'Fragmented' policies hindering low-CO2 manufacturing

19th February 2013

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EEF calls on the government to outline its vision for low-carbon manufacturing in the UK, warning that incoherent policies and a lack of finance are hampering the sector's efforts to cut emissions

In its latest report, Tech for growth, EEF warns that the UK’s position as a leading provider of low-carbon goods and services, and the manufacturing sector’s ability to reduce its environmental impacts, are under threat.

The manufacturing body calls for cross-party agreement on what a low-carbon manufacturing sector should look like, a wholesale review of existing climate change policy and greater government spending on research and development (R&D) on new clean technologies.

At the launch of the report, Gareth Stace, head of climate and environment policy at EEF, commented that the government lacked an overall strategy for the transition to low-carbon manufacturing. “There are pockets of vision, but they don’t necessarily join up,” he said.

“We need the government to set out its vision of manufacturing’s place in the low-carbon economy, focus more on innovation and provide greater regulatory stability to unlock investment in breakthrough technologies.”

In its report, EEF urges the government to outline a portfolio of low-carbon technologies where there are opportunities to innovate and to match OECD spending on R&D – currently the UK government spends 1% of its R&D budget on environment and energy technologies, compared with the OECD average of 3.7%.

To help manufacturers working to tackle their environmental impacts, EEF calls for a review of enhanced capital allowances, to ensure they are supporting investment in low-carbon technologies, and for the government to ensure that the green investment bank backs projects that would be unable to access funding elsewhere.

The report highlights in particular the challenges facing sectors that produce greenhouse gases as a part of their industrial processes, such as paper, steel, cement and glass manufacture. EEF warns that these sectors are reliant on breakthrough technologies to lower their emissions and that without government support they will find it “extremely difficult to remain economically viable”.

It wants the government to help hard-to-treat sectors by setting out a separate long-term decarbonisation strategy, extending the £250 million package of support for energy-intensive industries to 2020, and to lobby the European Commission to explore moving such sectors out of the EU emissions trading scheme and into their own sector-specific regime.

The report came after the UK’s cement-making sector confirmed that without the development of carbon capture and storage (CCS), its ability to cut carbon emissions in future was significantly limited. In its strategy to cutting carbon emissions to 2050, the cement industry confirmed that it had already cut greenhouse gas emissions by 55% on 1990 levels, and that with CCS it could cut them by a further 26% by 2050. Without CCS, however, it would only be able to make another 7% cut in emissions.

Read a blog from Susanne Baker, senior climate and environment adviser at EEF and author of Tech for growth, on why the UK must invest in R&D to compete in the global green goods sector

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