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New funding will support UK industry to move away from fossil fuels


Close up of off-road vehicle tyre Photo: Adobe Stock
New UK government funding includes over £6.6mn to help industry move away from using red diesel – commonly used for off-road vehicles and machinery

Photo: Adobe Stock

Over £31mn in new government funding is to support UK industry to reduce its reliance on fossil fuels and slash carbon emissions, helping it to become greener and cutting energy bills.

The funding includes over £6.6mn to help industry move away from using red diesel, also known as gas oil – a fuel commonly used for off-road vehicles and machinery, specifically in the quarrying, mining and construction sectors.


It will see the development of red diesel alternatives, such as e-fuels and green hydrogen, as well as technologies which capture and store energy that would ordinarily be wasted from a vehicle or machine so it can be used instead. The funding forms part of the Red Diesel Replacement competition, with winners from Phase 1 published in May.


Over £5.5mn is also being invested to develop technologies that support industry to cut back use of high carbon fuels and switch to cleaner power sources, such as hydrogen, electrification or fuel from biomass and waste products. The funding will be awarded to winners of Phase 1 of the Industrial Fuel Switching competition, with the cash supporting projects that replace natural gas with hydrogen in industrial processes, and design heat pumps for use in manufacturing sites.


In addition, winners from the first stage of the Carbon Capture Usage and Storage (CCUS) Innovation 2.0 competition will receive a share of over £12mn for trailblazing projects aiming to advance next-generation CCUS technology to deploy at scale by 2030. The second call of the competition has also launched, with up to £7.3mn available for this next round.


Some of the projects to receive funding include PUNCH Flybrid, based at Silverstone in Northamptonshire, who will receive £460,000 to deliver a high power electrically driven flywheel energy storage system, to store energy that would ordinarily be wasted from a vehicle or machine so the energy can be used instead. British Steel in Scunthorpe will receive £161,050 for a study into switching its manufacturing processes from natural gas to green hydrogen. Ingenza in Edinburgh will receive £443,632 to develop a new type of CO2 conversion technology, capturing carbon from industry and turning it into a versatile chemical that can be used across a variety of chemical, pharmaceutical, agricultural and household product sectors.