Farmers will also get financial help to invest in energy-saving equipment and slash their energy bills by a total of £4 million, and 25,000 tonnes of CO2 annually, using interest-free loans from the Carbon Trust, Environment Secretary Hilary Benn announced today.
From 1 February 2010, English farmers will be eligible for unsecured, interest-free loans for between £3,000 and £20,000 to help them upgrade to more energy-efficient equipment. The loans are designed to pay for themselves through direct energy savings provided over one to four years – and after the loan is repaid, farmers will make direct savings on their energy costs, as well as cutting the carbon footprint of what they produce.
Hilary Benn said:
"It makes sense for farmers to reduce the energy they use. It reduces the cost of producing food, and it cuts the environmental impact, too – something more and more consumers are asking about. But the up-front costs can be prohibitive.
These interest-free loans will help farmers to upgrade their equipment to become more energy efficient – saving money in the long run, as well as helping the agricultural sector to cut emissions right at the start of the food chain"
The loans scheme is part of the Carbon Trust's Big Business Refit - a campaign encouraging businesses to replace old, energy intensive equipment which wastes £3.3 billion a year. The money has been made available from the Carbon Trust's existing loans fund, which was bolstered by further funding from the Treasury in the 2009 Budget. The loans will be available on a first come, first served basis.
Examples of energy efficiency upgrades which the Carbon Trust loans will fund are:
- Thermal screens, used in greenhouse horticulture, typically cost up to £20,000, and can save over £10,000 / 100 tonnes of CO2 annually
- Milk cooling accounts for one third of the energy consumption of dairy farms. New systems cost £3,000, and save up to £1,000 / 6 tonnes of CO2 a year.
- Insulation • used in field horticulture crop stores, typically costs around £17,000, and saves up to £10,000 / 50 tonnes of CO2 a year.
- Upgrading heating and ventilation controls, in livestock farms, typically costs £3,000, and saves over £4,000 / 23 tonnes of CO2 a year.
- Grain drying humidity controls, used in arable farming, typically costs £3,000, and saves around £1,500 / 10 tonnes of CO2 a year.
Tom Delay, chief executive, the Carbon Trust, said:
"Upgrading old equipment using our loans scheme is an excellent way for farmers to be more competitive in difficult times, by cutting their costs and reducing carbon emissions. By reducing costs and associated carbon emissions in this way, goods will also be more appealing to the rising tide of carbon conscious shoppers"
NFU President Peter Kendall said:
"Improving energy efficiency is a win-win situation because it helps cut agriculture’s greenhouse gas emissions as well as saving money for farmers and growers. There are already examples of businesses that have taken simple but effective steps to reduce their environmental impact in this way and I hope these loans will enable others to follow suit."
The new funding has been provided to help the farming sector to meet the carbon reduction aims laid out the Government’s Low Carbon Transition Plan. In the plan, the Government announced a target to reduce agricultural greenhouse gas emissions by 3 million tonnes of CO2 equivalent annually by 2020. Using the loans scheme, the Carbon Trust hopes to provide around 1,000 farmers with £12 million, interest-free, to upgrade old equipment, or purchase renewable energy technologies, which will cut emissions by 25,000 tonnes of CO2 each year.
About the Energy Efficiency Loans scheme
This is an extension of the small and medium business loan scheme as expanded by Budget 2009 and supported by the Department of Energy and Climate Change. The minimum loan size available is £3,000, and the maximum size, for the farming sector is £20,000. There are no arrangement fees and applying is straightforward.
All loans are unsecured, interest-free and repayable over a period of up to four years. The loans are designed to pay for themselves through energy savings, so once the loan is paid off savings go straight onto the bottom line. On average, farmers are expected to save around £10,000 a year by replacing inefficient equipment.
Energy Efficiency loans are available to businesses meeting either of the following criteria:
- Companies that meet the EU definition of a small or medium-sized enterprise, i.e. companies with fewer than 250 employees and a turnover of less than €50m (around £42m at today’s exchange rate).
- Companies that are not eligible to participate in the CRC Energy Efficiency Scheme , i.e. companies that do not consume more than 6,000MWh of half hourly metered electricity. This typically equates to an annual electricity spend of £500,000.
To date, the Carbon Trust’s energy efficiency loan scheme has saved UK businesses £100m and 615,000 tonnes of CO2 by funding equipment replacement projects.
IIn Budget 2009, £100m was made available for low cost loans to small and medium-sized businesses. Based on current take-up, this fund is expected to help around 3,000 businesses to cut costs by £40m, and 26,000 tonnes of C02 a year.
£30 million has been dispersed to over 800 businesses since April 2009. Farmers will be able to apply for loans from February 1st 2010. If Farmers would like any further information on the loans before this date, we recommend that they visit www.carbontrust/loans. Farmers cannot apply in advance for the loans, but if they call 01865 885846 to register their name and contact details, they can register for a call back from Carbon Trust after the loans become available.
For more information please visit: http://www.carbontrust.co.uk/loans
About the Carbon Trust
- The Carbon Trust is an independent company set up in 2001 by Government in response to the threat of climate change, to accelerate the move to a low carbon economy by working with organisations to reduce carbon emissions and develop commercial low carbon technologies.
- We cut carbon emissions now by giving business and the public sector expert advice, finance and accreditation to help them reduce their carbon footprint and to stimulate demand for low carbon products and services.
- Since 2001 we’ve helped UK business save over 23 million tonnes of CO2, and more than £1.4billion. We aim to help our customers, across the private and public sectors, to cut a further 17 million tones of CO2 in the next three years
- In 2008 alone the Carbon Trust supported half a million UK businesses, saving companies up to £227 million from their annual energy bills and cutting up to 2 million tonnes of carbon dioxide from their annual emissions.
- We cut future carbon emissions by developing new low carbon technologies through project funding and management, investment and collaboration. We also identify market failures and provide practical ways to overcome them.
- We are helping the UK become a global hub for low carbon innovation. We do this through funding and managing projects, investing and collaborating on low carbon technologies and by identifying market barriers and practical ways to overcome them. Our work on commercialising new technologies will save over 24 million tonnes of carbon a year by 2050.
- The Carbon Trust is undertaking world leading projects in the offshore wind, marine energy, biomass, CHP, algae and advanced solar power sectors.