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Public Sector Decarbonisation Scheme | Phase 4 Updates

Ellie Edwardson

6th March 2024

What is the Public Sector Decarbonisation Scheme?

To achieve the government's target of reaching Net Zero by 2050, the Public Sector Decarbonisation Scheme (PSDS) was implemented to assist in reducing carbon emissions of businesses working within the public sector. To achieve this objective, funding has been made available to public sector applicants to support the implementation of energy efficiency and heat decarbonisation methods.

In these figures provided by, a funding pot of £1.17 billion for public sector decarbonisation was confirmed in December 2023:

- £670 million available in 2025 to 2026

- £300 million in 2026 to 2027

- £200 million in 2027 to 2028

Changes in Phase 4 of the Public Sector Decarbonisation Scheme?

Phase 4 has commenced from February 2024, but there are some modifications to the fund distribution process. Applicants can still choose to apply as before, but the process of fund allocation will be different from previous phases. The projects will be allocated through a more focused approach, prioritising the ones that can produce the most significant reduction in carbon emissions. Therefore, the order in which applications are received will not determine the funding allocation.

Further guidelines for Phase 4 are due to be announced in summer 2024.

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