UK lagging behind rivals on green growth, CBI warns
Growth in the UK’s green economy, including renewables and electric vehicles, is falling behind international rivals, the chief of the Confederation of British Industry (CBI) will say today.
The body, which represents British businesses, said the UK is has lost out on estimated £4.3bn of green growth market value in Europe alone and in April will fall from 5th to 30th place in OECD table on tax competitiveness.
It urged the government to bring forward market-making mechanisms like Contracts for Difference (CfD) that have “proven success” in the renewables sector and could be applied to other technologies like hydrogen, carbon capture and sustainable aviation fuels.
CfDs incentivise investment in renewable energy by providing direct protection to developers of projects with high upfront costs and long lifetimes against volatile wholesale prices.
The government should also use regulation to stimulate domestic demand for green technologies as is being done for electric vehicles, the CBI added.
Last year, the UK closed the grant scheme for electric cars, claiming that a “mature market” had already been created. Industry lobby heads said the decision came “at the worst possible time”.
The CBI estimates that automotive firms will lose out on around £3bn in EV assembly and battery production by 2030.
Finally, it recommends more support for hydrogen electrolysers that offer carbon-free routes to fuel, power industry and production of chemical gases. The UK has slipped 1 per cent in the global production market since 2020, which will account for £1.3bn worth by 2030 lost.
In a speech today, the director-general of the CBI, Tony Danker, is expected to say: “Growth still matters. This is people’s livelihoods and life opportunities. The PM set out less than a year ago what is needed to transform our economy. The ideas are there. Let’s stop second-guessing ourselves and get on, because there is money on the table to capture right now.
Danker will go on to argue that “our international competitors in Europe, Asia and the US are going hell for leather on green growth and getting firms investing. We are behind them now and seem to be hoping for the best.”
The CBI said that early data shows that the UK could stay stuck in a low-growth trap as the major drivers of productivity grind to a halt.
It urges the Chancellor to make key concessions in the Spring Budget for a new strategy to boost growth.
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