Business grants

CO2 Utilisation Challenge

CO2 Utilisation Challenge

Carbon Capture and Utilisation (CCU) refers to the opportunity to use captured CO2 in chemicals, fuels and materials production. CCU can potentially cut emissions, support sustainable manufacturing and circular resource use, and develop new income streams for Scottish businesses. If you're developing technology that could commercialise CO2, you can apply for funding support.

About the challenge

Are you developing technologies for the conversion of CO2 into a higher value product in Scotland? Or do you have an industrial site with CO2 emissions that you want to convert to create value?

If so, the CO2 Utilisation Challenge Fund could help support your move towards commercialisation.

Your project should be focused on the development of technology to use CO2 as a feedstock for conversion to a more valuable product. The fund is intended to support projects that will target pilot-scale or pre-commercial deployment of CO2 utilisation technology in an industrial setting within three years.

This fund is run by Scottish Enterprise on behalf of Scottish Government. It's being provided as part of the Scottish Government’s Programme for Government 2020/2021 commitments.

We want to ensure Scotland stays ahead of the new industrial opportunities that carbon capture, utilisation and storage deployment offers.

Promising early work shows that CO2 utilisation has real potential to help develop a circular economy. Research also suggests that it could provide opportunities for our workforces and economic benefits for a range of different sectors.

That's why we're supporting these emerging technologies through our £5 million CO2 Utilisation Challenge Fund, run in partnership with the Scottish Government.

How much funding is available?

The challenge grants are contributory. They cover up to 50% of incurred eligible costs, after the successful applicant submits evidence of expenditure.

Grants are expected to be in the range of £150,000 to £500,000. However, larger grants may be available for exceptional projects.

Who's eligible for this funding?

To be eligible for this grant, your business must:

  • Be able to deliver your project within 24 months
  • Be able to deliver key outcomes
  • Be committed to fair work and net zero principles

To be eligible for this grant, your project must:

  • Represent a significant innovation for your company and have strategic importance to your company
  • Deliver commercial benefits to Scotland’s economy
  • Result in a product, process or service which will be able to compete in a global marketplace
  • Create or safeguard R&D jobs
  • Include eligible costs

Which activities can this grant support?

If you're a business in Scotland running a project that will convert CO2 into a more valuable product, this grant can provide you with financial support for:

  • Conducting market research
  • Product, process and technical design and development
  • Assessing project feasibility, financial analysis, appraising options and preparing a business case for investment
  • Identification of productivity improvements
  • Intellectual and property search and advice, patents, trademarks including licencing fees, and legal advice costs
  • Costs associated with securing and/or acquiring technology rights
  • Third party work that delivers a tangible output, for example the creation of samples and prototypes, and fees for trials and testing
  • Gross salary for staff and management working directly on the development aspect of the project (using project costing spreadsheet)

Eligible costs

The costs you can claim against for this grant are:

  • Internal staff time (only for time spent working on the project)
  • Temporary specialist (on payroll)
  • Graduate placement (on payroll)
  • Consultancy (not on payroll)
  • Sub-contractor costs
  • Materials (consumable materials only, from multiple suppliers)
  • Capital Equipment that is used exclusively for the purposes of the development of the proposed project (depreciation only) 


Funding is currently available from 11 April 2022 until 31 March 2024. But please get in touch even if your project doesn’t fit within this exact timescale, as the team is happy to discuss alternative options.

How to apply

If you would like to discuss a potential project with us, please get in touch using the fields below and one of our team will reply to you as soon as possible to discuss next steps.

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