Aviation

Government launches £50m fuel switch plan for heavy industry

The Government has today announced that it has allocated almost £50 million to help industrial companies switch to alternative fuels that can help them cut carbon emissions and reduce their reliance on expensive fossil fuels.

The announcement, which came alongside today’s mini-budget, confirms £49.4 million will be made available to pioneer fuel transition projects across the country in a range of industries including metals, ceramics, pharmaceuticals and food manufacturing nutrition.

Business and Energy Secretary Lord Callanan said the government was “investing almost £50m to support British industry to ensure they are fit for the future and help end their dependence on expensive fossil fuels”.

“The development of transition technology will make this possible, accelerating the transition to cleaner fuels in our economy and reducing costs for businesses,” he said.

The new funding will be available through the Government’s second phase of £55m Competitions for industrial fuel switchingwhich aims to support the development of new fuel transition technology in the UK and help attract private investment into the sector.

Under Phase 2 of the Industrial Fuel Switching competition, fuel switching projects can apply for a share of £49.4m in public funding. This follows on from the first phase of the competition, which was awarded £5.6m in May 2022 21 projects carry out feasibility studies of their projects at an early stage.

First-stage winners included projects to help the ceramics, food and steel sectors transition from natural gas to hydrogen; plans to develop large-scale heat pumps for the food and pharmaceutical industries; and research examining the potential for switching glass plants from natural gas to gasified waste and biomass.

The funding is likely to be welcomed by the growing number of industries exploring the use of hydrogen, renewable energy, biomass and biogas to support net zero targets.

The economic case for such projects has strengthened over the past year as wholesale gas prices have risen, leaving many industrial firms facing steep increases in energy costs.

However, the latest funding comes amid uncertainty over the future of the government’s wider industrial decarbonisation strategy. The new administration has made clear that it sees hydrogen and other clean fuels as a key part of its long-term net zero strategy. But reports indicate that the planned energy security bill – which includes new measures aimed at mobilizing investment in hydrogen and carbon capture and storage infrastructure – could be delayed or scrapped altogether.

The news came on the same day the government announced its long-awaited mini-budget, which revealed plans to relax planning rules for offshore wind farms and provide a modest increase in funding for energy efficiency programs, as well as controversial moves to cut taxes and speed up road construction plans.

https://www.businessgreen.com/news/4056846/government-fires-gbp50m-fuel-switching-plan-heavy-industry Government launches £50m fuel switch plan for heavy industry

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