The net zero transition and the rising price of carbon is another challenge for energy-intensive businesses. Because the UK government wants businesses in Energy Intensive Industries (EII) to remain competitive, it is offering various forms of support.  We’ve outlined common questions on the Industrial Energy Transformation Fund (IETF).

What is the Industrial Energy Transformation Fund?

The Industrial Energy Transformation Fund (IETF) helps businesses with high energy usage cut their consumption through investment in energy efficiency measures and low carbon technologies. Phases 1 and 2 are now closed, and the first funding window for IETF Phase 3 will launch at the end of January 2024. This round of funding will be open from 29 January to 19 April 2024 and will grant up to £185m in funding to businesses across the UK.

Funding will be granted across two competition windows in 2024. The highest quality applications will receive funding in the first window, with any remaining budget being allocated in the second window.

Who benefits from the IETF?

The IETF is for businesses with specific projects designed to cut industrial energy use. Phases 1 and 2 allocated money for feasibility studies, industrial energy efficiency projects and deep decarbonisation technologies. Phase 3 of the IEFT covers similar areas:

  • Engineering studies
  • Energy efficiency deployment
  • Deep decarbonisation projects

Businesses in England, Wales and Northern Ireland can apply for the IETF. Businesses in Scotland can apply for the Scottish Industrial Energy Transformation Fund (IETF) instead.

What’s new to Phase 3 of the IETF?

Over the summer of 2023, the government launched a consultation on the design of Phase 3. The feedback will result in the following changes:

  • An expanded sector scope to include Controlled Environment Horticulture activities and industrial laundries and textile renting facilities.
  • Coal mining activities will no longer be eligible for funding.
  • Companies with industrial sites located in England, Wales or Northern Ireland, but registered in Scotland, will be able to apply to the IETF.
  • The minimum grant threshold will be lowered from £100,000 to £75,000 for Small and Medium Enterprises (SMEs) only.
  • Applicants for deployment grants that exceed £5 million will be asked to provide a feasibility or Front-End Engineering Design (FEED) study in support of their application.
  • The IETF will adapt its technology scope by lowering the eligible Technology Readiness Level (TRL) from 8 to 7 for energy efficiency deployment projects matching the requirement for decarbonisation projects. It will also allow end-use for waste heat recovery schemes in non-process heat demands and export to heat networks, subject to further development of bounding criteria.
  • The IETF will allow site relocations, subject to clearly defined constraints, monitoring and evaluation. It will also allow study projects to include offsite infrastructure, subject to clearly defined battery (boundary) limits.
  • The IETF will expand the scope of feasibility studies to include option analysis in the same strand. 

Does my business qualify for the IETF?

IETF funding is open to a range of SIC codes in mining and quarrying, manufacturing, recovery and recycling of materials and data centres. The consultation response confirmed it will be opened up to some new sectors: Controlled Environment Horticulture activities, industrial laundries and textile renting facilities. Coal mining activities will no longer be eligible for funding.

How do I apply for the IETF?

Applications will be open from Monday 29 January 2024.

To apply:

  • Applicants must submit a registration form, which can be found here on 29 January
  • Complete and submit the further IETF application forms by 3pm, Friday 19 April 2024

IEFT Phase 3 guidance is provided on the government website, and registration forms will also be added on 29 January. Phase 3 will be worth £185 million in funding.

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