UK risks dropping green energy lead by failing to respond to Biden’s $400bn package, Johnson Matthey chief warns
The head of one of Britain’s largest manufacturers has warned Prime Minister Rishi Sunak that he risks squandering the country’s lead in clean energy production by failing to respond to US President Joe Biden’s $400bn (£317bn) green stimulus package.
Liam Condon, chief executive of Johnson Matthey, told Sky News it has intellectual property which could help the UK become a world leader in the production of green hydrogen.
However, with the US now providing hundreds of billions of dollars of subsidies for those making similar products stateside through the Inflation Reduction Act, the UK risked losing out on this part of the green industrial revolution.
Condon said: “I think the risk is that over time we will lose another leading, cutting-edge industry where the UK could be a global champion. I think batteries is gone – we’ve lost that. That race is, from my point of view, over.”
“In hydrogen, the UK can still be a global champion. But we’ve got to move with a sense of urgency,” he added.
Green hydrogen is made through electrolysis powered by renewable energy and is seen as a potential solution to helping Britain achieve its net zero ambitions.
It has a very low emissions profile but is expensive to make.
The government is targeting 10GW of generation by the end of the decade through its energy security strategy.
The European Union has responded to Biden’s help by launching its own, albeit smaller, package intended to stimulate green energy production.
“The risk is if we don’t move with that sense of urgency, we will lose that next round of innovation as well. That’s real jobs for the future. Future-proof jobs for the next decade,” Condon warned.
New research out today illustrates the scale of opportunity Sunak could be forgoing by passing up revitalising the UK’s former industrial heartlands.
According to analysis by the economic think tank the Centre for Progressive Policy (CPP), ramping up investment in bygone manufacturing hubs like Lincolnshire and Yorkshire could unlock a £70bn boost to the economy, nearly four per cent of the UK’s entire GDP.
Tapping that potential growth would help narrow regional income divides in the UK, a key mission of former Prime Minister Boris Johnson’s ‘levelling up’ agenda, the report argues.
Ross Mudie, research analyst at the CPP and lead author of the report, said: “Each day, more major firms are shifting investment out of the UK and towards our competitors across the Channel and Atlantic.”
“Government inaction means we are failing to encourage the level of private investment our economy needs,” he added.
The CPP identified 95 sectors in 72 underperforming local economies – mostly outside of the south east and London – that are prime to jolt the UK’s sluggish growth and productivity performance. Some 80 per cent of those 95 sectors come from the manufacturing industry.
Sunak should adopt targets, similar to his fiscal rules, that tie him to ensuring factories’ contribution to UK GDP and employment is growing, the think tank recommended.
When approached for comment, a government spokesperson said: “We are leading the world in reaching net zero and are cutting emissions faster than any other G7 country. And the UK is one of the top three countries in the world for our record investment in clean energy.
“We’re investing £30bn to support our green industrial revolution with up to £20bn for carbon capture, utilisation, and storage. We’ve also kick-started the hydrogen sector in the UK, with the first projects announced in our £240m Zero Hydrogen Fund – helping to deliver this new clean power source. This will create thousands of green jobs and help deliver on our priority to grow the economy.”