SDZ0002

Written evidence submitted by International Development Research Centre (IDRC)

Summary

Research and innovation is a priority mission for reducing emissions from industry and manufacturing and thereby for reaching the UK’s net zero target.

IDRIC welcomes the government’s aim to provide greater clarity for research and innovation priorities, the evidence-based approach for identifying these and the attempt for more coordination across public bodies delivering research and innovation funding.

IDRIC supports the findings for the NAO report regarding the need for a systemic and longer-term perspective for research and innovation funding and would like to stress two points:

• The inadequacy of the traditionally understood pipeline or TRL model of innovation, where innovation advances through clear stages undertaken by specific actors.
• The lack of certainty beyond 2025 poses a challenge for developing some of the critical technologies for industrial decarbonisation, which will require considerable public and private investment at various stages of development over the next decades. Short-termism is detrimental for maintaining and nurturing the research ecosystem and collaborations needed to deliver cutting-edge research and innovation.

New and innovative approaches are needed to help energy-intensive industries such as steel, cement or chemicals to reduce their CO2 emissions, while safeguarding and creating new jobs and opportunities.

The Industrial Decarbonisation Research and Innovation Centre brings together researchers, industry, communities and policy makers to develop innovative solutions for a net zero industry. With a portfolio of over 60 interdisciplinary research projects collaborating with more than 200+ industry and academic partners, IDRIC works to advance the development and scale up low-carbon technologies and provides critical insight into social, economic and policy aspects of the transition to net zero.

IDRIC is currently funded by the £210m Industrial Decarbonisation challenge (IDC).

We welcome the government’s aim to provide greater clarity about its priorities for research and innovation funding, the evidence-based strategy to derive at priorities in the framework and the attempt to increase the coordination between government departments and public bodies involved in the delivery of research and innovation funding.

We would like to highlight two challenges in the current Research and Innovation Framework and Delivery Plan.

1. Research and Innovation Stages

We are pleased that the NAO report highlighted that half of energy sector emissions reductions for 2050 will come from technologies for which continued development is needed. However, more support is needed from the government to ensure that the research and innovation ecosystem that will drive this development has the resources needed.

Although certain technologies are proven, known technologies (e.g. CCS), to support scale up, continued research and innovation is required to optimise and de-risk their application across a range of contexts, and support the development of supply chains.

The report, as well as the Government’s Research and Innovation Framework and Delivery plan, outline the traditionally understood “pipeline”, or TRL model of innovation, whereby a technology moves from early-stage research conducted by universities, followed by prototyping and demonstration by spin-outs, finally to full commercial deployment.

However, the reality of innovation is not so linear, with different elements feeding in simultaneously. There is a need to revaluate the relationship between so-called “early” and “late” stages of innovation, which are often simultaneous in nature and require adequate and proportionate funding to support this interaction.

To support such an approach, a systemic perspective is needed that takes account of the wider systems challenges and dependencies on a technology as it develops to full commercial deployment. The understanding of such challenges may be less developed than the specific operation of the technology itself, so may require different kinds of research/innovation support. The Government's Net Zero research and innovation strategy should reflect this, and update its traditional pipeline thinking which is not efficient in incentivising outcome – for example, emissions reductions achieved, economic benefit gained.

Underpinning this approach will be support for collaborative, cross-disciplinary working. Continuity and stability via a more programmatic approach to funding can support the development and maintenance academic and industry networks which provide conduits for knowledge exchange and aggregation, and which can accelerate the development of innovative technologies and systems.

2. Longer term perspective

We would strongly urge the government to develop a longer-term, outcome-focused strategy for research and innovation. We agree with the NAO report that the spending review process is a hindrance to such R&I investment strategies.

Firstly, technologies for industrial decarbonisation need to be developed over the next decades. The NAO report is right in highlighting the need for considerable private investment, but uncertainty over the continuity of research and innovation will have knock-on effects for investments down the line.

Technology roadmaps could be a useful tool to inform decision points for funding critical research and innovation and deploying low carbon technologies in line with the Government’s 2050 Net Zero commitments. These could be complemented with a clearer indication how various public and private investment channels (incl. via the British Business Bank and the UK Infrastructure Bank) are expected to support the innovation pipeline over this timescale. Delivery against these roadmaps will require central oversight, as well as adequate data collection and interpretation to evaluate progress.

Secondly, it is important to stress that short-termism is also detriment for developing and growing a strong net zero research and innovation ecosystem itself. Short project funding cycles pose a key challenge for maintaining the institutional capacity and human capital needed to delivery cutting-edge research. A shortage of highly-skilled research staff since Brexit is already posing a serious risk to delivering the already funded research and innovation for net zero, let alone meeting research and innovation needs of the next decade.

Most importantly, strong collaborative networks, including between research and industry, have been a key driver of some of the most promising breakthroughs in net zero and decarbonisation research. Providing a strong signal of continuity for net zero research and innovation funding beyond 2025 is therefore critical to ensure the UK has a strong research and innovation ecosystem to delivery on the 31 challenges outlined in the government’s Framework.

In the review of net zero research and innovation programs recommended by the NAO by 2024, we would urge the government to consider the role of activities that foster strong and impactful collaborations between industry and academia. Such collaborations also support the retention and development research staff in key disciplines and provide auxiliary service such as in policy and knowledge exchange. For example, the activities being undertaken by IDRIC and similar consortia in key thematic areas for net zero.

Lastly, the delivery plan makes frequent references to the importance of international collaboration as a key driver of innovation for net zero. However, we are concerned that there is a lack of significant real-world action taken to ensure these collaborations form and continue to develop. We would strongly urge the government to devise a clear strategy to realise meaningful and impactful international collaborations, which are vital to accelerate the UK’s net zero transition and create supply chain opportunities.

June 2023