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Environmental Transformation Fund (ETF): Funding for Low Carbon Technologies

The Environmental Transformation Fund (ETF) is a new initiative to bring forward the development of new low carbon energy and energy efficiency technologies in the UK. The fund formally began operation on 1 April 2008, and is jointly administered by Defra and BERR.

A strategy for the Environmental Transformation Fund, setting out how the fund will operate, was published on 12 September and is available below:

UK funds

The ETF has UK and international elements. Funds within the UK element of the Fund will total £400 million during the period 2008/09 to 2010/11

International funds

Budget 2007 announced a joint Defra/DFID £800 million international element of the fund over the same period, to focus on poverty reduction and environmental protection, and help developing countries to tackle climate change. This brings the total value of the ETF to £1.2 billion over the three year period. The first £50 million has been earmarked to help tackle deforestation in the Congo basin.

What does the UK ETF aim to do?

The UK element of the Fund aims to accelerate the commercialisation of low carbon energy and energy efficiency technologies in the UK. In doing so, it will help reduce the carbon intensity of energy production as well as reduce energy demand. The fund will therefore contribute towards the UK’s climate change and renewable energy goals for 2020 and beyond.

The fund will specifically focus on the demonstration and deployment phases of bringing low carbon technologies to market. It will work closely with other organisations funding earlier stage research and development including the Energy Technologies Institute, Technology Strategy Board, and the Research Councils’ Energy Programme.

How do I apply for funding?

The Environmental Transformation Fund itself will not be open for funding requests. Instead, schemes funded by the ETF, such as those operated by the Carbon Trust and BERR, will be publicised via their websites and in the usual ways when funding becomes available.

What will be covered by the UK ETF?

The UK ETF brings together Defra’s and BERR’s existing low carbon technology funding programmes together with a number of new investments to begin in 2008/09, as follows:

  • Hydrogen Fuel Cell and Carbon Abatement Demonstration Programme
  • Marine Renewables Deployment Fund
  • Low Carbon Buildings Programmes
  • Bio-energy Capital Grants and Bio-energy Infrastructure Schemes
  • Offshore Wind Capital Grants programme
  • Carbon Trust’s innovation programme, including research accelerators, technology accelerators, and incubators
  • Carbon Trust funding for new low carbon technology enterprises, including Partnership for Renewables
  • Carbon Trust investments in low carbon technology businesses
  • Carbon Trust energy efficiency loans scheme for small and medium sized enterprises (SMEs)
  • Salix Finance public sector invest-to-save loan schemes

New schemes announced

21 February 2008

Hilary Benn announced the first set of new schemes to be funded from Defra’s element of the UK ETF:

  • £47.4m for the Carbon Trust’s technology programmes in 2008/09, including more funding for their SME loan scheme and the similar scheme in the public sector operated by Salix Finance Ltd
  • £10m in 2008/09 for new rounds of the Bio-energy Capital Grants and Bio-energy Infrastructure Schemes
  • Around £10m over three years for projects that demonstrate the potential of anaerobic digestion technologies at commercial scale

Defra News Release: £400m for Low-Carbon Britain - Defra announces 2008/09 Budget settlement

13 March 2008

Announcement of the investment of a further £30m over the next three years in public sector energy efficiency projects in England through Salix Finance Ltd. Salix is grant funded by the Carbon Trust as part of their wider approach to helping public bodies such as local authorities, universities, hospitals and central government departments reduce their carbon emissions.

Defra news release: Carbon trading announcement and £30 million for public sector energy improvements: Benn

2 April 2008

Hilary Benn announced his intention to launch a Green Neighbourhoods competition, aiming to help up to 100 streets and local areas across England reduce their carbon footprint by 60%, with a focus on demonstrating what can be achieved with older housing stock.

Defra news release: Benn takes the fight against climate change into homes and communities

Further details of these investments and the remainder of the 2008/09 allocation will be announced in due course. BERR’s existing schemes will continue in line with previous announcements.

26 June 2008

John Hutton announced his intention to launch a Offshore Wind Technology capital grants competition, supporting the demonstration of next generation technology for offshore wind.

Further details of the scheme will be announced in due course.