Grants for Cutting Emissions — and Simple Ways to Get Started

Cutting emissions used to sound like something only big corporates worried about. Not anymore. More clients are asking suppliers about their carbon footprint, energy bills keep climbing, and there’s real money on the table to help smaller businesses make the switch. Here’s what’s available and where to start.

National grants worth checking

Boiler Upgrade Scheme (BUS) — If your business (in England or Wales) is still on an oil, LPG or mains gas boiler, this scheme offers up to £7,500 towards an air-source or ground-source heat pump — rising to £9,000 for off-grid properties replacing oil or LPG heating. Since the April 2026 overhaul, air-to-air heat pumps are eligible too (up to £2,500), you no longer need an Energy Performance Certificate to apply, and installers must deduct the grant from your invoice upfront rather than you claiming it back afterwards. The scheme has also been extended to run until 2030.

Industrial Energy Transformation Fund (IETF) — Aimed at manufacturing and energy-intensive businesses looking to cut energy use through equipment upgrades or process changes. It’s a bigger, more technical scheme, but worth a look if you run a factory, workshop, or production site.

Carbon Trust Green Business Fund — Supports SMEs with grants covering a portion of energy-saving projects, plus free advice on where your business could cut costs. A good starting point if you’re not sure what “energy efficiency” even means for your setup.

Tax relief when you buy the equipment yourself

Grants aren’t the only route — if you’re buying energy-efficient kit outright, several capital allowances let you offset most or all of the cost against tax:

• Full Expensing — Now permanent. Limited companies get 100% first-year relief on qualifying new plant and machinery (heat pumps, solar panels, efficient machinery), cutting your tax bill by up to 25p for every £1 spent.
• Annual Investment Allowance (AIA) — Covers £1 million of qualifying spend a year at 100% relief. This is the one to use if you’re a sole trader or partnership, since full expensing is companies-only.
• 40% First Year Allowance — New from January 2026, for qualifying main rate plant and machinery that doesn’t fit under AIA or full expensing.
• 100% First Year Allowance for zero-emission vehicles and EV chargepoints — Extended to March 2027, useful if you’re electrifying a van or company car fleet.

Worth a quick word with your accountant before you buy — which allowance applies depends on your business structure and what you’re purchasing, and getting it wrong can mean missing out on relief you’re entitled to.

Local and regional grants

This is where it gets interesting — councils and regional bodies across the UK run their own schemes, often with less competition than the national ones. A few examples:

• Low Carbon Dorset — up to 40% of project costs for energy-saving or carbon-reducing investments (Dorset/BCP area only)
• Swansea Carbon Reduction Grant — up to £10,000 towards renewable energy or emissions-cutting changes, with 50% match funding required
• Green Business Grants (BANES & South Glos) — funding for equipment that cuts emissions and utility costs
• Business Sustainability Grant, West Lindsey — covers both equipment (LED lighting, efficient machinery) and services like carbon audits

There are dozens more like these tied to specific councils and regions. The UK Business Climate Hub is the easiest way to search what’s available near you, and many local hubs will also help you write the application.

Simple changes that don’t need a grant at all

Not every improvement needs funding behind it. Some of the biggest wins are also the cheapest:

• Switch to LED lighting — quick payback, immediate energy savings
• Get a free energy audit — several of the grants above include one, and it tells you exactly where your money (and emissions) are leaking
• Review your heating schedule — timers and smarter thermostats can cut waste without any capital spend
• Cut unnecessary business travel — video calls instead of site visits where it makes sense
• Ask suppliers about their own footprint — a five-minute question that can flag easy switches

Where to start

If you’re not sure which route fits your business, the Carbon Trust and your local council’s business support team are both free to talk to and won’t try to sell you anything. Start with a free energy audit if one’s available in your area — it’ll tell you which grants are actually worth applying for, rather than guessing.