UK Government funds £50m for new industrial fuel switching technologies

THE UK Government has allocated £49.4m (US$55m) in funding to help British industry reduce energy costs, and end its reliance on fossil fuels. 

The funds will be awarded to projects to help industries such as steel, ceramics, pharmaceuticals and food production switch from oil and gas, to using renewable sources like hydrogen, electricity, and biomass instead. 

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

The new funding is being made available through phase two of the Government's £55m Industrial Fuel Switching competition, an initiative that awards between £1m–6m per project and forms part of the wider £1bn Net Zero Innovation Portfolio. Along with fuel switching, the portfolio is also providing funding for carbon capture, usage and storage (CCUS), direct air capture and greenhouse gas removal (GGR), and nuclear advanced modular reactors (AMRs). 

Switching industry to lower carbon fuels is seen as a key step in helping the UK meet its legally-binding commitment to achieve Net Zero by 2050.  

Along with the recently-announced Energy Security Bill that was introduced to Parliament in July, the two packages would be complementary components in the Government’s push to deliver a cleaner, more affordable, and more secure energy system. 

With an overriding objective to overhaul everything from CO2 transport and storage, nuclear power, using hydrogen for heating and providing regulation on fusion energy, the Energy Bill fell in line with other countries’ commitments to cutting emissions, such as those recently announced by Australia and the US.  

However, less than 3 months after announcing the Energy Bill, according to reports by The I newspaper, the UK’s new business secretary, Jacob Rees-Mogg, has said that the Bill will be put on hold in favour of focusing on other objectives, specifically changing reforms to curb wholesale power prices in the face of soaring energy bills. 

Measures have been taken by the Government to ease growing financial pressure on households and businesses across the country by introducing a £150bn support package to help people pay their bills. The announcement quickly came under fire though as Prime Minister Liz Truss ruled out imposing a windfall tax on energy firms, suggesting instead that the package would likely be funded through additional Government borrowing, meaning that the financial support will eventually fall on taxpayers. 

Others, such as the Trades Union Congress (TUC), have pointed out that it would be cheaper to take the big five energy firms into public ownership rather than bailing them out. 

“In France, where national provider EDF is currently 84% publicly owned, household energy bills rose by just 4% this year. The French Government as the main EDF shareholder was able to instruct the firm to cut profits to keep prices down,” the TUC said. “If energy retail was publicly owned, the UK would be able to take a similar approach.”