UK trade risk from foreign low carbon competitors

Wednesday 29 November 2017
As global economy decarbonises, slow to adapt UK exporters risk losing out to foreign competition
 
As the UK prepares for trade talks with the EU, a new report warns key business sectors will have to decarbonise to stay competitive and exploit growth in the low carbon market post-Brexit.
 
Major UK export sectors, including the automotive and chemicals industries, risk losing out to foreign competition if they don’t adapt in time to fast rising global demand for low carbon goods and services.
 
A new report published today identifies weaknesses in four sectors:[1]

The chemicals sector is a strong UK exporter but highly energy intensive. It contributes 13 per cent of all the direct greenhouse gas emissions from manufacturing. As global economies favour new production techniques with lower carbon emissions, the UK’s trading position will be at risk unless the sector upgrades.
​​The global electric vehicle (EV) market is predicted to grow almost five fold from £41 billion in 2015 to £1,960 billion in 2030. While the UK has the potential to scoop up £95 billion of this market, it is currently lagging behind and importing more than it exports. Despite some positive announcements on EV charging infrastructure in the budget, the UK is not spending enough on battery development and the government has said it will buy around 1,200 EVs per year for its fleet. By comparison, the Indian government is buying 10,000 electric vehicles this year, and a further 10,000 after March.
​​Financial and professional services are by far the UK’s most significant export sectors, together contributing £78 billion gross value added (GVA) to the UK. Until recently, the UK was the global hub for low carbon financial services, but other countries, now threaten the UK’s advantage, just as demand is set to grow significantly. France is now home to the top three banks for sustainability, rated by investors. 

​Jürgen Maier, CEO of Siemens UK, who is speaking at the launch of the report on Wednesday 29 November, said:
“As we respond to the challenges and opportunities of decarbonisation, the bar has been raised even higher. The UK has a major challenge to increase productivity as well as reduce carbon emissions. These twin challenges are interlinked.
 
“The UK ‘Made Smarter’ review highlighted that, by investing in the latest digital technologies, we can boost industrial productivity by 25 per cent and reduce carbon emissions by 4.5 per cent by 2025. UK policy in these critical areas is now needed to drive international competitiveness.”

Christine Allen, director of policy at Christian Aid said:
“In future all trade has to be low carbon. The Paris climate agreement has shifted countries all over the world onto a trajectory of cleaner development, and blown the starting whistle on a race for new the technologies and markets needed to tackle climate change.[2]

“British aid and climate finance are assisting the poorest countries hit hardest by climate impacts. Britain is also in pole position to be a leader in low carbon trade.

“There are real risks that the City remains wedded to fossil fuels rather than setting the global gold standard for green finance. That would not be good for Britain or the climate.

“The government’s recent Clean Growth Strategy and Industrial Strategy, announced this week, have together set the UK on the right course. Cross government alignment is now needed on domestic and international policy, to support UK businesses in building the expertise the world is now demanding.”
 
ENDS
 
Contact:
Angela Francis (available for interview)
Senior economist, Green Alliance
afrancis@green-alliance.org.uk
Direct line: 020 7630 4526

Notes
 
[1] The report UK trade in a decarbonising world is published on 29 November 2017 by CAFOD, Christian Aid, RSPB, Green Alliance, Greenpeace and WWF. 
The report will be launched at the event Trade in a decarbonising world: where the UK can lead on Wednesday, 29 November 2017, 8.30 – 11.00am, at which Climate Minister, Claire Perry MP, will give the keynote speech followed by panel discussion with Jürgen Maier, chief executive, Siemens UK;  The Right Reverend Nicholas Holtam, Bishop of Salisbury; Baroness Brown of Cambridge DBE FREng FRS, Chair, Committee on Climate Change’s Adaptation Sub-Committee. The event takes place at Prince Philip House, 3 Carlton House Terrace, SW1Y 5DG. To attend the event please contact Elena Perez, Green Alliance, 020 7630 4520 eperez@green-alliance.org.uk

[2] The Paris Agreement will unlock $23 trillion of investment in climate smart investment in emerging economies alone.  Around 40 per cent of the global economy is on the same trajectory as the UK, with plans to reduce emissions by over 80 per cent by 2050.  This means fundamental changes to all infrastructure, goods and services. UK firms are well placed to take advantage of new trading opportunities this will bring.

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