Select Committee on Environmental Audit Written Evidence

Memorandum submitted by Johnson Matthey plc


  1.  Johnson Matthey is a UK-headquartered speciality chemicals company focused on its core skills in catalysts, precious metals and fine chemicals. Johnson Matthey has operations in 34 countries and employs around 7,500 people, including almost 3,000 at 19 sites in the UK. Its products are sold across the world to a wide range of advanced technology industries. The company has activities in a number of areas relating to clean fuels, pollution control systems for automotive and other industries, and in fuel cells and advanced technologies for the hydrogen economy.


  2.  Johnson Matthey believes that it is important to view the issue of carbon emissions (and their reduction) from transport within the context of other issues ranging from energy security and diversity to local emissions. It is also important to view short and medium term progress towards meeting targets (such as Kyoto) in conjunction with progress towards longer term goals.

  3.  Relating to carbon emissions, reductions can be achieved by reducing the carbon output per vehicle mile, reducing the distances travelled, increasing the number of passengers per vehicle and/or changing the mode of transport. It is not in Johnson Matthey's area of expertise to comment on the second, third and fourth of these issues and this memorandum therefore focuses on reducing carbon load per mile. We note, however, that it is important to look not only at on-road vehicles but also at carbon emissions from other transport sectors, including off-road machinery and boats, where carbon dioxide emission reductions can also be made.


  4.  In the short term, apart from demand management, carbon emission reductions can be brought about by greater use of more efficient engine technology, including lean burn gasoline engines and clean diesel technology. Although these engine variants typically produce less carbon dioxide per mile travelled than conventional gasoline internal combustion engine vehicles, they do produce other, regulated emissions (carbon monoxide, oxides of nitrogen and particulate). Exhaust emission control devices (including conventional catalysts) allow these vehicles to be used cleanly meeting current and next generation environmental standards, while also reducing carbon dioxide emissions.

  5.  Over the longer term, there will be other technologies which can reduce the carbon emissions per mile travelled. One current example would be from the increasing market penetration of hybrid vehicles, which offer fuel efficiency benefits in urban driving. Johnson Matthey also supports the increased use of an appropriate amount of biofuels, the use of which gives reduced lifecycle carbon emissions as well as increasing energy diversity in the transport sector. The adoption of clean synthetic fuels (gas to liquids) allows further diversification of supply and enables further pollution control technologies which require ultra low sulphur fuel.

  6.  Of course, as mentioned in the Prime Minister's foreword to Powering Future Vehicles Strategy, hydrogen and fuel cells will be increasingly important in the future. In the 2010 timeframe the implementation of hydrogen fuel cells in urban vehicles (eg buses) does offer the potential to introduce vehicles that produce zero emissions at point of use as well as to increase awareness of the technology. The ability of the technology to contribute to carbon or GHG targets in 2010 or 2020 will however be limited by its relatively low share of the vehicle parc. These technologies nonetheless remain critical to meet longer term goals. Continued work and support for development in this area remains essential to move the UK closer towards a lower or zero carbon emissions economy.


  7.  Addressing the specific question of which organisations are involved and the coordination between them, it is Johnson Matthey's view that it would be possible and desirable to increase the coordination between different government departments and other commercial and non-commercial organisations operating in this area. This notwithstanding, the establishment of organisations including the Low Carbon Vehicle Partnership, the Low Carbon and Fuel Cell Knowledge Transfer Network and Cenex (the Centre of Excellence for Low Carbon and Fuel Cell Technologies) was welcome and has provided a focus for much of the work in this area in the UK.

  8.  The scale of the environmental challenge of reducing carbon dioxide emissions from transport is extremely large and this presents correspondingly large opportunities for UK industry. New technology can play an important role in delivering lower carbon emissions without impacting on quality of life for users. Support for development, demonstration and early stage deployment of new technologies would provide direct benefits for the UK both in terms of competitiveness and by reducing carbon dioxide emissions.

  9.  For maximum effectiveness Johnson Matthey believes a combination of financial and regulatory initiatives are required. Johnson Matthey acknowledges the funding already provided into the development of new technologies to reduce carbon emissions. In many cases this is a critical enabler, particularly in early stage work.

  10.  However, as important as financial support is the contribution that government can make towards making more certain a future market. Government regulation is of particular importance in the environmental sector as market mechanisms cannot always be relied upon. Environmental benefits are a social, rather than an individual, good and consumers typically will not drive development of the market alone.

  11.  As a result, there is a greater responsibility placed on other government activities such as the introduction of clear, long-term and progressive regulation in the environmental sector. This is particularly important where innovative technology is involved. For example, the US Federal Clean Air Acts and the Californian Zero Emission Vehicle Mandate were instrumental in creating the market for automotive emission control catalysts and for automotive fuel cell development respectively. Comparable regulation in Europe has been weaker and has retarded the development of European adoption.

  12.  Although consultation with industry is required to ensure that workable regulation is introduced, tightening environmental regulation is not always viewed negatively by industry. The Corporate Leaders Group co-ordinated the publication of an open letter to the Prime Minister in June 2005 in which the Chief Executives of twelve FTSE 100 companies (including Johnson Matthey) gave their support to well-signposted and effective regulation.


  13.  A third element of government's contribution to bringing low carbon technologies to market is that of intelligent purchasing. The public sector has significant purchasing power and this can be used to stimulate and facilitate the commercialisation of new products. The Environmental Innovations Advisory Group (Defra/dti) has been working on the development of a framework for a "forward commitment" approach to procurement whereby a prospective purchaser commits to buy an agreed number of new products (which do not yet exist) at an agreed price at some point in the future, provided that it meets an agreed specification. The certainty of a future market allows the supplier to mobilise his own and his supply chain's resources to develop fully engineered products, rather than one-off prototypes for demonstration programmes.


  14.  In summary, Johnson Matthey supports the aims of the current enquiry and believes that continued innovation in environmental technology presents opportunities both to meet carbon reduction targets as well as to develop the UK as a centre for low carbon technologies. Government programmes already play a key role in helping with the development funding for technology but this needs to be coupled within a policy framework that includes well-signposted and progressive regulation and the facilitation of forward commitment in procurement.

  15.  Johnson Matthey would be pleased to elaborate any of the points raised here in oral evidence to the Committee if so required.

February 2006

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