Cleantech for UK is a policy advocacy initiative that convenes clean technology innovators, scale-up companies and investors to inform UK policymaking, operating under Cleantech Group. Our coalition spans companies working across agriculture and food systems, energy and power, materials and chemicals, transport and logistics, waste and recycling and environmental management, alongside the investors deploying growth and infrastructure capital into their projects. Many of our members are working to commercialise capital-intensive technologies that require demonstration plants, first-of-a-kind facilities and manufacturing capacity within the UK, and their investment decisions are highly sensitive to the cost and availability of finance, energy and industrial infrastructure.
This representation sets out six asks for the Autumn Budget, each designed to work within a constrained fiscal envelope. Most of them are changes to how government deploys existing capital, risk capacity and policy mechanisms: a targeted eligibility fix to an existing scheme, a guarantee or underwriting facility that sits as a contingent liability, or a ringfenced allocation within a budget already committed. We have set them out this way deliberately, since the choice facing the Treasury this Budget is whether to back UK cleantech by redeploying capital and risk capacity it already has, or to let the current gaps continue to push investment and manufacturing towards competitor economies that have already solved these problems. The first three asks are structural, cutting across every part of our coalition regardless of sector; the remaining three address specific mechanisms and bottlenecks already live within particular sectors.
Our objective is straightforward: make it easier for UK cleantech companies to build, finance and scale their first commercial assets in Britain.
Asks 1 to 3 are structural and cut across the whole coalition regardless of sector. These are where we would most welcome Treasury engagement.
1. A dedicated guarantee or first-loss facility, delivered through the National Wealth Fund and/or British Business Bank and sized following a proper assessment of the investable pipeline, to close the financing gap facing first-of-a-kind (FOAK) commercial cleantech plants.
2. An eligibility fix to the British Industrial Competitiveness Scheme and the British Industry Supercharger, so cleantech scale-ups facing the same wholesale electricity prices as incumbent energy-intensive industry receive the same relief.
3. Extend EIS and VCT eligibility for cleantech scale-ups, so companies with longer commercialisation timelines do not lose access to investor tax relief prematurely, and review the excluded activities list that inadvertently rules some of them out.
Asks 4 to 6 addressspecific mechanisms and bottlenecks already live within particular sectors.
4. An increase in the Economic Benefits weighting in the SAF Revenue Certainty Mechanism's evaluation scoring, from 10% to at least 20%, bringing it into line with the 20% economic-benefits weighting used in the Industrial Carbon Capture business model, and a broader definition of that criterion so it captures UK intellectual property and feedstock sourcing alongside jobs.
5. Dedicated, ringfenced Contracts for Difference budgets for tidal stream and wave energy in Allocation Round 9, held consistently across rounds.
6. Government backing for a British Steel Buyers' Club, aggregating cleantech SME and start-up demand for UK-produced steel, underwritten by the National Wealth Fund or British Business Bank.
UK cleantech's central problem is the failure to finance the first commercial plant. Pilot-stage innovation is relatively well funded in the UK; the financing model breaks down specifically when a company needs to move from a successful pilot to a first-of-a-kind commercial facility. That gap exists because construction-stage finance for a first-of-a-kind plant needs to be patient and loss-tolerant in a way conventional project finance is not, and because a plant that has never been built before cannot offer a lender the track record a second or third plant can.
Cleantech for UK maintains a pipeline of 215UK cleantech companies working towards FOAK commercial deployment. Our analysis of their capital needs, which we believe understates the true figure given gaps in publicly available data, puts the sums required at somewhere between £2.25billion and £5.76 billion. There is substantial private capital available for infrastructure and growth, but it is not currently willing to absorb the technology, construction and revenue risks attached to first-of-a-kind plants at the scale required. A targeted public backstop can reduce those risks sufficiently to bring private lenders and investors into transactions that would otherwise struggle to reach financial close.
Of the 54 pipeline companies actively raising now, around 37, roughly 69%, have no policy mandate or revenue mechanism underpinning their projects. These companies are beyond pilot stage and are seeking the capital needed to build commercial-scale plants or arrays, but lack the contracted revenue stream that would let conventional project finance underwrite construction. A further 8, roughly 15%, already have a mandate or revenue mechanism secured, putting them on a clearer path to conventional equity-plus-debt finance. Another 8, roughly 15%, have a mandate or revenue mechanism such as a Contract for Difference or a Revenue Certainty Mechanism in place in principle, but have not yet secured it in practice. One company does not fit cleanly into any of these categories.
We propose the facility operate through two windows, since these populations present genuinely different risk. The first isa mandate bridge, for the group with a mechanism in principle, where the underlying revenue mechanism is already defined in principle and this is a relatively conventional use of credit enhancement. The second window is narrower, and covers no-mandate projects only where there is a demonstrable route to market and sufficient underlying commercial economics, with the public instrument explicitly taking on a defined portion of technology, construction or revenue risk. A guarantee does not by itself create the revenue needed to repay debt. Extending it to a project with no credible route to revenue at all would mean government absorbing commercial risk directly, which shifts the instrument from a guarantee towards a subsidy, and keeping the second window narrower than the first reflects that distinction.
Within the mandate-bridge window, where a project does secure its CfD or RCM, the resulting contracted revenue can itself materially improve bankability, so a guarantee's role here is best understood as a bridge to that point. Self-reported capital figures do not exist for most of this group, but our own tiered capital-needs methodology gives a real planning estimate for three of these companies: one in the mid-scale plant tier(£15 million to £60 million), one in the smaller-array tier (£10 million to £40million), and a sustainable aviation fuel refinery, for which our planning assumption is at least £500 million to build. That puts the combined floor for just these three companies at £525 million or more, and the full mandate-in-principle group is larger still.
For the no-mandate window, the facility should operate as a selective underwriting mechanism, choosing projects against clear criteria for technical readiness, commercial credibility, route to market, UK economic benefit and the amount of private capital the public support would unlock. Only a portion of the 37 no-mandate companies will meet that bar in practice, but even a partial reach matters given the scale of that group.
This also understates the need on a forward view. Beyond the 54 companies raising now, a further 93 sit at pilot stage, and 47 of those are expected to reach demonstrator or first commercial readiness over the next two to four years. If a similar share of that group ends up needing a guarantee, a read-across from today's cohort applied to a group that has not reached this stage yet, the target population would roughly double within that window. A facility sized only for today's cohort could quickly become undersized, which argues for designing it as a facility government reviews and replenishes as successive cohorts reach this stage.
We ask the Treasury to direct the National Wealth Fund and/or British Business Bank to establish a dedicated guarantee or first-loss facility for FOAK cleantech projects that are sufficiently advanced to build but cannot secure conventional debt on commercial terms.
The facility's size should follow a detailed assessment of the investable pipeline and the level of guarantee required to unlock private debt. That is a narrower, technical judgement about risk absorption capacity.
This is modest by the standard of the Government's existing guarantee and risk-sharing activity: UK Export Finance alone provided £11.2 billion of new loans, guarantees and insurance in 2025/26,against a maximum commitment limit of £80 billion for its total outstanding exposure. UKEF's pricing model is designed to cover its expected costs and losses over time. NWF's published minimum private-investment ticket is £25million, with investments typically exceeding £100 million. Many individual FOAK projects therefore sit below the scale at which NWF normally invests. A dedicated facility could address this by deploying smaller guarantees to individual projects beneath a larger overall vehicle, a shape NWF can engage with directly. We would expect it to unlock several times its value in private co-investment: the UK's last major public green investor, the UK Green Investment Bank, attracted around £3 of third-party funding for every £1 it invested, and returned its own capital at a profit when sold in 2017. A guarantee facility can also be structured so that unused capacity is available to support subsequent cohorts, extending its impact well beyond a single commitment.
Structured well, this sits on the Government's balance sheet as a contingent liability. The objective would be to target projects sufficiently bankable that guarantee calls remain limited, although actual loss experience would depend on facility design and underwriting. The growth case is straightforward. FOAK plants are, by definition, first-of-their-kind manufacturing and infrastructure investment, and each one that locates in the UK brings construction jobs, permanent operating jobs and a template that can be replicated across the country.
Companies that do not meet that bar remain dependent on growth equity, which is exactly the population ask 3 is aimed at: EIS and VCT reform widens the pool of investable growth equity regardless of whether a mandate or a guarantee is available. Together, asks 1 and 3 cover the two different capital problems facing UK cleantech scale-ups: companies sufficiently advanced to benefit from risk-sharing alongside private debt, and those for whom deeper and more patient equity markets remain the immediate route.
UK steel producers, a useful proxy for energy-intensive industry generally, currently pay up to 25% more for electricity than their counterparts in France and Germany, an average of £59.48/MWh against £52.04/MWh in Germany and £47.76/MWh in France in 2025/26.Most analysis attributes the bulk of this gap to wholesale price formation, particularly the UK's gas-linked marginal pricing, more than to green levies.
The relief that already exists to address this, through the British Industrial Competitiveness Scheme and the British Industry Supercharger, is targeted at defined energy-intensive manufacturing activities and subject to eligibility and electricity-use criteria. A cleantech scale-up running a first commercial plant very often falls outside those activity definitions or usage criteria, and so receives none of the discount available to a larger incumbent competitor facing the identical wholesale price. Current policy protects many of the incumbent industries that cleantech is intended to decarbonise, while leaving the companies building the replacement technologies exposed.
This has a financing consequence as well as an operating one. Volatile, uncompetitive electricity costs make it harder for lenders and investors to underwrite the cashflow of a first-of-a-kind plant, so a price level that is merely uncomfortable for an established manufacturer with hedged supply can be the difference between a scale-up closing its funding round or not. Sweden offers a useful comparator: abundant, low-carbon industrial power has helped underpin a major green-steel investment ecosystem, including Stegra's €6.5 billion commercial-scale plant.
We ask the Treasury to widen the sector and usage eligibility of both schemes to capture cleantech FOAK and early commercial plants. Because this extends an existing scheme to a small additional population of companies, we would expect the additional cost to the Exchequer to be limited relative to the schemes' existing budgets, and for the change to be capable of delivery through the schemes' existing administrative rules, though this is a question for DESNZ and HMT officials to confirm.
Autumn Budget 2025 raised EIS and VCT investment and gross asset limits substantially, effective from April 2026,which is a welcome step towards a genuine scale-up funding regime. At the same time, industry lobbied for a fix to the age limit that determines how long a company can remain eligible for EIS and VCT investment, currently seven years from first commercial sale, or ten years for Knowledge Intensive Companies, and that fix was not included.
The age limit is triggered by the date of first commercial sale. Even measured that way, it is still a poor fit for capital-intensive cleantech, where the period between incorporation, technical validation and meaningful commercial deployment can be much longer than in software or other lower-capex businesses, and that is more pronounced still for companies outside London and the South East. A company that reaches the end of its eligibility window mid-scale-up can lose access to EIS and VCT capital at the point it most needs patient capital, increasing pressure to pursue a sale or listing earlier than would otherwise be optimal, to secure funding it would otherwise have raised domestically. A related problem sits in the EIS excluded activities list, which was designed around an earlier economy and inadvertently rules out some legitimate cleantech business models.
We ask the Treasury to equalise the age limit at ten years for all qualifying companies, extending the current Knowledge Intensive Company standard to every company, and to anchor the test to the age of the relevant trade or commercial activity, which may not always align with the age of the corporate entity carrying it. We also ask for a targeted review of the excluded activities list to remove inadvertent barriers to cleantech business models. Both changes could be made within the legislative framework established for the April 2026 reforms. We do not have a costing for either change, but we would expect the fiscal impact to be modest against the Exchequer saving from the parallel reduction in VCT income tax relief from 30%to 20%, since both changes affect eligibility criteria, leaving the rate and generosity of relief itself untouched.
The Department for Transport's published evaluation criteria for the first Revenue Certainty Mechanism allocation round score bids on three dimensions: deliverability at 50%, normalised strike price at 40%, and economic benefits at just 10%. DfT defines that economic benefits criterion primarily around UK jobs and the wider economic contribution of the plant. That is a reasonable starting point, but it stops short of what actually determines whether the UK captures lasting value from a project. A facility that imports its core technology and feedstocks under a foreign licence, but employs UK staff to run it, could score reasonably well on the criterion as currently defined, even though the intellectual property and much of the supply chain value sit overseas.
This remains a live design choice. The weighting was published as a minded-to position, DfT has not yet issued its formal consultation response, and the application guidance for the first allocation round is still to come. We ask the Treasury and DfT to increase the weighting on Economic Benefits from 10% to at least 20%, bringing it into line with the 20% economic-benefits weighting used in the Industrial Carbon Capture business model, one of the schemes DfT's own strategy publication cites as informing the RCM's design. We also ask, separately, that the criterion be broadened to include UK intellectual property and domestic feedstock sourcing alongside jobs. We would not expect either change to add cost beyond the RCM's existing budget envelope, since both affect which projects that budget favours, leaving its overall size untouched, though final scoring design is a matter for DfT to confirm. The second change also sits squarely within the Government's stated ambition to prioritise British suppliers in energy and manufacturing procurement.
Marine energy complements wind, and that value is currently underrepresented in system planning. Wind curtailment already costs the system over £1 billion a year, and independent modelling suggests tidal generation at scale could reduce system dispatch costs by around18%, largely by displacing balancing costs, because tidal output is forecastable years in advance in a way wind is not. NESO does not meaningfully represent tidal or wave in its central pathway scenarios.
The supply chain case is equally strong. Tidal stream projects currently achieve over 80% UK content, concentrated in coastal communities in Scotland, Wales and the north-west, a markedly higher UK content share than offshore wind achieves. The ask is modest against that backdrop. AR7 allocated £1.79 billion to offshore wind. The Marine Energy Council is asking for a £40 million tidal ringfence and a separate £7 to 10million wave ringfence in AR9, against a credible pipeline of between 47 and156 MW from developers that already hold consents and grid connections. The pipeline is there; the immediate constraint is the available CfD budget.
We would also ask the Treasury to support a provisional commitment covering multiple rounds. Marine energy struggles to attract private capital when ringfence decisions are made annually and late, and even a provisional signal covering AR9 and AR10, which commits no additional budget ahead of the normal allocation process, would materially improve investability.
Cleantech start-ups and SMEs building first-of-a-kind and demonstration-scale facilities need UK-produced steel, but each buys alone, often in volumes too small to secure the price, lead time or technical support available to larger buyers. The Government's Digital Catalogue is an important step forward: it requires relevant public-sector buyers to consult the UK steel market before procurement decisions are made and helps assess what the domestic market can produce. What it does not do is aggregate fragmented demand from smaller private-sector buyers or give them the purchasing power of a larger customer.
We propose a single Buyers' Club platform that builds on the existing Digital Catalogue, through which cleantech start-ups and SMEs aggregate and commit steel orders together. Cleantech for UK's own FOAK pipeline of 215 companies offers a ready founding membership, with wider cleantech and advanced manufacturing SMEs able to join as the platform expands. A pre-revenue company cannot commit to forward steel volumes in the way an established buyer can. We therefore ask the National Wealth Fund or British Business Bank to provide a limited working-capital or purchase-order guarantee for the first pooled procurement round, allowing participating companies to aggregate demand without requiring each individual company to carry the full commitment on its balance sheet. We do not have a robust estimate of the scale this underwrite would need to be, since it depends on aggregated order volumes we have not yet collected from the founding membership. The immediate objective would be to test the model through a first pooled procurement round, establish the aggregate demand, and then size the appropriate working-capital support with government.
We are happy to discuss any of these asks in more detail with Treasury officials ahead of the Budget, and to provide further supporting evidence, including our full FOAK pipeline dataset and marine energy pipeline assessment, on request.
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