Scottish Government: New £34 million Funding Opportunity

December 18th 2020

The Scottish Government has launched a new £34 million fund to help manufacturing industries reduce energy costs and emissions. The Scottish Industrial Energy Transformation Fund (SIETF) is open to industries where energy usage makes up a significant part of production costs. Scottish businesses can apply for match funded grants of more than £125 000 to invest in energy efficiency and low-carbon technologies.

Scotland’s Energy Minister Paul Wheelhouse said “Our industrial and commercial sector have a vital role to play in helping meet Scotland’s world leading climate change targets, including our strategy target for a 75% reduction in emissions by 2030, and improving industrial energy efficiency will be a significant part of that. The SIETF will support Scottish manufacturing industries transition to a low carbon future, not only helping businesses cut emissions but also reducing their energy costs. The support can be used to invest in a wide range of technologies, including systems to recover and re-use heat from an industrial process and technology to reduce the amount of energy used within a manufacturing production line. The fund will prioritise the most energy-intensive industrial sectors in Scotland – cement, ceramics, chemicals, food and drink including whisky and spirit distilleries, glass, iron and steel, paper and pulp, and oil and gas refining – to overcome the challenges associated with investing in energy efficiency or decarbonisation measures.”

The Food and Drink sector across Scotland has been actively involved with initiatives to become more sustainable, including GHG reduction measures such as the decarbonisation of process heat using hydrogen and an increased focus on low carbon logistics. The Scottish Industrial Energy Transformation Fund will provide an opportunity for forward-looking food and drink manufacturers and their local supply chain to co-invest alongside Scottish Government to improve energy efficiency and contribute positively to reducing emissions.


Background to the Scottish Industrial Energy Transformation Fund (SIETF)

In October 2018, UK Government announced plans, as part of the Industrial Strategy, to establish an Industrial Energy Transformation Fund providing up to £315 million until at least 2024. This is part of a package of support for decarbonising energy-intensive industries (EII) alongside the Industrial Clusters Mission, and Climate Change Agreements.

In Spring 2020, Scottish Ministers opted to deliver a separate IETF in Scotland over a similar timeframe. In September 2020, the Programme for Government announced that £34 million would be made available for capital projects over the next 5 years, an additional £8 million to the anticipated budget transfer from UK Government.

The importance of shared objectives to meet climate change targets will ensure that we work closely with other UK administrations on the SIETF. Yet a distinct fund allows flexibility towards the specific characteristics of Scotland’s industrial manufacturing base, supporting industry to go further and faster in the transition to a low carbon future.


Link to SIETF announcement:

SIETF webpage:

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