COMMONS

Government must do more to support companies developing new low-carbon products

04 August 2014

The Government is punching below its weight when it comes to support for UK businesses developing innovative low carbon technologies such as smart meters, heat pumps and renewable energy technologies, according to the cross-party Energy and Climate Change Committee.

Tim Yeo, Chair of the Energy & Climate Change Select Committee said

"Entrepreneurs developing exciting new sustainable technologies sometimes need help to bridge the ‘valley of death’ and bring products to market. The Government should be doing all it can to support innovative UK businesses in their efforts to access the growing global market for low-carbon goods and services.

We were surprised and disappointed to hear businesses and academic partners, among others, express continual frustration at the lack of consultation surrounding the Government’s new low carbon strategy. These innovators could hold the key to getting the UK over the line on our carbon emissions targets, but it’s going to be much harder for them to do that without better co-ordination to get us all pulling in the same direction and making better use of limited public funds.

It is unsatisfactory that four years after the NAO criticised DECC’s support for businesses developing innovative sustainable technologies, the Government still hasn’t tackled the poor communication and coordination between its low carbon innovation group and businesses and broader innovation partners."

The Energy and Climate Change Select Committee scrutinised the Government’s performance in supporting firms developing new products for the £3.4 trillion international low carbon good and environmental services sector - following up on a National Audit Office report that had been critical of the Department for Energy and Climate Change’s (DECC) record in 2010.

The Committee found that there has not been enough progress since then and the resources allocated by the Government to support companies do not match its level of policy ambition in this area. The Low Carbon Innovation Co-ordination Group (LCICG) Secretariat in DECC, for instance, is poorly resourced leaving the low carbon innovation sector without the kind of support that is necessary to bridge the so-called ‘valley of death’ and bring innovative new products to market.

European issues

DECC has admitted that this lack of staff resource also prevents it from engaging fully on European issues that are of direct relevance to UK innovators. These issues include the ability to shape multi-billion euro funding programmes, help UK innovators access EU funding, and help shape EU standards on low carbon products such as energy efficiency devices and heat pumps.

DECC and the LCICG therefore need to deliver better support on EU issues for UK innovators. At a global level DECC and the LCICG could do more to help UK innovators benefit more from their intellectual property internationally, to help to build greater confidence for potential investors to support innovation in low carbon technologies.

The Select Committee’s report also reprimands the Government for not doing enough to influence the EU on product standards which can make or break the market for UK innovation exports and, for wasting four years by not turning its LCICG into a high-performing outfit.

Background

In 2010, the National Audit Office first reported that the Department of Energy and Climate Change had inherited a poorly co-ordinated programme of publicly funded development of sustainable technologies. Multiple government agencies were supporting low carbon innovation without adequate pooling of efforts and the risks of gaps and overlaps was clear.

Further information

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