EIC’s first-ever manifesto: A call for an integrated and supported energy supply chain to be recognised

EIC has represented energy companies’ interests for more than 80 years. As the UK and global energy sectors have expanded and evolved to embrace new technologies and solutions, the need for a strong and coordinated supply chain has intensified – as has the need for it to be treated as such.

Every time the energy industry transitions, so do its members. Today, EIC continues to advocate for member companies as the voice of the energy supply chain – across all energy technologies and in all regions of the UK. What has become clear, however, is that the supply chain is not being listened to. 

“Our Survive & Thrive series has taught us a lot about the amazing capabilities and pain points of companies up and down the energy value chain in the UK,” says EIC CEO Stuart Broadley. “A lot of firms are doing brilliant things but are in trouble and receiving no help.

“The other source of fuel for this manifesto is final investment decision data, which shows a stark gap between net-zero ambition and reality. It is difficult for politicians and the media to hear, but this is non-partisan, non-biased information that should be underpinning decision-making. At the moment, they are not listening.”

The message from our members is clear and has to be heard. We have the knowledge and technological solutions to support the energy transition, but current policies are holding us back Rebecca Groundwater, EIC Head of External Affairs

The supply chain is struggling to be heard because the UK has an extremely disjointed system when it comes to setting and implementing energy policy. Various levels of government have different powers over energy policy, leading to slow and fragmented implementation. This, coupled with frequent ministerial changes, has created instability and deterred investment.

While high-level decisions are made, there is often limited engagement with the numerous SMEs and larger organisations that comprise the supply chain. Policies that favour the major energy players do not typically benefit the majority of the supply chain, or the innovators.

While they are aspirational, UK content mandates lack accountability, and innovation funding often ends after the initial trials. SMEs struggle to navigate complex funding landscapes, while growing companies are excluded from opportunities because of financial policies.

And what’s more, UK policy has largely ceased supporting hydrocarbon-related businesses domestically and abroad since 2020, despite ongoing global crises and uncertainties. Companies struggle to access capital and funding for growth and innovation because their primary revenue still comes from oil and gas. This persists even when they seek to diversify into renewables or decarbonisation projects, as their current profit sources overshadow these efforts.

The four pillars of the EIC manifesto

This is a heady mix of challenges, explored in further detail in the manifesto itself. But the problem is clear. Because enterprises in the supply chain see insufficient domestic opportunities and lack affordable access to global projects, they are abandoning the energy sector.

“The message from our members is clear and has to be heard,” says Rebecca Groundwater, EIC Head of External Affairs. “We have the knowledge and technological solutions to support the energy transition, but the way companies are categorised into siloes is holding us back.

“We need policymakers to help us export UK skills, to create certainty and to develop a joined up industrial plan that stretches beyond a single political cycle. With a new government in place, now is the ideal opportunity to properly engage ministers and ensure the supply chain is properly represented.”

EIC’s manifesto sets out a vision and  a series of proposals across four broad themes.

The first, and arguably the most significant, calls for the energy supply chain to be treated as an integrated whole. According to the latest EIC data, 82.9% of the UK’s energy supply chain is reliant on oil and gas. Of that oil and gas supply chain, 44.7% is diversified into renewables and net-zero technologies; only 15.1% of the UK renewables and net-zero supply chain grew out of non-oil and gas capabilities.

“This equates to thousands of companies servicing customers across all energy sectors – making policy for technologies in siloes causes problems for the supply chain where there are competing pulls on regions, available funding and growth,” says Broadley.

The second pillar concerns energy transition. While EIC members are eager to diversify into all areas of the energy transition, they routinely report that the pipeline of domestic projects, in all energy sectors, is unclear and faltering.

“The oil and gas industry operates with clear approvals processes and regulations,” says Groundwater. “Its economics, risks and rewards are well-understood, and that allows investors to assess project viability from the start. Unfortunately, this expertise hasn’t been effectively transferred to emerging technologies in the energy sector, and that has left a significant knowledge gap.”

The EIC Manifesto urges the creation of a detailed energy roadmap, collaborating with industry stakeholders to outline project timelines across technologies and regions. It also calls for a reassessment of financial access, supporting businesses transitioning to green energy and growing companies, to ensure fair opportunities throughout the supply chain and promote sustainable development.

This feeds into the third and fourth pillars, which cover exporting and international trade, and the UK’s place on the global stage. UK companies face a plethora of challenges when doing business with international markets, with many of these arising from regulatory constraints, costs and lack of support. To overcome these barriers, EIC is calling for much-improved access to export finance and on-the-ground, practical assistance. 

Broadley says: “The UK is already a global leader in its net-zero commitments and decarbonisation progress, and that is testament to the strength of the energy supply chain.

“We need to respect the work that’s been done and be proud of this strength. All too often politicians and the media fall into the trap of talking about the supply chain in such simplistic terms – that oil and gas is bad, and renewables are good.

Energy needs to become a top-table topic, with EIC as the authoritative, non-partisan voice representing the UK-wide value chain with data at its core Stuart Broadley

“A shared sense of urgency also needs to return. During the Covid pandemic, there was a joined-up attitude of ‘anything is possible’ – that has now gone, and we are back to being put into siloes.”

The manifesto also looks ahead to future energy policy and stability. In recent years, we have seen the opposite of this. Frequent leadership changes and the lack of a clear 2050 industrial strategy have hindered UK industry investment and focus.

We need policymakers to help us export UK skills, create certainty, and develop a joined-up industrial plan that stretches beyond a single political cycle Rebecca Groundwater, EIC Head of External Affairs

Moving forwards, a unified approach is crucial, with policy focusing on viable projects and clear five to 10-year timelines. The supply chain needs collaborative, holistic frameworks that transcend party politics and withstand changes in government. EU regulations should also be considered to streamline processes for UK businesses. Meanwhile, urgent attention to domestic grid capacity is needed while the supply chain eyes opportunities in more stable markets abroad.

Trust and trade are critical to competitive supply chains

Make no mistake, the challenges ahead of the UK’s energy sector are enormous.

As the voice of the supply chain, EIC is clear in its call to policymakers and other industry stakeholders: start listening to the thousands of companies that operate up and down the country and will, ultimately, determine the success of the UK’s energy transition.

While the new manifesto sets out numerous policy proposals, the first pillar or step is a prerequisite to tangible progress. The supply chain must be treated as an integrated, moving whole and not categorised into siloes, which polarises debate and fails to acknowledge the reality of how the energy sector actually works.

“We need that holistic mindset and approach to energy policy. Once this starts to happen, what we have set out in the manifesto is actually a series of relatively small, logical tweaks – we are not asking for anything radical,” says Groundwater.

Broadley adds: “There are two outcomes I would like to see. First, energy needs to become a top-table topic, with EIC as the authoritative, non-partisan voice representing the UK-wide value chain with data at its core.

“I also want to come back to respect. The UK must respect the world-leading capabilities we have and treat our energy value chain as one integrated ecosystem. Without this, it will be very difficult to advance towards net zero.”

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EIC members speak out

Integrate supply chains and simplify funding access 

Simon Wynne,

Head of ABB Energy Industries UK, Ireland and Azerbaijan

Integrating all supply chains into one strategy aligns with ABB’s approach to providing integrated operations across the entire energy industry. Our technology solutions serve all areas, and the more cross-sector collaboration there is, the more impact you make on energy efficiency – and therefore emissions.

The bigger picture is how an integrated supply chain will benefit society. First, it will encourage a more balanced energy mix, improving energy security. A diverse energy mix is vital to balancing supply and demand and making our energy infrastructure more sustainable. At ABB we call this “net additions AND lower emissions”, a two-fold focus to grow and integrate lower carbon energy systems while diversifying and optimising existing systems.

Breaking down siloes will also breed collaboration and innovation – crucial to a successful energy transition. While technology is an enabler, it is not a silver bullet, and it is only effective when deployed in conjunction with expertise from partners across the board. ABB is working in this way through partnerships in carbon capture and storage, green hydrogen and offshore wind with Pace CCS, CMG and Coolbrook, bringing different energy streams together to optimise industrial processes.

A single strategy will also impact the UK economy, because clear and consistent policies are more likely to attract investments in energy infrastructure and technology. More streamlined regulations reduce administrative costs and improve operational efficiency, which will encourage more projects to come online.

Andrew Bennion,

Managing Director of AIS

Since 2007, AIS has been continuously innovating its existing products and investing in the research and development of new products. Throughout the years, we have consistently found the funding application process to be complex and the processing of funding applications to be exceedingly protracted. 

The administrative burden often hinders growth opportunities rather than accelerating them. Energy is a fast-paced industry, so it is crucial for UK companies to keep up if they want to remain competitive. Unfortunately, development projects can be stunted by the funding difficulties caused by bureaucratic hurdles – undermining the UK’s reputation for innovation.

Bringing an innovative solution from conception to market is challenging and time-consuming. By simplifying funding access, UK companies could compete more effectively and evolve at the same pace as, if not faster than, the global market.

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EIC Manifesto 2024: a roadmap to a sustainable and integrated energy future

EIC calls for an integrated and supported energy supply chain to be recognised. Fragmented policies and insufficient backing are leading to disruptions and lost opportunities. The EIC Manifesto tackles these issues by advocating for a unified, holistic approach to energy policy.

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EIC call to action

An integrated approach to energy policy

• LISTEN to the supply chain: The UK energy sector needs to be heard. Policymakers must start listening to the thousands of companies across the UK’s energy value chain
• “The UK must respect the world-leading capabilities we have and treat our energy value chain as one integrated ecosystem. Without this, it will be very difficult to advance towards net zero” Stuart Broadley
• RESPECT the energy value chain: Policymakers must treat the UK’s energy value chain as an integrated ecosystem, recognising its world-leading capabilities.

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Join EIC in shaping a sustainable and inclusive energy future, where every voice counts, and progress benefits all. To read the EIC Manifesto 2024 visit the-eic.com/MediaCentre/Publications/EICManifesto

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Image Credit | John Holcroft | Shutterstock