The UK government announced funding of $40.1m (£32.5m) to support companies in cutting their reliance on fossil fuels.

The funding will go towards industries, including construction, mining, and quarrying, to develop greener technologies and low-carbon fuels. 

Announced on Friday, the government hopes the fund will encourage these industries to transition away from red diesel, a subsidised diesel replacement.

In 2022, the government removed the entitlement to red diesel from several industries, increasing the cost of fuelling machines with diesel. Heavy-duty vehicles and machines such as bulldozers, tractors, and cranes all frequently use red diesel to minimise fuel spending. This second phase of the ‘Red Diesel Replacement Competition’ supports projects that aim to produce red diesel alternatives.

UK minister for energy and climate change Graham Stuart said: “This latest round of funding will help to speed up industrial decarbonisation, providing industry and consumers with effective low-carbon alternatives to red diesel while boosting green investment to future-proof the resilience of British industry.”

Funding of $8.2m (£6.7m) was awarded to 17 winners in Phase 1 of the competition in electrification, e-fuels, green hydrogen, and technologies that capture and store energy. 

Belfast-based technology firm Catagen received $973,309 (£787,700) for two projects, an e-fuel generator to develop e-diesel, and a novel hydrogen compressor. A Liverpool-based dual fuel technology firm, ULEMCo, was awarded $517,252 (£418,613) to develop and install a combustion engine for onsite construction equipment in collaboration with Skanska and Building Research Establishment.