Policy News

Tuesday 08 September 2009

CBI deputy director-general John Cridland said today's recommendations would "keep Britain at the cutting-edge of low-carbon technology"

Renewable energy and low-carbon innovation must be better supported by the government, the CBI has said today (September 8).

In a new report, entitled Pulling ahead: innovating for low-carbon leadership, the business lobby organisation calls on the government to build on Britain's natural strengths in wind power, marine power, and carbon capture and storage (CCS) by creating the right physical infrastructure and minimising planning barriers.

The CBI says that streamlined planning processes and grid transmission network upgrades will be crucial for driving demand and innovation in the renewables sector.

It insists that the government needs to substantially upgrade the grid to ensure the demonstration and commercial deployment of large-scale renewable energy technologies.

And, it states that planning must be made simpler to remove barriers to innovation for renewable and low carbon businesses that are key to the UK's economic growth.

Other measures proposed today, include further policies to support "cutting-edge" industries that help cut carbon, changes to government procurement to foster take-up of low-carbon technology and improving the research and development (R&D) tax credit scheme, which the CBI says encourages investment and could help Britain lead the way in low-carbon innovation.

John Cridland, the CBI's deputy director-general, said: "Britain has great expertise in low-carbon technology and research. This must be encouraged and supported by government, but we also need policies that help to implement advances in technology in practical and commercially-viable ways."

Renewables

The report highlights three areas - wind, marine and CCS - as opportunities for Britain, and says the government must do what it can to support growth in these areas.

According to the report, Britain has some of the best wind speeds in the world for on-shore and off-shore wind generation. The CBI says that the UK is the world leader in off-shore wind and is likely to remain for some time the largest marketplace, which presents a valuable chance to become a centre of the off-shore wind industry and create export opportunities.

Marine power is also highlighted as a real strength. The CBI says that there is a strong existing technological base and research infrastructure in the UK with many of the leading companies being UK-owned or UK-based. Marine is said to be in the initial stages but the report makes clear it is likely to play an important role in the future.

In terms of CCS, the report notes the abundance of depleted oil and gas reserves in the North Sea, which are said to be a ready site for subsurface geological CO2 storage and present an opportunity to become a leader in CCS technology.

Government

The report's 10 recommendations for government are, according to the CBI, intended to "keep Britain at the cutting-edge of low-carbon technology".

It highlights the R&D tax credit scheme, saying that it can either reduce a company's tax bill or provide a cash sum, as well as allowing some companies to deduct up to 175% of qualifying R&D expenditure when calculating their profit for tax purposes.

The CBI also encourages the government to build on Britain's existing strengths, assess which technologies that can add value to the UK economy, back entrepreneurs, and minimise regulatory barriers to innovation for low-carbon technology.

Business

In addition, the CBI has put forward three recommendations for business to encourage low-carbon innovation.

Primarily, it encourages firms to make carbon efficiency part of their core business, taking steps to measure carbon use and include carbon costs in the bottom line. The report says that clear measurement of carbon use and the reduction potential of innovation can increase uptake and give businesses a head start on competitors.

However, the CBI also says businesses must focus on how frontline staff can reduce emissions and reward creative thinking.

John Cridland said: "We need to turn brainpower into business success to keep Britain at the cutting-edge of low-carbon technology and be rewarded for our expertise in this area. Today's recommendations would help this happen."