The Environmental Transformation Fund (ETF) is a Government initiative to bring forward the development of new low carbon energy and energy efficiency technologies in the UK. The fund formally begins operation in April 2008, and will be jointly administered by Defra and the Department for Business, Enterprise and Regulatory Reform (BERR).

The ETF is in two parts:

- Domestic. this Fund will total £400 million during the period 2008/09 to 2010/11

- International. this Fund will total £800 million international over the same period and will focus on poverty reduction and environmental protection, and help developing countries to tackle climate change.

this brings the total value of the ETF to £1.2 billion over the three year period. The first £50 million has been earmarked to help tackle deforestation in the Congo basin.

The domestic element of the Fund aims to accelerate the commercialisation of low carbon energy and energy efficiency technologies in the UK. In doing so, it will help reduce the carbon intensity of energy production as well as reduce energy demand. The fund will therefore contribute towards the UK’s climate change and renewable energy goals for 2020 and beyond.

The fund will specifically focus on the demonstration and deployment phases of bringing low carbon technologies to market. It will work closely with other organisations funding earlier stage research and development including the Energy Technologies Institute, Technology Strategy Board, and the Research Councils’ Energy Programme.

The domestic ETF brings together Defra’s and BERR’s existing low carbon technology funding programmes together with a number of new investments to begin in 2008/09, as follows:

On 21 February 2008 Hilary Benn announced the first set of new schemes to be funded from Defra’s element of the domestic ETF (see Defra news release):

4m for the Carbon Trust’s technology programmes in 2008/09, including more funding for their SME loan scheme and the similar scheme in the public sector operated by Salix Finance Ltd £10m in 2008/09 for new rounds of the Bio-energy Capital Grants and Bio-energy Infrastructure Schemes Around £10m over three years for projects that demonstrate the potential of anaerobic digestion technologies at commercial scale

Further details of these investments and the remainder of the 2008/09 allocation will be announced in due course. BERR’s existing schemes will continue in line with previous announcements.

The Environmental Transformation Fund itself will not be open for funding requests. Instead, schemes funded by the ETF, such as those operated by the Carbon Trust and BERR, will be publicised via their websites and in the usual ways when funding becomes available.

Useful links for the Environmental Transformation Fund: