Applications are being welcomed from industrial, commercial and community sectors after the fund was launched by Climate Change minister Phil Woolas.
Capital grants are available to public and private limited companies, from smaller businesses such as pubs, clubs, shops or farms, through to offices, golf courses, recycling centres, supermarkets and stately homes. Larger businesses including breweries, food processing companies and airports can also apply.
Schools, colleges, universities, hospitals, local authorities, housing associations and charities can also apply. Projects can cover biomass through to biodigesters.
Mr Woolas said: 'We have to take serious steps to tackle climate change by reducing our carbon footprint. As almost half of our CO2 emissions are the result of heating buildings or water or for industrial processes, switching our dependence on fossil fuels to more energy efficient equipment makes sense.
'Funding to support the installation of biomass-fuelled heat boilers and combined heat and power plants can really make a difference and I invite all those who are eligible to apply.'
Grants will be available for up to 40 per cent of the difference in cost of installing the biomass boiler or combined heat and power plant compared with the installation of a fossil fuel alternative.
The maximum grant for each project will be £100,000. There is a six week application window and no minimum grant threshold.
For full details, guidance notes and application forms click here.