Broadening of industrial energy saving scheme mooted

Firms benefiting from the government’s flagship industrial decarbonisation scheme could be broadened out to include new sectors such as horticulture.

The Department for Energy Security & Net Zero (DESNZ) has published a consultation paper on proposed changes to its Industrial Energy Transformation Fund (IETF).

The changes will feed into the third phase of the IETF, which provides grants to industries wanting to reduce their carbon footprint by investing in more energy efficient equipment.

Eligibility for help through the IETF is currently limited to energy intensive heavy industries: mining & quarrying, manufacturing, waste recycling and data centres.

However the consultation paper seeks views on the case for broadening the range of eligible sectors.

Opportunities for broadening the scope of the scheme could include highly energy intensive processes in non-traditional industries, such as horticulture, with significant potential to adopt energy saving technologies, it says.

The government’s move to broaden eligibility for the IETF follows widespread criticism from sectors, including horticulture, that they have suffered from rocketing heating bills over the last couple of years while not being able to draw on the kind of support enjoyed by traditional energy intensive industries, such as steel works.

The paper says that the government intends to reduce the minimum size of grants through the IETF from its current level of £100,000, which it says is too high for some small businesses.

It also says DESNZ intends that IETF phase three funding will only be eligible for improving industrial processes and will not be offered for projects designed to use the recovered energy for non-industrial applications such as space heating or projects exporting heat or electricity for use at other sites.

The government has recently announced that £185 million of support will be made available through the third phase of IETF.