Guidance

Funding for low carbon industry

Government funding to reduce the carbon emissions from UK industry.

Innovation to reduce the carbon emissions from UK industry and driving down the cost of carbon capture, use, and storage

Across government, Innovate UK, Research Councils, and BEIS expect to invest around £162 million in industrial research and innovation, including Carbon Capture, Use and Storage (CCUS).

As part of this commitment, within the BEIS Energy Innovation Programme, BEIS expects to invest around £100 million in low carbon industrial innovation to reduce the risks and costs of accelerating the roll out of low carbon technologies which will enable UK industry to remain competitive.

Call for CCUS Innovation

On 31 July 2018 BEIS launched a £15 million Call for CCUS Innovation to offer grant funding for innovation projects that lead to:

  • A significant reduction in the cost of capturing and sequestering carbon dioxide; and/or
  • A quicker, more widespread deployment of CCUS in the UK and internationally;

Funding of up to £5 million will be considered for feasibility studies, industrial research or experimental development projects; and up to £7 million for research infrastructure that enables the UK to conduct world-leading research and innovation into CCUS. Project funding will be available for up to 24 months, with projects finishing by 31st March 2021.

This Call will ensure the UK remains at the forefront of CCUS innovation, developing novel technology and processes that reduce the cost of deploying CCUS and positions the UK as a world technology leader in CCUS. Applicants must complete and submit the application forms (see below) by email to Industry.Innovation@beis.gov.uk by Sunday 11 November 2018:

CCUS Call guidance

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CCUS application form

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CCUS finance form

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CCUS partner details form

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CCUS Call Q&A

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In 2017 BEIS commissioned Wood to execute a study assessing the most promising CO2 capture technologies in order to inform future innovation spending programmes and to shape future policy direction for carbon capture technologies in the power and energy intensive industries. A literature review of novel capture technology was completed, and eleven techno-economic benchmarks were studied.

This benchmarking comprised eight current state-of-the-art carbon capture on power generation, two leading next generation carbon capture technologies on power generation, and one carbon capture benchmark on hydrogen production.

The literature review and benchmarking report are being published to accompany the Call for CCUS Innovation. Innovation projects that focus on reducing the cost of capturing and sequestering CO2 will be compared to the benchmarks produced by BEIS/Wood, to determine if they produce meaningful improvements against the current state-of-the-art CCUS technology, and how robust the case is for them achieving these improvements.

Literature review

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Benchmarking next generation technologies

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As part of the BEIS/Wood study a levelized cost of electricity/hydrogen (LCOE/LCOH) calculator was produced as part of the benchmarking analysis. BEIS intends to share this calculator to allow applicants to compare their technology against the benchmarks produced in the study, and for this analysis to be used in project applications for the Call. BEIS will upload the LCOE/LCOH calculator by the 3 September.

Hydrogen Supply Competition

Low carbon hydrogen could play an important role for decarbonising industry, power, heat and transport. However, for a market to grow, potential users (in any application) need to be confident in supply of sufficient amounts of low carbon hydrogen at competitive price.

The £20 million Hydrogen Supply programme aims to accelerate the development of a low carbon bulk hydrogen supply solutions for industry, power, buildings and transport at a technology readiness level (TRL) between 4 to 7, which could result in lower capital or operating costs when compared to Steam Methane Reformer with Carbon Capture & Storage (SMR+CCS), or improve the capture rates at a comparable cost.

If you are interested in applying to the programme, please read the Hydrogen Supply Programme guide:

BEIS hydrogen supply programme: details of an upcoming innovation programme

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Industrial Energy Efficiency Accelerator

To support innovation in energy efficient technologies, the government will be investing up to £9.2 million for an Industrial Energy Efficiency Accelerator, to be delivered over the next 4 years.

This Accelerator will seek industry-specific solutions which are close to commercialisation by leveraging private sector investment and strengthening UK supply chains to reduce energy costs for UK industry. After a competitive process, the Carbon Trust has been awarded the contract to help BEIS deliver this programme. The Carbon Trust has been holding events to engage with both industry and their suppliers, and the competition is now open to applications.

We have recently committed £560,000 to 2 successful projects in the first round of the Industrial Energy Efficiency Accelerator (IEEA). The IEEA aims to broaden the range of technologies available for industrial energy efficiency, bringing down the cost for decarbonisation. More information on the companies that have successfully bid for these projects will appear shortly.

Further information is also available from the Carbon Trust

Industrial fuel switching to low carbon alternatives

The Clean Growth Strategy highlights the need for industry to begin to switch from fossil fuel use to low carbon fuels such as biomass, hydrogen and clean electricity. Beyond 2030, the switch to low carbon fuels for industry will need to substantially increase in scale. Government has launched the first phase of an innovation competition which has been allocated up to £20 million which focuses on market engagement and potential scope for fuel switching in industry. The competition aims to stimulate early investment in fuel switching processes and technologies, so that a range of technologies are available by 2030 and beyond.

Element Energy successfully bid for the first phase which aims to understand the potential for industry to operate on low carbon fuels and the innovation required to enable this to happen, a report detailing Element Energy’s findings will be published in the autumn.

Carbon Capture and Utilisation (CCU) Demonstration

As part of the government’s Clean Growth Strategy BEIS will be allocating up to £20 million to design and construct carbon capture and utilisation (CCU) demonstration projects. This programme will encourage industrial sites to capture carbon dioxide which could then be used in industrial applications. This would help to enable a pathway for learning and development of capture technologies at an intermediate scale, reducing the costs and risks. The programme will be run in 3 phases:

Phase 1 focuses on initial scoping study for an engineering supplier to work on BEIS’ behalf with potential host sites, carbon dioxide users and technology suppliers to produce site-specific cost estimates for deploying CCU at UK industrial sites.

Phase 2 of carbon Capture & Utilisation (CCU) Demonstration Programme Advert

£20m BEIS Call for CCU demonstration innovation

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Phase 2 will fund projects to conduct design studies for constructing CCU equipment at UK host sites.

Phase 3 will fund projects to construct and demonstrate CCU.

Wood. Plc successfully bid for Phase 1 which aims to work on BEIS’ behalf with potential host sites, carbon dioxide users and technology suppliers to produce site-specific cost estimates for deploying CCU at UK industrial sites.

2 reports on carbon dioxide utilisation that were prepared by Ecofys and the Royal Society are also available.

Ecofys report on carbon dioxide utilisation

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Royal Society report on carbon dioxide utilisation

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ERA-NET Cofund – Accelerating CCS Technologies (ACT)

In 2016 the UK joined a consortium of nine European countries to co-fund collaborative innovation projects into CCUS called Accelerating CCS Technologies (ACT). ACT is a European Research Area Network (ERA-NET) Cofund, which is a tool established by the European Commission under the Horizon 2020 programme for research and innovation. The idea behind ERA-NET Cofunds is that European countries should join forces when it comes to funding RD&D and innovation on subjects of high European interest.

Under the scheme, 9 European countries - Germany, Greece, the Netherlands, Norway, Romania, Spain, Switzerland, Turkey, and the UK – have come together to provide €25.34 million to support collaborative projects that can accelerate the deployment of CCUS within Europe; the European Commission adding a further €11.26 million, giving a total pot of €36.6 million.

Within the €36.6 million BEIS has committed £4.4 million, matched with a further £2.2 million in co-funding from the European Commission, to support UK participation in 5 collaborative projects with European partners.

Of the 8 projects selected in May 2017 the UK is contributing to 5:

ACORN: aims to initiate a low cost full chain carbon capture and storage project in North East Scotland that is readily scalable to nationally significant CO2 infrastructure

ALIGN: a large scale project aiming to accelerate the demonstration and implementation of European CCUS projects by addressing specific R&D gaps across the CCUS chain, including capture, transportation, storage and utilisation

DETECT: aims to provide pragmatic and reliable tools to reduce risks and costs for CO2 storage operations

ELEGANCY: aims to fast-track the decarbonisation of Europe’s energy system by exploiting the synergies between two key low-carbon technologies: CCS and hydrogen

PRE-ACT: an industry-driven research project with a strong focus on improving strategies for monitoring and management of pore pressure distribution to address the main storage-related challenges for the deployment of CCS: capacity, confidence and cost.

Contact

Please direct any other questions to industry.innovation@beis.gov.uk.

Published 25 January 2017
Last updated 15 August 2018 + show all updates
  1. Phase 2 advert for CCU Demonstration programme published.
  2. £15 million CCUS Innovation Call.
  3. Update on 2 successful projects in 1st round of Industrial Energy Efficiency Accelerator
  4. Hydrogen supply programme: detailed advert published
  5. Call for Carbon Capture, Use and Storage (CCUS) innovation announced.
  6. New Hydrogen Supply Competition announced,
  7. Detail of 'ERA-NET Cofund - Accelerating CCS Technologies' added.
  8. Phase 1 ITT for deploying CCU at UK industrial sites.
  9. Procurement notice for fuel switching notice competition.
  10. Updates from the Clean Growth Strategy.
  11. Details of competition winner published
  12. Invitation to tender now open for the Industrial Energy Efficiency Accelerator.
  13. First published.