British farmers to get interest-free loans for energy saving technology

The loans – ranging between £3,000 and £20,000 – will come on stream in February 2010 through the Carbon Trust. It is estimated that through take up of the loans, the energy bill of the agricultural sector will be cut by £4 million, saving 25,000 tonnes of CO2 emissions. Individual farmers should also be able to save an average £10,000 a year.

The loans scheme is an extension of the Carbon Trust’s ‘Big Business Refit’, a nationwide campaign that encourages British businesses to replace old, energy intensive equipment.

They are being provided to help the farming sector meet the carbon reduction aims laid out in the Government’s ‘Low Carbon Transition Plan’. In the plan, the Government announced a target to reduce agricultural greenhouse gas emissions by three million tonnes of CO2 equivalent annually by 2020.

Environment Secretary, Hilary Benn said: "It makes sense for farmers to reduce the energy they use. It reduces the cost of producing food, and it cuts the environmental impact, too – something more and more consumers are asking about.

The type of agricultural energy efficiency upgrades eligible for Carbon Trust loans include greenhouse horticulture thermal screens, which cost up to £20,000 and can save over £10,000 and 100 tonnes of CO2 annually; milk cooling systems that account for one third of the energy consumption of dairy farms with new systems costing £3,000, saving up to £1,000 and six tonnes of CO2 a year, and upgrading livestock farm heating and ventilation controls, typically costing £3,000, and saving over £4,000 and 23 tonnes of CO2 a year.

The Carbon Trust states the loans are designed to pay for themselves through direct energy savings provided over one to four years – and after the loan is repaid, farmers will make direct savings on their energy costs, as well as cutting the carbon footprint of what they produce.

"Upgrading old equipment using our loans scheme is an excellent way for farmers to be more competitive in difficult times, by cutting their costs and reducing carbon emissions,” said Tom Delay, chief executive, the Carbon Trust.

NFU president Peter Kendall welcomed the loans. "Improving energy efficiency is a win-win situation because it helps cut agriculture’s greenhouse gas emissions as well as saving money for farmers and growers. There are already examples of businesses that have taken simple but effective steps to reduce their environmental impact in this way and I hope these loans will enable others to follow suit."