The government has announced a £90m drive to cut carbon emissions in industry and homes, in moves to use low carbon alternatives to fossil fuels used by heavy transport and industry.

The £90m forms part of the department for business, energy and industrial strategy’s £500m innovation fund, which is dedicated to harnessing and rolling out cutting edge technology to fight climate change.

£70m will include funding for two of Europe’s first-ever low carbon hydrogen production plants - the first on the banks of the Mersey, the second planned for near Aberdeen. A third project will develop technology to harness offshore wind off the Grimsby coast to power electrolysis and produce hydrogen.

Hydrogen is a low or zero-emission alternative to fossil fuels which could power future industry and transport. Currently difficult and expensive to produce in bulk, hydrogen could be vital in the fight against climate change as a low carbon alternative to fossil fuels used by heavy transport and industry.

The investment will also fund projects to trial cutting-edge technologies for switching industrial production from fossil fuels to renewables in industries such as cement and glass production.

The remaining £20m will be used to fund projects aimed at cutting household emissions and bills through nine UK-wide local smart energy projects. 

If successful, the 10 community pilot projects from Rugeley near Stafford to Coleraine in Northern Ireland could revolutionise local energy generation – allowing local communities to join the frontline in the fight against climate change.

In Rugeley, a coal fired power station is to be demolished and turned into a sustainable village of 2,300 homes. Residents will benefit from thermal storage units instead of traditional gas boilers, enabling them to draw, store and heat their homes with geothermal energy from local canals and disused mine shafts.

In Coleraine, a micro-grid of nearly 100 homes will be established, powered entirely by local wind power. It will help lower household electricity bills by as much as 50% and boost the contribution of renewables to the local energy mix by a quarter.

Kwasi Kwarteng, minister for business, energy and clean growth, said: “Cleaning up emissions from industry and housing is a big challenge but today’s £90m investment will set us on the right path as we develop clean technologies like hydrogen. This is an important part of our efforts in eliminating our contribution to climate change by 2050 while also growing our economy, creating up to two million green collar jobs across the country by 2030. This investment in low carbon innovation will be crucial to help us end our contribution to climate change by 2050.”

The National Infrastructure Commission welcomed the news, but said the need to identify safe replacements for natural gas is an urgent problem. 

A spokesperson for the commission said: “Today’s announcement offers welcome further detail on how some of the government’s £500m innovation fund will be spent. However, the need to identify safe replacements for natural gas to heat the UK’s homes is an urgent problem. Our national infrastructure assessment in 2018 called for acceleration of work to enable a community trial of hydrogen supply by 2021, if the UK is to stand any chance of reaching net zero by 2050 or sooner. We hope the government’s forthcoming national infrastructure strategy sets out a more detailed plan for achieving that goal.”