Industrial Energy Transformation Fund

9th February 2021

On 7 February 2021 the government announced £40 million in funding for businesses to help the hard to decarbonise industrial sectors reduce emissions and improve energy efficiency.

Key points

• £40 million government investment to help polluting industries including steel, pharmaceuticals and food and drink to find new ways to reduce their carbon emissions
• solutions including using heat recovery technology to generate electricity and replacing gas with hydrogen fuel will help businesses cut energy costs, protect jobs, and improve air quality across the UK
• funding supports the government’s mission to build back greener and eliminate the UK’s contribution to carbon emissions by 2050

The Government has announced that some of the UK’s most polluting industries will benefit from £40 million funding to help them cut their carbon emissions, while reducing their energy bills.

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

They will drive them towards a cleaner, more sustainable future as part of the green industrial revolution by 2030 and 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.

Doing so will create and support thousands of British jobs, cut carbon emissions and lead to cleaner air for the people of the UK.

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 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.

Today’s announcement follows an initial launch in June 2020 which saw 39 applications approved for funding in the first window, totalling £31 million. 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 Industrial Energy Transformation Fund (IETF) window opens for applications on Monday 8 March and closes on Wednesday 14 July:

• find out more about applying for funding for the IETF Phase 1: Spring 2021
• the Scottish Government is administering £34 million (£26 million from the IETF) for investment in Scotland and launched the Scottish IETF in December 2020

Watch our webinar on Net Zero for the Food & Drink industry here.  Or read more about Net Zero and our e-book, ‘The Power of Zero’ which serves as a guide for business leaders. Download your free copy here.