Circular Economy Organics Sector Transformation Fund – Round 1

The Circular Economy Organics Sector Transformation Fund (the Fund) supports the diversion of organic waste from landfill and the enhancement of end markets for recycled organics across the agricultural sector.

$10.2 million is currently available under round 1 for organic processing businesses to develop new or enhance existing organic processing infrastructure to improve product quality or increase capacity.

Through this fund, applicants will also be considered for additional support from Australian Government's Food Waste for Healthy Soils Fund. Sustainability Victoria will assess and select applicants through a competitive and merit-based process to be considered for the Australian Government’s Fund. Sustainability Victoria will be responsible for submitting the application on behalf of the applicant.

Sustainability Victoria and Australian Government funding will need to be at least matched by the Applicant on a minimum 1:1:1 basis.

Future funding will be available to support the growth of recycled organic end markets to use the increased supply of better-quality products; it will open in 2022.

For the purposes of this grant program the term ‘organics’ or ‘organic’ refers to organic waste diverted from landfill.

This grant is part of the Recycling Victoria Policy funding.

Information bulletin

Find out more using the Information bulletin.

1. Fund overview

1.1 Fund objectives

The Fund’s objectives are to:

• increase the recovery and reprocessing of source separated organic waste into quality composts and soil conditioners
• increase the use and market demand of the end products, especially for use on agricultural soils
• support employment and long-term economic growth and development.
• support Victoria’s transition to a circular economy

This will be achieved by funding projects that build new or enhance existing organic processing infrastructure:

• to increase capacity
• to improve product quality through the installation of decontamination infrastructure or the procurement of technical equipment that improves product quality, including product testing.

1.2 Funding available

1.3 Co-contribution

2. Eligibility

2.1 Who can apply

2.2 Who cannot apply

2.3 What will be funded

Applications must be:

• a project that builds new or enhances existing organics processing infrastructure to either:
  • increase capacity, or
  • improve product quality through the installation of decontamination infrastructure or the procurement of technical equipment, including product testing
• a project(s) that had a confirmed investment decision made on or later than 15 April 2021 and will be commissioned and operational by 30 March 2024
• a proposed project that is expected to be economically viable over its operational life.

Eligible recycled organic processing infrastructure include:

• aerobic composting
• anaerobic digestion.

Special conditions apply to Australian Government-funded projects where the funding is for construction or building work and the Australian Government funding is at least $10 million. You and your subcontractors will need to comply with the Code for the Tendering and Performance of Building Work 2016.

You can submit multiple applications. Each application must be for a different project. An application must not be for multiple projects.

2.4 What will not be funded

Projects are ineligible for funding if they:

• focus on materials other than organics waste diverted from landfill
• do not meet the eligibility criteria of the Fund
• relate to small organic recycling systems processing less than 2,000 tonnes of organic waste per year (per facility or processing unit)
• relate to the following waste management processes:
  • Mixed Waste Organic Outputs (MWOO) facilities
  • Mechanical Biological Treatment (MBT) facilities
  • infrastructure to facilitate the collection and redistribution of edible food waste to food rescue charities
  • food waste disposal such as insinkerators and macerators
  • food dehydrators or similar on-site rapid food waste processing equipment
  • extending capacity for collection of waste (for example, food organics and garden organics (FOGO) collection and transport)
  • infrastructure, such as gate fees (IT, computer or software), kitchen caddies and bags or bin liners, bins and
  • vehicles.
• are being undertaken in order to comply with regulation or a regulatory notice or order
• do not meet regulatory or planning requirements
• are subject to current industrial relations investigation or prosecution
• have commenced construction of infrastructure before 15 April 2021
• seek funding for research, demonstration and development (new technologies proven by demonstration will be considered)
• do not clearly demonstrate a need for government support
• will not be commissioned and operational by 30 March 2024.

The following costs are ineligible for funding:

• in-kind contributions
• lease or purchase of land
• routine or cyclical maintenance works
• ongoing operational costs such as, but not limited to, salaries, electricity, water and other utilities
• costs of equipment not dedicated to the project purpose
• purchase of vehicles (for example, front-end loaders and forklifts)
• pre-construction (site preparation) activities (for example, site clearing, or site accessibility works)
• the repair of facilities damaged by vandalism, fire or other natural disasters where the damage should be covered by insurance
• business case development
• feasibility studies
• contingency costs
• permit, licensing and approval costs
• marketing, advertising and promotional costs
• research, development and demonstration
• leasing of equipment
• travel, conferences and other educational activities
• requests for assistance in managing cash flow.

3. Assessment process

The assessment panel will assess the application based on merit according to the criteria below.

3.1 Assessment criteria

What

Weighting: 40%

Describe how your project will deliver on the purpose of the fund and any of the objectives.

Demonstrate how your project will:

• increase the recovery and reprocessing of source separated organic waste into quality composts and soil conditioners (also include how feedstocks and outputs will be monitored and assessed to ensure safety and quality of end products)
• increase the use and market demand of the end products, especially for use on agricultural soils
• support employment and long-term economic growth and development.
• support Victoria’s transition to a circular economy

Demonstrate how your project is viable in terms of:

• technology and infrastructure (including contamination identification and removal and capacity to adapt to any changes to the Australian Standards which may increase minimum product requirements)
• feedstock sourcing and output capacity
• landfill diversion and end markets.

3.2 Diversity consideration

Sustainability Victoria may overlay rankings to achieve an overall mix of projects that represent:

• a geographical spread across Australian jurisdictions that addresses regional, remote and metro waste challenges
• a diversity in project types (that is, innovative), especially those that increase resilience of markets and end product quality

• consortium projects that address cross-jurisdictional gaps.

3.3 Due diligence checks

4. Funding conditions

4.1 Before starting the project

• Projects gaining any necessary regulatory and planning approvals required to proceed to construction.
• Participate in an inception meeting to discuss project and funding agreement.
• Agree to realistic evidence-based and performance-based milestone payments.
• Provide Sustainability Victoria with insurance certificates of currency.
• Sign Sustainability Victoria’s funding agreement within 30 days of approval.
• Provide a project plan.
• If you receive funding of more than $250,000, plan for capital works signage.
• If your project is based in metropolitan Melbourne or across Victoria, and is given funding of at least $3 million, you need to meet Local Jobs First requirements.
• If your project is in regional Victoria, and is given funding of at least $1 million, you need to meet Local Jobs First requirements.

4.2 During and after the project 

• Deliver the project as outlined in the application and comply with the funding agreement.
• Contribute to regular project progress updates or meetings.
• Notify Sustainability Victoria immediately about any delay or change to the project.
• Provide update reports to Sustainability Victoria at agreed milestones with evidence of expenditure, progress and performance.
• Provide adequate monitoring and evaluation of the project according to the funding agreement.
• Collect and release data to Sustainability Victoria. Sustainability Victoria may share or report on the data.
• Contribute to the project’s promotional activities (for example, provide Sustainability Victoria with support by reviewing and approving written stories or videos).
• Participate in and contribute to Sustainability Victoria activities to distribute the findings to broader stakeholders (for example, government and industry).
• Acknowledge that Sustainability Victoria has contributed funding in all communications related to the project
• Comply with the Code for the Tendering and Performance of Building Work 2016 requirements (if applicable).

5. Timeline

Dates may change.

The below timeline is for this Fund:

Applications open: 23 October 2021

Applications close: 18 November 2021

Information session: 4 November 2021

Notification of outcome: March 2022

Funding agreements established: May or June 2022

Project completion date: 30 March 2024

6. How to apply

Your application

• Allow adequate time to plan, research, gather supporting documentation and draft your application.
• As this is a competitive grant, we cannot review drafts or provide feedback.
• You must use SmartyGrants, unless you have written permission from Sustainability Victoria

Tips for using SmartyGrants

7. Assistance available

7.1 Investment facilitation

We recommend Applicants to engage with investment support services before submitting their application to ensure their project is investment ready and set up for success.

Sustainability Victoria offers an investment facilitation service for projects that increase Victoria’s resource recovery sector.

Read about our assistance with investing Victoria’s resource recovery industry.

Or email invest@sustainability.vic.gov.au for more information.

7.2 Information sessions

There will be an online information session.

The information session will outline the:

• intent of the fund
• types of applications we are seeking
• application process.

Participants attending the information session will have an opportunity to ask questions about the fund and the application process.

A recording will be available after the session.

7.3 Contact us

We cannot review drafts or provide feedback.

Phone: +61 3 8656 6757 Monday to Friday, 10:00 am to 4:00 pm.

Email: grants.enquiries@sustainability.vic.gov.au

In the subject line, use the grant name Recycling Victoria Organics Sector Transformation Fund Round 1.

8. Why the Victorian Government is providing this funding

The Victorian Government has invested over $515 million to deliver transformation and reform of Victoria’s waste and recycling industry. This includes $380 million to stabilise and rebuild the state’s waste and resource recovery sector.

This fund is released as part of the Victorian Government’s Recycling Victoria policy. The policy will fundamentally boost jobs and establish a recycling system Victorians can rely on.

The Fund delivers on key Commitment 8 of the policy is to increase the use of recycled materials. This fund is a key component of the $30.46 million Recycling Victoria Markets Acceleration Package and the $76.9 million Industry and Infrastructure Development Package.

The policy has a target to halve the volume of organic materials going to landfill between 2020 and 2030, with an interim target of 20% reduction by 2025. As Victoria works toward this target, there will be a corresponding increase in the volume of recycled organics supplied to the market. To reduce the risk of market failure from over supply, we must increase the demand for recycled organics by enhancing product value.

The Food Waste for Healthy Soil Fund

The Food Waste for Healthy Soil Fund is an Australian Government initiative that will invest $67 million support the diversion of nutrient-rich household and commercial organic waste from landfill to soils.

This funding forms part of the $214.9 million commitment by the Australian Government in the 2021-22 Federal Budget to improve and protect Australia’s soil.

The Fund aims to increase Australia’s organic waste recycling rate from 49 per cent to 80 per cent by 2030.

Together with co-contributions from participating state and territory governments and industry, the Fund will leverage over $170 million of investment to build new and improve existing organic waste recycling infrastructure to divert organic waste into nutrient rich compost and soil enhancers. Funded facilities will increase the quantity and quality of recycled organic waste available for use especially in the agricultural industry.

For more information, visit the Department of Agriculture, Water and the Environment website.

Funding allocated under this program will be delivered via the Victorian Government’s Recycling Victoria Organics Sector Transformation Fund.

9. Definitions

Applicant

The applicant who applies for the funding and is responsible for all details in the submission of an application and the contractual obligations under the funding agreement with Sustainability Victoria if successful for grant funding.

Co-contribution

The Applicant’s required cash or in-kind contribution to the total project income.

Direct Jobs

Actual new full-time positions created by your business. This can include training or upskilling of employees who would otherwise be made redundant through the implementation of your project.

Environmental, Safety or Workplace Breach

An environmental or safety breach is any past or current prosecution, reportable incident, investigation, notice, penalty, warning, regulatory intervention or enforcement action from the Environment Protection Authority (EPA), Victorian WorkCover Authority (WorkSafe) or Fair Work or failure to comply with any environmental, safety and workplace laws.

Environmental and Safety Laws

Environmental and safety laws are the Occupational Health and Safety Act 2004, Environment Protection Act 2017 or any other legislation, regulation, order, statute, by-law, ordinance or any other legislative or regulatory measure, code, standard or requirement relating to the protection and safety of persons or property or which regulate the environment including laws relating to land use planning, pollution of air or water, soil or groundwater contamination, chemicals, waste, the use, handling, storage or transport of dangerous goods or substances, greenhouse gas emissions, carbon trading, or any other aspect of protection of the environment.

Full-Time Equivalent Employees (FTE)

The hours worked by one employee on a full-time basis.

Calculating FTE

The calculation is used to convert the hours worked by several part-time employees into the hours worked by full-time employees. For example, you have three employees working the following - 40, 40 and 20 hours per week, giving you 100 hours per week in total.

Assuming full-time hours are 40 hours per week, your full-time equivalent calculation is 100 hours divided by 40 hours which equals 2.5 FTE.

In-kind Contribution

An in-kind contribution is a contribution of a good or a service other than cash.

In-kind contributions should include the cost for activities that are directly related to delivering your project. Examples include:

• staff time to manage project implementation (project management and installation costs that utilise existing internal resources);
• time spent on project activities by volunteers; and
• donated goods or services related to the project.

The following activities cannot be considered as in-kind contributions:

• operating expenses that are not directly associated with delivering the project; and
• opportunity costs such as staff ‘downtime’ during the installation of equipment or implementation of activities.

Applicants must fairly justify how they determined the dollar value for in-kind contributions.

Not-for-Profit (NFP)

An organisation that provides services to the community and does not operate to make a profit for its members (or shareholders, if applicable).

Organics/ Organic

Organic waste diverted from landfill for the purposes of creating a recycled organics product

Project Participant/s

An organisation engaged by the Applicant to assist in the delivery of the Applicant’s project, including but not limited to major subcontractors, contractors, product suppliers and consultants.

Project Partner/s

An organisation/s in an agreed partnership with the Applicant that have a critical role in the project and a formal commitment to delivering the support required to ensure the project’s success. The partnership needs to be demonstrated by a formal agreement between the partners that outlines the governance, financial and intellectual property arrangements and roles and responsibilities of each party. A formal agreement must either be in place or be finalised before commencement of the project.

Related Entities

Entities which are related to the Applicant, including:

• Holding companies of the Applicant
• Subsidiaries of the Applicant
• Subsidiaries of holding companies of the Applicant
• Companies with common directors or shareholders as the Applicant
• Companies that are a beneficiary under a trust of which the Applicant is a trustee
• Trustees of a trust under which the Applicant is a beneficiary
• Companies that conduct business at the same address as the Applicant, or the same address as the location of the activity for which the funding is sought

Social Enterprise

A social enterprise is a business that trades to intentionally tackle social problems, improve communities, provide people access to employment and training, or help the environment.

Social enterprises:

• are driven by a public or community cause, be it social, environmental, cultural or economic
• derive most of their income from trade, not donations or grants
• use the majority (at least 50%) of their profits to work towards their social mission.

Related Person/s

Related Person means a director, officer, employee, agent, board member or contractor of the Applicant or a Related Entity.

Workplace Laws

Workplace laws are the Fair Work Act 2009, or any other legislation, regulation order, statute, by-law, ordinance or any other legislative or regulatory measure, code, standard or requirement relating to the provision of fair, relevant and enforceable minimum terms and conditions for all persons and to prevent discrimination against employees.