Australia

AU-4:Clean Technology Program (CTP)

Policy Description

In June 2011, the Australian government introduced the Clean Energy Legislative Package, which includes an emissions trading system (the Carbon Pricing Mechanism, AU-1) as well as various support measures to stimulate clean energy and provide support to safeguard competitiveness, economic growth and household purchasing power. As part of the Clean Energy Future policy package, the Clean Technology Program was established to to provide incentives for businesses in all sectors to invest in clean energy and reduce emissions, especially energy efficient and low emissions technologies.  

Description

In June 2011, the Australian government introduced the Clean Energy Legislative Package, which includes an emissions trading system (the Carbon Pricing Mechanism, AU-1) as well as various support measures to stimulate clean energy and provide support to safeguard competitiveness, economic growth and household purchasing power. As part of the Clean Energy Future policy package, the Clean Technology Program (CTP) was established to provide incentives for businesses in all sectors to invest in clean energy and reduce emissions, especially energy efficient and low emissions technologies.  The Program consists of three streams:

  • The Clean Technology Investment Program (CTInvP), provides grants to manufacturers to support investments in energy-efficient capital equipment and low-pollution technologies, processes and products.
  • The Clean Technology Food and Foundries Investment Program (CTFFIP), helps manufacturers in those industries to invest in energy efficient capital equipment and low emissions technologies, processes and products. 
  • The Clean Technology Innovation Program (CTInnP), helps businesses in all sectors undertake applied research and development, proof-of-concept and early-stage commercialization activities that develop new clean technologies and services, including low emission and energy-efficient solutions that reduce greenhouse gas emissions.

 

The above three programs are being implemented by AusIndustry, the Australian Government’s business program delivery division within the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education. AusIndustry is supported in the delivery of these programs by Innovation Australia, an independent statutory body [2].

The Australian government had originally committed $1.2 billion over a period of seven years to the Clean Technology programs - $800 million for CTInvP, $200 million for CTFFIP, and $200 million for CTInnP. However, announcements made in July 2013 reduced the funding profile of all the programs. According to this announcement, the life of the Clean Technology Investment Programs will be extended by one year allowing the Government to deliver savings of $162 million ($27 million from the Clean Technology Innovation Program and $135 million from the Clean Technology Investment Programs) [3].

As of August 2013, CTInvP and CTFFIP had awarded 488 grants, valued at around $260 million and leveraging $789 million in investment by manufacturers. CTInnP awarded 25 grants valued at around $30 million and leveraging $61 million in investment by innovative companies [3].

 

 

Clean Technology Investment Program

The Clean Technology Investment Program is a merit-based grants program to help Australian manufacturers maintain competitiveness in a carbon constrained economy. The program provides grants for investments in energy efficient capital equipment and low emission technologies, processes and products. 

 Applications are evaluated against the program’s merit criteria by Innovation Australia (an independent statutory body), i.e. the extent of the reduction in carbon emissions intensity, the capacity and capability of the applicant to undertake the project and the extent to which the project maintains and improves the competitiveness of the applicant’s business. For projects over AUS$1.5 million an additional criterion applies, i.e. the contribution of the proposed project to a competitive, low-carbon Australian manufacturing industry and the benefits to the broader Australian economy. Grants above AUS$ 10 million will be submitted to the cabinet.

Grants are offered on a co-investment basis, with tiered grant funding ratios (the amount of own funding an applicant is to provide compared to the grant size) that vary according to project size and applicant turnover (see below table [AusIndustry, 2011]). Grants range from $25,000 to more than $10 million. Dollar-for-dollar (1:1) funding category is available for manufacturers with facilities that have emitted 25,000 tonnes or greater, but less than 100,000 tonnes of covered emissions in the last full financial year prior to lodging an application. These facilities do not need to meet any turnover or maximum grant amount threshold.

For manufacturers who are not liable under the Carbon Pricing Mechanism, the available grant ratio is dependent on the size of the grant requested and the turnover of the applicant.

 Grant amount

Annual turnover of applicant*

Applicant to grant ratio

AUS$25,000 – < 500,000

Less than AUS$100 million

Up to 1:1

AUS$25,000 – < 500,000

AUS$100 million or more

Up to 2:1

AUS$500,000 - < 10 million

N/A

Up to 2:1

≥ AUS$10 million

N/A

3:1 (*1)

 

* applies to the annual turnover of the applicant in the financial year preceding the lodgement of an eligible application.

 

For some companies with manufacturing facilities that are likely to face a direct carbon liability an additional funding ratio is available. This grant ratio is available for manufactures with facilities that have emitted 25,000 tonnes or greater, but less than 100,000 tonnes of covered emissions in the last full financial year prior to application lodgement.

Grant amount

Annual turnover of applicant*

Applicant to grant ratio

$25,000 – upwards

N/A

Up to 1:1

 

 

Applicants must meet the following criteria (*2):

  • Be a non tax exempt corporation that is incorporated in Australia with manufacturing activities in Australia;
  • Have met one of the prescribed energy or emissions thresholds in the year before applying:
    • Electricity use of at least 300 MWh; or
    • Natural gas use of at least 5TJ; or
    • Emissions from fuels and/or electricity of at least 0.27 ktCO2-eq;

OR be directly liable under the Carbon Pricing Mechanism;

  • Be able to fund the costs of the project that will not be covered by the grant;
  • Has not been named as an organisation that has not complied with their obligations under the Equal Opportunity for Women in the Workplace Act 1999.

 

Eligible project activities are capital investment and associated implementation activities (installation, commissioning, associated staff training etc.) that relate to implementing one or more energy efficiency or emissions reduction measures. Eligible activities can occur before a project (if conducted at least 12 months before applying e.g. energy audit, conducting a bench test or pilot study, energy modeling, undertaking a feasibility study), during a project, and after a project (if within 15 months of the project’s completion (e.g. the verification of energy savings and emission reductions, audit of expenditure. Note that here verification is done by the participant (or service providers). No independent verification is required by the programme). Maximum project duration is 2 years, with a maximum 6 month-extension. Activities during the project (the second category of eligible activities) must involve investment in capital equipment (i.e. not only in operation & maintenance, training or changing business practices) to be eligible. This can include:

  • Replacement of existing manufacturing plant, equipment and processes;
  • Modifications to existing manufacturing plant, equipment and processes;
  • Changes to energy sources for the existing or replacement manufacturing plant or processes;
  • Replacing or modifying existing manufacturing facilities to enable production of new low emissions products.

New plants or Greenfield sites are not covered unless they replace existing plants or sites. R&D and early commercialisation activities are not eligible (as they are eligible under the Clean Technology Innovation Program, see below), nor are projects reducing transport emissions.

Successful applicants enter into a legal agreement with the government, outlining the grant funding available and the obligations of both contract parties, including compliance and reporting obligations of the applicant. Payments are based on pre-defined milestones, of which completion must be proven prior to payment. Milestone reports must include the agreed evidence and identify the total eligible expenditure incurred in achieving the milestone. The final report after completion of the project must include independent financial audit of the total eligible expenditure and measurements and supporting evidence of the verified energy or carbon savings delivered by the project. Approach and timeframes for the verification of energy and carbon savings depend on the project type.

Clean Technology Food and Foundries Investment Program

Rules and procedures in the CTFFIP are largely the same as for the CTInvP, but limited to companies in the food and foundries manufacturing industries. It is now open for applications.

 

Clean Technology Innovation Program

The CTInnP supports the development of a range of clean technologies including low GHG emission and other energy-efficient technologies, especially those technologies that are in the early stages of commercialization or proof of concept. The program also supports applied research and development in the clean technology sector. 

 

The program offers grants from $50,000 to $5 million and will fund up to 50% of the eligible expenditure on a 1:1 funding basis.   Applications for funding are assessed by a Clean Technology Innovation Committee. IF the request for funding is greater than $3 million, it is further assessed by Innovation Australia. 

Policy Information Expand this section for information on the key features of the policy, such as its date of introduction, categorization, main objective(s) and linkages with other policies.

Policy Categorisation

Policy Instrument Type: Economic, Incentives & Subsidies

Position in the Pyramid

About Us

Participation: Voluntary

Period

Start Date: 2012

End Date: 2018

Policy Linkages

Supports Carbon Pricing Mechanism (CPM) Effort Defining
Supports Generator Efficiency Standards (GES) (ENDED) Effort Defining

Agencies Responsible

AusIndustry
Climate Change Authority

Primary Objective: Energy

Objective

­- CTInvP: to support Australian manufacturers to invest in energy-efficient capital equipment and low emission technology, processes and products in order to maintain competitiveness in a carbon constrained economy; ­- CTFFIP: idem, but limited to food and foundry manufacturers; ­- CTInnP: to support the research, development and commercialisation of clean technology products, processes and services.

Target Group

­- CTInvP: Manufacturing industry; ­- CTFFIP: Food and foundry manufacturers; ­- CTInnP: Australian business (including SMEs) and individuals, companies cooperating with universities.

Driver of energy consumption or emissions affected by policy: Total energy use, total GHG emissions.

Implementation Information Expand this section for information on targets, monitoring, verification and enforcement regimes, and implementation requirements and tools.

Coverage

Not applicable

Quantitative Target? no

Progress Monitored? yes

Verification Required? yes

Enforced? yes

Sanctions: Grant funds are to be recovered if the grantee is not in compliance.

Requirements on the Target Group

  • Co-invest in the project
  • Entering into a legally binding agreement with the government
  • Report on project milestones with supporting evidence
  • Bear the cost of any program evaluation (in addition to the normal program requirements for monitoring)

Support by Government

Extensive technical support in terms of guidelines, factsheets, calculators and templates (see Implementation toolbox).

Implementation Toolbox

  • Customer Guidelines
  • Eligible Expenditure Guidelines
  • Information sessions
  • Online application forms
  • Energy Threshold calculator
  • Carbon and energy savings calculator
  • Return on Investment calculator
  • Factsheets on estimating energy and carbon savings, financial benefits, and Identifying energy efficiency and emission reduction,
  • Other government resources
  • Account declaration template
  • FAQs

Complexity of Implementation

Government

No details available yet, but in general, investment support is relatively simple to administer compared to other types of policy measures. Most complex part of the scheme is likely to relate to risk management

Target Group

­Complexity will depend on the application procedure requirements. No details available yet, but in general participation in financial support schemes is relatively simple compared to other types of policy measures. Also, participation is voluntary.

Impacts, Costs & Benefits Expand this section to find information on policy effectiveness and efficiency.

Impact Quantitative Estimate Qualitative Estimate
Estimated effect on energy consumption or emissions Not available
Estimated costs/benefits for industry Reduces cost for clean investments
Estimated cost for government

References & Footnotes

References

[1] Australian Government, Clean Energy Future website. http://innovation.gov.au/industry/cleanenergyfuture/Pages/default.aspx

[2] Australian Government, Clean Technology Program website. http://innovation.gov.au/industry/cleanenergyfuture/Pages/CleanTechnologyProgram.aspx

[3] AusIndustry, Clean Technology Programs, Factsheet (issued 16 July 2013). http://www.ausindustry.gov.au/programs/CleanTechnology/CleanTechProgram-FactSheet/Pages/default.aspx

[4] AusIndustry, Program Summary. http://www.ausindustry.gov.au/programs/Documents/AusIndustryProgramSummary.pdf

[5] AusIndustry, Clean Technology Investment Program, FAQs page. http://www.ausindustry.gov.au/programs/CleanTechnology/CleanTechnologyInvestment/CTIPProgramInformation/Pages/FAQs.aspx

[6] AusIndustry, Clean Technology Food and Foundries Investment Program website. http://www.ausindustry.gov.au/programs/CleanTechnology/CTFFIP/CTFFIPProgramInformation/Pages/default.aspx

[7] AusIndustry, Clean Technology Innovation Program website. http://www.ausindustry.gov.au/programs/CleanTechnology/CleanTechnologyInnovation/Pages/default.aspx

[8] AusIndustry, Clean Technology Innovation Program, FAQs page http://www.ausindustry.gov.au/programs/CleanTechnology/CleanTechnologyInnovation/Pages/CTINP-FAQs.aspx

Footnotes

(*1) Unless otherwise recommended by the Cabinet of the Australian Government

(*2) Not eligible are amongst others, applicants that are eligible under the Steel Transformation Plan, under the Clean Technology Food and Foundries Investment Program or under the Jobs and Competitiveness Program.