Food and Drink Sector: Consultation on the Industrial Energy Transformation Fund

United Kingdom

The Department for Business, Energy & Industrial Strategy is seeking views on the final design of the £315 million Industrial Energy Transformation Fund (the "Fund"), parts of which may be of particular interest to food and drink sector. The fund is to be delivered by 2024 and aims to help businesses invest in schemes that will cut carbon emissions and reduce energy costs. This consultation is intended to refine the details of the Fund, before applications for Phase 1 open in summer 2020. The consultation can be found here.

Efficiency and carbon

The Fund is an element of the current Government's Industrial Strategy to help businesses improve their energy efficiency by at least 20% by 2030. This is part of the UK's wider commitment to reach net zero greenhouse gas emissions by 2050. It aims to address barriers to investment in decarbonisation. While existing policies incentivise such investment, the Fund is intended to bridge the gap where projects have been developed but are not yet commercially feasible.

The focus is on emissions from industrial processes in the UK, to save on costs and carbon in the short term while assisting with full decarbonisation in the long term. The proposals for the Fund include supporting:

  • Energy efficiency technologies that improve industrial process energy efficiency, and those that reduce energy demand across a system;
  • Deep decarbonisation technologies;
  • Feasibility and Front-End Engineering and Design (FEED) studies for projects deploying the above technologies; and
  • Capacity building where companies lack the expertise required to conduct the above studies or deploy the above projects.

Food and drink sector

A minimum award of £1 million per project is proposed for Phase 1 of the Fund, which is to be delivered exclusively through grants. Improvements to compressed air systems, improvements to refrigeration and storage, and process optimisation are offered as potential examples in the food and drink sector.

The consultation has a strong focus on heavy energy using businesses involved in goods manufacturing, including the food and drink sector. The consultation cites that 66% of energy use in the food and drink sector is from natural gas, with 54% of the energy demand being from boilers and 27% from direct heating. The consultation highlights fuel switching potential in this sector, for example replacing natural gas with low carbon alternatives and using heat pumps to support low temperature processes. The Fund also refers to the potential of mechanical vapour recompression, ultraviolet pasteurisation or sterilisation and infrared heating.

Comment

The consultation is welcome in terms of practical support for businesses looking to decarbonise. The deadline for responses is 21 November 2019.