£40m released by UK government to help clean up polluting businesses

Proposed solutions include using heat-recovery technology to generate electricity, and replacing gas with hydrogen fuel, potentially helping businesses to cut energy costs, protect jobs, and improve air quality across the UK.

The funding, announced today, supports the government’s mission to build back greener and eliminate the UK’s contribution to carbon emissions by 2050.

Businesses in energy-intensive sectors, including pharmaceuticals, steel, paper and food and drink, will be able to apply for grants worth up to £14m through the government’s Industrial Energy Transformation Fund, totalling £289m in funding up until 2024.

In this second competition window, the minimum grant has been lowered to £100,000 for deployment projects, offering more flexibility for small businesses to receive funding so they can speed up getting their ideas to market.

With potential projects taking place across the East and West Midlands, North East, North West, and Yorkshire and the Humber, as well as in Wales and Northern Ireland, the government grants will enable businesses to use new technology to improve the efficiency of industrial processes and reduce energy demand.

The grants are intended to drive businesses towards a cleaner, more sustainable future as part of the government's green industrial revolution by 2030 and the mission to eliminate the UK's contribution to climate change by 2050.

This includes factories installing electric motors and heat pumps to replace their natural gas-fired boilers and steam turbines; manufacturers using heat-recovery technology to recycle waste heat and generate renewable electricity, and industries such as the food and drink sector carrying out studies to replace natural gas with hydrogen as their primary fuel.

The plans could create and support thousands of British jobs, cut carbon emissions and ultimately lead to cleaner air for the UK's population.

Anne-Marie Trevelyan, energy minister, said, “We can only achieve our ambitious plans to tackle climate change if everyone plays their part, including businesses large and small.

“That’s why our £40m investment will not only help some of the highest-polluting industries like steel, paper and pharmaceuticals build back greener by finding innovative ways to reduce their carbon emissions, but will also create more opportunities for growth and jobs by levelling up and making industry fit for the future.”

The fund supports the UK government’s mission to build back greener and level up the country’s industrial heartlands by allowing them to lay the path for economic growth.

The government’s Industrial Energy Transformation Fund (IETF) is worth £289 million, with funding available across England, Wales and Northern Ireland up until 2024. The fund supports heavy industry as the UK transitions to a low-carbon economy.

An initial launch of the scheme in June 2020 saw 39 applications approved for funding in the first window, totalling £31m in grant money.

It is calculated that as a result of these projects carbon emissions will be reduced by 2.6 million tonnes over their lifespan, which is equivalent to taking 38,000 fossil-fuelled cars off the road over a 30-year period.

The IETF window opens for applications on Monday 8 March and closes on Wednesday 14 July.

In November 2020, the government unveiled its 10-point plan for the UK's ‘green industrial revolution’.

Since that time, it has loosened the purse strings to fund a variety of future-facing projects, ranging from a drive to establish the first net-zero emissions industrial zone by 2040 to the planting of 800,000 trees across the UK as part of the Green Recovery Challenge.

E&T recently examined Boris Johnson’s 10-point plan for a green industrial revolution in more detail to see how achievable the individual aims are and what more might be needed to kickstart the new green economy.

Despite the government's largesse in funding new green projects, experts have warned that, post-Brexit, the UK is at risk of falling behind in key areas of technology, including the space industry and R&D.