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Department for Business, Enterprise and Regulatory Reform Department of Energy and Climate Changewww.hmg.gov.uk/lowcarbonThis vision is helping us toDepartment for Business, Enterprise and Regulatory ReformDepartment of Energy and Climate Change Low Carbon IndustrialFirst published March 2009.Crown Copyright. URN 09/571 Strategy: A vision
Low Carbon Industrial Strategy: The challenge for business and government is to make sure that the UK benefits the public spending and planning processes the Government has put in place, will driveA vision economically and industrially from the move to low carbon – ensuring that the jobs demand for low carbon and resource efficient goods and services. and growth that it could bring support ourThe transition to a low carbon world will transform our whole recovery from the downturn and our long But we must also think about how we best term industrial future. equip UK businesses and workers to competeeconomy. Lord Stern’s landmark Review in 2006 set out for these opportunities. In an increasinglythe economic case for action on climate change and for A low carbon industrial strategy competitive global market it is vital we create the conditions that make the UK the bestinvestment in a low carbon economy. Recognising that must seize the opportunities that country in the world to grow a low carboneconomic necessity, the UK has through the Climate Change will come with change: a new business. We need a new industrial activism industrial activism for a new that brings together different strands ofAct become the first country in the world to adopt a legally green industrial revolution government policy to ensure low carbonbinding target to reduce carbon emissions – by at least companies based here have access to the We already have in place the key targets and26% by 2020 and by 80% by 2050. infrastructure, skilled workers, research and regulatory drivers for carbon reductions in the development and investment opportunities areas of households, transport and power they need. We need to make sure that weAchieving this means that by that date, the demands of the low carbon economy generation. The framework Government drive the green industrial revolution fromevery unit of output in Britain will need to be offers a significant potential contribution to has put in place aims to give industry the the regions as well as nationally, buildingproduced using on average just one tenth economic growth and job creation in Britain, confidence to invest in bringing low carbon on distinct regional and local advantagesof the carbon used today. not only as part of the short term economic products and services to the market. It across the UK, and market British strengths in recovery, but also through sustainable growth includes the Climate Change Act, whichThis transition will transform our whole a competitive global marketplace. over the decades to come. sets binding carbon budgets for the UK, theeconomy. It will change our industrial EU Emissions Trading Scheme, which coverslandscape, our supply chain, and the way in The global market for low carbon goods almost half of all emissions, the Renewables Opportunities will exist in sectorswhich we all work and consume. For as well and services is already worth over £3 trillion Obligation and our target of 15% of all right across the UK and globalas being an environmental and economic and growing rapidly. For the UK, which is energy coming from renewables by 2020, economyimperative, the shift to a low carbon already a leader in many low carbon and the new Carbon Reduction Commitment,economy is also an economic opportunity. resource efficient services, technologies For businesses, the transition to low carbon building regulations, vehicle emissions offers both commercial opportunities andBusinesses and consumers can benefit and processes, this is a huge potential standards, and dynamic product standardsfrom significant savings through energy and opportunity. the chance to save money and release for consumer goods. All these, alongsideresource efficiency measures. And supplying1 Low Carbon Industrial Strategy: A vision Low Carbon Industrial Strategy: A vision 2
*80%The UK is the first country in the world to adopt a legally binding target to reduce greenhouse gas emissions by 80% by 2050productive resources through greater energyefficiency. At the heart of the Low CarbonIndustrial Strategy are drivers of fundamentalchange in four key areas:• Energy efficiency to save businesses, CASE STUDY: T-Mobile Life’s for Sharing By establishing an energy management “ The global market for low carbon goods and services is already worth over £3 trillion and growing rapidly. For the UK, which is already a leader in many low carbon and resource efficient services, technologies and processes, this is a huge “ consumers and the public services money steering group, potential opportunity.• Putting in place the energy infrastructure for T-mobile was able to save £648,000 on the UK’s low carbon future – in renewables, its energy bills last year alone. The group nuclear, Carbon Capture and Storage and helped to map and carry out a raft of Greater resource efficiency has a includes making it easier for businesses to a ‘smart’ grid measures to optimise energy savings, establishing targets to drive this across fundamental role to play in increasing the access advice and support through Business• Making the UK a global leader in the productivity and competitiveness of UK Link (www.businesslink.gov.uk) under Solutions different areas of the business. development and production of low business and it is also increasingly becoming for Business, the Government’s streamlined carbon vehicles a selling point for both UK and international portfolio of business support products, and environmental experts and other stakeholders• Ensuring our skills, infrastructure, we will now develop our approach for customers. A national shift to greater resource the Real Help campaign being offered procurement, research and development, ensuring UK businesses can benefit from efficiency would also support the creation during the downturn, so as to help them demonstration and deployment policies the transformative change to a low carbon of tens of thousands of jobs for businesses make simple changes to reduce their make the UK the best place to locate and economy. The resulting Low Carbon Industrial in this sector. resource use and save money. develop a low carbon business and make Strategy will be published in the summer. sure international business recognises that. Despite the clear economic case for The public sector has to demonstrate undertaking energy efficiency measures, leadership in the move to a low carbonThe global shift to a low carbon economy Saving businesses, consumers lack of information and lack of finance – economy. The public sector could savecould help to drive renewed growth that and the Government money especially in the current economic climate a significant proportion of the £4 billion itwill lift us out of the economic downturn. It through energy efficiency – can prevent businesses from taking them spends on energy each year throughwill be key to the UK’s long term industrial up. Government has a clear role in removing energy efficiency measures. The publicfuture. Set out here are the areas in which More efficient use of energy and other these barriers and already provides advice sector could also boost demand forthe Government believes we can build on resources could save businesses and and low cost finance, including through the innovative low carbon products andexisting work to create a comprehensive consumers in Britain billions of pounds every Carbon Trust and Regional Development services as part of the £175 billion it spendsand ambitious step change that ensures year. Much of this can be achieved from Agencies. While this assistance has been very annually on providing public services.UK businesses can benefit fully from global simple and cheap actions. The savings successful, our ambition is to go further. Thismoves to a low carbon economy. In made could be quickly channelled intoclose consultation with businesses, unions, new investment.3 Low Carbon Industrial Strategy: A vision Low Carbon Industrial Strategy: A vision 4
*£3.3BN It is estimated that UK businesses could save a massive £3.3 billion a year on their energy bills through greater energy efficiency CASE STUDY: Blue-NG Putting in place the energy But it is not enough to increase our use of opportunities for UK businesses are set out in infrastructure for the UK’s low low carbon energy generation sources. We the Government’s Heat and Energy Strategy must also transform the electricity grid itself, for consultation on 12 February, and we will Blue-NG has created carbon future ensuring that it is equipped for the rapid continue to explore other opportunities such an ultra-efficient Energy is the engine of our society and connection of new forms of energy, able to as Combined Heat and Power. Combined Heat and our economy. Since the industrial revolution, adapt to the move to low carbon vehicles Power system fuelled the world has been dependent on high What are the key opportunities for UK and increasingly efficient in the way it by sustainably sourced carbon fossil fuels for its energy needs. business in moving to a new energy transmits and distributes electricity. Improving bioliquid, the first of That will change dramatically in a low carbon infrastructure? our grid architecture will be essential as we its kind in the world. economy. In the years ahead we will be The CHiP (Combined Heat and intelligent support more small-scale generation through transforming our electricity generation and the advent of our new Feed-in Tariffs. £5 CASE STUDY: Smith Electric vehicles Power) is already attracting global interest energy grid to deliver power more efficiently due to its electrical efficiency rating billion of investment in the grid is already and to adapt to new forms of power planned for the next five years, and we have Smith Electric which peaks at 86%, making it 30% generation. set an aim of having smart meters installed in Vehicles is the world’s more efficient than its closest rival. every home by 2020. We could also achieve largest manufacturer By 2020 we will need to increase energy from carbon savings by generating heating of road-goingWe have two objectives on energy efficiency renewable sources by nearly 10-fold to meet commercial electric our renewable energy targets, saving 20 centrally and distributing it to local homesfor our Low Carbon Industrial Strategy: to vehicles. Hundreds million tonnes of CO2 each year. Alongside and businesses through district heatingfacilitate a comprehensive step change in of Smith’s zero our civil nuclear sector and a shift to clean networks. emission vans and trucks are in operationthe number of businesses and public sectoroperations making the shift to greater energy coal through Carbon Capture and Storage, The UK’s Low Carbon Industrial Strategy will today with customers including Royalefficiency, and to make sure that an active these new technologies will vastly reduce the develop further our approach for delivering Mail, DHL, TNT and Sainsburys. Boastingindustrial policy means UK firms have the skills carbon released in generating our electricity maximum economic benefits from the a top speed of up to 70 mph, a rangeto advise and carry out this work, and to bring supply and heating our homes. The shift to of over 100 miles and a payload of up UK’s shift to greater use of renewables, civilnew energy efficiency technologies to market. renewable energy sources could also help to to 7,400 kg, these vehicles are well suited nuclear power and Carbon Capture and reduce the UK’s dependence on imported oil for urban delivery cycles. Last month itWhat are the main barriers in the UK to Storage. It will set out our strategy for making announced a major collaboration with and gas, helping to reduce the vulnerability the UK’s energy grid more efficient andbusiness and the public sector realising the Ford to develop an electric version of of UK businesses to shifting energy prices. ‘smarter’. Details of our proposed approachfull benefits of energy efficiency? the Ford Transit Connect for the North for improving heat generation, creating American market.5 Low Carbon Industrial Strategy: A vision Low Carbon Industrial Strategy: A vision 6
*7.4% Our low carbon sector represents 7.4% of our GDP in the UK.Making the UK a global leader in We have already committed over £350 Making the UK the best place in CASE STUDY: OGI Groundwaterthe development and production million of support to encourage uptake of the world to locate and grow a ultra-low emission vehicles and our support Specialists Ltdof low carbon vehicles low carbon business for the automotive sector in the downturn hasOur transport system is fundamental to our been designed to help secure its long-term To capitalise on the growth opportunities OGI Groundwatereconomic strength, connecting people to future as a world leading low carbon industry. from a move to a low carbon economy, we Specialists Ltd isplaces and businesses to markets. However, We now need to equip the UK to compete in must create the conditions for the UK to be a groundwaterthe only sustainable future for transportation the global market both for vehicles and their – and be seen to be – the leading location specialist consultancy,lies in a transformative shift to low carbon. components. in the world for growing an innovative low traditionally providingOur ambition must be for the UK to be carbon business, developing new low carbon advice to engineeringa world leader in low carbon transport, This means removing barriers to private sector products and services. In practice, this firms who need toespecially at the forefront of development investment, accelerating the development means having people with the right skills in dig boreholes. Using their existing expertiseand manufacture of low carbon automotive of low carbon road transport technologies the right place at the right time, a research they have taken advantage of a new lowtechnology. through support for low carbon vehicle base which supports ground breaking carbon opportunity to become specialists research and development, showing research, and the capacity to turn these into in the installation of Ground Source Heat leadership through our public procurement world beating technologies. Pumps. These renewable heat systems CASE STUDY: Wave Hub provide space and hot water heating policies, and making the UK a leading global The UK is already establishing itself as a major with 40% of the carbon emissions of location to demonstrate low carbon vehicle player in the £3 trillion global market for low conventional heating. Wave Hub is a technology, as well as in other systems such groundbreaking project as rail transport. carbon goods and services. Our low carbon off the North Cornwall and environmental sector, worth £107 billion In the decades ahead, companies will make coast to create the Our Low Carbon Industrial Strategy will set out a year, represents 7.4% of our GDP The sector . critical decisions about where to locate low world’s first large-scale how, working with the private sector, we can is growing fast, even in the downturn, and is carbon manufacturing and innovation. If wave energy farm. coordinate public sector activity to ensure expected to employ over 1 million people we are to benefit, this will require strategic It will allow wave the UK is a global leader in developing, by the middle of the next decade. thinking from government to use the power device developers to test their devices demonstrating and manufacturing ultra-low of public procurement, public policy, and on a scale not seen before, potentially emission vehicles and vehicle components. We also have a world class science and shape the regulatory environment, Britain’s creating 1,800 jobs and injecting £560 research base and a superb record for million into the UK economy over 25 years, What is the best way for Government and infrastructure, its facilities for research and innovation: in 2007, the UK attracted 30% and providing the base for a much wider business to work together to secure a world development and the skills of its workers of all European venture capital investment marine energy industry in the UK. leading position for the UK in low carbon to make the UK an obvious international in clean technology. transport? destination for low carbon industry,7 Low Carbon Industrial Strategy: A vision Low Carbon Industrial Strategy: A vision 8
*30 % In 2007, the UK attracted 30% of all European venture capital investment in clean technology CASE STUDY: Toyota Motor Europe recovery, but to contribute to long term job management issues that will deliver the We now want to hear your views creation and growth. culture change required in all sectors of the economy. Harnessing the talent and on how we achieve that vision. Toyota Motor UK workers across all sectors will need to commitment of the entire UK workforce will You can contact us through Europe take a 360 gain the skills to work with new low carbon be the key to success. degree approach, technologies and processes, or provide new our website,www.hmg.gov.uk/ deliberately integrating services that will come with a low carbon How do we build the infrastructure, skills lowcarbon, setting out both the training, e-learning economy. Often, these are not new skills, but and research base we need to make the and performance UK the world’s foremost destination for challenges facing business now new ways of applying a foundation of training management in technical subjects. low carbon investment? and in the future, and how we within their Environmental Leadership programme. Tackling the entire life cycle The skills to use low carbon goods and can work together to overcome Next Steps – Building on means leadership on production, logistics, services will be embedded into training them. We will use these views sales and end-of-life skills, as well as the our vision well known skills in vehicle technology. across every profession, equipping This document sets out our vision for a low to inform policy development businesses across the UK economy to move rapidly to meet demand for new services. carbon economy in the UK. Going forward, towards our Low Carbonresearch and development. It also means we will work actively with stakeholders to Industrial Strategy. The Low Carbon Industrial Strategy will set out develop our approach for achieving thatcoordinated support for RD&D that is easy how the Government will work with leading vision. We are committed to using a strategicfor business to access and navigate, anddelivered efficiently. employers and key strategic partners, such direction from Government to continue to www.hmg.gov.uk/lowcarbon as the Sector Skills Councils, to stimulate drive a step change in the UK’s transition to aOur Low Carbon Industrial Strategy will set out demand, support business innovation and low carbon economy. This change is not justways of ensuring that the UK is the best place create the framework for developing low an environmental and economic imperative;in the world to grow a low carbon business carbon skills in the UK workforce and securing it is also potentially a huge economicand successfully attract new investment, jobs for the future. It will be particularly opportunity for Britain, both in moving out ofnot only as part of the short term economic important to address the leadership and the current downturn, and in mapping out our industrial future. Printed in the UK by The Stationery Office Limited on behalf of the Controller of Her Majesty’s Stationery Office ID6032917 03/09 Printed on Paper containing 75% recycled fibre content minimum.9 Low Carbon Industrial Strategy: A vision Low Carbon Industrial Strategy: A vision 10