Hot issues: manufacturing, materials, and environment unit newsletter. Issue 27: March 2007

Budget 2007: £100m for innovation and steps towards a low carbon economy

The Collaborative R&D competition, part of the DTI-led Technology Programme, will provide funding to the most innovative, marketable projects which will boost the UK economy. The Spring competition will open on 14 April. The money will allow businesses to research and develop new technologies, from environmentally friendly, low-carbon projects to leading-edge manufacture.

The £100m will provide:

• £40m for advanced manufacturing – including design engineering technology for aerospace, vehicles and energy
• £15m for energy technologies, both renewables and continued production of hydrocarbon reserves
• £15m for lightweight materials
• £5m for plastic electronics – to build on the UK’s current competitive edge
• £7m for areas of medicine that bring together materials, nanotechnology and tissue engineering with surgical and clinical sciences
• £8m for ICT, developing technologies to support better networked business

The budget also saw £6m of funding, a 50% increase in funding for householders to install small scale renewables such as micro wind turbines and solar panels was announced in the Budget today. It will take the total available under the Low Carbon Building Programme to more than £18million. At the same time the scheme is to be re-shaped to make best use of the extra funding. Proposals will be brought forward in May.

The Budget builds on the draft Climate Change Bill, with measures to encourage Government, business and individuals to tackle climate change by reducing carbon emissions.

The "green" finance measures in the Budget include:

• landfill tax to rise to encourage the development of alternatives to landfill
• inflation-only increase in climate change levy
• further details of a stamp duty exemption for zero carbon homes
• further use of vehicle excise duty to incentivise the purchase of low carbon cars
• no income tax or capital gains tax for income derived from micro-power generation in the home
• phasing-out of high-energy light bulbs in the UK by 2011
• incentives for biofuel development and use competition for a carbon capture and storage demonstration

Detailed information on the technology priorities, application timescales and supporting events is available here:
www.dti.gov.uk/innovation/technologystrategy/technologyprogramme/index.html

Budget information: www.hm-treasury.gov.uk/budget/budget_07/bud_bud07_index.cfm

The Climate Change Bill

Key points of the draft bill, include:

• A series of clear targets for reducing carbon dioxide emissions - including making the UK's targets for a 60 per cent reduction by 2050 and a 26 to 32 per cent reduction by 2020 legally binding.
• A new system of legally binding five year “carbon budgets”, set at least 15 years ahead, to provide clarity on the UK's pathway towards its key targets.
• A new statutory body, the Committee on Climate Change , to provide independent expert advice and guidance to Government on achieving its targets and staying within its carbon budgets.
• New powers to enable the Government to more easily implement policies to cut emissions.
• A new system of annual open and transparent reporting to Parliament.
• A requirement for Government to report at least every five years on current and predicted impacts of climate change and on its proposals and policy for adapting to climate change.

The draft bill is subject to a full public consultation alongside pre-legislative scrutiny in Parliament. The consultation can be accessed from the link below and will run until 12 June 2007.

Defra website http://www.defra.gov.uk/corporate/consult/climatechange-bill/ 

For further information please contact: terry.martin@dti.gsi.go.uk  

Plans for the new Advanced Engineering export advisory group

High Level Group on Competitiveness, Energy, and the Environment

The first and second HLG reports made recommendations on issues surrounding the functioning of the EU energy market, energy efficiency, EU ETS, and long term energy futures. Some of the key recommendations from these reports have been developed and included in the European Commission’s energy and climate change package, which formed the basis of the European Council conclusions on energy and climate change policies.

The HLG members met on 27th February and discussed ways of helping Energy Intensive Industries adapt to the energy and climate change challenges, in particular looking at the roles incentives, and innovation and technology policies can play.

Following the meeting the HLG’s third report has been published (see link to website below). It makes recommendations under 3 priority headings:

• Public support frameworks should move from protecting the past to investing in the future
• Enabling technology leadership and innovation
• Stimulating demand for more sustainable intermediate products

Looking forward, the next section of work to be undertaken by the HLG will focus on the following areas:

• Furthering economic and environmental performance of EU enterprises
• Natural resources, secondary raw materials, and waste

The HLG will also identify measures to secure international action on energy and climate change as part of its work in 2007. These will be presented and discussed at a major conference in November, which will also highlight the Group’s other main findings and decisions.

High Level Group website http://ec.europa.eu/enterprise/environment/hlg/hlg_en.htm

For further information please contact: faith.quigley@dti.gsi.gov.uk

An Energy policy for Europe

The Prime Minister, along with other EU Heads, agreed that the EU should reduce greenhouse gas emissions by 20% by 2020, with an aim to increase this to a 30% reduction by 2020 and 60-80% by 2050 provided that other developed countries commit themselves to comparable emissions reductions. Alongside this, the Council agreed to a 20% renewable energy target and a 10% biofuels target, providing that the sustainability could be proven.

The Council also confirmed that Member States want to make progress on the Internal Market, particularly on the effective separation of supply and production activities from network operations (unbundling); further harmonisation of powers and strengthening the independence of national regulators; the establishment of a mechanism for national regulators to cooperate and take decisions on cross-border issues; a coordination mechanism for TSOs; a more efficient system for cross border electricity trades, including through network standards; increased transparency measures; and an Energy Customers’ Charter.

Other measures agreed include:

• A Plan for Priority Interconnections in the electricity and gas networks of the Member States so that a European grid becomes a reality;
• To appoint EU coordinators to accelerate critical priority projects of European interest, including the Nabucco Gas Pipeline;
• The creation of crisis response mechanisms, including the creation of an Energy Security Correspondents network;
• Proposals to promote sustainable power generation from fossil fuels;
• An analysis of the situation of nuclear energy in Europe;
• An analysis of the availability and costs of gas storage facilities in the EU;
• The establishment of an Energy Observatory; and
• A work sheet for a future European Energy Strategic Technology Plan.

The Commission second Strategic Energy Review in two years time will report on progress.

European Commission greenhouse gas emissions targets

Further details can be accessed from the European Commission Environment DG website at the link below.

EU Climate Change:  http://ec.europa.eu/environment/climat/home_en.htm

Contact: terry.martin@dti.gsi.gov.uk 

Emissions Trading Scheme

As part of the ongoing stakeholder engagement process on the future of the EU ETS, an issues paper inviting responses will be available as of Friday 30th March on the Defra website. The paper will pose questions relating to the priorities for the EU ETS Review as set out by the Commission – see above for details. A formal consultation is intended to be issued later in the year, but this issues paper gives stakeholders an initial opportunity to feed into the Government’s policy development on the future of the EU ETS.

Approved UK National Allocation Plan (phase II) http://www.defra.gov.uk/environment/climatechange/trading/eu/phase2/phase2nap.htm

European Commission Assessment of Phase II NAPs http://ec.europa.eu/environment/climat/ip_1650.htm

UK Manifesto on the EU Emissions Trading Scheme http://www.defra.gov.uk/environment/climatechange/trading/eu/future/index.htm

Contact: faith.quigley@dti.gsi.gov.uk

NATIONAL GRID STARTS EARLY CONSULTATION ON ENERGY SUPPLIES FOR NEXT WINTER

While supplies of North Sea gas are set to decline further, new sources of gas are due to come on stream able to deliver an extra 50 million cubic meters (mcm) of gas a day – over ten percent of the gas Britain would use on a very cold day. These new sources include:

• connection of the Langeled pipeline to the new Norwegian Ormen Lange gas field means that this source alone could deliver a fifth of Britain’s gas needs on an average winter day.
• expansion of the new interconnector pipeline with Holland has increased capacity from 10 billion cubic meters (bcm) a year to 15 bcm a year
• two new LNG terminals in Milford Haven which will add another 16 bcm of potential gas import capacity, and
• a new gas storage facility at Aldbrough and expansion of the existing Hole House Farm gas storage facility

National Grid points out in its report that Britain is increasingly linked to the wider European gas market and the emerging global LNG market and this will impact on how much gas is supplied to the UK. If there are supply shocks in other countries then prices in the UK may have to rise to continue to attract LNG and piped gas from Europe.

Copies of National Grid’s Winter outlook report and a factsheet Securing Britain’s Gas Supply with more details on the new gas importation facilities is available from the Press Office section of the Ofgem website at www.ofgem.gov.uk

Third Environmental Permitting Programme: On Guidance for a Streamlined Environmental Permitting and Compliance System

Environmental Permitting Guidance will be replacing existing lengthy guidance for the waste management licence (WML) and pollution prevention and control (PPC) systems (except for activities regulated by local authorities where the existing General Guidance Manual will be updated to reflect the changes to the system) with an easy-to-read, concise piece of guidance.

It will be a simple, single reference point explaining how the new, streamlined Environmental Permitting Regulations work and, where possible, how they will be implemented.

The consultation closes on 11 April 2007

www.defra.gov.ukm

Establishing a Voluntary Code of Best Practice for the Provision of Carbon Offsetting to UK Customers

The Code is designed to give consumers clarity and confidence when they choose to offset. It proposes that the most suitable carbon credits for offsetting are those from the regulated market because they are robust and verifiable.

The consultation closes on 13 April 2007

www.defra.gov.uk/corporate/consult/carbonoffsetting-cop/index.htm

Next Generation Science for Planet Earth

The Natural Environment Research Council is now developing a strategy for 2007-2012 that builds on the success of their current strategy, Science for a sustainable future 2002-2007.

NERC aim to align strategy development with the spending review cycle and to develop longer-term planning. This will include developing a more dynamic rolling strategic process that ensures that they track changes in the external environment and continuously assessing the environmental science capabilities in the UK. This will enable the Council to review and identify priorities, set targets and make funding decisions.

NERC’s strategy development consists of two parallel, but independent, strands of work.

• Using strategy development panels to develop science themes.
• Developing the other non-science priorities, such as knowledge, scientific infrastructure, people and the organisation etc.

The Office of Science & Innovation (OSI) and Treasury are increasingly emphasising the delivery of science, training and knowledge transfer and in demonstrating outcomes from Science Budget investments. OSI has established a revised 'planning and performance management' framework for the research councils to monitor and report delivery from Science Budget allocations. The framework ensures all research council priorities cascade from the Science Budget objectives that derive from the Science & Innovation Investment Framework 2004-2014.

The consultation close on 16 April 2007

www.nerc.ac.uk/about/strategy/next.asp

Water Metering in Areas of Water Stress & Consultation on Identifying Areas of Water Stress

The Environmental Agency consultation seeks views on proposed method of identifying those areas of England that have different levels of water stress. By classifying areas in this way the activities aimed at saving water can be focussed in those areas where there is greatest need and greatest potential benefit.

Both consultations close on 24 April 2007

www.defra.gov.uk/corporate/consult/water-metering/index.htm

www.environment-agency.gov.uk/yourenv/consultations/1690000/?version=1&lang=_e

Consultation on the principles of a Unified Charging Framework

On the 31 January the EA launched a consultation that sets out the principles on which they believe any new UCF should be based and provides an outline of the proposed framework. The aim of this consultation is to get some feedback on the proposed principles of the UCF.

The consultation close on 24 April 2007

www.environment-agency.gov.uk/yourenv/consultations/1692070/?version=1&lang=_e

Responding to our Changing Climate: A Climate Change Adaptation Action Plan for Wales

This document – Responding to our Changing Climate – is the consultation on the development of that Action Plan, and sets out what impact climate change will have on Wales and begins to identify the key actions required in response.

This consultation document has been prepared by drawing on:

• the responses to Our Environment – Our Future – Your Views: the consultation on Environment Strategy for Wales
• the responses to the consultation on a UK Adaptation Policy Framework
• good practice examples, reports and research results on adaptation responses in Wales, the UK and other parts of the world

The responses to the consultation will help shape the content and priorities of the final Climate Change Adaptation Action Plan.

The consultation close on 27 April 2007

Review of the UK Oil Spill Treatment Products Approval Scheme

The consultation close on 11 May 2007

www.defra.gov.uk/corporate/consult/oilspill-treatment/index.htm

The draft Renewable Transport Fuel Obligations Order

The consultation close on 17 May 2007

www.dft.gov.uk/consultations/open/draftrtfo/

Operation of the UK National Emission Reduction Plan

The LCPD (2001/80/EC) deals with emissions of sulphur dioxide, nitrogen oxides and particulates from Large Combustion Plants (LCPs) with a thermal rating equal to or greater than 50 MW. In the UK, operators of “existing” LCPs (i.e. those first licensed before 1 July 1987), have been given the option of meeting LCPD requirements by participating in the UK NERP.

The NERP enables plant operators to trade emission allowances for sulphur dioxide, nitrogen oxides and particulates, while preventing them from emitting an amount of these pollutants that is greater than that for which they hold emission allowances.

The consultation paper sets out the proposed operation of the NERP, including the Large Combustion Plants (National Emission Reduction Plan) Regulations 2007, which have been drafted to prescribe its operation within the UK.

The consultation close on 22 May 2007

www.defra.gov.uk/corporate/consult/emission-reductionplan/index.htm

Non-agricultural Diffuse Water Pollution in England and Wales and Mechanisms to Deliver Water Framework Directive Requirements on Hydromorphology

The consultation close on 28 May 2007

www.defra.gov.uk/corporate/consult/nadwp-hydromorphology/index.htm

European Internal Market - Proposals for a Regulation on Accreditation and Market Surveillance and a Decision on a Common Framework for the Marketing of Products - [COM(2007)37 Final & COM(2007)53 Final]

The Proposal for a directly applicable Regulation will create a European legal framework for Accreditation to ensure that the market has confidence in conformity assessment bodies (i.e. testing, certification and inspection bodies). It also establishes a framework for Market Surveillance which is intended to ensure equal levels of enforcement across the Community and to strengthen co-operation between Member States and with the Commission. There is also a new proposal on border controls for non-compliant products.

The Proposal for a Decision will not have a direct effect in law but will set the formal framework for all new legislative proposals (including revisions and updates) for Community harmonisation legislation in this area. It is intended to streamline and improve the existing mechanisms that were established by the New Approach and to extend these across other areas of product legislation. The Proposal contains definitions that will clarify commonly used terms and responsibilities and also covers conformity assessment procedures, the notification of conformity assessment bodies and CE marking.

The consultation close on 1 June 2007

www.dti.gov.uk/consultations/page38188.html

Draft Climate Change Bill

The consultation close on 12 June 2007

www.defra.gov.uk/corporate/consult/climatechange-bill/index.htm

Tax incentives for development of Brownfield land

The Government is committed to a step change in housing supply and at the 2005 Pre-Budget Report set out an ambition to increase housing supply by 200,000 net additional homes by 2016. At the same time it is committed to maintaining a high proportion of development on brownfield sites. The Barker Review of housing supply in 2004 recommended that land remediation relief should be extended to give help to long term derelict sites and the Barker review of land use and planning (2006) recommended that the government should consult on reform of land remediation relief to ensure that it brings forward new development on hard to remediate sites.

Budget launches the consultation on improving the effectiveness of the two tax incentives for cleaning up contaminated land, land remediation relief and the exemption from landfill tax for waste from contaminated land. The consultation covers:

• Long term derelict land
• Improving the development focus
• Timing issues in land remediation relief
• Japanese Knotweed
• the landfill tax exemption for waste from contaminated land

Any legislation needed following the consultation will not be enacted before 2008.

The consultation close on 14 June 2007.

www.hm-treasury.gov.uk/budget/budget_07/documents/bud_bud07_brownfield.cfm

Manufacturing Advisory Service (MAS)

MAS owes much of its success to the strong partnership between DTI, RDA s and other key stakeholders who provide access to free hands-on advice and assistance from professional experts. More than a third of firms have gone on to take up in-depth project work with the service at a subsidised rate, enabling them to achieve a vital competitive edge through adopting global best practice in manufacturing.

You can register with the national website to receive a regular e-newsletter in order to find out about recent news and forthcoming events involving MAS.

For further information about the services offered by MAS, go to the MAS national website www.mas.dti.gov.uk

or get in touch with your local MAS Regional Centre direct by calling the MAS helpline number 0845 658 9600.

DIRECTOR
Robert Sullivan
0207 215 1474
robert.sullivan@dti.gsi.gov.uk

Manufacturing

Energy and Environment Policy

Sector Knowledge

Central Team

Dean Thomas
Senior Policy Advisor
Environmental industries
020 7215 1283
Dean.Thomas@dti.gsi.gov.uk