Interest-free loans aim to slash energy costs

Interest-free loans will help farmers slash energy bills by a total of £4m, the government has announced.

DEFRA secretary Hilary Benn said loans from the Carbon Trust for £3000-20,000 would encourage farmers to upgrade to more energy-efficient equipment and save 25,000 tonnes of CO2 a year. The unsecured loans will be available from this spring.

The loans are designed to pay for themselves through direct energy savings over one to four years. After the loan is repaid, farmers will make direct savings on their energy costs, as well as cutting the carbon footprint of the food they produce.

Mr 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. But the up-front costs can be prohibitive.”

The loans scheme is part of the Carbon Trust’s Big Business Refit – a nationwide campaign encouraging British businesses to replace old, energy intensive equipment which wastes £3.3 billion a year.

Money has been made available from a £100 million Carbon Trust fund ring-fenced by the Treasury from the 1 April 2009 until the end of March 2011. The loans will be available on a first come, first served basis.

NFU president Peter Kendall said: “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.”

Investing in a new milk cooling system would typically cost £3,000 but could save the average dairy farm up to £1,000 and 6t of CO2 a year. Installing grain drying humidity controls would cost a similar amount but save £1,500 or 10t of CO2 a year.

Farmers cannot apply in advance for the loans, but can register to be contacted once the loans become available by calling 01865 885846. For further information, visit www.carbontrust.co.uk/loans.