Decarbonising UK Manufacturing: 2025 Grants
With the UK industrial sector under growing pressure to meet net-zero targets, 2025 presents a significant opportunity for engineering and manufacturing businesses to decarbonise through grant funding, innovation support, and infrastructure schemes.
From renewable heat systems and clean power to hydrogen and smart factory upgrades, here’s what’s available in 2025 to help your operations go greener, and save money doing
1. Industrial Heat & Renewable Energy Upgrades
Energy-intensive manufacturing sectors can benefit from schemes supporting:
Heat pumps
Biomass systems
Solar PV
LED lighting & building fabric upgrades
🔹 Key Opportunity:
Industrial Energy Transformation Fund (IETF) – Phase 3 rounds open in 2025
Up to 70% funding for projects that cut industrial carbon emissions
Includes process efficiency, electrification, and onsite renewables
2. Electrification & Energy Efficiency
Through schemes like the Public Sector Decarbonisation Scheme (for public suppliers/partners) and Energy Efficiency Loans, manufacturers can access support for:
Heat recovery
Variable speed drives
Smart controls
Factory electrification
💡 Some local enterprise partnerships (LEPs) also offer low-interest loans and match funding for industrial energy upgrades.
🔗 Check local LEP support via the LEP Network
3. Hydrogen, HVO & Clean Fuels for Industry
Manufacturers that rely on high-temperature processes or diesel-based equipment can explore:
Hydrogen retrofits or switching
HVO (Hydrotreated Vegetable Oil)
Bio-LPG pilots
The ZEHID and CMDC programmes, though aimed at logistics and ports, also support fuel switching infrastructure relevant to industrial estates and shared logistics zones.
🔗 Clean Maritime Demonstration Competition
4. Innovation & R&D Funding for Engineers
2025 is a huge year for low-carbon innovation in engineering, with dedicated support for trials, prototypes, and demonstrators through:
Innovate UK Smart Grants – for transformative tech
TRIG (Transport Research & Innovation Grants) – includes manufacturing-adjacent projects
Made Smarter Innovation – focused on digital manufacturing, IoT, and sustainable design
R&D grants often cover up to 70% of eligible project costs and help de-risk clean technology adoption in the production environment.
Carbon Footprinting & Sustainability Reporting
Manufacturers are increasingly expected to measure and disclose:
Scope 1 & 2 emissions
Carbon intensity per product
Lifecycle emissions (LCA)
Funded support is available for adopting ESG reporting frameworks. The SBS Net-Zero Program is available part funded via many local authority schemes, plus further funding may be available defendant on your local authority area for SBS Support. SMEs and suppliers to public sector or large net-zero-aligned buyers.
.
| Scheme | Focus Area | Funding | Relevant Tech | Deadline |
|---|---|---|---|---|
| IETF | Industrial heat & efficiency | Up to 70% | Heat pumps, solar, VSDs | Spring–Autumn 2025 |
| Innovate UK Smart Grants | Clean tech R&D | £100k–£2M | Any innovation | Ongoing |
| TRIG | Early-stage projects | £45k/project | Automation, logistics, decarb | 2025 rounds open |
| Public Sector Decarb Scheme | Heat, solar, HVAC | £1.4B (mostly public sector) | Solar, heat pumps | Varies |
| CMDC | Port/industrial zone fuels | £30M | Hydrogen, solar | Maritime + zones |
| Local Energy Hubs/LEPs | Regional support | Match funding/loans | Mixed | Localised |
| HVO pilots | Fuel switching | Various | HVO, Bio-LPG | Ongoing |
Whether you’re making components, operating industrial estates, or managing energy-intensive processes, the path to net-zero in UK manufacturing is now funded and feasible.
Act now to secure grants, lower operational costs, and future-proof your engineering operations.