program, Clean Energy Finance Corporation and the Australian Renewable Energy Agency (ARENA);

  • routine maintenance; and

  • establishing a new production facility, green-field production site, or a facility for a new product which does not replace an existing site.


* This list is not exhaustive. Other activities or specific expenditure may be ineligible where the Program Delegate decides they do not directly support the achievement of the planned outcomes of the project or that they are contrary to the objective of the Clean Technology Investment Program or the Clean Technology Food and Foundries Investment Program.


QUESTIONS

  1. What other activities, beyond what is identified above, could be undertaken to achieve a reduction in energy consumption or improvement in carbon efficiency?

  2. What collaborative projects including supply chain activities could be undertaken to achieve a reduction in energy consumption or improvements in carbon efficiency?

  3. Are there additional activities that should be ineligible activities?



ELIGIBLE EXPENDITURE



It is proposed that expenditure under the following headings be eligible to attract grant funding if it is directly related to eligible project activities:

  • labour (excluding non-cash salaries);

  • contractors;

  • plant and equipment;

  • tooling; and/or

  • acquisition or adaptation of technologies or know-how.


Other miscellaneous expenditure, if directly related to eligible project activities, may be eligible. The program does not provide retrospective funding—if a grant is offered, only the costs of project activities performed on or after the approved project start date attract grant funding.


To be eligible, the grantee must incur expenditure on or after the project commencement date and on or before the project completion date, with the exception of final audit costs which can be incurred within three months of the project completion date. The project commencement date cannot be before the date the Program Delegate accepts the application for assessment.


Activities paid for by the grantee using non-cash considerations are not eligible expenditure. Non-cash considerations are contributions to a project that have no impact on entity cash flow, and no record in the entity’s statement of financial performance.


QUESTIONS

  1. Should changes to, including the construction of buildings directly associated with, facilities used solely or predominantly for eligible manufacturing be eligible?

  2. Should funding from other State/Territory/Local government programs be allowed as part of the matching contribution if directed at new activity?

  3. What other expenditure should be considered as eligible?

  4. Should costs related to exiting contracts using black/brown energy be included? If so on what basis?

  5. Should there be a threshold for overseas expenditure (e.g. purchase of foreign made capital equipment)? Could this be sourced locally?



MERIT CRITERIA



As the grants are not “entitlements”, eligible applications will be assessed against merit criteria and the most competitive will be funded. Applications should aim to demonstrate a strong case against each of the criteria.


Competitive applications will demonstrate strong claims against each of the merit criteria. Merit Criterion 1 applies to all applications. Merit Criterion 2 applies to projects with a grant amount in excess of $500,000. Merit Criterion 3 applies to large projects with a grant amount in excess of $1.5 million.


Criterion 1 - The extent of the reduction in carbon or energy intensity associated with the manufacturing process or facility arising from the proposed project.

  • The energy and/or carbon outcomes to be achieved by the manufacturing project will be measured against benchmark data provided by the applicant. Benchmark data will be the total energy consumed and/or carbon generated on the manufacturing project site in the 12 months prior to the application date.

  • Energy Efficiency Indicators and/or Carbon Efficiency Indicators will be used to measure the energy and carbon performance of the business before and as a result of the project.

    • An Energy Intensity Indicator is a ratio that expresses the energy consumption of an entity per business metric eg electricity use divided by number of units produced

    • A Carbon Intensity Indicator is a ratio that expresses the greenhouse gas emissions of an entity per business unit eg. carbon dioxide equivalent emissions divided by number of units produced.

  • Applicants will be expected to provide evidence to support the claimed improvements in energy and/or carbon intensity.

  • In assessing the merit of the claimed reduction in energy and/or carbon intensity, the following factors will be considered:

    • A reduction in direct carbon liability

    • Predicted changes in the Energy Intensity Indicator relative to the applicant’s benchmark data

    • Predicted changes in the Carbon Intensity Indicator relative to the applicant’s benchmark data

    • Energy savings per dollar of grant funds requested

    • Carbon savings per dollar of grant funds requested


QUESTIONS

  1. What is a reasonable period in which to achieve predicted improvements in energy and/or carbon intensity?

  2. Can applicants accurately predict the changes in energy consumption to be generated by the project?

  3. For projects related to improvements in carbon intensity of products, can applicants accurately predict levels of improvements in carbon intensity of the product (compared to current product)?

  4. What evidence can applicants provide to support their claimed reduction in energy and/or carbon intensity?

  5. What are the most appropriate business measurements to apply in calculation of energy or carbon intensity indicators (e.g. electricity bill)?

  6. What tools can be used to calculate applicant’s benchmark data and predicted improvements in energy and carbon intensity?

  7. Could the National Greenhouse and Energy Reporting System (NGERS) Calculator be used? - https://www.oscar.gov.au/Deh.Oscar.Extension.Web/Content/NgerThresholdCalculator/Default.aspx

  8. Should payback periods be considered in assessing the merit of projects?

  9. Can minimum target benchmarks be set for relative improvements in energy and carbon intensity?

  10. What would be the basis for selecting a target benchmark?

  11. Would target benchmarks vary across different manufacturing industries?


Criterion 2 - The capacity and capability of the applicant to undertake the project. Addressing this criterion with a high level of detail is compulsory for grants equal to or larger than $500,000. Applications for grants under this amount would need to provide warrants as sufficient evidence.

  • An applicant must demonstrate that it has the capability to undertake the project within the proposed budget and timeframe.

  • Applicants will need to identify the resources required to undertake the project and provide a well articulated project plan, including budget and milestones.


QUESTIONS

  1. Should prior investment in reducing the carbon footprint of a business be used as evidence of capability to undertake the project?


Criterion 3 - The contribution of the proposed project to a competitive, low-carbon, Australian manufacturing industry and the benefits to the broader Australian economy. This criterion is compulsory for grants larger than $1.5 million.

  • It is expected that all large projects will include a significant demonstration component.

  • The applicant should describe the environmental and economic benefits including Australian industry participation. The benefits could be in areas such as competiveness, sustainability, jobs, skills development, longer-term opportunities for Australian suppliers on a commercial basis, value adding, regional development and anticipated flow ons through the supply chain. The benefits may be direct or indirect.

  • For ‘product’ projects, evidence of the resultant improved carbon intensity of the product during its in-service life should be addressed in this criterion.


QUESTIONS

  1. What activities could be undertaken by the applicant to demonstrate project outcomes?

  2. Should the impact of investment from a project on the local community, including the possible multiplier effect of program monies being spent in the local community, be included in the merit criteria for this program?

  3. How would the impact of the project on the business – and regional community – be demonstrated by the applicant?

  4. Are the proposed eligibility and merit criteria suitable for the scope of projects anticipated?

  5. Are there any other issues that should be considered?



GRANT DURATION



The programs will support projects to a maximum of two years duration. If successful, extensions of time of up to an additional six months may be considered if the need for the extension could not have been anticipated prior to the project commencing.


QUESTIONS

  1. Is allowing two years for completion of projects appropriate?



APPLICATION AND ASSESSMENT PROCESS



The programs will be administered and delivered by AusIndustry, a specialist program delivery division of the Department. The applicant must meet all costs associated with preparing applications and providing information to AusIndustry.


Applications will be lodged electronically with AusIndustry.


Applications may be lodged at any time and eligible applications will be assessed on a continuous basis. The eligibility of applications will be assessed by AusIndustry and decided by the Delegate. Only eligible applications will proceed to the merit assessment stage.


The assessment of eligible applications would occur as follows:

  • applications for grants of $25,000 to less than $500,000 will be assessed by AusIndustry/a Departmental Committee;

  • applications for grants of $500,000 to less than $10 million will be assessed by a committee of Innovation Australia; and

  • applications for grants of $10 million or more will be referred to the Cabinet of the Australian Government for consideration.


Innovation Australia will provide expert independent advice to the Department and Government in respect to the merit and rank order of applications.


Applicants will be informed in writing of the success or otherwise of their applications. Applicants may apply for multiple projects within one program.


AusIndustry will enter into funding agreements with successful applicants and monitor the performance of grantees.


QUESTIONS

  1. Are you likely to apply for a grant? If so, from which program, what amount of funding and when would you be seeking it (e.g. approximately $1 million in 2013-15 from the Clean Technology Investment Program)?


OTHER ISSUES

  1. The Department welcomes comments on other issues that should be considered in the design of the Clean Technology Investment Program and the Clean Technology Food and Foundries Investment Program.



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