In October 2008 the Scottish Government launched a new grant aid scheme aimed at SMEs, aiming to increase the competitiveness of small businesses in the biomass equipment and services sector. Under the scheme, £3.3 million has been made available in grants of up to £100,000 to cover up to 50% of the capital costs of installing new biomass heating systems.

£1.6 million was claimed during the first round of funding leaving £1.7 million available during the second round. Applications for second round funding are to be made by 4 September. SMEs which are not eligible to receive support from the Scottish Rural Development Plan are eligible under the Biomass Heat Scheme, and eligible biomass fuel sources include:

  • Woodfuel derived from forestry residues, arboricultural tree management and primary processing.
  • Wood arising from secondary processing, such as furniture making.
  • Recycled wood.
  • Energy crops.
  • Food industry waste.
  • Grain, straw and other agricultural fuel stocks.
  • Silage.

More information, and an application form to apply for funding, can be found on the Forestry Commission's website at