Government invests over £31 million to help industry slash emissions and energy costs

Over £31 million in new government funding will support industry to reduce its reliance on fossil fuels and slash carbon emissions, helping it to become greener and cutting energy bills.

The funding announced on 31 May includes over £6.6 million to help industry move away from using red diesel, also known as gas oil – a type of fossil fuel commonly used for off-road vehicles and machinery, specifically in the quarrying, mining, and construction sectors.

It will see the development of red diesel alternatives, such as e-fuels and green hydrogen, as well as technologies which capture and store energy that would ordinarily be wasted from a vehicle or machine so it can be used instead. The funding forms part of the Red Diesel Replacement competition with winners from Phase 1 published today.

Over £5.5 million is also being invested to develop technologies that support industry to cut back use of high carbon fuels and switch to cleaner power sources, such as hydrogen, electrification or fuel from biomass and waste products. The funding will be awarded to winners of Phase 1 of the Industrial Fuel Switching competition with the cash supporting projects that will replace natural gas with hydrogen in industrial processes, and design heat pumps for use in manufacturing sites.

In addition, winners from the first stage of the Carbon Capture Usage and Storage (CCUS) Innovation 2.0 competition will receive a share of over £12 million for trailblazing projects aiming to advance next-generation CCUS technology to deploy at-scale by 2030, putting the UK at the forefront of the growing carbon capture market. Also launched today is the second call of the competition, with up to £7.3 million available for this next round. CCUS is a key developing technology that involves capturing and storing carbon emissions from industrial processes, from sectors such as power, cement, chemicals and refining. Establishing a CCUS industry in the UK will help unlock tens of thousands of jobs across the UK by 2030, while supporting the economic transformation of our industrial regions.

'As we accelerate the UK’s energy independence by boosting clean, home-grown, affordable energy, it’s crucial that our industries reduce their reliance on fossil fuels.

'This investment will help them to not only cut emissions, but also save money on energy bills, on top of supporting jobs by encouraging green innovation across the UK.'