R&D and the Green Revolution: Fast-Tracking Green Innovation

From flooding and forest fires to climate conferences and controversial protests, climate change has featured more and more prominently on the agenda in recent months. So much so that it’s becoming increasingly impossible to ignore.

And so, with governments the world over waking up to the necessity of action, plans, proposals and investments surrounding green infrastructure are on the rise.

In the UK’s case, this necessity has been further fuelled by the need to progress and stabilise the current system during the uncertainties of post-Brexit adaptation and recovery from Covid-19.

Of course, all of this requires the foundation of the road to net zero: research and development. That’s why, today, we’re looking at what role R&D looks set to play in green innovations and the 10-point plan for a green industrial revolution.

What is green innovation?

A new business-led Green Innovation Policy Commission (GIPC) concluded in a recent report that green innovation is finding ways to create economic and social value while also achieving better environmental outcomes. This is done through the creation and adoption of new ideas, inventions, practices, processes, products and organisational forms.

The GIPC also concludes that, if this kind of systemic innovation was to meet today’s environmental challenges in an economy-enhancing way, it would require governments to forge new partnerships for technology deployment at scale. This would make working closely together at strategic, sectoral and local levels vital to success.

Why is it important?

As a report from the GIPC and think tank Green Alliance summarises:

“The plans needed for economic recovery are an opportunity to build an economy that is more fit for a net-zero future, that protects against the impacts of climate change and looks after the natural capital we depend on. Green innovation will play a vital role in economic recovery...supporting the government in its ambition to position the UK at the forefront of the green industrial revolution.”

Green research, development and innovations stimulate economic growth by:

• Increasing competitiveness and growth: green innovation investments yield economic perks for both business and society - private sector returns on R&D spending are typically between 20-30% (and the economic benefit to wider society tends to be 2-3 times higher). Accelerating innovation enables businesses to compete in global markets with higher productivity and novel products or services that are sure to be in high demand as world economies decarbonise
• Promoting business resilience: green innovation can limit business reliance on supply chains, leaving them less exposed to supply chain disruption. On top of that, these environmental solutions can also limit a business’s reputational damage and regulatory changes
• Supporting new carbon jobs: green innovations have the potential to create thousands of new jobs within the next decade. Crucially, these will be disrupted across the UK, following regional patterns where areas require energy efficiency and environmentally considered upgrades

Of course, that’s not to overshadow the primary reason that green innovation is so important: achieving net zero and tackling climate change. As the GIPC report points out 

“The challenge of net zero is wide-ranging. Businesses, buildings, transport, industry and agriculture – the whole of production and consumption – will all be profoundly affected”.

Indeed, there are areas where the UK is already excelling in this green revolution - take sustainable farming and renewable energy such as offshore wind, for example. However, there are also plenty of areas where there’s still work to be done, from electric vehicles and battery opportunities to low-carbon heating technologies.

What does green innovation look like?

Recognising the economic and ethical perks of a green revolution, the UK Government has committed to a significant increase in R&D investment over the coming years.

The Department for Business, Energy & Industrial Strategy (DBEIS) published the areas of focus for these investments in a 10-point plan for a green industrial revolution:

• Advancing offshore wind: the Government aims to produce 40GW of offshore wind by 2030, creating new jobs and spurring growth in ports and coastal regions. To achieve this, it has introduced competition in onshore networks alongside a £160m support package for modern ports and manufacturing. The R&D opportunities in wind farming, energy storage and network infrastructure are numerous
• Driving the growth of low carbon hydrogen: the Government has a goal of developing 5GW of low carbon hydrogen production capacity by 2030, and has supported this with a £240m Net Zero Hydrogen Fund. R&D around the use of hydrogen is likely to yield high investment interest from both public and private sources
• Delivering new and advanced nuclear power: although controversial, decarbonising industry, heat and transport with small modular reactors (SMRs) is expected to attract £300m of private investment following its public funding
• Accelerating the shift to zero-emissions vehicles: the UK is committed to ending the sale of new petrol and diesel cars and vans from 2030, backed by £2.8bn in support of electrifying public transport networks
• Green public transport, cycling and walking: with £2bn already pledged to low-traffic neighbourhoods and the potential of 3,000 jobs being created by 2025, revolutionising current public transport (and the infrastructure that surrounds it) promises to be prosperous
• ‘Jet zero’ and green ships: with aviation and maritime being among the main global polluters - yet integral to globalised import and export systems - it’s little surprise green innovation is a major focus in this space. Future-proofing the aerospace industry is worth £12bn to the economy, meaning investment is once more plentiful
• Greener buildings: buildings are one of the simplest yet most significant areas where emissions can be reduced by swapping to energy-efficient options. This has led to The Green Homes Grant and the Public Sector Decarbonisation Scheme both being extended, as well as other schemes encouraging energy efficiency
• Investing in carbon capture, usage and storage: with a goal of capturing 10Mt of carbon dioxide by 2030, this emerging sector is sure to receive significant investment (to the tune of £1bn by 2025) and is set to support approximately 50,000 new jobs
• Protecting our natural environment: as part of the action against climate change, large-scale public investment in our natural environment is essential. Among the plans are goals for new national parks to cover up to 30% of the UK by 2030, nature conservation and restoration projects to be supported by a £40m Green Recovery Challenge Fund, and investments in natural disaster defences
• Green finance and innovation: as we’ve already touched on, the green revolution presents the opportunity for a green economy. High-risk, high-reward R&D projects which contribute towards the goal of net zero will find significant support following the launch of the £1bn Net Zero Innovation Portfolio

Most research and development is driven by opportunities in new or expanding markets. When it comes to green innovations and achieving net zero, however, things are a little different.

While green innovation of course offers new market opportunities, the urgency and scale required means governments have a crucial role to play. From providing low-carbon infrastructures and redesigning markets to implementing regulatory drivers and other incentives, research and development in this area must emphasise the need to decarbonise at an unprecedented rate.

Achieving a green revolution, then, requires public and private sectors to work together in their research and development efforts to overcome the barriers of green innovation and drive systemic change that benefits all of us.

With so much emphasis rightly being placed on fast-tracking green innovations, it’ll come as little surprise to learn that there are so many opportunities for research and development in this area.

If you choose to pursue this avenue, make sure you’re maximising your chances of getting the funding you deserve. Get in touch with Lumo to learn how we can help you.