The Department of Transport (DfT) has had expressions of interest from more than 70 organisations in bidding for the funding, which will be matched by industry. The money will be available to projects that produce low carbon waste-based fuels, to be used in planes and lorries.
A feasibility study (72 page / 1.24MB PDF) was carried out earlier this year to support the competition for funding. It found there were a wide range of technologies that could produce renewable fuels suitable for use in aviation and heavy goods vehicles (HGVs), and 12 potential routes to renewable fuels that could be supported through the competition for funding.
According to the feasibility study, funding would be used to develop between three and five “demonstration-scale” projects producing an advanced renewable fuel within three years. If successful, a similar number of commercial plants could be in operation by 2030.
The government said a low carbon transport fuel industry could be worth up to £600 million by 2030.
Last month the UK government announced legislation to ban the sale of new petrol and diesel cars from 2040 amid plans to substantially increase the use of electric cars. Electricity cannot power planes or HGVs due to their weight.
Meanwhile last week the government said it would carry out live trials on technology to help HGVs travel in close proximity to one another before the end of 2018. The trials of 'platooning' could make lorries more efficient, lowering emissions and improving air quality, according to the DfT.