Government announces £220 million to help energy-intensive companies decarbonise

The government has launched a second phase of its Industrial Energy Transformation Fund (IETF), which provides grants to help big-emitting industries cut their carbon emissions.

The funding will support green projects that help businesses across England, Wales and Northern Ireland clean up their industrial processes, improve their energy efficiency and reduce their carbon emissions – and is eligible to industries including pharmaceuticals, steel, paper, and food and drink.

Switching from gas

Companies can bid for grants of up to £30 million, which can be used to support a range of projects including installing more efficient boilers, electric motors and heat pumps to replace their natural gas-fired boilers and steam turbines, as well as developing technologies for industrial carbon capture, fuel switching and recycling waste heat into renewable electricity.

Industry produces 16% of the UK’s emissions today and will need to cut emissions by two thirds by 2035 to set the UK on the path to net zero by 2050. As well as helping businesses decarbonise their industrial processes, it is hoped that the fund will drive down energy bills for energy-intensive businesses.

The first phase of the IETF launched in 2020 and a total of £289 million has been made available through both phases. The time available for businesses to invest these funds extended to 2025.

Companies which took advantage of phase 1 of IETF include Saint Gobain Glass UK, which received a grant for a new, more efficient glass production furnace, and Tate & Lyle Sugars, which received funding for a study of deep decarbonisation of its sugar refinery.

The IETF Phase 2 Autumn window opens for applications on Monday 27 September and closes on Monday 6 December 2021.