Innovation support

Low Carbon Challenge Fund

Low Carbon Challenge Fund (LCCF)

LCCF Stage 2 is now closed. LCCF provides competitive grant funding for academic institutions, public bodies, and third-sector organisations in the Lowlands and Uplands (LUPS) area of Scotland to support initiatives helping Scottish SMEs to unlock global opportunities of the climate emergency.

About the fund

Academic institutions, public bodies and third-sector organisations in Scotland can receive competitive grant funding to support initiatives that will help small and medium-sized enterprises (SMEs) in Scotland to unlock global opportunities of the climate emergency and in doing so contribute toward Scotland’s target of reaching net zero emissions by 2045.

Up to £6 million of European Regional Development Fund (ERDF) grant funding is currently available. Grant funding will be awarded on a competitive basis. Its aim is to support the creation of a national network of regionally-based initiatives, to stimulate and improve innovation in SMEs.

One key element of the fund will be for initiatives to support SMEs in preparing for new market opportunities which are emerging as a result of the global climate emergency and in the drive towards net zero emissions. Some examples of these opportunity areas include but are not limited to:

  • Low carbon transport
  • Low carbon heat
  • Water technology
  • Hydrogen
  • Energy efficiency
  • Offshore renewables
  • Local energy systems
  • Carbon capture usage and storage

The overall aim of the LCCF is for projects to be of a scale and level of ambition to enable SMEs to unlock the opportunities of the climate emergency and contribute toward achieving Scotland’s net zero target, leading to long-term transformational change.

LCCF projects

Advancing Manufacturing Challenge Fund (AMCF)

Find out about the AMCF Projects offering support to SMEs.

Cluster Builder Services

Project themes

Preparing the workforce

Developing and encouraging SME leaders, and/or senior management to:

  • Take proactive steps to develop a culture that future-proofs their business by focusing on the other themes listed
  • Increase the capacity and diversity of the workforce, creating a culture of continuous learning to foster innovation and support transition to new low carbon products and services


Supporting SMEs to be more innovative:

  • Supporting SMEs to invest in the development of new products, services and/or processes to the market or to the firm - for example, access to test laboratories or test sites
  • Helping SMEs build collaborations - for example, building consortia to apply for other funding opportunities and/or project sponsors
  • Accessing expert advice and support in developing low carbon solutions
  • Increasing business expenditure on research and development (BERD)

Supply Chains

Supporting SMEs to:

  • Identify opportunities for the creation of new supply chains for cross-sectoral opportunities within low carbon
  • Strengthen existing low carbon supply chains - for example, enhancing availability of data in terms of supply and demand and linkages with Tier 1 suppliers

Responding to new, growing or shifting markets

Supporting SMEs to access expert advice on:

  • Direction of low carbon/climate change and impact on existing markets
  • Preparing future strategies and business modelling support
  • Regulation and legislation landscape of low carbon technologies

Preparing pipeline for trade opportunities

Supporting SMEs to:

  • Take innovative services and products overseas
  • Engage with potential international investors/partnerships

The changing nature of the customer

Supporting SMEs to engage with the relevant communities to:

  • Ensure understanding and working with customers to shift behaviours when considering design and adoption of low carbon products and services

Horizontal themes

You'll also need to demonstrate and measure:

  • How you'll include positive approaches to equal opportunities and non-discrimination in the work of the project
  • Equality between men and women
  • How you'll promote sustainable development through the work of the project

Guidance for projects


  • Projects start – 4 January 2021
  • Projects end – by 28 February 2023
  • Projects submit final claim and final report – by 31 March 2023

Got a question?

Get in touch to find out more about this fund