Regulatory agility to match rapid innovation

1046.  The regulatory environment is a critical factor in determining the commercial success of net zero R&D and technology innovation. Stakeholders including Coadec Startup Planet and Imperial College London supported this, and members of the Council for Science and Technology advised that relevant regulations and standards "must be agile and responsive to enable companies to capitalise on the opportunities from emerging technologies relevant to net zero".742

"...it is not the absence of regulation that has greater potential to drive markets and growth, but rather the presence of smart regulation that is responsive to emerging developments" - LSE743

1047.  The Government recognised the need for greater regulatory agility to match innovation. It acknowledged this in the 2021 Innovation Strategy which sought to consult on how regulation can ensure that the UK is well-placed to extract the best value from innovation.

1048.  Demonstrations are vital for emerging net zero technologies. Stakeholders including the Royal Academy for Engineering and Energy Systems Catapult raised how vital demonstrations are to provide assurance to potential investors in the viability of an emerging technology. An example of can be seen in the below case study.744

1049.  The Faraday Battery Challenge is a good example of the Government using demonstrator projects to show its long-term commitment to support net zero critical innovation. The Government committed up to £541 million to develop the UK battery technology industry. This included funding feasibility studies, industrial research and experimental development - funded in partnership with industry.745 This programme was specifically developed in recognition that R&D was crucial to addressing a strategic challenge coupled with an economic opportunity (in this case, the growing reliance on battery technology). This Review has found many other such challenges, as summarised in its ten strategic missions.

1050.  Regulators can support demonstrations of new technologies to interested innovators. SMEs and roundtable attendees felt regulators could play an important role in enabling demonstrations. Nesta for example noted in a working paper on the "rise of 'anticipatory regulation' approaches" to match the pace of emerging net zero technologies which include various forms of demonstration.746 The European Marine Energy Centre advised the Review that "[regulatory bodies] must introduce an element of flexibility for testing and demonstration purposes. Otherwise, we will never be able to learn about these new systems and develop learnings around their functionality, management, and safety dimensions for future standards to be defined."747

1051.  Building on the success of the Faraday challenge - and to demonstrate long-term commitment to the biggest issues in the net zero transition - we recommend establishing up to three new R&D demonstrator projects, out to 2035, aligning with the ten-year missions set out by this review. These should be considered when creating the overarching R&D and technology roadmap.

1052.  The Government Chief Scientific Advisor (GCSA) was tasked in the recent Autumn Statement with reviewing how the UK can better regulate emerging technologies to ensure growth. We recommend that this forthcoming work from the Office for Science and Technology Strategy (OSTS) considers how regulators can provide more opportunity for demonstrations for net zero technologies.