Green car funding rules explained

The Australian Federal Government has begun to roll out its implementation plans for the $1.3b Green Car Innovation Fund (GCIF).

Application procedures, rules and criteria that will govern the distribution of the fund over a ten-year period commencing this year are being explained to stakeholders and potential applicants in a series of briefings around the country that began this week.

The briefings, which began in Brisbane on Monday and conclude in Perth next week, detail the scope and reasoning behind the fund as well as the general eligibility and application process.

Two channels of funding will be offered -- one to vehicle manufacturers already registered under ASIC (Automotive Competitiveness and Investment Scheme) or ATS (Automotive Transformation Scheme): Holden, Ford and Toyota; and a second stream open to all other companies (ie: component suppliers, etc). The second stream can include consortia that include one or more of the local car manufacturers, but the carmaker must not be the principal applicant.

Fund monies will be supplied on a one-to-three basis -- that is, the GCIF will fund up to 25 per cent of any eligible projects. Projects must specifically reduce fuel consumption and greenhouse gas emissions, but are not required to fit into any predetermined fuel or powertrain emphasis. Indeed, non-powertrain initiatives are also eligible for funding under the scheme.

That said, the Department of Innovation, Industry, Science and Research (DIISR) personnel on hand to roll out the GCIF information stated the fund specifically excludes applications related to alternative fuel development or production of alternative fuels in their own right. Associated infrastructure projects are also specifically excluded.

They say, the funding can only be applied to technology related to passenger cars and passenger car derivatives.

Funding will be merit based and applications will be assessed by Innovation Australia. Car company applications have a minimum application amount of $10m (effectively a $40m project) and cumulative grants will be capped at $300m per applicant.

Were Holden, Ford and Toyota all to achieve a maximum funding take-up, $400m would remain in the kitty for component suppliers and the like.

Eligible expenditure under the GCIF's rules essentially includes everything up to the commercialisation of a product or technology.

Though the application process for the GCIF will not be released in its final form until April, DIISR confirmed both Holden and Toyota had already received funding approval under the new arrangements.

In the case of Holden, the GCIF will support the development of a "fuel-efficient small car" to be built at the company's Elizabeth (SA) operation (more here). Toyota's well-publicised funding was announced by Prime Minister Rudd even before the GCIF was formalised (more here) and will go to defray costs to assemble hybrid versions of the Camry at Altona.

Ford Australia says it is "in active discussion on how it can best take advantage of the opportunities the GCIF presents". Spokesperson Sinead McAlary said, however, the carmaker would not comment on specific projects or the amount funding the company is seeking at this time.

According to the DIISR Fund Framework paper released in December 2008, the GCIF's objective is to "enhance R&D and commercialisation of Australian technologies that significantly reduce fuel consumption or greenhouse gas emissions of passenger motor vehicles."

Such a framework does not preclude the exportation of key technologies, says the fund adminstrators. However, in such cases clear benefit to the Australian economy and contribution to "a competitive Australian automotive industry" must be demonstrated, they said.