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Government announces £190m for industry to transition to net zero

Over £190m will be made available to help industry in the transition to net zero, reducing emissions as they switch to cleaner, cheaper energy.

Minister for Energy Efficiency and Green Finance Lord Callanan today (Monday 22 January) announced 12 winners from the Local Industrial Decarbonisation Plan competition, who will each benefit from a share of up to £6m to develop plans for a low carbon future.

This funding will give winning businesses and partners the chance to work together on plans to cut their emissions, learning from each other while also having access to technical advisors to prepare for adopting measures such as using hydrogen or carbon capture.

In particular, this will be targeted at projects outside of the UK’s major industrial areas, from a Yorkshire pet food manufacturer to a Poole ferry operator. Companies in dispersed locations away from industrial heartlands account for 55% of the country’s industrial emissions.

He also shared plans to open a new phase of the Industrial Energy Transformation Fund later this month for a further £185m, which will help companies transform their operations to run on cleaner, more secure energy – backing measures such as replacing inefficient equipment, installing electric furnaces, and switching to hydrogen. The funding is ensuring businesses are supported in the transition to net zero in a sustainable way and cost-effective way, securing green industrial jobs for the future.

Sectors including manufacturing and recycling – and for the first time controlled environment horticulture, industrial laundries and textile renting facilities – will be among those eligible to apply for this new support as part of wider government efforts to meet the UK’s net zero targets.

Minister for Energy Efficiency and Green Finance Lord Callanan said:

“From manufacturing chemicals to food and drink, UK industry is at the heart of our economy.

“With over £190 million available for businesses to make the move to cleaner, cheaper energy – and with 12 projects benefiting directly today – we are delivering the support they need to decarbonise.

“I look forward to seeing the plans developed by the successful clusters and encourage other businesses to apply to our Industrial Energy Transformation Fund, which has already made awards to over 150 projects to help companies go green.”

Today’s winners include:

Shoreham Port Industrial Cluster, an established cluster with 175 businesses based on the 110-acre site, which will explore ways to reduce emissions and improve local air quality by working with local councils
Industrial Decarbonisation for Northern Ireland (ID-NI), which will develop plans to help local businesses increase their productivity while also cutting emissions, embracing the opportunities that a low carbon future will offer.
Decarbonising the Midlands Aerospace Cluster (DMAC), who will work with key players in the region’s aerospace supply chain, identifying manufacturing processes that contribute to greenhouse gas emissions and potential solutions.
The Industrial Energy Transformation Fund will also offer support for businesses to switch to more energy efficient technologies through a new phase opening on Monday 29 January.

Previous winners have included:

Pioneer Foods in Peterborough – a leading cereal manufacturer, to improve the energy efficiency of their 3 industrial ovens by replacing burners, minimising heat loss and installing new motors.
Cemineral in Lincolnshire – a supplier of cement products for housing and infrastructure, to convert its conveyance and processing systems to electric power, helping to reduce their carbon emissions.
Natural World Products in Dunmurry – a producer of peat-free composts and soil conditioners, to replace diesel-powered equipment with electric equivalents.

These announcements are part of the government’s commitment to spend more than £12bn on energy efficiency by 2028, helping more households and businesses to benefit from lower bills and cleaner energy.

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