Scottish Industrial Energy Transformation Fund: guidance - competition three

Guidance notes and application forms for the third call of the Scottish Industrial Energy Transformation Fund (SIETF).

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SIETF supports industrial sites with high energy use to transition to a low carbon future. It will improve the international competitiveness of many companies whilst protecting jobs. The Fund targets industrial processes, helping industry to:

  • cut energy bills by investing in more efficient technologies
  • reduce emissions by bringing down the costs and risks associated with investing in decarbonisation technologies

Funding is allocated through a competitive process aimed at supporting the highest quality bids. The fund is open to a broad range of industrial manufacturing sectors and will support applicants both within and outside of industrial clusters. Decisions on funding awards are weighted towards energy and/or carbon savings, therefore it is primarily aimed at businesses with high energy use.

The third round of SIETF competitions has two competition calls open until 18 November 2022:

Competition 1 deployment (open until 30 November 2022)

To support the deployment of readily available energy efficiency technologies that improve process energy efficiency and reduce energy demand (specific or absolute reduction) and/or to support decarbonisation of industrial processes, for example through fuel switching.

The £34 million of capital funding allocated will be accessed via several calls (of which this is the third call), with funding profiled from 2021 to 2026. Up to £26 million has been made available for projects that could be awarded capex funding from this call (for deployment to March 2026).

Competition 2 – studies (feasibility and FEED – open until 18 November 2022)

To support feasibility and  front-end engineering and design studies (FEED) into energy efficiency or deeper decarbonisation such as through fuel switching, we would like to build a pipeline of potential projects for further capital calls, therefore, to identify priorities whilst non-capital funding is limited we welcome approaches on a case-by-case basis, including from:

  • all scales (above the minimum threshold) of FEEDor feasibility studies
  • from demonstration projects that could include a proportion of capital funding (for example for installation of energy efficiency or decarbonisation equipment that may become operational assets)
  • from studies that may run into, in part or in total, subsequent financial years for which further resource funding is expected to be made available

For both feasibility and FEED studies, the manufacturer must know which technology they want to deploy. However in this call we have created a new opportunity for site owners/operators to apply for funding to assess how different decarbonisation technologies could be applied or deployed.

Competition 2a – studies (options appraisals – open until 18 November 2022)

We welcome applications for appraisals that cover more than one option to decarbonise a site (and/or to make it more energy efficient). This strand has revised assessment.

Further details on feasibility, studies, and options appraisals are in the eligibility section, and on the application forms.

Advice and support landscape

SIETF is a funding stream focused on support to adapt existing processes. Grants are available to support businesses to invest in their processes to become more energy efficient and/or to decarbonise.

SIETF is positioned within a wider advice and support landscape for industrial users in Scotland that seeks to improve energy efficiency or decarbonise manufacturing industries. This includes the £26 million Low Carbon Manufacturing Challenge Fund (LCMCF) announced alongside SIETF in 2020. The LCMCF, which is in development, will offer research and development support to a broader group of manufacturers and their supply chains to allow them to move towards low carbon technology, processes and infrastructure.

Taken together, this £60 million 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.

Other sources of grant funding are available (depending on how and when each fund is administered) to help manufacturing industries, sometimes operating in consortia, such as from:

  • new and emerging energy technology focused support such as through the Emerging Energy Technologies Fund (EETF) and the Carbon Capture and Utilisation Challenge Fund
  • to increase the range of options available to enable decarbonisation at a faster rate, the UK Government Industry of Future Programme (IFP) could be suitable for industries exploring different technological options to decarbonise at earlier stages than SIETF could support
  • BEIS Net Zero Innovation Programmes at lower technology readiness levels (TRL) including:

Other areas of support should be accessed if manufacturers wish to address energy or carbon emissions that relate to use of buildings, or premesis. SIETF's focus is industrial processes.

Innovative finance

The 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.


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