Industrial Energy Transformational Fund - £40m of funding to help businesses cut their carbon emissions - PKF Francis Clark
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Industrial Energy Transformational Fund – £40m of funding to help businesses cut their carbon emissions

Grant schemes looking for projects to move the UK towards zero carbon are like buses at the moment – hot on the heels of announcement of the latest round of the Energy Entrepreneurs’ Fund (EEF) comes news of a round of funding from Industrial Energy Transformational Fund (IETF).

The second round of funding from IETF opens for applications on 8 March 2021 and what particularly piqued my attention here was reference to food and drink as being a sector targeted for submission of potential projects.

The Industrial Energy Transformation Fund (IETF)

The government’s IETF is worth £289 million with funding available across England, Wales and Northern Ireland up until 2024. The fund supports heavy industry as the UK transitions to a low-carbon economy.

It was initially launched in June 2020 with a funding round / competition which saw 39 applications approved for funding, totalling £31 million.

The second round – confusing called IETF Phase 1: Spring 2021

The second round was announced on Sunday (7 February) with headlines including:

  • ‘£40 million government investment to help polluting industries including steel, pharmaceuticals and food and drink to find new ways to reduce their carbon emissions
  • solutions including using heat recovery technology to generate electricity and replacing gas with hydrogen fuel will help businesses cut energy costs, protect jobs, and improve air quality across the UK’

Further details

Projects sought
  • projects deploying technologies that improve the energy efficiency of industrial processes (Deployment)
  • feasibility and engineering studies into energy efficiency and deep decarbonisation measures for industrial processes (Studies)
Business size and geographical location
  • open to businesses of any size registered in England, Wales or Northern Ireland
Business SIC codes
  • To be eligible, your business must operate a site which falls into the following categories of activity:
    • manufacturing 10(000) through to 33(200)
    • data centres 63(110)
Grant size (per project)
  • Energy efficiency deployment projects (min grant £100k; max grant £14m)
  • Engineering studies (£50k; £14m)
  • Feasibility studies (£30k; £7m)
Eligible project costs for Energy efficiency deployment projects
  • The IETF will only award grant funding to cover the eligible costs of deploying technologies where it can be demonstrated that these costs are additional and necessary to achieving the energy efficiency saving:
    • a)  If the technology’s only purpose is to achieve energy savings (for example in the case of a heat exchanger project) then it is possible to consider the total investment costs as eligible costs
    • b) In other cases, you must include a counterfactual case as part of your application. This means you have to refer to a similar, less energy efficient investment that would have been credibly carried out without the grant. The difference between the costs of both cases of investment identifies the energy efficiency-related cost and constitutes the eligible costs
Grant intervention rates
  • Grant intervention rates depend on size of entity, type of project and geographical area for example if you are a small organisation, are undertaking a deployment project in assisted area A you may be eligible for funding of 65% of eligible project costs
Project scope – Deployment
  • This competition aims to support the commercial roll out and permanent installation of technologies [that improve the energy efficiency of an industrial process or processes] at industrial sites. Some examples of eligible technologies are set out here (see also below) as are items that will not be funded including electricity generation and the installation of new renewable projects like solar panels or wind turbines
  • Items that may be funded include:
    • monitoring and management equipment that improves the efficiency of processes
    • more efficient heat exchange
    • more efficient driers
    • energy recovery from waste heat
    • energy recovery from waste pressure
    • onsite resource efficiency measures to reduce wastage and optimise use of raw materials.
    • more efficient refrigeration or other cooling or heating measures necessary to create and maintain the operational temperature of the industrial process itself (including cooling technologies for data centres).


More details

More details of the competition, including how to apply can be found here.

There is also reference to online briefing events and an eligibility screening assessment, which you are encouraged to request as early as possible.

PKF Francis Clark

As always with grants for R&D, potential applicants would do well to consider the interaction with R&D Tax Credits and this is an area where our innovation and technology tax group can assist.

FEATURING: Richard Wadman
Richard qualified as a Chartered Accountant with KPMG in 1993. Since 2006 he has worked in Corporate Finance, firstly with the predecessor firm in Truro… read more
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