How UK Government’s Funding for Innovations is Reducing Heavy Industry’s Fossil Fuel Reliance

The UK Government is set to award £32.5m to innovators developing technologies that could reduce reliance on polluting red diesel in industrial sectors such as construction and mining.

Red diesel is often used for off-road, heavy-duty vehicles such as bulldozers, forklifts and cranes. It is also often used to power machinery in industrial settings and sometimes used in oil-fired heat processes. By the UK Government’s own figures, it accounts for around 14 million tonnes of CO2 each year, as well as being a significant contributor to air pollution because it generates PM10 and nitrogen oxide when used.

In a bid to help reduce red diesel use in the UK, the Government created the Red Diesel Replacement Competition, which supports projects developing new technologies that enable vehicles and machinery that commonly use red diesel to run using cleaner options.

It has today (20 January) opened applications for the second phase of the competition, confirming that £32.5m will be shared between three to five demonstration projects which participated in the first phase. The funding is being drawn from the £1bn Net Zero Innovation Portfolio, opened in 2021 by then-Chancellor Rishi Sunak.

The £6.7m first phase of the Competition saw several projects focused on hydrogen receiving Government backing. These included a consortium building two prototype heavy-duty engines capable of running on ammonia and hydrogen, comprising the University of Nottingham, Clean Air Powert and MAHLE Powertrain. Also supported through phase one were Catagen’s work to develop a hydrogen processor and a separate project to convert a piling machine to run on hydrogen fuel, including ULEMCo, Skanska and the Building Research Establishment.

Hydrogen produces no carbon dioxide emissions at the point of combustion. However, its production can be high-carbon and, indeed, most global hydrogen production is fossil-fuelled. To that end, the UK Government is targeting 10GW of low-carbon hydrogen production capacity by 2030, of which at least 5GW should be for ‘green’ hydrogen made using renewable electricity. The other hydrogen will be subject to a new standard on lifecycle emissions.

Aside from hydrogen, the Red Diesel Replacement Competition is supporting technologies including innovative steam turbines.

Phase 1 Red Diesel Replacement Competition winners have until 30 March to apply for Phase 2. Funding will be provided through to March 2025.

Energy and Climate Minister Graham Stuart said the industrial sectors set to benefit from the innovations supported through the Competition “are crucial to our economy” and “also have an important role to play in our shift towards a greener, more secure future.”

Stuart added: “This latest round of funding will help to speed up industrial decarbonisation, providing industry and consumers with effective low-carbon alternatives to red diesel while boosting green investment to future-proof the resilience of British industry.”

Industrial clusters

In other low-carbon heavy industry news, the World Economic Forum (WEF) announced at its annual meeting in Davos this week that nine new industrial clusters across Europe, Asia and North America have joined its Transforming Industrial Clusters Towards Net-Zero initiative. Also supporting the initiative are Accenture and EPRI.

The initiative is striving to convene 100 industrial clusters to secure commitments to net-zero by mid-century and to build upon those pledges with public-private and cross-industry partnerships to scale solutions. It also facilitates discussion and learning between clusters across the world.

Joining the initiative this week are the Sanjiang New Area Industrial Part and Ordos-Envision Net-Zero Industrial Park in China; the USA’s National Hydrogen Centre and the Greater St Louis and Illinois Regional Clean Hydrogen Hub Industrial Cluster; the Kawasaki Industrial Complex in Japan; the Jababeka Industrial Cluster and Indo-Pacific Net-Zero Battery Materials Consortium in Indonesia, and the Andalusian Green Hydrogen Valley in Spain.

The initiative now includes 17 clusters, which collectively generate 451 million metric tonnes of CO2e each year. These clusters employ more than 2.7 million people.

Technologies being deployed to decarbonise the clusters include electrified heating and cooling served by low-carbon electricity; hydrogen; materials innovation including recycling; biomass co-firing and carbon capture. Several are also working to shift to providing a greater proportion of low-carbon materials and products.

“The nine new industrial cluster members add momentum to our programme and diversify the locations and types of industries seeking to accelerate their decarbonisation, making our initiative truly global and comprehensive,” said the WEF’s head of energy, materials and infrastructure, Roberto Bocca.

“The programme now covers several heavy industries sectors in nine countries across four continents. We encourage other industrial estates and hubs to join us in helping reduce CO2 emissions faster by creating international public-private and cross-industry partnerships which enable implementation of low-carbon technologies.”