The new building, which will be carbon neutral in operation, will be the global centre of R&D and manufacturing for two key technologies on the path to net zero.

The £25m inward investment – by Danish family-owned multinational Danfoss – will be home to Danfoss Editron which develops electric and hybrid powertrain systems for heavy-duty vehicles, and to Digital Displacement – a technology conceived at the University of Edinburgh which will radically reduce energy consumption in hydraulic machines.

Danfoss estimates that global adoption of these two technologies could reduce the lifetime CO2 emissions of excavators alone by 80 Megatonnes (Mt) by 2030 – equivalent to the entire annual CO2 emissions of Scotland and Denmark combined.

The flagship centre at Shawfair Business Park in Midlothian will complete next year and will be carbon neutral in operation. The building will recover energy used during production and testing, with a heat pump available as a backup if required, whilst the building’s electricity consumption will also be covered by a green power purchase agreement. The facility is being developed by Buccleuch Property

Brian Kennedy, director of operations from Danfoss Scotland, said: “This building will be Danfoss’s first carbon neutral manufacturing facility and demonstrates the company’s commitment to become CO2 neutral in all global operations by 2030, at the latest.

“Danfoss believes that energy efficiency, electrification and increasing integration between energy use and supply are the key steps to a sustainable future. With this building and these technologies, we believe we are contributing to this goal.

“Scotland is the natural home for this facility. Digital Displacement is a Scottish invention and brings with it a skilled and growing workforce which we aim to increase further in the years ahead.”

The ongoing development and commercialisation of the two technologies is being supported by the UK’s Advanced Propulsion Centre and Innovate UK.

In 2018, Danfoss, together with partner Robbie Fluid Engineering, secured £11m from APC towards the company’s £22m Digital Displacement programme, aimed at radically reducing energy consumption in off-road machines.

In 2021 Danfoss Editron, together with partners Meritor and Electra Commercial Vehicles, secured £15.9m APC funding towards a £31.9m programme to develop zero-emission electric powertrains for heavy vehicles.

Jon Beasley, business development and programmes director for APC, said: “I’m incredibly proud to be part of this landmark moment for Danfoss.

“It is great to see how an APC-funded project, to create next-generation low-carbon technologies, has catalysed additional investment from an overseas parent company who recognise the UK’s innovation capability and the growth opportunities that presents.

“It demonstrates that with the right support, the automotive sector can prosper, delivering jobs, inward investment and huge progress towards net zero.

“The Danfoss technology we are supporting with APC funding is a brilliant example of a project that accelerates the UK’s ambitions to remain a leader in net zero automotive innovation and engineering, that focusses on the heavier duty segment of the industry.”