Transitioning to a more sustainable business model is becoming increasingly important for our landlord and tenant clients in both the private and public sectors. In this alert we highlight a number of government backed grants, incentives and other investment products that provide financial support to sustainability projects which could be relevant to projects you are planning for your property, or activities you undertake from your premises. Our experts would be happy to work with you to help you access the available funding.
On the face of it, few support packages are obviously property focussed, but many have a broad scope, covering activities ranging from large scale industrial processes to the use of commercial office space and forestry, and a number of approved projects have a property interface relevant to both building owners and tenants undertaking their own fitout works, for example:
- Upgrading existing building services, e.g. converting coal or gas boilers to a biomass heat source or heat pumps, replacing existing lighting with LEDs and upgrading existing chillers.
- Installing new infrastructure into buildings, e.g. EV charging infrastructure and solar power systems.
- Other building upgrades to achieve Green Star ratings.
- Sustainable Food and Fibre Futures: Administered by the Ministry for Primary Industries, this fund provides funding of up to $40 million each year to support initiatives for increasing sustainability in the food and fibre sectors. Funding is available for businesses, NGOs, community groups and industry bodies with projects in the agriculture, food and beverage and forestry sectors. Funding is administered through co-investment with the government and can be through grants or partnerships depending on the length and complexity of the project. Initiatives supported by the fund range from small grassroots community led projects to large scale industry development.
- Government Investment in Decarbonising Industry (GIDI) Fund: Administered by the Energy Efficiency and Conservation Authority (EECA), this fund is available for New Zealand-based private sector businesses to accelerate the decarbonisation of industrial processes and process heat. Projects considered for funding include those improving energy efficiency, technology innovation, fuel switching that reduces the use of fossil fuels, and electricity network infrastructure upgrades. This funding may be useful for businesses subject to the government’s proposed national direction on industrial greenhouse gas emissions, which we discuss here. Applications for the most recent round of funding have closed, with the next round of funding due to open in the next few months, so it is worth monitoring the EECA website if this fund is relevant to you.
- State Sector Decarbonisation Fund: Also administered by EECA, this fund provides $200 million in funding to assist state sector organisations to reduce their carbon emissions. For example, funding is available to replace coal boilers, install low-emission heating alternatives, replace vehicle fleets with E-vehicles and install LED lighting. This funding is aimed to help the government to achieve its goal of making the public sector carbon neutral by 2025.
- Research and Development (R&D) tax incentive: The R&D tax incentive rewards businesses who perform R&D activities with a 15% tax credit. This tax incentive is for all businesses engaged in R&D activities, not just for those transitioning to be more sustainable. To be eligible, you will need to spend between $50,000 and $120 million a year on R&D activities, being activities that:
- seek to solve scientific or technological uncertainty;
- seek to create new knowledge, new or improved processes, services or goods;
- use a systematic approach;
- happen in New Zealand; and
- do not appear on the list of ineligible R&D activities.
- Businesses engaged in R&D activities transitioning to be more sustainable may also be eligible for Callaghan Innovation’s R&D grants.
- New Zealand Green Investment Finance (NZGIF): NZGIF is a green investment bank with an initial $100 million of investment capital. Rather than offering grants, NZGIF follows a typical professional investment process and works with private capital markets and co-investors to accelerate the flow of capital into decarbonisation projects. Its focus is on transport, process heat, energy efficiency (including retrofitting commercial buildings), agriculture, renewable energy, plastics and waste management.
Please get in touch with any member of our team if you would like to discuss how any of the options above might be relevant to you.
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