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Is the PM right, is the UK really the world leader in green technologies?

There has been a great deal of debate following the PMs recent announcement to push back UK targets in relation to climate change.

GreenTech

Here at Source Advisors, previously GovGrant, digs into recent patent filings, in the UK and globally, to determine innovative activity in the low-carbon vehicle sector. We establish which companies are innovating, where the inventors are based, and which markets are being identified as key for using, selling, and/or manufacturing low-carbon vehicle technologies.

What is the 10-Point Plan for a Green Industrial Revolution?

Sunak’s recent announcement to push back UK targets in relation to climate change has been met with divided opinion by consumers, environmental experts, and industry. No matter what side of the fence you are on, the UK in 2020, published a 10-Point Plan for a Green Industrial Revolution, designed to turbocharge investment in making the UK a global leader in green technologies. The PM hinted that the UK is THE leader on Net Zero, whilst this may be a holistic view that includes policy intention and action, the amount of carbon emissions reduced since 1990, and future direction – the PM included innovation in green technologies in that bracket.

So, what is the 10-point plan? And what technologies does it prioritise for the UK? Below is a list of the 10 technologies of focus:

  1. Offshore Wind
  2. Low-Carbon Hydrogen
  3. Nuclear Power
  4. Zero Emission Vehicles
  5. Green Public Transport, Cycling and Walking
  6. Jet Zero and Green Ships
  7. Greener Buildings
  8. Carbon Capture, Usage and Storage
  9. Protecting the Natural Environment
  10.  Green Finance and Innovation

Zero Emission Vehicles as a crucial priority for Net Zero by 2050

Let’s look at the key policy area affected by the PM’s statement and a crucial pillar within the 10-Point Plan, low-carbon vehicles. According to the UK Government, in 2021, Transport was the highest greenhouse gas emitter by sector, accounting for 26% of our greenhouse gas output in that year. That’s higher than sectors like Energy, Agriculture, and Industrial Processes. The greatest contributor to that is road vehicles, notably higher than aviation, shipping, or heavy goods vehicles. Therefore, it is not a stretch to assume that shifting consumers from greenhouse gas emitting vehicles to more environmentally friendly alternatives will have a positive effect on reducing the UK’s greenhouse gas output.

Innovation will be crucial to making that change affordable and viable for consumers. The vehicles themselves need to be financially accessible to most consumer groups and the associated infrastructure needs to be adequate to cope with demand. Now, for consumers to buy into the change, the user experience for ‘filling up’ their new (likely electric) vehicles needs to be as seamless as going to the petrol station for a quick top up.

What can patents tell us about investment in low-carbon vehicle technology?

Investment in innovation within a certain territory, for example the UK, is likely to be driven by (in part) the future consumer demand in the UK for greener transport alternatives and the UK’s policy framework for encouraging the shift to greener vehicles. Given Sunak’s recent change to push back the ban on new diesel, petrol, and hybrid vehicles by 2030, to 2035, this is likely to create uncertainty in the market. Is the UK serious about shifting to greener vehicles? If Sunak’s willing to shift targets once, who’s to say he won’t do it again?

Patent filings are a great way to determine innovative activity within a certain technology area and/or territory. It allows us a view into what companies are driving the activity, where the innovation is happening, and where the key markets are for using, selling, and/or manufacturing their technologies.

Source Advisors research into low-carbon vehicle patents

We look at what countries are protecting their innovations in the UK; what countries dominate in terms of innovative activity in this area and how the landscape has changed in the UK from 2015 to 2020. To give flavour for whether the UK is the world leader in low-carbon vehicle innovation.

Low-carbon vehicles in the context of the data below encompasses innovations related to electric vehicles and green aviation.

Significant drop in foreign countries protecting in the UK

Figure 1 serves as a valuable visual representation for UK’s attractiveness as a global market for protecting low-carbon vehicle technologies for the 5-year period between 2015-2020.* This chart provides an insight into the UK’s decline as an attractive place for foreign investment in this space. Notably, the chart illustrates a substantial volume of technology development in the United States in 2015, safeguarded within the UK through either UK (GB) patents or the European patent system. Usually, companies will seek to strategically file patent applications in foreign countries that are key markets for growth, and the United States, Germany, and Japan significantly contributed, technologically, to innovations protected during that period. In contrast, the UK exhibited relatively modest contributions, by volume, to technology development.

Domestic output by the UK in its own technology has shown minimal improvement over the depicted five-year period. However, filings from the US and Germany have dropped off significantly.

This trend is a concerning one, why has there been such a significant drop in foreign companies protecting in the UK in that time? Is this the Brexit fallout? It’s not a stretch to imagine that the uncertainty the referendum vote brought to the UK’s future economic outlook would have had an impact on foreign investment.

So, is this a UK-only problem or are patent filings dropping globally, too?

Figure 1. Low-carbon vehicle patents active in the UK & country breakdown by inventor address.

Innovative activity in low-carbon vehicle technology increasing globally

Figure 2 reveals that, in general, patent filings have increased globally between 2015-2019, largely driven by an increase in filings from Japan, Germany, and South Korea. It is likely that COVID had an impact on filing numbers in 2020, given the uncertainty lockdowns brought around future consumer behaviour combined with the slowdown of physical R&D projects, naturally reduced innovative output.

The UK sits 6th for patent filings by volume, behind the likes of the US, Germany, and France. By comparison, in 2020, patent applications filed by Germany were 8x higher than applications filed by the UK. We learn that Germany, the US, and Japan are continuing to lead innovative activity in this space, but they are not protecting their innovations in the UK like they used to. This may indicate that they may not see the UK as a market of importance as they once did back in 2015, which is a worrying sign. The drop in investment would not be so worrying if UK numbers had increased sufficiently to make up for the drop (higher UK based output).

The global picture suggests a specific shift in the UK’s market dynamics. So, what, or who, has contributed to this shift? we have already mentioned Brexit but who were the top contributors back in 2015? and how does this compare to the picture in 2020?

Figure 2. Five year view of patent applications filed by volume, globally, in the low-carbon vehicle space & breakdown by inventor address.

Who is filing patents in the UK – a shift in market dynamics?

Figures 3 and 4 add more depth to the picture painted by Figures 1 and 2, the figures depict the entities engaging in patent filings within the United Kingdom in 2015 and 2020, respectively.

Notably, RTX Corporation, a US-based organization, who prominently provide aerospace and defence solutions leads filing numbers in 2015. Safran, a French company, also invested in the aviation space following as the second-largest filer. Remarkably, in 2015, no UK-owned company secured a position within the top 10 entities filing patents in the UK. 5 out of the top 10 are predominately invested in aviation (RTX, Safran, Boeing, GE, and Collins Aerospace). 3 out of the top 10 are invested in EV’s (Nissan Motor, VW, and Toyota), and 2 out of the top 10 are invested in battery technologies (LG Chem & LG Energy Solutions). Geographically, the top 10 is dominated by US and Asian players.

However, the scenario shifts significantly in 2020, as evidenced by Figure 4. Previously dominant US companies (Boeing, GE) no longer maintain a presence in the top 10, and RTX Corp, although still ranking second, exhibits a substantial decrease in filing volume. Additionally, Figure 4 introduces Rolls Royce as the first UK owned company to feature among the top patent filers, although the Tata Motors filings are influenced heavily by the UK, with all 72 filings contributed by Jaguar Land Rover (JLR).

Interestingly, JLR is the only entity that would have made the top 10 in 2015.

From a battery technology perspective, LG appears to have reduced their filing activity in the UK significantly, leaving CATL, a Chinese battery manufacturer, to replace LG as the battery representative in the top 10.

Figure 3. Top 10 applicants, by volume, with active UK patent applications – low-carbon vehicles 2015.

Figure 4. Top 10 applicants, by volume, with active UK patent applications – low-carbon vehicles 2020.

Is the UK seen as a significant market in the low-carbon vehicle space?

Over the 5 year period between 2015-2020, the market has been dominated by foreign players, not UK players. JLR is the only player that’s emerged. In a market dominated by foreign players, foreign investment in the UK is crucial for skilled jobs to be located here and hopefully for technologies to be created here. We are seeing it, its not like it doesn’t exist, but its not in the same ballpark as what we’re seeing in Japan, US, South Korea, Germany and even France.

In terms of who’s dropped off the radar, its foreign filers. It’s likely that they do not view the UK as important a market to protect than it once was. Businesses will protect in markets where they will manufacture, sell, use those technologies. Or are threatened by competition that might protect in those key markets. Our research suggests that the UK is ranked as the 7th largest market for patent applications filed in this space.

Conclusion - is the UK the global leader for low-carbon vehicles?

Past patent activity suggests not. Though the UK is one the world leaders in the space, the top 5 are filing considerably more than the UK.

What impact will Sunak’s announcement have on future innovative activity? That is yet to be seen, industry seems divided on its opinion on the delay, with Ford speaking out against the change and JLR describing the change as ‘pragmatic’. However, as our research has shown, uncertainty created by an unpredictable political and economic landscape has had an impact on foreign investment in the past, and it is not a stretch to say that this may happen again. Given that there is a general election around the corner, with the Conservatives and Labour seeming to be on the opposite ends of the spectrum when it comes to net zero, investors may wait to see how it all plays out.

Source

  • Data was collected from PatentSight on 28/09/2023
  • Definition of industry/sector is low-carbon vehicles which includes innovations related to electric and hybrid road vehicles, green aviation, and low-carbon marine alternatives.

*Recent data (2021-2023) is likely to be incomplete, patent applications are not made available to the public until at least 18-months after the application was filed, hence it is not included in this article. 

About Akshay Thaman | IP Consultant & Policy Lead

Akshay works closely with our clients to uncover IP that may be hidden within their businesses. As a Member of the British Patent Information Professionals group (BPIP) he brings academic rigour and commercial experience to his role as IP Consultant & Policy Lead.
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About Alec Griffiths | IP Manager

Alec heads our IP services team to offer patent and IP strategy advice to our clients. Alec is a strong advocate for IP literacy and engages in initiatives to bring IP awareness to all who could benefit, including start-ups and universities.

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