Low-carbon technology could give UK £880bn boost

EEF calls on the government to give more support to green manufacturing

The government must set out how it will support manufacturers to unlock the multibillion-pound potential of the low-carbon economy, it has been urged.

Manufacturers' organisation the EEF said that driving forward the development of green products and technologies to cut emissions, which UK businesses could export to the rest of the world, could deliver an £880 billion boost between now and 2050.

But a report by the EEF warned that the UK's position as the sixth-largest producer and provider of low-carbon goods and services is faltering, with manufacturing output falling in 2010-11.

Other countries, including China, the US, India and South Korea, that have strategic policies for boosting their low-carbon industries, saw double-digit growth in the same period, said the EEF.

The UK is also lagging behind in government spending on research relating to climate and energy, committing just over 1% of its R&D budget to energy, compared with a developed country average of 4%.

The EEF is calling on the government to set out a clear vision by the end of this year for UK manufacturing in a low-carbon economy, to give businesses the certainty to invest in new products and technology.

Gareth Stace, the organisation's head of climate and environmental policy, said: “The low-carbon economy represents a massive opportunity for manufacturers. If we can build an early lead in key areas we have the chance to export our solutions to the rest of the world.

“But we are failing to take advantage of this opportunity to be a world leader in low-carbon goods and services. We need government to set out its vision of manufacturing's place in the low-carbon economy, focus more on innovation and provide greater regulatory stability and predictability in breakthrough technologies that will deliver it.”

Businesses are already investing in green growth, with six out of 10 developing processes to improve their environmental performance. More than half of large companies are developing products and processes to help them and their customers manage climate and environment issues, said the EEF.

But steps by government are needed to ensure that the UK can gain a lead in developing technologies, to ensure industry has access to the skills and finance to invest in decarbonising technology, and to deliver competitively priced electricity.