Britain has great low-pollution technology but it needs to be supported

Most people will not pay more for renewable energy than for fossil fuels. That is the reality that Lord Turner's Committee on Climate Change skirted around and the challenge that businesses trying to developing green technologies face every day.

By Richard TylerPublished: 5:57PM BST 12 Oct 2009
For low-carbon alternatives to compete with the mainstream, the companies that are pioneering them need the support of a stable regulatory framework and a package of pricing and tax-relief incentives to give them confidence to invest.
Take biofuels. Kevin Thomas, managing director of Regenatec, warns that he may have to take his company's diesel-engine conversion technology and develop it in India because the UK is such an uncertain market in which to invest. The conversion kits allow diesel engines in commercial vehicles, boats and generators to run on pure plant oil (which Regenatec also produces), and one of its main shareholders, Berkshire-based Courtney Coaches, is among those companies running their fleet off its supplies (other pioneers include the food service logistics group 3663, Stagecoach and even McDonalds).

However, Regenatec's original "angel investor" who had backed the company's development pulled out in March (as he did in several similar low-carbon technology investments). The reason? "He said he just didn't believe the Government walks the walk" on its pledges to reduce pollution, Mr Thomas tells me.
One threat looming over the biodiesel industry is the impending withdrawal next April of a 20p per litre tax relief. It is due to be replaced by certificates that can be traded between those that produce biodiesel and those that don't have enough to meet new renewable obligations (largely those selling at the forecourt pumps).
The only problem is that this new system has undermined investment and innovation in the UK, even as it has helped the Government to hit its target that a minimum of 2.5pc of all the fuel sold contains a mix of biofuels.
The multinationals have managed this feat in part through pumping their own low-grade biofuel from plants on the Continent – which doesn't sound very sustainable. The knock-on effect is that domestic producers have had a hell of a time. The certificates had a maximum face value of 15p a litre but no minimum, and between April and September this year they were worthless.
The problem has in part been caused by poor drafting of the Renewable Transport Fuel Obligations regulations, which created the certificate system and derive from an EU directive. Three consultations along and still more changes are expected.
Some small biofuels producers under the banner of the UK Sustainable Biodiesel Alliance have begun lobbying the Department for Transport and HM Treasury to maintain the 20p relief. They argue that small producers simply can't cope with certificates that can be worth a lot one month but nothing the next.
Convert2Green, another producer of high-grade biodiesel, was receiving £30,000 a month in certificate revenue, only to lose it all when they lost value. If the small producers have wobbly finances, then the large corporates that rely on them will become nervous, slowing down the adoption of renewables.
The uncertainty is also pushing companies overseas. Regenatec is considering a move because it has a more promising market overseas. India is trying to tackle unreliable power and fuel supplies in remote areas and Regenatec's technology would let farmers grow crops such as jatropha that can be turned into fuel to power the existing small diesel generators that sit beneath mobile-phone masts. The company already has a commercial partner in the country but both are looking for a local financial sponsor and Mr Thomas says they know they need to be on the ground to start with to ensure the fuel produced is of a high quality.
One of Lord Turner's many suggestions was that the Government had to reduce investors' risk so that they provide the capital that companies like Regenatec require. It's a start. While other countries such as Brazil are well advanced in use of renewables, Britain is floundering despite all the talk of targets.
Brighton-based Elektromotive talks of how it took Brighton and Hove City Council more than two years before it agreed to trial the company's award-winning roadside charging posts for electric vehicles – even though the devices are made by manufacturers all within a 30-mile radius of the south coast city.
There's nimbyism and then there's sticking your fingers in your ears, jumping up and down and shouting as loud as you can until the chance goes away. . .in Regenatec's case to India.