Green Investment Bank

WRITTEN EVIDENCE SUBMITTED BY THE CENTRE FOR PROCESS INNOVATION (GIB 21)

WRITTEN EVIDENCE FROM THE CENTRE FOR PROCESS INNOVATION FOR THE ENVIRONMENTAL AUDIT COMMITTEE’S ENQUIRY INTO THE GREEN INVESTMENT BANK

1. The Centre for Process Innovation (CPI)

1.1. CPI is the Technology Innovation Centre (TIC) that serves the process and chemistry using industries. It is strongly focused on the ‘green’ or ‘clean technology’ sector in its target markets of sustainable processing and printable electronics. It works with public and private partners to develop processes that drive the m ore efficient use and reuse of increasingly scarce sustainable natural resources . More information about CPI can be found in section 7 and at www.uk-cpi.com .

2. The Significance of Barriers or Market Failures Requiring the Establishment of a Green Investment Bank (GIB) and the Risks of Not Getting this Done Quickly

2.1. There is a significant opportunity for the UK to increase the availability of investment to businesses, particularly start-ups and SMEs, that are developing innovative green technology. Raising funds, both capital and revenue for this type of business is very challenging in the current environment.

2.2. There is an appetite for green investment opportunities, but many opportunities are at an early stage of development and appear risky to the investment community, one of the roles of a Green Investment Bank (GIB) would be to create mechanisms that de-risk these investment opportunities.

2.3. CPI meets, creates and works with many innovative green technology businesses that are seeking investment. If a GIB is not created quickly many of these businesses will fail or will move out of the UK to secure investment.

3. The Objectives and Roles the Green Investment Bank Should Assume, the Areas it Should Operate in and how its Lending and Investment Decisions Should Balance Green Benefits Against Financial Risks

3.1. CPI feels that a GIB would create benefit if it were to focus on the development and funding of early stage businesses between technology readiness levels 4 and 7.

3.2. A GIB could de-risk and support early stage businesses to ensure that investment opportunities and technology developments are being lost.

4. The Green Investment Bank’s Investment Priorities and Whether and How the Bank Should Support and Foster Areas Where the UK has Emerging Green Technology Strengths

4.1. There is an opportunity to create a partnership between open access technology innovation centres (TICs), such as the Centre for Process Innovation (CPI) and a GIB to work together to de-risk early stage opportunities to create investable technical and commercial cases.

4.2. CPI would support a role for a GIB that provides early stage and follow-on finance for UK based technology development businesses that have the technical and business skills to create viable businesses.

4.3. To have greatest benefit a GIB should cover the whole green technology sector with a particular emphasis on technologies and businesses that reduce the use of natural resources, either by using resource more efficiently or by using wastes as part of the process.

4.4. The GIB’s investment priorities should be in sound technology and infrastructure that can economically satisfy the UK’s future needs. These priorities should include the priorities of BIS and the Technology Strategy Board. CPI has a particular interest in supporting industrial biotechnology, anaerobic digestion, sustainable engineering, smart chemistry and printable electronics.

5. The Funding and Governance Structures Required to Create an Effective and Accountable Body Including the Role of Green Bonds

5.1. The most effective role for a GIB would be to offer services and investment products that are not currently available. In CPI’s view support is most needed to cross the funding gap between research and mainstream profitable businesses.

6. Summary

6.1. As the TIC supporting the process industries CPI strongly supports the creation of a GIB and would be very happy to work collaboratively with Government and the Investment Community to create an innovative partnership between the finance and technology communities that can de-risk early stage investment opportunities to increase the success rates of early stage investments.

6.2. CPI also supports the development of an integrated mechanism for public sector intervention that supports and nurtures invention and the conversion of ideas into viable businesses. This development of the existing mechanism would make funding available to support research and discovery (through the Research Councils), technology development and innovation (through the Technology Strategy Board) and early stage finance (through a Green Investment Bank). We feel a model of this type would increase the success of public investment and create a public private partnership that brings viable businesses to profitable commercial reality.

7. Introduction to the Centre for Process Innovation

7.1. CPI is the Technology Innovation Centre (TIC) that serves the process and chemistry using industries. It is strongly focuse d on the ‘green’ or ‘clean technology’ sector in its target markets of sustainable processing and printable electronics. It works with public and private partners to develop processes that drive the m ore efficient use and reuse of increasingly scarce sustainable natural resources .

7.2. It does this by combining market knowledge and technology understanding to develop and prototype products and processes quickly and efficiently with minimal risk to its public and private sector partners. The organisation supplies its advanced manufacturing products and services internationally.

7.3. The company works in the innovation space between the discovery of an idea and the delivery of a product or service to the commercial market. In technology readiness levels (TRL) CPI works from level 4 to level 7. The business model has delivered substantial benefit because it links the needs of business to CPI assets and technology expertise.

7.4. The CPI team has consistently delivered innovation assets and leading edge development programmes on time and to budget. In its six years of existence it has grown at over 60% per year and now serves major clients such as Arup, Corus, Akzo Nobel, Croda International, Ensus, DeLaRue, Dr Reddy’s, Johnson Matthey, Unilever and Thorn Lighting. It has a n international reputation in two main technology areas:

Advanced Manufacturing for the Process Industries – Markets served include energy, high value chemicals, carbon capture and pharmaceuticals. This business unit is home to the National Industrial Biotechnology Facility and Anaerobic Digestion Development Centre .

Printable Electronics – CPI targets barrier coatings, advanced material deposition processes, printable electronic materials, printable circuits for high resolution display and smart packaging applications, solid state lighting and organic photovoltaics.

7.5. The CPI model has been developed and tested to serve the process industries. It is currently also developing innovation opportunities for a range of markets from high temperature processing to zero carbon communities. The CPI approach can readily be applied to set-up and grow technology innovation centres for other market sectors that are of strategic importance to the UK .

15 October 2010