£80 million boost for UK businesses to help combat carbon emissions

6 July 2023

Businesses across the UK have received a share of over £80 million government funding to ditch costly fossil fuels for cleaner alternatives.

From hydrogen-powered cornflake production to low carbon Scottish whisky distillation, at the end of June businesses across the UK received a share of over £80 million government funding to ditch costly fossil fuels for cleaner alternatives. 

Breakfast giant Kellogg’s is among 29 successful projects to change their production processes to cut their emissions. The company plans to use hydrogen to fuel their cereal making process in Manchester, backed by over £3 million government investment.  

Meanwhile one of Scotland’s oldest whisky makers, Annandale Distillery, will also take a step towards a new low carbon future, with a £3.6 million government investment in new thermal heating technology. This will see the distillery work with Exergy3 Ltd to develop a system that stores energy from electricity in special ceramic bricks, to then produce heating gas that could fully decarbonise the whisky-making process.

The funding, announced by Minister for Energy Security and Net Zero Graham Stuart, puts businesses on a path to revolutionising their industry with cleaner energy sources – such as hydrogen and biomass. It marks the government’s latest move to boost the UK’s energy security and grow the economy. 

Minister for Energy Security and Net Zero Graham Stuart said:

Whether it’s the first meal of the day or a night cap, the great manufacturers of our country are striving to cut their carbon emissions and their energy bills – and in turn, support our efforts to boost our energy security.

Our investment of over £80 million will help them to go further and faster, using the latest science, technologies, and new energy sources to cut ties with fossil fuels and future-proof their industries.

The Minister will announce the winners at today’s Climate Innovation Forum, where he’ll call on industry leaders and international bodies to get behind the green innovation drive, as part of London Climate Action Week’s flagship event.

Lord Callanan, Minister for Energy Efficiency and Green Finance, said: 

Britain has a long and proud history of pushing the boundaries in science – and our backing with over £80 million for these cutting-edge projects today will help make way for the next era of innovation.

The transition away from fossil fuels presents a huge opportunity for our growing green energy sector and we will continue to make sure UK business can benefits from its full potential.

Another leading name getting a slice of the funding is Britain’s biggest biscuit maker, Burton’s Food Ltd – home to Maryland cookies and Jammie Dodgers – which will see them innovate to swap out a gas oven for low carbon electric, at their Dorset bakery, thanks to over £3.3 million from the government.

Around £950,000 will also go to consumer goods giant Procter & Gamble (P&G) to explore how to integrate CCUS into their manufacturing, by extracting carbon from the company’s waste streams to help cut emissions.

The project will form of a new research drive, CarboNation, in partnership with Newcastle University’s School of Engineering and Centre for Process Innovation.

The energy projects receiving backing today come in the latest round of the government’s £1 billion Net Zero Innovation Portfolio, which aims to scale up low-carbon technologies for use across UK industries. 

The £82.9 million announced today comprises:

  • Industrial Fuel Switching competition: 13 businesses, from a paper factory to glass manufacturers, will receive a total of £52.5 million to support projects developing low-carbon alternatives to fossil fuels, such as hydrogen or biofuels
  • Hydrogen BECCS Innovation Programme Phase 2: 5 project winners have been awarded a total of £21.2 million to turn biomass and waste, such as sewage, into hydrogen with carbon capture
  • CCUS Innovation 2.0 competition: 11 winning projects, including recycling CO₂ for fertiliser production, will be given a total of £9.2 million to develop the latest technology in carbon capture usage and storage

The funding forms part of the government’s commitment to reduce overall UK energy demand by 15% by 2030, alongside the wider ambition for the UK to move towards greater energy independence. 

Dr Markus Rondé, chief executive officer of Exergy3, said:

The decarbonisation of industry is a fundamental part of the UK’s race to net zero. However, so far, the extremely high operating temperatures of many industrial processes have made it technically and financially challenging.

The NZIP funding enables us to build a full-scale demonstrator at the Annandale Distillery in Scotland. For Exergy3’s technological and commercial development this will be a great leap forward and we are all very excited to try Annandale’s first batch of low-to-no carbon whisky.

Scott Frame, Vice President, R&D and Site Leader, Newcastle Innovation Centre, said:

CarboNation is a great example of where innovation can be applied to carbon capture and use technologies to solve specific challenges that are not only relevant to P&G, but both the wider Fast Moving Consumer Goods industry and society at large.

We’re really excited to have received this grant, alongside other valued partners, in order to accelerate P&G’s understanding within this area, supporting our collective pursuit of wider sustainability goals.

Alongside the funding allocated today, the government has also published new reports to support the transition to alternative energy sources for UK industry. This includes guidance on designs for hydrogen technology systems, as part of the Industrial Hydrogen Accelerator programme.

How can CarbonStore help you?

In partnership with Tilhill, CarbonStore can help you deliver new woodland creation and woodland-based carbon mitigation projects to help your business offset its residual carbon emissions. These projects not only achieve the highest possible standards in carbon offsetting but also offer many widespread benefits we can all enjoy.

Please contact David McCulloch, the head of CarbonStore, personally either by email (david.mcculloch@carbonstoreuk.com) or by phone (07500 950832).

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