Automotive Innovation: Green Car Innovation Fund

Late last year (on 19 December 2008), Senator Carr announced developments in the $6.2 billion New Car Plan for a Greener Future, namely:

• A framework paper outlining the proposed operation of the $1.3 billion Green Car Innovation Fund and inviting feedback
• Ministerial guidelines for the Automotive Industry Structural Adjustment Program (AISAP) (PDF) supporting consolidation of companies through merger and acquisition
• Appointments to the Automotive Industry Innovation Council.

Green Car Innovation Fund Framework
As a proposed grants program, the framework for delivery is going to be very important in terms of access to funding, quality of arguments and advice and overall costs/risks. This framework is available here (as a Word document).

The Green Innovation Fund will provide grants on a competitive, merit based basis on a 1:3 funding ratio. Apparently this can be varied if risk profiles or the proposed project makes a significant contribution to the international competitiveness of the Australian industry. It will support R&D and the commercialisation of Australian technologies that significantly reduce fuel consumption or greenhouse gas emissions of passenger motor vehicles.

It will operate in two streams to support projects of up to three years' duration (although a six month extension may subsequently be considered):

• Stream A will support Motor Vehicle Producers registered under the current ACIS program or the new Automotive Transformation Scheme (ATS) and will be for a grant of $10m or more (though less than $300m in total support under the program for that applicant); and
• Stream B will support companies (including companies formed in order to complete projects) other than Motor Vehicle Producers, although they may participate as consortia members. Grants under Stream B must be for at least $100,000.

Activities supported will be for R&D, proof-of-concept, early-stage commercialisation and pre-production activities carried out in Australia, which makes this very similar in definition to the existing Climate Ready program, and the previous Commercial Ready and R&D Start programs.

Merit Criteria
Grants will be assessed according to the following merit criteria:

• The extent of the reduction in passenger motor vehicle fuel consumption and/or greenhouse gas (ie carbon dioxide equivalent) emissions arising from the proposed project
• The technical merit and extent and calibre of innovation generated in Australia by the proposed project
• The capacity and capability of the applicant to undertake the project, including management capability
• The commercialisation potential of the proposed project to the benefit of Australia
• The contribution of the proposed project to a sustainable and internationally competitive Australian automotive industry, and the benefits to the broader Australian economy

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 (R&D, proof of concept, early-stage commercialisation):

• labour (including salaries, special bonus for employing recent graduates);
• contractors;
• plant and equipment;
• tooling;
• prototype;
• IP protection;
• collaboration;
• acquisition (for adaptation in the project) of new leading-edge technologies.

Only expenditure incurred on or after the approved start date of the project will be supported and that cannot be on a date before the program delegate accepts the application for assessment.

Applications
Applications can be lodged at any time and will be assessed continuously. Decisions will be made by a committee of Innovation Australia, except where grants exceed $10m where applications will be will be referred to Cabinet for approval.
On the current timetable the Fund will be launched and first applications called for in April 2009.