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NSW Net Zero Manufacturing Initiative – Low Carbon Product Manufacturing

The inaugural round of the Low Carbon Product Manufacturing program features two funding streams:

  • The construction ready stream offers a total of $95 million. Grants range from $2M to $20M.
    • EOI will be accepted until 19 April 2024.
  • The project development stream offers a total of $5 million. Grants range from $50K to $900K per eligible project development activity.
    • Detailed applications will be accepted until 3 May 2024.

Both streams require successful applicants to contribute a minimum of 50% of the total project cost from sources outside the NSW Government.


The Net Zero Manufacturing Initiative, integral to the NSW Government's aim for net zero emissions by 2050, combines three programs:
- Clean Technology Innovation (CTI) for developing low-emission technologies
- Low Carbon Product Manufacturing (LCPM) to support local production of essential low-carbon goods
- Renewable Manufacturing (RM) to boost local production of renewable energy components.

The LCPM aims to invest in new industrial facilities and advanced manufacturing capabilities, facilitating the decarbonisation of the NSW economy toward achieving net zero emissions by 2050. It has four key objectives:
- stimulating economic growth throughout NSW
- encouraging investment and employment in emerging low carbon industries
- developing a diverse, self-sufficient, resilient, and competitive low carbon manufacturing sector
- establishing new industrial facilities and advanced manufacturing capabilities to drive decarbonisation efforts in NSW.

Key Requirements

The construction ready stream application process involves two stages: expression of interest (EOI) and detailed application (by invitation only).

EOIs meeting eligibility criteria and passing merit assessment will receive invitations to submit a detailed application.

Eligible applications are assessed based on three merit criteria during the EOI stage, necessitating applicants to meet these criteria to advance to the detailed application stage. Firstly, it evaluates the deliverability and technical feasibility, including the technical capacity to operate the manufacturing facility, readiness to achieve operational status within four years of funding agreement execution, and the commercial viability of the proposed technology. Secondly, it examines the financial and commercial feasibility, focusing on the market viability of the low carbon product and its potential profitability. Thirdly, it considers the strategic significance of the product in reducing emissions compared to similar materials.

During the detailed application stage, four merit criteria are applied. These include a more comprehensive assessment of deliverability and technical feasibility, financial and commercial feasibility, and strategic significance, as well as an evaluation of the project’s value for money and affordability to the government. This involves determining the project’s economic contribution through a cost-benefit analysis, ensuring a positive benefit-cost ratio and net present value per dollar of government grant. Additionally, it examines the funding contribution from non-government sources, which must constitute at least 50% of the total project cost, with in-kind contributions not being eligible.

The project development stream follows a single-stage detailed application process, wherein applications are evaluated against specific merit criteria.

These include assessing the project’s purpose and capability to deliver, considering factors such as the justification for the project, readiness to commence and complete within 18 months of funding agreement execution, and the applicant’s experience and capacity to deliver. Additionally, the strategic significance of the project is examined, focusing on its potential to reduce emissions compared to conventional products or materials. Furthermore, the value for money and affordability to the government are assessed by evaluating the cost-effectiveness of the proposed budget and the proportion of cash contributions from the applicant and other non-NSW government sources in relation to the total project development cost.

What is eligible for funding?

The construction ready stream supports projects aimed at establishing new or expanded manufacturing facilities within NSW.

These facilities are required to produce low carbon products on a commercial scale from categories such as building materials (e.g., cement, steel, aluminium, cross-laminated timber), ‘green’ chemicals (e.g., ammonia, methanol), biofuels (e.g., derived from biomass or animal waste), power fuels (e.g., produced with renewable energy like hydrogen), and inputs for agricultural production (e.g., fertilisers, animal feeds). To be eligible, the project must demonstrate the production of a low carbon product with lower lifetime carbon dioxide equivalent (CO2e) emissions compared to equivalent conventional products. Additionally, the project must be in NSW, completed within four years of the funding agreement execution (by 30 June 2032 at the latest), financially sustainable without ongoing government investment, demonstrate that it would not occur in NSW within the same timeframe without government support, and have a viable commercial strategy.

Funding can be utilised for capital expenses (CAPEX) and other project-related costs, which are eligible only after both parties have signed a funding agreement. These costs encompass purchasing land (if essential and suitable alternatives for renting are unavailable), acquiring, constructing, installing, or commissioning new plant, equipment, or machinery, establishing new facilities, buildings, or hubs, procuring necessary technology and intellectual property (IP), upgrading existing facilities, buildings, plant, equipment, or technology where required for project delivery, and covering external project management and administration expenses (up to 10% of the project cost).

The project development stream supports initiatives aiming to secure a financial investment decision for constructing a commercial-scale manufacturing facility in NSW for low carbon products.

Organisations intending to commercially manufacture their low carbon products can seek funding for four types of project development activities. These activities should facilitate a financial investment decision to establish a new or expanded manufacturing facility. If an applicant plans to undertake multiple eligible projects, separate applications are required for each category.

Eligible project categories include front-end engineering design, product carbon footprint assessment, product compliance and certification studies to scale manufacturing, and manufacturing facility development approval. The project aims to facilitate the attainment of a financial investment decision for constructing a commercial-scale manufacturing facility for various low carbon products in NSW, encompassing building materials (e.g., cement, steel, aluminium, cross-laminated timber), ‘green’ chemicals (e.g., ammonia, methanol), biofuels derived from biomass or animal waste, power fuels produced with renewable energy (e.g., hydrogen and hydrogen-derived fuels), and inputs for agricultural production (such as fertilisers, animal feeds, etc.). Additionally, the project must align with one of the four outlined categories, demonstrate a necessity for government support to proceed within the designated timeframe, and be completed within 18 months of the funding agreement execution.

Funding can cover expenses directly associated with project delivery, but only after both parties have signed a funding agreement. Eligible costs comprise payments to contractors or consultants managing the project or executing specific project components, expenditures for hiring essential project staff, excluding labour costs for existing positions handling other tasks within the organisation, and administrative costs directly linked to the project, capped at 10% of the project’s total cost.

What companies are eligible for funding?

The construction ready stream

Applicants, whether international, interstate, or NSW-based, must meet several eligibility criteria to qualify for funding. The lead applicant must hold or obtain an Australian Business Number (ABN) before entering into a funding agreement and must also meet specific entity requirements. These include being registered for goods and services tax (GST), holding or obtaining necessary insurances, and not being subject to any insolvency events or listed on the Australian Department of Foreign Affairs and Trade (DFAT) sanctions list. Additionally, applicants must disclose any legal proceedings or investigations that may impact their ability to fulfil obligations under the funding agreement, as well as any government grants applied for related to the proposed project. It’s essential to adhere to employment contracts, industrial agreements, and relevant codes of conduct, along with meeting Workplace Health and Safety legislation requirements. Foreign Investment Review Board (FIRB) approval may also be necessary before project commencement.

The project development stream

To qualify for funding, the lead applicant must meet several requirements. This includes obtaining an Australian Business Number (ABN) before entering into a funding agreement and being an entity type such as a company incorporated in Australia, a company limited by guarantee, an incorporated trustee, an incorporated association or co-operative, or an Aboriginal and/or Torres Strait Islander Corporation. Additionally, they must hold or acquire all required insurances, not be subject to any insolvency events, and not be listed on the Australian Department of Foreign Affairs and Trade (DFAT) sanctions list. Furthermore, applicants must disclose any legal proceedings or investigations that could impact the project execution or the reputation of the NSW Government, as well as any government grants applied for related to the project in the last 5 years. Finally, they must comply with employment contracts, industrial agreements, codes of conduct, and Workplace Health and Safety legislation.

Is this grant competitive or entitlement based?

Competitive. Your application will be assessed among other applications by a judging panel.

How can I increase my chances of winning this grant?

By engaging an accredited government grants consultant, such as Avant Group.

Competitive grants often require significant business case development and project analysis to support the application, this may include detailed presentations supporting the project’s merit, projected sales, cost-benefit analysis and more.

As part of your engagement with Avant Group, your account manager will assess the required documents and will provide the following as needed to support your grant submission.

Grant application writeup including a detailed presentation illustrating how the grant funding will contribute to your project, how the funding will contribute to the project’s budget, a project milestone plan, delivery timeline, impact on employment if applicable and a breakdown of the management and leadership team for the project

  • Industry analysis presentation
  • Competitor Analysis Presentation
  • Marketing and Sales Analysis Presentation
  • 3-5 year Cashflow Forecast
  • 3-5 year Balance Sheet Forecast
  • Cost-Benefit Analysis of Grant Funding
  • End-to-end grant application including information collating, analysis and application writing
  • CAPEX (Capital Expenditure) cost-benefit analysis
  • Stakeholder relations and Risk Mitigation Plans
  • Any other relevant forecasting that will support your application

How can I get help with my application? Or know if I’m likely to win funding?

Avant Group offers a no-obligation assessment of your eligibility for funding and will assess your likelihood of a successful grant application.