The company, headed by Picton resident Nick Gerritsen, was selected in the Postcode Lottery Green Challenge for its work turning biomass into fuel.
CarbonScape was selected for its patented method of converting wood, such as saw dust, and other biowaste into high-value graphite, activated carbon and metallurgical coke.
Mr Gerritsen said CarbonScape's renewable "Green Coke" could replace fossil fuels in the steel industry and lower greenhouse gas emissions.
The company aimed to take its message about transforming waste into valuable commodities and lowering carbon emissions to the world, he said.
The winner will receive €500,000 (NZ$783,000) to spend on business costs and the runnersup will get €100,000 each.
The judging panel will take into consideration the votes a company receives at greenchallenge.info.
"We're very excited that the judges have recognised CarbonScape's great potential to reduce greenhouse gas emissions through cradle-to-cradle resource management," said Mr Gerritsen.
He is also the director of environmental biofuel company Aquaflow, a finalist in the 2012 Red Herring Asia Award.
Aquaflow turns agricultural waste such as tree off-cuts and algae into biofuels for cars.