A Report for The UK Government: A New Era of ClimateTech?

The annual ClimateTech Policy Coalition (CTPC) report has been published, outlining short-term opportunities for the UK government to adopt in order to scale climate technologies to reach the goal of net zero.

The CTPC report is from an independent advocacy group that serves as the policy voice for Britain’s technology-led startups and scaleups that have the potential to lessen the impacts of climate change.

The advocacy group is made up of multiple organisations, consisting of: techUK, Startup Coalition, Undaunted, Cleantech for UK, Tech Nation and Tech Zero.

Cleantech for UK's Director, Sarah Mackintosh emphasises the importance of the report by stating: "The UK’s ClimateTech ecosystem stands at a critical juncture. While the new Government sparked initial optimism, our research reveals a sector eager for clear policy direction and support.

"This report offers actionable, quick-win recommendations to help the UK seize immediate opportunities and lead in ClimateTech innovation, turning ideas into tangible economic and environmental progress." 

What's inside the CTPC report

The CTPC report emphasises multiple ways the UK can lead in climate technology under the new Labour government.

The report addresses urgent climate challenges whilst bearing in mind economic growth and global competitiveness. 

Actionable recommendations to support innovation, align policies and accelerate progress toward net-zero goals are included in the report by stating:

Embed ClimateTech into industrial strategy:

• Position ClimateTech as a cornerstone of the UK’s economic growth and decarbonisation efforts
• Prioritise transformative sectors like hydrogen, energy storage and carbon capture
• Align innovation with long-term industrial goals to secure sustainable growth

Address policy uncertainty:

• Provide clear and actionable roadmaps for government initiatives like GB Energy and the Warm Homes Plan
• Unlock datasets and promote transparency to foster ClimateTech innovation and adoption

Support startups and scaleups:

• Focus on funding mechanisms, including the National Wealth Fund, to de-risk early-stage projects
• Create sandboxes for regulatory testing in waste reuse, retrofits and agricultural robotics
• Streamline grant structures to provide consistent support across innovation stages

Accelerate innovation in key areas:

• Leverage smart data technologies for energy efficiency and consumer empowerment
• Reform the Voluntary Carbon Markets (VCM) to ensure integrity and encourage high-quality credits
• Advance greenhouse gas removal initiatives with robust standards for monitoring and verification

Remove regulatory barriers:

• Update outdated definitions in the Plastic packaging tax to support innovative materials
• Streamline processes for novel food approvals and cultivated meat production to unlock sector growth

Public-private partnerships:

• Encourage collaboration between government and industry to accelerate deployment of transformative technologies
• Attract private investment through blended finance tools like first-loss guarantees and targeted loans

Broader ClimateTech impact:

• Highlight the UK's £26b (US$ 32.5b) ClimateTech ecosystem as a foundation for global leadership
• Address global challenges by supporting ClimateTech export opportunities to decarbonise industries worldwide.

Calling for immediate actions

The report details many ways to accelerate with climate technology, however some have a higher priority than others. 

In a previous report by CTPC, it was stated that there is a critical gap for innovative startups in the built environment sector, under schemes like: ECO, SHDF and HUG, the PAS 2035 standard requires technologies to meet specific “measure type” requirements. 

The advocacy group addressed this by stating the government should coordinate sector-wide efforts and leverage the RetroNetZero Network, established by BRE in 2024, to guide innovators through regulatory processes. 

While RetroNetZero provides a strong starting point, its potential can only be fully realised with a new home, such as the Regulatory Innovation Office (RIO), to ensure widespread adoption and support.

The challenge of combating climate change lies in addressing an externality, humans currently do not pay for emitting harmful greenhouse gases. 

To solve this market failure, the CTPC highlights that two main options exist: 

• Compliance markets – these limit permissible emissions and cover only 24% of global emissions
• The Voluntary Carbon Market (VCM) – actors voluntarily buy credits to fund carbon removal or emission avoidance projects.

While the VCM has matured through industry collaboration and standards, challenges like greenwashing and low confidence in credit quality persist; however, its impact is critical – without funding for carbon removal or protection of carbon sinks, the path to climate catastrophe accelerates.

There is also a growing consensus in the ClimateTech sector that high-quality, integrity-focused carbon removal credits should be included in the UK Emissions Trading Scheme (UK ETS). 

Transitioning to this model will require the government to establish robust qualification criteria and monitoring, verification and reporting (MRV) standards. 

The UK government recently stated that it intends to “define the methodologies that Greenhouse Gas Removal projects supported under the business model will need to meet rather than endorse one, or multiple, third party MRV methodologies” under its planned approach through the parallel work.

The CTPC report also discusses the global cultivated meat market that was recently valued at nearly £197m (US$246.9m) in 2022, with a projected compound annual growth rate of 51.6% from 2023 to 2030. 

Within the report, Startup Coalition data highlights the UK’s small but growing cultivated meat sector, which has raised over £70 million (US$ 87.5m) in five years and is worth over £160 million (nearly US$200m)

However, the process remains constrained by outdated legislative timelines inherited from the EU, which have not been revised post-Brexit. 

A "Brexit Opportunity" highlighted in the December 2022 CTPC report was reforming agricultural robotics regulations. 

This need for "moonshot" innovation was emphasised in the June 2023 Independent Review into Labour Shortages in the Food Supply Chain and the November 2023 Pro-Innovation Regulation of Technologies Review. 

While no action has been taken yet, the Labour Government's planned 2025 Food Strategy provides a key opportunity to address this as part of a comprehensive review of UK food production.

The CTPC report provides a comprehensive blueprint for scaling climate technology in the UK, highlighting actionable steps to address urgent climate challenges while fostering economic growth and global competitiveness.

By embedding ClimateTech into industrial strategy, removing regulatory barriers, supporting startups and leveraging public-private partnerships, the UK can position itself as a leader in the global green economy. 

Immediate action on these priorities will not only accelerate progress toward net-zero goals but also drive innovation, job creation, and sustainable growth, ensuring the UK remains at the forefront of ClimateTech advancements.

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