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16 MAY 2018

WHY THE ENVIRONMENTAL SECTOR NEEDS A PROJECT PIPELINE

Infrastructure has a steady pipeline of projects and the environmental technology sector needs the same

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ue to EIC’s links to ACE, I am often an interested observer at ACE conferences and events, and am well aware of the importance that the infrastructure industry places on having a ‘pipeline’ of projects. The problems of ‘feast and famine’ have become well-known, in terms of retaining skills, attracting investors and the like. And in no small part due to the work of ACE, the government machine now appears to understand this. The sequencing of Crossrail, HS2 and then Crossrail 2 is a step forward.

This problem though is also found in many of the environmental sectors that EIC members work in. Take for example the companies that develop and manufacture retrofit exhaust treatment systems for diesel engines.

This SCR/DPF technology can bring an old Euro IV bus or truck right up to Euro VI standards in terms of cutting NOx and particulate emissions. Clever technology, and an area where the UK has strong expertise, but in reality, the demand for this piece of environmental kit (each one of which costs several thousands of pounds) is almost entirely dependent on regulation – bus and fleet companies will not pay for them unless they have to, not least because retrofit systems also make engines slightly less fuel efficient.

It’s also worth noting that truck and bus engines are complex beasts, coming in many different types and variants, and packaged in chassis in different ways, all of which means that bespoke R+D can be required to develop and fine tune a system so that it delivers consistent real-world performance - all of which must then be accredited at a testing centre which may be overbooked.

Most of the companies in this niche sector are medium-sized manufacturing firms, often family-owned. They tend not to have huge financial resources and don’t find it easy either to weather several years of low demand, or to suddenly scale up if half the freight industry comes asking for a low emission fix. And yet this is exactly what often happens.

In the mid-2000’s as the Low Emission Zone (LEZ) in London came into force and a government-funded Clean Bus Technology Fund was created to support bus retrofit in other cities, order books were good. But for several years air pollution dropped down the agenda, and there was less business (the lack of effective enforcement of the LEZ also meant little in the way of an aftermarket of maintenance and repairs of the filter systems).

Compare that to now, when in London the Ultra Low Emission Zone is less than a year away, some 30 English and Welsh cities are being told to implement Clean Air Zones, and the Scottish Government, not to be outdone, is rolling out its own Low Emission Zone scheme. Depending on the details of each scheme, and whether they include HGVs and coaches as well as buses, orders for tens of thousands of systems could be coming, which the industry would struggle to deal with.

If, instead, the various government players had co-ordinated and set out a long-term strategy of cleaning up heavy vehicles, this could have been the basis of steady growth in an innovative, UK-based manufacturing sector which has huge overseas demand. Isn’t that just what the government’s industrial strategy is supposed to be encouraging?

Of course, this sort of un-joined up government is nothing new, but that doesn’t make it any less frustrating when it happens. The infrastructure sector has come a long way in getting government to recognise the need for a steady pipeline of projects - in the environmental technology sector we need to get better at doing the same.

This blog originally appeared as an opinion piece in Infrastructure Intelligence.

Matthew  Farrow

Matthew Farrow

Executive Director, EIC

Matthew leads ACE sister organisation, the Environmental Industries Commission.

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