New Net Zero Funding for UK Businesses in Non-Industrial Areas Announced

UK industries and businesses are set to get a major boost to take the net zero transition leap as the UK government has announced over £190 million in funding.

The Department for Energy Security and Net Zero announced £190 million in funding for 12 winning projects on January 22. This is to develop plans to reduce emissions from the UK manufacturing sector by bringing together local partners.

The new net zero funding announced by the Sunak government will provide government aid up to £6 million along with an additional £185 million in funding from the Industrial Energy Transformation Fund, which will benefit other UK industries.

The primary objective of the new net zero funding for UK industries is to help the UK economy successfully transition into a net zero economy by supporting UK businesses to reduce emissions and energy bills amidst the ongoing cost-of-living crisis. It will help fulfil the net zero targets of the UK as more UK businesses switch to cleaner energy.

This comes at a time when the UK launched the biggest nuclear power expansion plan in recent times so that the energy security issues of the country are secured.

According to the funding plan, the 12 UK businesses getting the funding will be partnering to reduce their emissions. They will have access to technical advisors to prepare for the measures like carbon or hydrogen capture.

The UK government is particularly targeting to support projects outside the major industrial areas for this purpose. Little-known UK companies in remote areas like a Yorkshire pet food manufacturer or a Poole ferry operator make up 55 per cent of UK emissions. Hence, the plan is to help such businesses make the switch to green energy.

A new phase of the Industrial Energy Transformation Fund would be launched to help UK businesses adopt cleaner energy options for operations. The £185 million funding through this phase will help UK companies replace inefficient equipment, switching to hydrogen fuel and installing electric furnaces. This sustainable and cost-effective way of switching to green energy is likely to create more green jobs, said the government.

Through the new net zero funding the UK government is trying to facilitate green energy transition in the industrial laundries and textile renting facilities, the UK environment horticulture sector apart from the UK manufacturing and recycling sector.

Can the new net zero funding keep the UK on the decarbonisation track?

Speaking about the new net zero funding, the UK Minister for Energy Efficiency and Green Finance Lord Callanan said: "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," Lord Callanan added.

The 12 projects that won the grants include the Shoreham Port Industrial Cluster, which has 175 UK businesses based on the 110-acre site that is working on improving air quality, the Industrial Decarbonisation for Northern Ireland (ID-NI), which will help local businesses increase productivity by adopting emission-reducing measures.

Other projects awarded in this phase of funding include the Midlands Aerospace Cluster (DMAC) which seeks to decarbonise the UK aerospace supply chain.

Earlier, winners like the Peterborough cereal manufacturer Pioneer Foods and Lincolnshire cement housing products maker Cemineral took the net-zero leap by installing more energy-efficient burners and new motors and converting to electric power conveyance systems respectively.

Dunmurry-based peat-free compost maker Natural World Products also switched to electric-powered equipment from diesel-powered ones through this funding.

The new net zero funding is part of the UK government's plan to invest £12 billion on energy efficiency by 2028 which would help UK homes and businesses reduce their energy bills.

One of 12 winners of the new funding, Tom Willis, the Chief Executive of Shoreham Port, said: "This funding will support us to create a tangible plan to decarbonise our Cluster, enabling us to act as a catalyst for regional emission reduction."

Meanwhile, the Chief Executive of Midlands Aerospace Alliance (another winner of the grant), Dr Andrew Mair said: "It is notoriously hard to move fast in aerospace given tightly controlled sector-specific materials and processes for manufacturing aircraft parts that have a long in-service life.

"This provides a key challenge for the cluster which we are excited to tackle through this cluster decarbonisation project, with the ambitious aim of developing in detail credible and feasible solutions to reduce emissions in the region's aerospace cluster."

The Challenge Director of Industrial Decarbonisation at Innovate UK, Bryony Livesey said: "Today's announcement shows the keenness of businesses to collaborate on plans to decarbonise by forming local industrial clusters and working together to drive down emissions.

"This is a crucial step in tackling decarbonisation at dispersed sites on the UK's journey towards net zero by 2050."