Industrial energy efficiency
To improve Scotland's overall energy efficiency, it is essential that we engage with the industrial and commercial sector, which accounts for around 40% of total final energy consumption in Scotland. Improving its efficiency will make a significant difference to meeting our national climate change targets.
Improving industrial and commercial energy productivity by at least 30% by 2032, through a combination of fuel diversity, energy efficiency improvements and heat recovery, is a key priority in our updated climate change plan 2018 to 2032 (December 2020).
Scotland’s most energy-intensive industrial (EII) sectors – cement, ceramics, chemicals, food and drink, glass, iron and steel, paper and pulp, and oil and gas refining – have the opportunity to reduce on-site emissions by a combination of means such as:
- making industrial processes (energy and materials) more efficient
- switching to lower carbon fuels, including electrifying industrial processes where feasible
or
- capturing carbon emissions then storing or utilising the carbon (CCUS)
We continue to engage with EII sectors and sties to address the challenges associated with investing in measures to decarbonise, including via energy efficiency.
Support for industrial decarbonisation
We are incentivising our industrial sector to decarbonise its processes by investing £34 million between 2021 and 2026 through the Scottish Industrial Energy Transformation Fund (SIETF).
The SEITF supports manufacturing industries to fund investment-ready energy efficiency technologies and deeper decarbonisation studies, supporting Scotland’s ambition to achieve net-zero emissions by 2045 whilst maintaining competitiveness.
Benefits and challenges
Greater energy efficiency can have many benefits for industry, including:
- reduced operating costs
- protection against energy price rises
- an additional income stream, for example through the recovery or use of captured excess heat
However, investing in energy efficiency measures presents challenges. Payback periods for equipment or technology are often considered too long, and business cases for greater efficiency may struggle to gain board approval due to the multinational nature of many companies.
Given that the industrial sector accounts for more than half of Scotland's exports and sustains many high-value jobs, it's crucial that we support rather than force industry to save energy.
Engaging with industry
We are engaging with industry to:
- build industrial cross-sector working that includes trade associations from the EII sectors and Scottish site representatives
- gain detailed insight into investment barriers and work together on how to overcome them
- examine the roles of government, agencies and industry to collectively achieve greater industrial energy efficiency or decarbonisation
During workshops with a range of industrial stakeholders we gathered evidence on the nature of Scotland’s industrial landscape including the challenges and opportunities for decarbonisation. In 2020 we published a discussion paper on decarbonisation and energy efficiency in the industrial sector that summarises our engagement.
Contact
Any enquiries regarding the Industrial Energy Transformation Fund should be sent to SIETF@gov.scot
Any other enquiries regarding industrial energy efficiency or decarbonisation should be sent to EII@gov.scot