UK Net Zero Research and Innovation Delivery Plan

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New grant funding has been made available in recent years beyond the areas outlined in the core Innovate UK budget. Government departments have looked to innovation grants as a way of delivering their most pressing policy objectives.

A case in point is the Department for Energy Security and Net Zero (DESNZ), which, since being formed in February 2023, has committed around £4.5 billion of additional grant funding through its UK Net Zero Research and Innovation (R&I) Delivery Plan to 2025.

These new grants are best understood as a part of the recent ‘green subsidy race’, in which governments worldwide compete to attract green businesses to develop technology in their countries. This race really heated up in August 2022, when the US Inflation Reduction Act announced $369b for green tech, followed by the EU’s Green Deal Industrial Plan in March 2023 worth around €400b ($428b).

The breakdown of this vast new budget is best shown in the following diagram.

Planned UK Net Zero R&I funding by sector to 2025

The major research and innovation grant programmes for these net-zero sectors account for about 85% of the £4.5b funding.

The UK Government invests in this R&I across a broad portfolio of sectors to create a roadmap for developing and deploying green technologies. This will ensure that the most economically efficient pathways to net zero remain open whilst allowing the market to respond to new opportunities and challenges that arise from the transition to net zero.

This Net Zero R&I funding is weighted towards Transport and Power, with significant investments in other areas such as Hydrogen, Heat and Buildings, and Carbon Capture (CCUS). These areas require government intervention to help create new markets or to overcome technological barriers preventing private sector investment (known as ‘market failures’). For Buildings, programmes focus on demonstrating the most effective and efficient ways to support large-scale deployment of low-carbon heating and retrofitting solutions.

The range of grants available via this new Net Zero R&I funding strand can be complex. Ayming specialises in helping UK businesses interested in net-zero innovation find the right competition for their needs.