ZEVI: Alternative fuel vessels and refuelling infrastructure

Overview

Innovate UK, part of UK Research and Innovation, will work with the Department for Transport (DfT) to invest up to £77 million in innovation projects. These projects will develop, deploy and operate clean maritime solutions for 3 years in a real world environment.

The Zero emission vessel and infrastructure (ZEVI) competition is part of a suite of interventions being launched by the UK Shipping Office for Reducing Emissions (UK SHORE), part of DfT. They aim to transform the UK into a global leader in the design and manufacturing of clean maritime technologies.

Scope

The aim of this competition is to fund:

100% battery electric vessels
alternative fuel vessels
vessel energy efficiency technology, such as wind assistance
vessel charging infrastructure
shore power and corresponding vessel technology
alternative fuel refuelling infrastructure for vessels

Your project must focus on alternative fuel vessels and their corresponding infrastructure. Alternative fuel electric hybrid vessels are within scope. “Alternative fuels” in this competition refers to fossil fuel alternatives such as hydrogen, ammonia and methanol. The infrastructure must be able to refuel the vessels for the requirements of their operational activities.

Your project can include multiple vessels and infrastructure locations and demonstrate a wide range of operational profiles. A project with a single vessel and single infrastructure location will be in scope if this is appropriate for the operational activities of that vessel.

Your project will be funded from the agreed start date up until 31 March 2025, for costs associated with:

project delivery
vessel development
infrastructure development

You must demonstrate all funded vessels and infrastructure for 3 years, at your own cost, ending 31 March 2028.

You must engage with the Maritime and Coastguard Agency (MCA) during the project. The MCA may also contact successful projects to discuss the details of your project. Failure to engage with the MCA when requested could result in your project being suspended or funding withdrawn.

Your proposal must:

define the 3 year deployment and demonstration that you plan to conduct, including all associated costs and the range of operational use cases
focus on maritime and the development of a sustainable and scalable approach to zero emission vessels and infrastructure
present a well-rounded and industrially driven consortium capable of rapid deployment
evidence that you can acquire or build vessels and supply the infrastructure needed to carry out a successful demonstration in the required timeframe
define a long term strategy to decarbonise this sector, with a viable commercialisation route to expanding nationally and internationally

Technologies for all sizes and categories of maritime vessel subject to the Merchant Shipping Act 1995 are in scope. Solutions and demonstrations can be suitable for one target size of vessel or multiple types. Pleasure and commercial vessels are in scope.

The vessel must be a United Kingdom ship, as defined in 85(2) of the Merchant Shipping Act 1995, or you must provide clear justification for use of a non-United Kingdom ship in your application.

All ports and harbours are in scope, including infrastructure for freight, passenger, pleasure and commercial vessels. Offshore infrastructure is also in scope, such as wind farms.

Innovate UK encourage projects from around the UK:

to support boosting jobs and economic growth
including ports, vessel operators, vessel manufacturers and their supply chain

Innovate UK welcome projects from areas with existing clean maritime expertise or co-located in clusters of renewable energy production and usage including hydrogen.

You must clearly demonstrate how you will anchor Intellectual Property (IP) generated by the project in the UK and how it will be exploited for the benefit of the UK supply chain in the future.

The 3 year demonstration period should take place in UK waters wherever possible. International vessel operations with a UK registered vessel are only acceptable where fully justified and the benefit to the UK clearly explained. We will not fund international infrastructure or operations originating outside the UK.

Your project must:

demonstrate operational utilisations of vessels and infrastructure
operate zero emission vessels in various types of locations and sea states, whilst performing a range of duty cycles to reflect the variety in vessel operations
ensure all vessels and infrastructure funded in your project are in operation by 31 March 2025, vessels can be deployed earlier or in stages if desired
ensure adequate training is provided for all those using the vessels or infrastructure
ensure there are appropriate repair and maintenance provisions for your vessels and infrastructure during the 3 year demonstration period
share your project’s learning before, during and after your demonstration, both independently and by supporting activities organised by the funders or their agents
collaborate fully with organisations responsible for regulation, safety and incident response to conduct a safe demonstration
maximise UK value in terms of supply chain and deployment

Vessel specific requirements for Strand 3

You must:

focus on use of vessel technology that can be scaled
only use alternative fuel vessels,
ensure any ancillary equipment and auxiliary power provision in use is zero emission, including deck machinery such as cranes
ensure demonstrated vessels meet all safety, regulatory and legal requirements

Alternative fuel electric hybrid vessels are within scope. “Alternative fuels” in this competition refers to fossil fuel alternatives such as hydrogen, ammonia and methanol.

For projects also developing vessel energy efficiency technologies, you must focus on technologies that significantly increase the range and endurance of the vessel. You can also focus on technologies that are critical to lowering fuel usage to reach commercial viability, including wind propulsion.

Infrastructure specific requirements for Strand 3

You must:

ensure all proposed infrastructure funded through the programme, is accessible to other operators outside the consortia by appointment and at a suitable market rate
ensure infrastructure is located to enable a variety of operations, potentially including offshore refuelling
utilise a proportion of infrastructure capable of refuelling multiple vessels rapidly and back-to-back
ensure use of hydrogen that meets the UK’s draft low carbon hydrogen standard, such as that produced using renewable electricity
meet all safety, regulatory and legal requirements
align with current and emerging international standards
describe any decommissioning that is required at the conclusion of the demonstration, infrastructure which can viably be repurposed does not require decommissioning

Projects can use existing or planned infrastructure where it is compatible with their demonstration.

Your project can focus on one or more of the following:

domestic green corridors
ferry services, including between islands and on inland waterways

Eligibility

Your project must:

have total costs of between £3 million and £40 million
not exceed a grant request of £20 million
start by 1 October 2023
claim all grant funding by 31 March 2025
complete a 3 year demonstration of all funded vessels and supporting infrastructure
carry out all of its project work in the UK
intend to exploit the results from or in the UK

The funding period for your project can last for a maximum of 20 months, the project funding period.

You must complete your funded project and 3 year demonstration of all vessels, with corresponding infrastructure, no later than 31 March 2028.

You must only include eligible project costs in your application.

Under current restrictions, this competition will not fund any procurement, commercial, business development or supply chain activity with any Russian and Belarusian entity as lead, partner or subcontractor. This includes any goods or services originating from a Russian and Belarusian source.

To lead a project your organisation must:

be a UK registered business of any size,
be a ship owner or manufacturer or operator (ship as defined in the Merchant Shipping Act (MSA) 1995 Section 313(1)), or an infrastructure owner or operator, such as a port or windfarm
collaborate with a UK registered infrastructure owner or operator if you are a ship owner, manufacturer or operator
collaborate with a UK registered ship owner, manufacturer or operator if you are an infrastructure owner or operator

More information on the different types of organisation can be found in our Funding rules.

Non-UK business can apply to this competition in reference to activities they are planning to undertake in the UK. The business must be registered in the UK before any funding can be awarded and all work must be undertaken in the UK.

Trust ports and Municipal ports will be treated as businesses.

Academic institutions cannot lead or work alone.

Your project can include partners that do not receive any of this competition’s funding, for example non-UK businesses. Their costs will count towards the total project costs.

Subcontractors are allowed in this competition.

Subcontractors can be from anywhere in the UK and you must select them through your usual procurement process.

You can use subcontractors from overseas but must make the case in your application as to why you could not use suppliers from the UK.

There is no limit to how many applications an organisation can submit in this competition, either as a lead or partner.

If you are involved in more than one application, you must clearly state how all projects can be resourced and delivered if successful.

You can use a previously submitted application to apply for this competition.

Exclusions

Innovate UK are not funding projects that:

do not meet the scope and objectives of this competition
focus only on increasing the efficiency of current conventional fossil fuels and fossil fuel powertrains of maritime vessels
are focusing on on-vessel power generation and fuel production to reduce greenhouse gases (GHG’s), for example, wind turbines, solar panels, synthetic fuel production
are focusing on nuclear technologies
are focusing on personal watercraft (PWC)
propose a demonstration using ancillary equipment that is not zero emission, for example deck machinery
have significant proportion of costs focussing on standard grid capacity upgrades
include costs for alternative fuel or energy production
include costs for purchasing land or for generating electricity
have failed to demonstrate the resources to deliver multiple zero emission vessel and infrastructure (ZEVI) projects if applicable

Innovate UK cannot fund projects that are:

dependent on export performance, for example giving a subsidy to a ship builder on the condition that it exports a certain quantity of ships to another country
dependent on domestic inputs usage, for example giving a subsidy to a ship builder on the condition that it uses 50% UK product in their ship

Funding Costs

Up to £77 million has been allocated to fund innovation projects across the three strands of this competition. Funding will be in the form of a grant.

You can request funding for your eligible, capital project costs and your non-capital research and development (R&D) project costs. These costs must be listed separately in your application.

Your total grant request must be no more than £20 million against your total project costs.

If successful you will not be able to:

reassign capital costs to R&D costs
reassign R&D costs to capital costs
increase the amount or proportion of grant funding you are requesting for capital costs or R&D costs

The total funding available for the competition can change. The funders have the right to:

adjust the funding allocations between the three competition strands
apply a portfolio approach

Your proposal must demonstrate value for money and your grant funding request must be the minimum needed to make your project viable.

We will work with successful projects to enable funding to be claimed and drawn down, to support interim payments defined as part of key commercial agreements between project participants and suppliers. If successful you will be required to evidence commercial agreements with suppliers and draw down the grant according to milestones and terms stated within the agreement.

All funding for your project must be claimed and drawn down by the 31 March 2025. Your demonstration must continue until 31 March 2028 at the participants’ own costs.

Research and development costs (non capital costs)

If your organisation’s work on the project is commercial or economic, your funding request must not exceed the limits below. These limits apply even if your organisation normally acts non-economically but for the purpose of this project will be undertaking commercial or economic activity.

For industrial research projects, you could get funding for your research and development (R&D) eligible project costs of:

up to 70% if you are a micro or small organisation
up to 60% if you are a medium sized organisation
up to 50% if you are a large organisation

For experimental development projects which are nearer to market, you could get funding for your research and development (R&D) eligible project costs of:

up to 45% if you are a micro or small organisation
up to 35% if you are a medium sized organisation
up to 25% if you are a large organisation

During the funding period to 31 March 2025, you can claim for ‘repair and maintenance’ contracts related to vessels or infrastructure. You can also forecast and claim for ‘repair and maintenance’ contract costs that are required for your demonstration phase to 31 March 2028.

These costs are separate from the cost of purchasing the vessels or infrastructure and must be listed within the Innovation Funding Service finance section as part of your ‘research and development’ costs.

All your related Capital Costs must be submitted separately on the capital costs spreadsheet provided.

Separating these costs will allow Innovate UK to support you in receiving the appropriate level of funding. Funding can only be claimed until 31 March 2025, claims that fall after that date cannot be supported.

All repair and maintenance contracts and any other goods or services offered or purchased between project partners, must be delivered without profit for the purposes of this competition.

Research participation

The research organisations undertaking non-economic activity as part of the project can share up to 5% of the total eligible project costs. If your consortium contains more than one research organisation undertaking non-economic activity, this maximum is shared between them.

Of that 5% you can get funding for your eligible research and development (R&D) project costs of up to:

80% of full economic costs (FEC) if you are a Je-S registered institution such as an academic
100% of your project costs if you are an RTO, charity, not for profit organisation, public sector organisation or research organisation

Within the 5% limit of the total eligible project costs, research organisations can get funding for eligible capital project costs of up to 80%, subject to the capital cost funding rules.

Eligible capital costs

Your application can include the purchase of capital equipment as an eligible project cost for large-scale demonstration projects. Investments must be relevant to the project and the maximum intervention rate on these purchases is up to 80% grant for the duration of the project up until 31 March 2025 for all organisations.

As part of your application, you must calculate the net cost of any capital usage of capital equipment. This must exclude any usage after the project end or any usage that is not part of your project.

You must estimate the residual value and we may independently value capital equipment at the end of the project. Where there is a discrepancy which results in you exceeding the rate of subsidy you have been awarded, this will need to be redressed.

Your eligible project capital costs must be the purchase, construction, or upgrade of research resources, including vessels and infrastructure, that perform economic activities.

Your total eligible project capital costs must be the investment costs in intangible and tangible assets. These can relate to vessels or refuelling stations.

Access to the infrastructure for their operation or use must be open to several users outside of the project, without discrimination and be granted on a transparent basis. Users must be charged the appropriate market price.

If an organisation has financed at least 10% of the investment costs of the project infrastructure, it can be granted preferential access under more favourable conditions. The access must be in proportion to the organisation’s contribution to the investment costs and access conditions must be made publicly available, unless within a restricted area.

Innovate UK will work with successful projects to independently evaluate the programme by collecting data on several factors related to your vessels, infrastructure and wider demonstration. The outcomes of the project will be made openly accessible, however, any sensitive data will be anonymised and remain confidential.

Within a capital infrastructure project involving businesses or collaborations with business and research organisations, if your organisation’s work on the project is commercial or economic, your funding request must not exceed the limits set out in this scope. These limits apply even if your organisation normally acts non-economically but for the purpose of this project will be undertaking commercial or economic activity.

Where you are conducting commercial or economic activities (which may include research organisations) as part of the project, you can claim grant funding up to 80% of their eligible project costs. The funding rates are a maximum rate, the funding you request should be the minimum amount to make your project viable.

Funding cannot be used to reduce the total cost of vessel operations below the cost of fossil fuel vessel operations. You will have to submit details of your capital costs as part of your application.

You could get funding for your eligible project capital costs for the duration of the project up until 31 March 2025 of up to 80% of your investment into:

alternative fuel vessels used for your demonstration
refuelling stations used for your demonstration

You will have to provide a cost breakdown for this in your application. Y

Innovate UK may contact applicants for further information related to your capital costs after your application has been submitted.

If successful you may be required to claim funding awarded for capital costs separately to your projects R&D costs.

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