The Earthworker Cooperative, a pro-sustainability group, is lobbying state and federal governments for $1 million to help build a factory that would manufacture hot water systems in the Latrobe Valley.
The CFMEU’s Luke van der Meulen claimed that the factory would be worker-owned and would create 40 jobs for locals.
"There's a lot of talk in the Latrobe Valley about transitioning our economy to other industries," he told the ABC.
"Just knowing that we face serious environmental challenges is not enough.
"We need to take every possible step to deal with the big transition issues facing our community."
Van der Meulen said that the factory would create technology built under licence from Douglas Solar.
The Latrobe Valley Express reports that Earthworker are also seeking micro-finance to get the factory up and running.
Organiser Dave Kerin said that the group was concerned about the disappearance of local manufacturing jobs.
"When you see everything closing at the moment, the Shell refinery and car plants, and you just see all these manufacturing jobs and good middle-ranking wealth creating jobs disappearing overseas,” he told The Express.
He also hoped that the group could help create more jobs in the region.
"We then want to make that the first of many factories across Gippsland that are manufacturing the green technologies," he said.