£45.7m for businesses to clean up industrial processes and reduce energy costs

The government has announced 26 winners, from three competitions, who will share £45.7m in a drive towards putting the UK a closer to meeting international targets, and see businesses save money on their energy bills.

Companies benefitting include Tweed Valley Maltings in Northumberland for whom the funding will help establish a low carbon energy centre, utilising a wind powered electric boiler. This will cut bills, reduce emissions and secure their energy independence.

The funding has been award across three competitions:

• The Red Diesel Replacement (RDR) programme aims to support the development and demonstration of low carbon fuel and system alternatives to using red diesel in the construction, and mining and quarrying sectors. The programme promotes the decarbonisation of these high-impact sectors, which are affected by partial removal of the entitlement to use red diesel and rebated fuels which was effective from April 2022.

In this competition, £25.7 million in government funding has been awarded to six winning projects. They are also receiving £14.2 million of private investment through match funding from the projects. 

• The Industrial Hydrogen Accelerator (IHA) competition supports projects generating evidence on end-to-end industrial fuel switching to hydrogen. It covers the full technology chain, from hydrogen generation and delivery infrastructure through to industrial end-use, including the integration of the components in a single project.

Two winning projected will share £7 million in government funding for what is the final phase of this project. They are also receiving £5.7 million of private investment.

• The Industrial Energy Transformation Fund provides grant funding for feasibility and engineering studies, and for the deployment of industrial energy efficiency and deep decarbonisation projects.

£13 million will go to a total of 18 winning projects in what is phase 2 of the IETF. They are also receiving £22.9 million of private investment.

Minister for Energy Consumers and Affordability Amanda Solloway said: ‘As we continue towards our goal of reaching net zero by 2050, we want to ensure businesses have all the support they need to power our transition to a cleaner, cheaper energy system.

‘Our funding will support ground-breaking projects in malting, construction and manufacturing so businesses can incorporate green energy into their day-to-day operations.’

One of the winners in the Industrial Hydrogen Accelerator Competition was the Bay Hydrogen Hub, run by EDF Energy Generation, which generates low-carbon hydrogen using steam from the generation of nuclear energy and will support the asphalt industry move to a cleaner fuel source.

Rachael Glaving Commercial Director at EDF said: ‘Nuclear power can play a vital role in decarbonising industries which rely on fossil fuels. The Bay Hydrogen Hub will do just that and at the same time help the UK reach net zero.’