The SIETF will provide grant funding to reduce energy costs and emissions through increased energy efficiency. Decisions on funding awards are weighted towards energy and/or carbon savings, therefore it is primarily aimed at businesses with high energy use.
The SIETF currently consists of two competitions, with funding profiled from 2021 to 2026. These are as follows:
Competition 1 – deployment
- this funding invitation will seek to support the deployment of readily available energy efficiency technologies that improve industrial process energy efficiency and reduce energy demand
- later calls within this competition (from later in 2021) will look to support the deployment of decarbonisation technologies which may require further technological development
Competition 2 – Studies
- this funding invitation will provide support for carrying out feasibility and engineering studies into energy efficiency or deeper decarbonisation such as through fuel switching
Having almost halved our greenhouse gas (GHG) emissions since 1990, Scotland is at the forefront of the international response to the global climate emergency. We have committed to become a net-zero society by 2045; five years before the rest of the UK and in line with advice from the government’s independent expert advisors, the Climate Change Committee.
To achieve this, emissions from industrial processes must be reduced wherever feasible. Energy-intensive industries or ‘EII’ form a core part of Scotland’s manufacturing base and cover sites that consume high levels of energy; these being responsible for over 15% of all Scotland’s GHG emissions in 2018.
An update to Scotland’s Climate Change Plan (2018-32) is due to be published shortly. This will include updated progress against the following targets relevant to EII:
- by 2032 industrial and commercial energy productivity will improve by at least 30% from 2015 levels through a combination of fuel diversification, energy efficiency improvements and heat recovery
- by 2032 industrial and commercial emissions intensity will fall by at least 30% from 2015 levels, through a combination of fuel diversification, energy efficiency improvements and heat recovery
Advice and support landscape
The SIETF is positioned within a wider advice and support landscape for industrial users in Scotland seeking to improve energy efficiency. This includes the £26m Low Carbon Manufacturing Challenge Fund (LCMCF) announced alongside SIETF in Programme for Government. This LCMCF, which is in development, will offer support to a broader group of manufacturers and their supply chains.
Taken together, this £60m is a key part of the Scottish commitment to stimulate investment to decarbonise our existing industrial manufacturing base as well as nurture low-carbon innovative solutions and net zero economic opportunities that can be scaled-up to contribute to a pipeline of projects.
Public health crisis
Manufacturing industries across all sectors also face significant economic challenges in the wake of the COVID-19 pandemic. Investment in EII can sustain a significant number of high-value jobs that are often in the supply chains. This economic activity is vital for regional communities, the Scottish manufacturing sector and economy as a whole. The SIETF will therefore be considered as part of a wider strategic approach to support a just and green recovery.
A review of the SIETF in mid-2021, after the first application window and prior to further calls, will consider adding criteria for jobs retention or labour market transition plans especially for larger projects as part of Just Transition planning, and connecting to the Scottish Government’s Green Jobs Fund, which could develop expertise in this area.
In June 2020, the Scottish Government announced a separate £62 million Energy Transition Fund to support businesses in the oil, gas and energy sectors over the next five years to provide an economic stimulus to re-start the economy and support supply chains in the transition to low-carbon energy.
The recently established Scottish National Investment Bank is a publically owned bank that operates on commercial lending principles, providing patient and growth capital for businesses and catalysing private sector investment. As a mission-oriented investor, the Bank will support ambitious companies and important infrastructure projects to shape an economy with fair work, inclusive growth and net-zero emissions at its heart.
Scottish manufacturing industries have flagged a common concern that businesses have limited capital available for match-funding projects given the challenging economic climate. In such cases, applicants may wish to consider approaching the Scottish National Investment Bank to discuss what commercial finance options may be feasible where they are able to demonstrate that the full finance requirement cannot be obtained through a combination of SIETF funding and private sector finance.
Forms and guidance
- Scottish Industrial Energy Transformation Fund - competition 1: energy efficiency deployment - form and guidance
- Scottish Industrial Energy Transformation Fund - competition 2: feasibility and front-end engineering design studies - form and guidance
- Scottish Industrial Energy Transformation Fund (SIETF): state aid guidance