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The Carbon Trust

17 Mar 2011 10:03:35

Green growth opportunities in Scotland

New research from the Carbon Trust has shown that Scottish business leaders are almost unanimous in their belief that green growth is an opportunity for their business (94%) over the next five years. However, when asked which country is best prepared to take advantage of the green economy, over one in five Scots (22%) sighted Germany as number one, compared to 19% of Scots who put the UK as number one.

These findings come as the Carbon Trust's Green Growth campaign launches in Scotland, backed by businesses across the UK including Pelamis Wave Power, Artemis Intelligent Power and Diageo.

Over three quarters (77%) of Scottish business leaders expect a bigger percentage of jobs to be in the green economy in 5 years' time, with it helping to grow the UK's export market. Yet only a quarter (26%) of those surveyed actually have a strategy in place to take advantage of the opportunities for their business. While there is general agreement that new technology is going to drive green growth (75%), only around a third (36%) of businesses are investing money in the research and development of green products and services.

John Stocks, manager, Carbon Trust in Scotland, commented: "It is reassuring to note that there is belief in the green economy and the future it has in Scotland, but the lack of actual strategy to take advantage of this needs to be addressed.

"Businesses need to look beyond the short-term financial reporting cycle and place some smart, early bets on the future. Otherwise the cost, both to Scotland's economy and to the environment, will be too great to ignore. Scotland offers a wealth of opportunity and there is huge potential for Scottish businesses to the take the lead in green growth particularly in areas such as marine power due to the vast natural resources available."

Of those surveyed, the greatest numbers of Scottish bosses – 22% – believe that Germany is best prepared to benefit from green growth, with the UK coming second with less than one in five citing the UK as the most prepared nation (19%).

The Carbon Trust research suggests that leadership is vital to any company seeking to take advantage of growth in the green economy. Scottish respondents were more vigorous in their thoughts on this with three in four decision makers (78%) citing it as a top three requirement, compared to the UK figure of 74%. By contrast, only a quarter (28%) of the Scots senior managers surveyed believe access to capital is an essential item for green growth.

The majority of business leaders questioned – 75% – state that the key benefit of "going green" is to enhance their corporate reputation. However, over a third (36%) say that having a "sustainable" business plan can actually increase profits. The environmental and low carbon market is worth over £112bn a year in the UK and employs over 900,000 people. It is forecast to grow by 25% over the next four years.

Janette Harkess, SCDI director of policy said: "SCDI strongly believes that Scotland has huge economic opportunities arising from the low-carbon economy. Today's report from the Carbon Trust provides further valuable evidence of this.

"Scotland has the natural assets, the research capacity and the skills to become a global leader in the development of low carbon technologies to export across the world. We must ensure that, working in collaboration, the correct decisions are taken by our public and private sector organisations to maximise these opportunities and ensure Scotland’s place as a key global player comes to fruition."

Alan Barclay, governance director of Diageo Europe Supply, commented: "Environmental sustainability is core to the future of our business. We depend on a healthy environment and natural resources to make our products and so we believe that environmental sustainability is a business imperative as well as a social imperative.

"We are committed to minimising our environmental impacts wherever we operate. That is why when we opened a new malt whisky distillery at Roseisle on Speyside and a new rum distillery in the US Virgin Isles last year, both were designed to be powered by their own on-site bio-energy facilities, using by-products from the distillation process to produce renewable energy and reduce our carbon footprint. In Scotland, we are also investing £65million in a bio-energy plant at our Cameronbridge distillery in Fife, one of the biggest investments in cutting edge green technology in the UK outside the utilities industries."

"Right throughout our supply chain from procurement to production to packaging we are setting ambitious targets to reduce waste and carbon consumption, all with a view to achieving the continued sustainable growth of our business."

Artemis Intelligent Power was founded to develop efficient and controllable hydraulic power transmissions systems, which form an important building block for many forms of renewable energy. Over 16 years it grew organically to 30 employees before being acquired in 2010 by Mitsubishi Heavy Industries. The Carbon Trust supported the development of its technology for renewable applications.

Win Rampen, managing director of Artemis Intelligent Power, said: "We firmly believe that there is tremendous opportunity in the area of technology development for harnessing and distributing the many forms of renewable energy. The machinery required is still at a very early stage and much maturing will be required before we can be confident to pick the winning technology. Our society has to aim to harvest its energy requirements from natural resources in almost real time if we really expect to create a sustainable world.

"The countries which succeed in developing the renewable energy extraction hardware of the future will be best placed not only to make use of it locally but also to build their economies through its export. The challenge in making it happen in Scotland lies in encouraging the new technology champions, finding the financial resources and making good engineering decisions. This is particularly difficult where there is no map. But it is paramount!"

Jonathan Muirhead, chairman, Scottish Leather Group, commented: "Last year, we launched a £6million thermal energy plant, which was 10 years in the planning. This will allow us to make leather without costing the earth. The process will take waste from our subsidiaries, which previously went to landfill, and turn it into heat and steam, which the factory needs for drying leather and heating water. It will also produce oil, which will be used as fuel and the final waste product, a mineral ash, will be sold on to the construction industry. We take our environmental responsibilities seriously, our customers expect it and our reputation as industry leader demands that we are ahead of the competition. Sustainability is not a choice, it's a requirement."

The continuous investment in technical innovation throughout the Scottish Leather Group has moved their manufacturing process from a craft based operation to a technology driven enterprise with their own manufacturing IP. Mr Muirhead concludes: "There is a need for industry to self-fund and develop such technology to ensure full advantage is taken of the green economy."

Pelamis Wave Power (PWP) was responsible for launching the world's first commercially available machine for generating wave energy. Two of its machines have been sold to E.ON and Scottish Power which will undergo trials off the coast of Scotland that it is anticipated will act as the springboard for larger scale commercial projects.

A key focus for mass deployment is to increase annual energy yield and to reduce costs. The ability to install and remove machines quickly and inexpensively for maintenance purposes minimises "waiting on weather" and increases accessibility. PWP is working with the Carbon Trust on innovative ways to achieve these aims and in doing so is playing a key role in helping the UK become a world leader in wave energy generation.

Max Carcas, business development director from PWP said: "With a new technology, relatively small investments can drive innovation leading to step changes in the cost of energy delivered, in a way that is just not possible with more mature forms of generation. The work we have done with the Carbon Trust has demonstrated this, and this can be seen in other sectors.

"For example, the cost of electricity generated from coal in the twenties cost more than ten times what it does today. In the wind sector a similar process of innovation and market deployment has led to generating costs falling by 80% over the past 30 years. Denmark had the foresight to invest early on and is now reaping the benefits of this by exporting several billion pounds worth of turbines per year in a market growing at more than twenty per cent per annum. We have a similar opportunity in wave energy but only if we as a country prioritise the investment required to produce this return."


• A total of 109 online surveys were completed with senior decision makers from companies in Scotland with at least 50 or more employees between 14 December 2010 and 31 January 2011.
• 62 of these interviews were very senior decision makers (director or above); 60 of the organisations involved employ more than 1,000 staff.
• A full analysis of the data is available.

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