Red Diesel Replacement competition

This competition provides funding for projects developing low carbon alternatives to red diesel for construction, mining and quarrying. This is Phase 2 of a two-phase competition, but is open to all applicants, whether or not they have taken part in Phase 1.

Opportunity Details


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A total of £32.5 million is available in grant funding for Phase 2, with up to £12 million per project (minimum usually £1m). You do not need to have taken part in phase 1 to apply. You must register by 23rd March, and complete your application by 30th March.


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The £40 million Red Diesel Replacement competition aims to support the development and demonstration of low carbon fuel and system alternatives to red diesel for the construction, and mining and quarrying sectors. The competition supports the decarbonisation of these high-impact sectors that will be affected by the partial removal of the entitlement to use red diesel and rebated fuels from April 2022.

The purpose of Phase 2 is to support the physical demonstration of an end-to-end system / solution replacing existing red diesel-using technologies on construction and mining or quarrying sites, including engineering design, build, trial, decommissioning, market assessment, and knowledge dissemination.

Projects must demonstrate a low carbon integrated system that includes multiple component technologies from fuel generation/production, distribution, storage and delivery, and end-use on a construction and mining/quarrying site.

Projects must demonstrate that the system is at TRL 7 upon completion.

The RDR programme aims to achieve the following objectives:

  1. Develop commercially viable and globally applicable low-carbon alternatives to red diesel, looking at long-term solutions.
  2. Demonstrate an integrated, low-carbon solution at a moderate scale on site for the quarrying and mining sector, and the construction sector.
  3. Disseminate the learnings and results of the Red Diesel Replacement programme to international stakeholders, industry and other diesel-using sectors.
  4. Inform policy teams on the potential of these low-carbon alternatives and create awareness of the spin-off opportunities for other sectors (e.g. maritime, aviation and road freight).
  5. Deliver match funding from industry.
  6. Accelerate the commercialisation of low-carbon red diesel alternatives.

Projects must provide an end-to-end solution, made up of multiple component technologies, for replacement of equipment that currently uses red diesel at a construction, mining or quarrying site. Projects must include the end-to-end solution which encompasses the following stages in a single project:

  • Generation (e.g. producing electricity via a solar farm) or
  • Production (e.g. taking a feedstock and converting it to a particular fuel)
  • Distribution and storage, including refuelling/energy delivery
  • End use

An example would be a renewable energy installation producing electricity which is then converted to hydrogen and transported to a construction site where it is used in a piece of equipment to do mechanical work.

Fuel / Energy Production: Projects must support or align to a technology that uses one or more of the following long-term energy vectors:

  • Hydrogen
  • Direct electricity
  • Battery
  • E-Fuels (E-Diesel, E-Methanol, E-Methane)
  • Ammonia
  • Renewable dimethyl ether (rDME)
  • Renewable Transport Fuel Obligation (RTFO) Development Fuels (segregated waste fats/oils are not eligible)

Applications must be led by private organisations or research and technology organisations (RTOs) and may not be led by universities or non-commercial organisations.

For more information, FAQs, and details from the briefing, see the link below.


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