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The Industrial Energy Transformation Fund (IETF)

21 February 2024


Everyone has their part to play when we look at the ever daunting task of decarbonisation. As the 2050 net zero deadline creeps closer, what is available to UK industry?

Launched in 2020, the Industrial Energy Transformation Fund (IETF) was established as a means to help businesses with high energy use to cut their energy bills and carbon emissions through investing in energy efficiency and low carbon technologies.

Split up into phases, the IETF consists of £500 million
of funding - available up until 2028.

The UK Government have most recently opened the Phase 3 (spring 2024) competition with a second competition window to be opened later in 2024.

Who has benefitted from the IETF so far?

During phase 1 and 2 of IETF approximately £260 million of funding was available.

Phase 1 of IETF focused on supporting the deployment of energy efficiency projects as well as decarbonisation studies. Phase 2 expanded upon the IETF scope and supported the deployment of decarbonisation technologies.

Successful projects have included;

  • A hand-made crystal manufacturer received £511,153 to help support the phasing out of gas furnaces and replacing them with electric ones. This change is expected to result in 80% annual decrease in energy consumption.
  • A polypropylene producer received £1,122,686 to support a heat integration project at one of their locations. This project aimed to reduce steam consumption at the location by harnessing heat from the vapour steam that would otherwise be wasted. This project will reduce natural gas usage needed to produce steam via the site boilers by 30%.
  • A brick manufacturer and SME based in Yorkshire was awarded £38,800 to carry out a feasibility study that assesses the possibility of utilising waste heat from the exhaust gases from their kilns to offset the gas demand for the dryers used to dry clay.

What about Phase Three?

Phase Three of IETF launched in January 2024, with the Spring deadline occurring in mid-April 2024. £185 million is allocated for phase three – this is split between two competition windows.

Funding is allocated across three competition strands:

  • Studies: feasibility and engineering studies to enable business to investigate identified energy efficiency and decarbonisation projects prior to making an investment decision
  • Energy Efficiency: deployment of technologies to reduce industrial energy consumption
  • Decarbonisation: deployment of technologies to achieve industrial emissions savings

This round of IETF has also lowered the minimum grant threshold from £100,000 to £75,000 for small and medium enterprises (SMEs).

Who can apply?

Phase Three (Spring 2024) has expanded its sector scope to now include:

  • controlled environment horticulture activities
  • industrial laundries
  • textile renting facilities

This means businesses that fall under one of the below areas can apply*:

  • Mining and Quarrying
  • Manufacturing
  • Recovery and recycling of materials
  • Data Centre
  • Industrial Laundries
  • Controlled Environment Horticulture

*eligibility requires applicants to have an existing site to fall under eligible SIC codes. You can check this here.

How can Drees & Sommer help?

We have a team of specialists who have extensive knowledge of the application processes required in order to secure government funding. The Drees & Sommer team can help you both identify projects but also write robust applications for submission. Our team can then deliver any feasibility studies or energy efficiency / decarbonisation project, ensuring your project is delivered within the required timescales as well as help you achieve your desired outcomes.

What do you need to do?

If you would like to explore the option of IETF, then get in touch. With Phase 3 already open, you need to act quickly in order for your application to be as strong as possible.

If IETF is not an option for you, then our teams can work with you in order to unlock decarbonisation opportunities as you work towards net zero.

Speaking of deadlines...

Are you ready for the June 5th ESOS deadline? Phase 3 is now here and deadline rapidly approaching. Not prepared? Don't worry, our team can support! Get in touch.