An industry lobby group has welcomed the Gillard government's changes to a $1 billion grants program to help manufacturers prepare for Labor's carbon tax.
Climate Change Minister Greg Combet on Thursday announced that smaller manufacturers applying for grants under $500,000 will only have to match the government on a dollar-for-dollar basis.
Originally a co-investment of three dollars from grant recipients was required for every dollar put up by Labor.
Under the new rules, businesses applying for all other grants under $10 million will be required to contribute $2 for every $1 from the government.
The money will help companies invest in new equipment and processes that cut their carbon emissions.
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For grants of $10 million or more, recipients will still be expected to make a co-contribution of at least $3 for each $1 of government support.
The Australian Industry Group says the changes are a win for businesses outside the resource sector who were finding it hard to raise the capital needed for local investment.
"Our members gave us strong feedback that the ratio of grant to business contribution initially proposed for this program was too low to get many worthwhile projects over the line," Ai Group incoming chief executive Innes Willox said in a statement.
"Clearly, the government has responded to these concerns with grants now covering up to 50 per cent of the cost of projects for smaller businesses - exactly those who face the greatest capital constraints."
Ai Group also welcomed a stronger focus on the bottom-line impacts of a project proposal alongside its emissions reductions.
But Mr Willox said, "Industry remains concerned about the overall impact on competitiveness from the carbon price."
Mr Combet told parliament that 3000 manufacturing businesses already had expressed interest in the seven-year program which will help them buy new plant and equipment to cut their energy costs or reduce carbon pollution.
Mr Combet said encouraging innovation, cutting energy costs and reducing carbon pollution would all promote competitiveness and "support jobs in workplaces".
Eligible manufacturers can apply for funding from Thursday.
Projects may include switching to less carbon-intensive energy sources or installing new manufacturing equipment, processes and facilities to reduce energy consumption and carbon emissions.
The Clean Technology Program includes $800 million for general manufacturers, $150 million for food processors and $50 million for foundries and metal forges.
The government also finalised the regulations for its jobs and competitiveness programs that provide $8 billion over three years to emissions-intensive trade-exposed industries.
"Firms that invest in efficiency measures will not only improve their productivity, they may well receive more than 100 per cent of their carbon liability in free permits," Mr Combet said.
"It provides a direct financial incentive for new investment that will support jobs, productivity and competitiveness in those industries." Labor's carbon tax starts on July 1 with a $23-a-tonne pollution price before transforming into an emissions trading scheme in mid-2015.
