Moving to low-carbon heat sources is crucial in the battle against climate change with nearly half of the UK's emissions coming from heating.

Today more government money becomes available for industry, businesses and community organisations to help towards the cost of buying and installing biomass-fuelled heating and combined heat & power projects, including anaerobic digesters, in England.

Around £12 million in funding is available in the latest round of the Bio-energy Capital Grants scheme. Grants of up to £500,000 are on offer to pay for up to 40% of the difference in cost between a biomass boiler and its fossil fuel alternative.

Launching Round 5 of the Bio-energy Capital Grants Scheme, Sustainable Development and Energy Innovation Minister, Lord Hunt of Kings Heath said: "Nearly half of the UK's carbon emissions come from heating, so it's essential to change how we heat businesses, hospitals, schools and community buildings.

The Government's Bio-energy Capital Grant Scheme makes installing boilers run on biomass much more affordable. "By using biomass fuel to generate their own energy instead of coal, oil or gas, organisations can reduce their carbon impact and take an active role in the fight against climate change.

"We've also recently introduced new legislation which will mean people who do generate their own heat or electricity will be financially rewarded for doing so." So far, through previous rounds of the Bio-energy Capital Grant Scheme, £55 million has been allocated to help set up biomass power stations, biomass-fuelled combined heat and power plants and biomass heating systems.

For example, the Marsden Farms project in Gloucestershire received a grant payment of £87,890 to replace eight fossil fuel boilers with two biomass versions to heat rural office units and accommodation. The project has already seen a 23% reduction in heating bills and estimates saving 205 tonnes of CO2.

Also today, the Department of Energy and Climate Change has proposed changes to Phase 2 of the Low Carbon Buildings Programme. In order to ensure its continued success and to allow organisations such as schools, hospitals, charities and local authorities in the UK to carry on receiving funding for solar photovoltaic projects, a reallocation of £7m of LCBP2 funds has been proposed. Since changes to and promotion of Phase 2 of the LCBP in April, there has been a substantial increase in the allocation of grants across technologies, with particularly high demand for solar PV technologies, which generate electricity using the energy of the sun. Phase 2 Low Carbon Buildings Programme has already allocated £21 million since it was set up in 2006. Notes to Editors 1.

Applications to the Bio-energy Capital Grant Scheme are welcome from industrial, commercial and community sectors in England. This includes public and private limited companies, from pubs, clubs, shops or farms, to offices, supermarkets and stately homes right through to large businesses like breweries or airports. Community organisations like schools, colleges, universities, hospitals, local authorities, housing associations and charities can also apply. The scheme is open to new applications until at least 30 April 2009.

Applications will be assessed on a rolling basis, as and when they are received.