Nearly £50M funding boost for Britain’s industrial future

£49.4m will be awarded to pioneering projects across the country, helping drive economic growth through the development of fuel switching technology which will see a wide range of industries, including steel, ceramics, pharmaceuticals, and food production, reduce their reliance on fossil fuels and slash energy costs.

Business and Energy Minister Lord Callanan said: “We’re investing nearly £50m to back British industry, making sure they’re fit for the future and helping end their dependency on expensive fossil fuels.

“Developing fuel switching technology will make this possible, accelerating the transition to cleaner fuels across our economy, and driving down costs for businesses.”

Industrial fuel switching shifts industrial energy use from high carbon to low carbon fuels, with the aim of decarbonising industry in line with the UK’s target of reaching Net Zero by 2050 while boosting economic growth, jobs, and prosperity.

Fossil fuels (including coal, gas and oil) made up around 55% of industrial energy consumption in 2019. As set out in the Industrial Decarbonisation Strategy, to decarbonise industry in line with Net Zero, it is expected that industrial emissions need to fall by around two thirds by 2035 and at least 90% by 2050.

Investing in this technology will make it easier and more cost-effective for industry to be powered by cleaner fuels like hydrogen and renewable electricity, instead of fossil fuels.

The funding, available through Phase 2 of the £55m Industrial Fuel Switching competition, will support the development of new fuel switching technology in the UK, helping to attract private investment into the country and supporting new green jobs.

Supporting British industry to end their dependency on fossil fuels is a vital part of the government’s plans to boost domestic energy resilience, alongside accelerating renewables and scaling up nuclear.

Under Phase 2 of the Industrial Fuel Switching competition, fuel switching projects can apply for a share of £49.4m government funding. This follows Phase 1 of the competition, which saw £5.6m awarded in May 2022 to 21 projects for early-stage feasibility studies into their project designs.

Previous winners under Phase 1 included:

• Projects helping the ceramics, food production and steel sectors become powered by hydrogen instead of natural gas
• Technology to develop heat pumps for food and pharmaceutical businesses
• Studies exploring switching glass making facilities from natural gas to gasified waste and biomass