Britain’s manufacturers are powering ahead with investment in green technologies, with most planning to include a commitment to green growth in their business plans over the next five years.
The findings come in a major new report by Make UK, Manufacturing a sustainable future – capitalising on green technologies, which reveals that, despite calls to scale back the UK’s net zero ambitions, manufacturers remain committed, with over 8 in 10 companies planning to invest in green growth, especially prioritising renewable energy. A previous Make UK survey also found that 92% believe the transition to net zero is important for their business.
However, barriers remain, particularly as investments in energy efficient technologies like solar panels, wind turbines or low-carbon heating face higher rateable values, effectively penalising companies by increasing factory values and business rates. Make UK is urging the Government to announce in the Budget that these investments will be removed from business rates calculations, as 44% say this holds back green technology investment—a greater barrier than even energy costs (41%).
If Government fails to remove green investments from business rate calculations, it will slow decarbonisation and hinder progress towards Net Zero ambitions. Additionally, Make UK noted that, despite commitment to green technology investment, industrial energy costs remain significantly higher than in the US, France, or Germany. While the British Industrial Competitiveness Scheme (BICs) is set for 2027, questions remain about its future. It’s essential that the focus stays on developing cleaner energy and energy security through green technologies.
Verity Davidge, Director of Policy at Make UK, said: “At a time when there are calls for the UK to row back on net zero ambitions, manufacturers are clearly committed to investing in green technologies to make operations more efficient by reducing costs and emissions. However, perversely, such investments increase business rates, which not only dissuades but penalises those ‘doing the right thing’.”
She added that the Government should remove this disincentive as a first step, then broaden R&D tax relief and lower long-term energy costs. This could unleash a wave of green investments, making operations more efficient by reducing costs and emissions. The report states UK manufacturers’ biggest green investment priorities are renewable energy (49.7%), greener supply chain materials (41.1%), and digitalisation (35.6%).