How the UK government is supporting cleantech innovation

Innovation is a fundamental part of the transition to net zero. The UK government is providing a combined total of £1.3 billion from the Net Zero Innovation Portfolio (NZIP) and the Advanced Nuclear Fund (ANF) from the Department for Energy Security and Net Zero to accelerate the commercialisation of key technologies which have the potential to contribute to this low-carbon future.

The NZIP is key to supporting the UK’s pathway to a low-carbon future by 2050 as part of the government’s Net Zero Growth Plan (HM Government, 2023). NZIP aims to decrease the costs of decarbonisation, underpin innovation across the energy system, and drive economic growth by anchoring new technology to the UK.

NZIP was launched in April 2021 and will run to March 2025. It is part of a wider ecosystem of public funding as set out in the Net Zero Research and Innovation Framework (HM Government, 2021) and the accompanying Delivery Plan (HM Government, 2023b).

We are now halfway through delivering the NZIP and have already supported more than 450 projects and nearly 4,000 jobs (see Figure 1). These projects reflect the energy challenges we face and the exciting technologies being developed to address these. Amongst others, this is apparent in industrial decarbonisation, including developing low-carbon fuels for UK industry

Industrial Fuel Switching programme
As part of the NZIP, the government has now committed up to £57.5 million of funding through the Industrial Fuel Switching (IFS) programme to support the development and demonstration of fuel switching and fuel switch enabling technologies for UK industry. This includes fuel switches from high-carbon fuels to hydrogen, electricity, biomass, and other low-carbon fuels. The largest emissions sources include manufacturing and construction (such as iron and steel, chemical, and cement), oil refineries, and industrial non-road mobile machinery. The Industrial Decarbonisation Strategy (March 2021) highlighted fuel switching as one of five near-term innovation priorities to support the wider deployment of industrial decarbonisation technologies in the 2030s. Innovation is needed to bring down the costs for these, overcome technical challenges, and increase industry confidence. 

The UK has set an ambition of supporting up to 10GW of low-carbon hydrogen production capacity by 2030, with at least half from electrolytic production. Government-funded programmes, such as the Hydrogen Supply 2 competition, aim to support the development of innovative low-carbon hydrogen supply and generation. It is looking to address specific technological gaps to make hydrogen production, storage, and supply more efficient and cost-effective, as well as funding real‑world testing of more mature innovative hydrogen supply solutions.

Electrification is also being explored by industrial sites. Electrifying industrial processes which currently use high-carbon fuels poses one of the biggest fuel switching technical challenges due to the very different nature of electric vs, for example, natural gas fuels. This can result in very different operating conditions using electricity, which is often less of an issue with hydrogen/biofuels.

Biofuels and waste-derived fuels are other options being considered within industry and are particularly promising for remote/dispersed sites. Other industrial sectors face unique challenges; for example, the cement sector has likely unavoidable process emissions which require carbon capture solutions. The cement sector represents about 7% of global CO2 emissions (MPA, 2020), with process carbon emissions representing almost two-thirds of total UK sector emissions.

As part of the latest funding announcements from NZIP, more than £80 million of funding has been provided to businesses to demonstrate innovative low-carbon solutions. This included 13 projects which will receive a share of funding from the IFS programme to demonstrate their fuel switching solutions and increase the uptake of low-carbon fuels. These projects cover hydrogen and biofuels as well as the electrification of some industrial processes. Industrial sectors represented by the programme include glass, aluminium, food & beverage, paper, and hydrogen distribution. Also included in this announcement were winners of the Hydrogen Bioenergy with Carbon Capture and Storage (BECCS) Innovation Programme to turn biomass and waste, such as sewage, into hydrogen with carbon capture, and winners of the CCUS Innovation programme, which includes recycling CO2 for fertiliser production.

Glass Futures case study
One of these 13 projects is led by Glass Futures, a not-for-profit Research Technology Organisation supported by members from within the glass sector. This £6 million project seeks to demonstrate the viability of low-cost, sustainable waste-derived fuels in decarbonising firing processes within the glass and ceramics sectors. The project will identify and demonstrate a range of economically and technically attractive low-cost, bio-derived fuels for a range of industrial glass and ceramics sites with furnaces/kilns of differing designs/scales. Some of the world’s largest glass manufacturers and Glass Futures members O-I, Ardagh, and Encirc plan to demonstrate biofuels on their container glass plants, with NSG also trialling biofuels on its float glass plant and refractory manufacturer DSF on its ceramics site.

The project will also develop a detailed economic understanding of the fuels, their availability and sustainability, as well as their compatibility with carbon capture utilisation and storage (CCUS) technologies. The fuels demonstrated within this project have the potential to help the UK achieve net zero 2050 targets, providing a route to decarbonise existing furnaces/kilns and providing solutions to off-cluster manufacturing sites, where the costs to develop the necessary infrastructure to provide other low-carbon fuels (such as hydrogen, electricity) could be prohibitively high.

Green Distilleries programme
It is estimated that there are more than 300 distilleries across the UK. The most energy-intensive part of the distillation industry is whisky distilleries (around 7x more energy intensive than gin distilleries), which directly produce around 500,000 tCO2e/yr. The majority of these emissions come from the generation of heat for the distillation process, which accounts for 70% of the distillation industry’s energy demand. Around 60% of the energy used to produce heat is from natural gas; however, due to the remote location of some of the distilleries, the industry still uses a range of fossil fuels, including coal, medium/heavy fuel oil and, in some circumstances, peat.