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TechUK urges government to back emerging digital clean technology sector

To ensure the UK reaches its climate and decarbonisation goals, TechUK is calling on the government to support the emerging clean tech sector

Sebastian Klovig Skelton
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Published: 08 Sep 2020 11:30

Already existing digital technologies have the potential to deliver a 15% reduction in carbon emissions by 2030 while also contributing significantly to the UK economy, but policy interventions are needed to create the right business environment, claims a new report.

Launched during London Tech Week on 7 September, the report by TechUK and Deloitte, How to make the UK a digital clean tech leader, suggests that digital technology already in the field can enable a 7.3 million tonne reduction in UK carbon emissions, or 15% of the 48 million tonnes carbon dioxide equivalent (Mt CO₂e) needed by 2030.

“The vast majority of this [decrease] comes from the application of smart grids to energy networks, followed by the use of Industry 4.0 technologies in manufacturing. Remaining carbon savings come from agriculture, mobility, and smart building technologies,” said the report.

The economic analysis conducted by Deloitte also suggested already existing digital technologies could in turn deliver £13.7bn Gross Value Added (GVA) to the UK economy if put to better use.

“When addressing the climate crisis, how we develop and deploy digital technology matters. Clean technology is already making a positive contribution to economic growth and to reducing emissions – and this contribution is projected to grow,” said Nick Owen, UK chair of Deloitte

“There is still much more to do, however, and we are committed to working with our clients to deploy clean technology as an essential tool in addressing the climate crisis head-on.”

The report added that while the UK has a strong base in “renewables, technology businesses and cultural awareness of environmental issues”, there are still several barriers to entry for UK companies. “We have identified four key levers to cement this growth: innovation, policy and regulation, data, and finance and investment strategies,” it said.

Unlocking potential

To unlock the potential economic and environmental benefits, the report recommends a number of actions that can be taken by government to pivot these four areas towards decarbonisation.

“We have just three decades left to reach net-zero and are on the cusp of embarking on massive system changes across our economy. We can harness digital to help us to reach that more efficiently,” said Susanne Baker, TechUK’s associate director for climate, environment and sustainability. “But to maximise what we as a sector can do, we need to create space for digital and critically we need an inclusive debate and strategy on open data for the planet.”

For innovation, this includes running trials and pilots for longer to properly prove the business model and value propositions; getting government departments to run outcome- and problem-based innovation challenges to crowd-source innovative solutions; and setting up new platforms so that innovation bodies can share both successes and failures more transparently.

“As it stands, the government’s Grand Challenges mission on clean growth, as set out in its 2017 Industrial Strategy, has goals to halve the energy use of new buildings by 2030, to establish the world’s first net-zero carbon industrial cluster by 2040, and to put the UK at the forefront of design and manufacturing for zero emission vehicles. While at the time bold, these goals, or missions, need reframing in the context of the enormous challenge to reach net-zero,” said the report.

“With net-zero emissions now 30 years away, there should be a focus to pivot the UK innovation ecosystem towards decarbonisation and long, meaningful trials that help UK firms scale-up. This requires both programmes that enhance early stage technology development and a clear route to market for promising innovations.”

Read more about government technology

  • Defra’s sustainable IT strategy seeks to help government and private organisations maximise the benefits of sustainability, with an overall mission to “leave the environment in a better state than we found it”.
  • The 2020 Budget pledges to increase research and development funding to £22bn a year, £5bn for broadband roll-out and £900m to ensure UK businesses lead the way in “high-potential technologies”, but slashes tax relief for entrepreneurs.
  • Seventeen research and innovation projects across the UK will receive up to £50,000 each in government funding to respond to some of the world’s most pressing challenges, including climate change and medicine production.

In terms of policy, TechUK are also calling for “system-level thinking” in order to escape siloed regulation efforts and ways of working, recommending that the Department of Business, Energy and Industrial Strategy (BEIS) establish a new net-zero delivery office to support greater coordination across government departments and regulators.

It added that the Regulatory Horizons Council (RHC) should also establish a net-zero tech taskforce, which would collaborate closely with the tech sector, to work through regulatory bottlenecks and legislative barriers.

If the recommendations are adopted, the RHC would also play a role in reviewing regulations that are preventing businesses from sharing or using data, although the report does not specify which regulations are currently stopping this from happening.

“To fully realise the potential of open data, it is critical that appropriate and relevant data governance is in place that is robust and inspires confidence from regulators, policy makers and industry, and that government incentivises and facilitates sharing and reuse of data across organisations and between sectors,” it said, adding that government’s ongoing work on a National Data Strategy should reflect the need for open data in the transition to net-zero.

The last set of recommendations focus on expanding access to finance and investment. With only three decades left to meet the net-zero emissions goal, the report focuses on the creation of new incentive schemes to stimulate low-carbon investment.

This includes the government considering “options for VAT reductions, tax offsetting and the entire suite of indirect tax measures that make energy reducing technologies more investable”, as well as dedicating public financial support mechanisms “to new low-carbon technologies to de-risk and lower the cost of capital for early deployment”.

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