Green and growth, can we have both? Lessons from the transport sector

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Courtesy of Energy Institute (EI)

Sometimes it is assumed that sustainability comes with a cost. However, the UK car manufacturing sector seems to have proved that this is not the case. Could this success be replicated in other sectors? Marc Height reports.

The car manufacturing sector in the UK has been an underreported success story, both in terms of its economic achievements, and in its embrace of lower carbon technologies and accomplishments in reducing emissions.

Tailpipe emissions from new vehicles produced in the UK have reduced by 25% in the last 10 years. The average new car built in the UK achieved an EU-imposed target of 130 grammes of carbon dioxide per kilometre two years ahead of schedule, with average new car emissions falling for the 16th successive year to 128.3 g/km in 2013, according to figures from the Society for Motor Manufacturers and Traders (SMMT). Provisional figures recently released by the European Environment Agency show that this is not just a UK phenomenon – the EU as a whole has also reached the target two years ahead of schedule.

These statistics are clearly impressive, and are a result of car manufacturers actively embracing technological improvements in engine efficiency, car weighting, and aerodynamics, alongside research and development into more advanced drivetrains, including hybrid, full electric and hydrogen vehicles.

But as well as making more environmentally friendly vehicles, the UK is also producing a lot of them. Last year UK car manufacturing hit a six-year high, reaching levels seen before the financial crash of 2008, again according to figures from the SMMT. Of course, you could argue that efficiency gains per vehicle are diluted by a larger number of cars being sold, but this is hardly the fault of the car manufacturers.

Technological innovation is coming from within the UK itself, with manufacturers and start-up companies building on engineering heritage to develop the vehicle technologies of the future. Nissan’s first electric vehicle, the LEAF, is manufactured in Sunderland, for instance.

Jaguar Land Rover, which posted record sales in 2013, is investing a great deal in new technologies and materials to reduce weight and make more efficient drivetrains. It has invested £100mn in a UK R&D centre in Warwick to employ 1,000 researchers and engineers. According to Stephen Crisp, Director of Global Government Affairs at Jaguar Land Rover, the company has 340 hybrid engineers, and takes the issue of e-mobility very seriously.

This is all clearly good for the economy, jobs and productivity, leading to lower carbon products that can be exported. What is the secret to the success?

Clear vision

Any business success story is going to rely on fluid relationships between government, industry and the consumer, and this is evident in the transport sector. Speaking at an event organised by Sustainability Hub and the Low Carbon Vehicle Partnership, Professor Paul Ekins, Director of the UCL Institute of Sustainable Resources, said that while the market will pick technological winners, it is the government’s role to stimulate and prepare markets, and that ‘the government gets this in the automotive sector.’

It is this joined-up approach with a clear direction that has proved to be the secret to the success. And fundamental to this is the UK’s Automotive Council, says Joe Greenwell CBE, CEO of the Automotive Investment Organisation (a UKTI organisation which is steered by the Automotive Council to attract investment into the UK automotive supply chain).

The Automotive Council consists of representatives from government and industry, and is focused on developing the UK’s supply chain, as well as creating roadmaps for low carbon vehicles and fuels. The creation of the Council was an ‘inspiredmove’, says Greenwell, closely followed in importance by the decision to create a £1bn Advanced Propulsion Centre in the UK later this year, which is aimed to capitalise on the UK’s efforts so far and help bridge the ‘valley of death’ (between the R&D and full commercialisation stages) for automotive products before market. The government’s Office for Low Emission Vehicles (OLEV) also plays a part in this joined-up attitude towards the automotive sector, cutting across the key government transport departments: the Department for Transport, the Department for Business, Innovation and Skills, and the Department of Energy and Climate Change.

Replicating in other sectors?

Could this success be replicated across other sectors in the UK?

Not at the moment, says Ekins – a joined-up approach is very much lacking across the low carbon space, he thinks. Ekins talked about the ‘fiasco’ of government policy on low energy buildings to illustrate his point. A lack of enforcement on building regulations, a failure to deliver zero carbon homes, the lack of protection of the Merton Rule; all this points to the opposite of the government approach taken with transport, he says.

In a similar vein, Dave Sowden, CEO of the Sustainable Energy Association, says that fundamentally, if the objective is to reduce emissions without impacting competitiveness, the focus should be more towards demand-side energy projects, rather than large expensive low carbon supply projects. ‘The centre of gravity around energy is in the wrong place,’ he said. In terms of pounds per megawatt hour, the biggest gains and cheapest way to reduce carbon is by reducing demand.

And when thinking about electricity, Jennifer Webber, Director of External Affairs at RenewableUK, makes the point that there needs to be more of an indication of the government’s direction in this area, with more certainty needed by the industry to attract investment; such as a renewables target that stretches beyond 2020.

It seems that the automotive success story in the UK is underpinned by a government and industry body that is supporting UK interests and defining a clear path forward for the sector. This approach could be utilised more effectively in other sectors to achieve the same results. As Webber asked at the event, would hybrid cars be as attractive if the government threatened to change their support every five years?

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