Chemical industry support raises decarbonisation funding questions
IChemE’s Budget response highlights competitiveness measures alongside reduced capital grants
The Institution of Chemical Engineers has welcomed industrial support in its response to the UK Government’s 2026 Budget, while raising concerns about decarbonisation funding. Its announcement highlights the £350 million Critical Chemicals Resilience Fund, planned for launch before year-end, and electricity-cost reductions for eligible manufacturers from April 2027.
IChemE also reports reduced capital grant funding for carbon capture, utilisation and storage and hydrogen projects. It says the government intends to prioritise mature projects and explore alternative investment models, but questions how emerging technologies will reach commercial deployment.
Why this matters for policymakers
- Delivery scrutiny Assess whether fund eligibility protects strategically important chemical supply chains.
- Investment certainty Clarify replacement financing routes and transition arrangements for viable decarbonisation projects.
- Joined-up assessment Examine electricity support and capital funding together when assessing industrial emissions policy.
Image: Illustrative photograph of BASF’s chemical plant in Portsmouth, Virginia, United States, not a UK facility receiving the announced support. Photograph: William Grimes, public domain. William Grimes at English Wikipedia, Public domain. Resized and converted to JPEG for display.