The investment will help fund projects such as carbon capture, electricity networks, hydrogen, nuclear and offshore wind.
The government has earmarked £960m for clean energy manufacturing projects as part of a wider £4.5bn package designed to bolster the UK’s manufacturing sector.
The announcement of the investment, called the Green Industries Growth Accelerator, comes after the steel sector urged the government to reduce industrial electricity prices in the wake of moves to shift production processes away from fossil fuels like coal towards carbon-neutral options powered by green energy.
The manufacturing sector makes up over 43 per cent of all UK exports and employs around 2.6 million people.
But from next year, carbon-intensive industries such as steelmaking and car production will be forced to gradually reduce their emissions at the rate needed for the UK to reach net zero goals.
The Treasury said it hoped the financial package would help unlock further private investment in green energy while boosting the UK’s energy security.
Chancellor Jeremy Hunt said: “Britain is now the eighth-largest manufacturer in the world, recently overtaking France. To build on this success, we are targeting funding to support the sectors where the UK is or could be world-leading.
“Our £4.5bn of funding will leverage many times that from the private sector, and in turn will grow our economy, creating more skilled, higher-paid jobs in new industries that will be built to last.”
Business secretary Kemi Badenoch said: “The UK is a global hub for advanced manufacturing, with world-leading automotive, aerospace and maritime sectors. This package builds on recent investment wins, such as the £4bn gigafactory, and the £600m invested to build the next generation of electric Minis, and ensures that the government can continue to help create jobs, grow the economy and secure the future of great British manufacturing.”
The government said it also wanted to accelerate the deployment of “digital twins”, which sees companies create digital replicas of the full manufacturing process to improve processes around product development, manufacturing and maintenance.
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