IETF overview
In the 2018 Autumn Budget, the UK government announced £315 million in funding until 2024 to fund a shift to ‘greener’ operations in the UK’s manufacturing and data centre industries. £289 million of the total sum is earmarked for England, Wales and Northern Ireland and is managed by BEIS, while the Scottish government has control of the remaining £26 million for investment in Scotland.
In Phase I, £30 million of the total amount under the control of BEIS will be available for two types of projects:
- deployment, i.e., projects that implement technology to reduce fuel bills and carbon emissions; and
- studies, meaning feasibility and experimental (i.e., engineering) studies into energy efficiency and decarbonisation for future deployment projects.
In each case, the grants are accessible only for those businesses:
- registered as under SIC codes 10-33 (manufacturing) or as data centres; and
- eligible for state aid under applicable EU rules on exempt aid.
In addition to the (non-exhaustive) summary requirements noted below, successful applicants will be subject to monitoring and verification obligations that could last up to five years after the project has finished. This is to enable BEIS to analyse the effectiveness of the IETF against its objectives; it is not intended to be an audit.
Deployment grants
Funding under this category is restricted to projects that:
- utilise technology proven to improve the energy efficiency of industrial processes, such as heat exchangers or energy recovery systems;
- would not be possible without this funding;
- are restricted to one location only; and
- require a minimum grant of £250,000 (no cap) to be deployed.
The deployment projects must start by 1 April 2022 with the technology being operational (i.e., delivering efficiencies) by 31 March 2024.
Study grants
Funding under this category is for studies that:
- Assess:
- feasibility, meaning that they will investigate new technology or establish its technological or commercial viability; or
- engineering, meaning that they will identify specific design features and provide a project cost estimate following a multi-disciplinary approach; and
- Focus on:
- energy efficiency, meaning reducing the energy intensity of a process; or
- deep decarbonisation, meaning the reduction of greenhouse gas emissions from a process even if there is no energy-efficiency gain (using alternative fuel, for example); and
- Are estimated to cost:
- at least £60,000 and last up to 12 months for feasibility studies; or
- at least £100,000 and last up to 24 months for engineering studies, with the grant covering only a part of the total cost and the percentage of the grant being tied to the size of the applicant organisation (large v. medium v. small/micro).
Studies must commence by 1 October 2021 and end by 30 September 2023.
Application site
Applications for each competition are to be submitted (by applicant or their authorised representative) using the dedicated websites set up by BEIS, which can be accessed via the following links:
Future phases and miscellaneous notes
Phase 2 of the IETF is due to be launched in 2021. For Phase 2, the IETF will provide grant funding support for large-scale demonstration or deployment of deep decarbonisation projects, whilst continuing to support the activities carried out during Phase 1. The original consultation on the design of the IETF is available online at Gov.uk.
Funding under the IETF does not exclude companies from other, complementary schemes such as the Industrial Strategy Challenge Fund and the Industrial Heat Recovery Support Scheme, or from other, non-investment schemes such as the Energy Technology List, which provides a ‘buyer’s guide’ to energy-efficient plant and machinery.
Given the wide range of businesses that are eligible to apply for the funds (SIC codes 10-33 cover all manufacturing), competition for the funds is expected to be high. The requirement that deployment grants would not be possible without the relevant funding may limit their availability to smaller businesses; however, the same is not true for study grants.
Do get in touch with your usual Reed Smith contact if you would like further information on this phase of IETF funding or on similar funds made available by the UK government.
Client Alert 2020-458
