More support for industry to cut emissions and energy bills

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

  • Twelve winning projects will bring together local partners and develop plans to cut manufacturing emissions, with up to £6 million in government support 
  • up to £185 million available for the next round of the Industrial Energy Transformation Fund, with even more sectors eligible to apply
  • funding will support businesses reduce emissions and bills by making the switch to cleaner energy, helping to meet the UK’s net zero goals

A multi-million-pound package will help businesses across the UK to cut their emissions and energy bills. 

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 £6 million 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 £185 million, 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 for 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 £12 billion on energy efficiency by 2028, helping more households and businesses to benefit from lower bills and cleaner energy. 

Further quotes

Shoreham Port Industrial Cluster LIDP

Tom Willis, Chief Executive of Shoreham Port, said:

"We are delighted that the Shoreham Port Industrial Cluster has been successful in the Local Decarbonisation Plans Competition and will receive a portion of the £6 million awarded by the Department for Energy, Security and Net Zero in partnership with Innovate UK. As a Trust Port, collaborative relationships with local, educational, and business communities remain key to our success. 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."

NEW- ID (Northeast Wales)

Ben Burggraaf, CEO of Net Zero Industry Wales, said:

"Today’s funding announcement is another welcome step in the right direction for Welsh Industry’s journey to net zero. It will allow the region to continue to thrive at the industrial forefront of the UK, aided by the uptake of low carbon technologies — all while opening up a range of skills and employment opportunities. 

"We look forward to supporting the NEW-ID Plan which in turn, will support us in our mission to empower businesses to build greener futures. What’s more, we are confident that learnings from other live projects — such as the great work being delivered by SWIC, DDF and Net Zero North West — will allow us to maximise the Plan’s potential."

Decarbonising Midlands Aerospace Cluster

Dr Andrew Mair, Chief Executive at Midlands Aerospace Alliance, said:

"Decarbonisation is essential to the future of the Midlands’ aerospace industry and we know the cluster’s responsibility in this area as well as the opportunities it brings. But 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."

Solent LIDP 

Anne-Marie Mountifield, Chair of The Solent Cluster, said: 

"This announcement is great news for our region and for the decarbonisation ambitions for the whole of the UK.  Here in the Solent, the funding will be used to work with industry to ensure access to low-carbon hydrogen production and carbon capture and storage, at the same time as measuring wider economic benefits to the local region. Working together as The Solent Cluster, we have the potential to effect real change in energy production and consumption which will, in turn, secure existing livelihoods and create new green jobs, support energy resilience and affordability, and ensure the UK is at the forefront of the emerging low-carbon economy."

ID-NI (Northern Ireland) 

Rachel Sankannawar, Head of Green Economy Development at Invest Northern Ireland, said:

"We welcome today’s announcement which will bolster our efforts to unlock the economic possibilities of a low carbon future for Northern Ireland.  

"The funding provided will enable us to collaborate with key industry partners, our universities and all 11 Councils to develop and implement a comprehensive local industrial decarbonisation plan for Northern Ireland. The plan will not only enhance our competitiveness globally but support us to boost our productivity and contribute to reducing our emissions."

Innovate UK 

Bryony Livesey, Challenge Director – Industrial Decarbonisation at Innovate UK, 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."

Department for Energy Security and Net Zero
Lord Callanan