Notice

Phase 1 Red Diesel Replacement competition: questions and answers

Updated 31 May 2022

This notice was withdrawn on 29 August 2024

This competition is now closed. We have published a list of the Phase 1 successful projects.

These are answers to frequently asked questions and questions that were asked at the competition launch webinar on 27 September 2021.

Questions 1 to 23 were published on 11 October. Questions 24 to 32 were published on 21 October.

Part 1: Frequently Asked Questions

1. When can I apply for Phase 1 of the Red Diesel Replacement competition?

The competition opened for applications on 27 September 2021 and will close at 2pm on 22 November 2021.

2. How can I apply?

Applications must be submitted online by the deadline. Applicants must register for a password to access the online application form. Registration closes on 15 November 2021.

3. Do I need to have registered my expression of interest by 27 September 2021 to be able to apply for Phase 1 of the competition?

No, you do not have to have registered your expression of interest to apply for the competition.

4. When will applicants be notified about the results of their applications?

Applicants can expect to be notified in early January 2022, depending on the number of applications we receive. Letters will be sent to successful and unsuccessful bidders.

5. When are Phase 1 projects expected to start and finish?

Phase 1 projects are expected to start from the end of January 2022 and have 11 months to finish by 30 December 2022.

6. When can I apply for Phase 2 of the competition?

Phase 2 of the competition will launch in the first quarter of 2023.

7. When are Phase 2 demonstration projects expected to start and finish?

Phase 2 demonstration projects are expected to start in the second quarter of 2023 and finish by 31 March 2025.

8. I need help finding partners to form a consortium in Phase 2. Are you planning to do anything to help?

The Department for Business, Energy and Industrial Strategy (BEIS) is planning to organise match-making events to help organisations find partners to form consortia for Phase 2. These events are planned to take place in July 2022 and in the fourth quarter of 2022 (final date to be confirmed).

9. Is the competition open only to UK based organisations? Can non-UK based organisations lead a project?

The competition is open to all organisations, independent of where they are based. Projects can work with international partners, but at least 50% of the project’s costs must be incurred in the UK. It is preferred that the demonstration of technologies will be at a UK site, but can be at a non-UK site if this can be shown to be reasonably justified.

Non-UK based organisations can lead a project, however, please note if successful we would expect organisations to provide appropriate financial information about their organisation to pass due diligence.

10. What is the maximum amount of funding that BEIS will provide per project?

BEIS can provide up to £460,000 for each project.

11. Can I submit more than one application as a lead applicant?

Lead applicants can submit (and be awarded) more than one application for grant funding in Phase 1, but applications must be materially different. Lead organisations may only enter one application into each Lot as the project lead.

12. Can my organisation apply as part of multiple consortia?

Consortium member(s) can take part in multiple successful bids. However, if project consortium member(s) are part of multiple successful bids they must be able to deliver on all of them and they must not have applied for funding for the same piece of work more than once. BEIS will not provide more than £2.5 million to a single organisation in Phase 1.

13. Can my organisation apply for more than one Lot?

No, applicants must select one Lot in the application form. If a project covers multiple Lots then the applicant should identify the primary Lot which best represents their project. All Lots will be evaluated against the same assessment criteria.

14. Who will be reviewing and scoring the applications?

Applications will be assessed by 3 independent assessors (internal and external to BEIS).

Part 2: Questions from the competition launch webinar

15. Can rail in any way such as rail freight aggregate transport be considered or qualify as construction?

No, rail freight aggregate transport would not be considered or qualify as construction, mining, or quarrying.

16. Are both phases open to single company applicants and consortiums or is it consortiums only?

Individual organisations as well as consortia are welcome to apply for both Phase 1 and Phase 2. There is no explicit requirement for collaborative applications.

17. Can the project be led by an academic/research organisation, or does the lead need to be from industry?

The project can be led by any organisation, including an academic or research organisation, but the role as lead partner should be justified within the project application. The lead organisation can only submit one application as the lead applicant but be part of a consortium in other proposal(s) if the innovation is materially different.

18. Are academic partners permissible if supporting technology development in industrial research?

Yes, academic partners can support technology development in industrial research.

19. Is there a cap on the proportion of overall project costs that can be drawn down by research organisations?

Research organisations (see definition in Section 5 of the competition guidance) that are not higher education institutions can claim 100% of project costs so long as they do not claim any central funding from government for research. Universities can only claim costs at 80% of the Full Economic Costs (FEC) calculated using the Transparent Approach to Costing (TRAC) methodology.

Note that in all cases these organisations must only be undertaking non-economic activities. Non-economic activities are those which could not be completed and delivered by private sector organisations, like performing a public function and not placing goods or a service on a competitive market. For example, the provision of consultancy services to businesses or to government or the provision of contract research services would qualify as an economic activity.

Research organisations which are engaged in economic activity as part of the project will be treated as business enterprises for the purposes of funding and the grant intensity which is relevant to the size of that organisation and type of activity being carried out would apply.

It is possible for research organisations to carry out a mixture of non-economic and economic activities in which case different grant intensities will apply to the different categories of work.

20. This competition appears to exclude any and all technologies or solutions to dramatically reduce emissions from diesel, even if zero particulate, etc. output. Is that the case? If so, isn’t that rather short sighted?

Those technologies to reduce emissions from diesel are not excluded, however the technology proposed must be at Technology Readiness Level (TRL) 4 to 7 at the start of the project. The competition aims to develop technologies to decarbonise the entire supply chain, from fuel production to distribution, storage and energy delivery, and the use of the fuel in equipment, with a focus on longer-term energy pathways identified as electricity, hydrogen or ammonia, and e-fuels (e-diesel, e-methanol and e-methane).

21. Are all Biomass feedstocks considered to be in the short term or would feedstocks that would be considered as waste still be ok going forward?

Eligible biomass feedstocks are those waste derived feedstocks that meet the definition of ‘development fuels’ as set out in the Renewable Transport Fuel Obligation guidance part 2: carbon and sustainability guidance year 2021.

Recycled carbon fuels are also eligible subject to the guidance provided in the competition guidance. Please refer to Section 3 of the competition guidance for further details.

22. Is there a separate programme for agriculture, which are huge users of red diesel, and with seasonal shift patterns? Combine harvesters run up to 20 hours every day and are then idle for over 8 months.

Agriculture is not a target sector for the Red Diesel Replacement competition as the sector is not affected by the red diesel rebate removal announced in 2020. However, we note that the technologies developed from this competition will also be applicable to other sectors, such as agriculture, to support decarbonisation.

Further cross government work is required to develop policies to support the deployment of technological solutions and required infrastructure in specific sectors including industry, agriculture, transport and buildings. Relevant departments will work together to ensure a coherent approach.

23. How do I find the contact details of participants?

Cenex sent an email to attendees of the competition launch webinar containing an opt-in declaration for contact details to be shared. If you have opted-in, you should have received the contact details. However, if you have opted-in but have not received this information yet please email RDR@beis.gov.uk.

Part 3: Anonymised questions received

24. How would match funding work if the total grant of the project is below or equal to £460,000? Does match funding only apply if the total grant value exceeds £460,000?

All organisations must provide match funding for their project, except for non-university Research Organisations where BEIS can provide up to 100% funding. The maximum amount of aid that BEIS can provide organisations is shown in Table 4 within Section 5 of the competition guidance. The maximum amount of funding that BEIS can provide per project is £460,000. For example, a large-sized, single organisation submitting an Industrial Research project worth £350,000 would be able to claim a up to 50% of its costs and must provide evidence of how the other 50% of costs would be funded.

Acceptable sources of match funding include private investment (subject to financial due diligence), bank loans, company’s own cash reserves, in-kind contributions, and donations. Please note that where private investments are concerned, projects must provide evidence of this investment within 3 months of the project starting, or the grant may be terminated. Additionally, in-kind contributions must be quantifiable, eligible, recorded and evidenced, and actual costs.

Unacceptable sources of match funding include, but are not limited to, other public-sector funding, funding granted to another project, illegal or fraudulent activity, and contributions of things which are considered ‘ineligible costs’ e.g., value of intellectual property.

Please refer to Appendix 1 of the competition guidance for a list of eligible and ineligible costs.

25. If an RTO participates as a partner in a collaborative ‘industrial research’ project with a consortium involving large and medium sized companies, would the RTO be able to receive 100% of the costs or would it be limited to 65%?

For collaborations containing different sized enterprises or Research Organisations, funding intensity is related to the size and type of the organisation receiving the grant funding, and the type of innovation activity being carried out. Non-profit research and technology organisations (RTOs), including Catapults, and other Research Organisations defined in Section 5 of the competition guidance, can claim up to 100% of the eligible project costs when these organisations are carrying out non-economic activities. See answer to question 5 for the definition of non-economic activities.

26. Can we cost in-kind support, for example, time spend of the project by industry partners etc. to cover the match funding?

It is possible for an organisation to provide other resources such as land, equipment and manpower, to the project as a private investment in lieu of a cash injection. Staff time spent on the project, paid by yourselves or another partner and evidenced in the project costs breakdown form, would be accepted as match funding contribution. Contributions, like all eligible project costs, must be quantifiable, eligible, recorded and evidenced, and actual costs. Any cost which is considered ineligible to be covered by the grant will not be accepted as a contribution. Please refer to Appendix 1 of the competition guidance for a list of eligible and ineligible costs.

Would time spent on the project by our staff, costed at an agreed (non-profit) hourly cost rate, evidenced against timesheets, count towards our matched funding contribution?

Staff time is an acceptable form of match funding. To price staff time you should include all direct costs relating to and including salary e.g., national insurance contribution, company car etc. This costing should not include overhead rates, these are ‘indirect costs’ and should be calculated separately.

27. There is clear guidance regarding the level of funding available dependent on the size of each business. Is there an overall match funding requirement on a project basis? For example, irrespective of the make-up of the project consortium, the total funded amount will only be 50% (as per some competitions such as APC).

BEIS will fund up to £460,000 per project.

28. I would like to understand if a novel fuel additive (that works with all liquid fuels: fossil, bio-derived, other) would be in-scope in Lot 3 for the possible match-making phase later in the competition? We have a fuel additive that has the potential to alter the combustion process to reduce the formation of NOx and other harmful gases, as well as improving overall fuel efficiency. Would our technology be eligible?

No, the development and use of additives in fuels is not within the scope of the competition.

29. Can Phase 1 grant funding be used to conduct a feasibility study for a Phase 2 demonstration project?

Phase 1 activities can include feasibility studies elements pertaining to component technologies for fuel production, distribution, storage and energy delivery systems, fleet management and equipment. Phase 1 projects are however expected to demonstrate such component technologies ready for Phase 2 system-level demonstration. Please refer to Section 3.4 and 3.5 of the competition guidance for more details on the Phase 1 outputs.

30. We would like to explore options for retrofitting specialised vehicles for construction & quarrying that currently use red diesel with hydrogen fuel cells. Would this be eligible for this competition?

Yes, this project would be eligible under under Lot 2: Development of equipment and fleet management infrastructure. Hydrogen fuel cells is considered an eligible technology.

31. I wanted to enquire about partnerships with technology companies who may want to join a consortium with us.

See response to Question 8 for Phase 2.

32. Would it be possible to have a copy of the presentation from the RDR Phase 1 launch?

The recording, presentation slides and transcript from the RDR Phase 1 competition launch webinar held on 27 September 2021 are available on the RDR competition webpage.