In a significant move to support the transition to net zero, the UK Government’s innovation arm, Innovate UK, has announced a new funding round of up to £8 million for small and medium-sized enterprises (SMEs) to develop net zero products and services.
Net Zero Living Programme
This funding is part of the Net Zero Living programme, a three-year £60 million initiative aimed at investing in businesses and local organisations that are accelerating the transition to net zero. The programme focuses on supporting SMEs in developing new products and services that enhance digitalisation and data use in net-zero projects, as well as embracing user-centred design to align with real-world customer and market needs.
Data and Digital Competitions
Under the data and digital competitions, £4.5 million has been awarded to 60 projects that apply data, digital, and AI technologies to accelerate the take-up of carbon reduction measures. These projects are concentrated in areas such as building retrofit, housing, and green commuting. An additional £3.5 million will be allocated to 48 projects focused on user-design, helping early-stage growth businesses develop net zero products or services that meet user needs. These projects will also include funding for ‘living laboratories’ where firms can test their products with end users before launch.
International Collaboration
The programme also facilitates international collaboration, providing UK businesses with the opportunity to work on innovative solutions with partners in Africa and Asia who are facing similar carbon reduction challenges. This international element has already enabled UK businesses to collaborate with overseas partners on various net-zero projects in countries including South Korea, India, South Africa, and Kenya.
Existing Impact
To date, the Net Zero Living initiative has awarded over £30 million in funding to 52 projects across the UK. This investment has not only supported local innovation but also contributed significantly to the national effort to achieve net zero targets.
Broader Context and Investment Needs
While publicly funded projects like these are crucial, they alone will not be sufficient to meet the UK’s net zero targets. It is estimated that over £1 trillion in national investment will be required to decarbonise the UK’s energy supply, buildings, and transport systems. Local authorities will need between £25-£50 billion of development capital for smaller scale net zero projects over the next 25 years to stay on track to reach the 2050 climate goals.
Economic Benefits
There is growing evidence that such significant investments can provide a substantial return on investment (ROI). In Scotland, for example, the net zero economy has been found to contribute 5.7% to the wider economy, support 85,500 jobs, and contribute £74 billion to the UK economy at large. This underscores the potential economic benefits of investing in net zero initiatives.
Additional Initiatives and Funding
The UK Government is also investing in other initiatives to support innovation and net zero goals. For instance, the Net Zero Innovation Portfolio, a £1 billion fund, aims to accelerate the commercialisation of low-carbon technologies and systems in areas such as power, buildings, and industry. This portfolio focuses on 10 priority areas, including future offshore wind, nuclear advanced modular reactors, energy storage, and bioenergy.
Additionally, Innovate UK is supporting regional innovation clusters through its launchpad programme, which includes funding for innovation hubs in various regions. This programme aims to support high-growth companies in sectors such as renewable energy, digital health, and agri-tech, and is part of a broader effort to make the UK an ‘innovation nation’.
