7 November 2011
The Isle of Man is leading the way in clean tech innovation, says Claire Milne
Climate change remains a global threat and is one of the most significant challenges facing the world today. Investments in clean technology have grown significantly in the past ten years, with governments and industries eager to capitalise on the vast opportunities available. The clean tech industry is currently estimated to be worth more than £3tr, with this figure projected to increase to over £4.3tr by 2015.
As a co-signatory to the Kyoto Protocol, via the UK, and an active participant in the international climate change process, the Isle of Man has recognised the need to review its potential for developing additional renewable energy sources and is committed to the reduction of its carbon emissions.
Similar to the business clusters that the Isle of Man has established around its high-tech manufacturing, space exploration,
e-gaming and aerospace industries, the island’s clean tech sector has experienced considerable growth in recent years and is set to become a leading contributor to the Manx economy.
A survey on the economic impact of the Isle of Man clean tech sector, carried out by PricewaterhouseCoopers (PwC) and published in May 2011, revealed that there are more than 100 companies active in the island’s clean tech sector with an estimated annual turnover of £92m. Approximately £4.64m of this is wholly attributed to clean tech activities and services. These companies are expecting their revenue to double in the next three years.
The Isle of Man government has invested in the island’s energy infrastructure, its commercial sector and its social and housing sectors to reduce the island’s dependency on imported energy and to improve the island’s economic competitiveness. This remains an ongoing process.
The Isle of Man’s energy system is undergoing a significant transformation and the island’s government has committed to further additional changes. The relatively new combined-cycle gas turbine plant, energy from waste installation and plans to expand the natural gas network will all have a long-term impact on the shape of the island’s future carbon emissions and energy dependency.
In addition, the island has adopted a short-term renewable electricity target of 15 per cent by 2015 which, if to be achieved, will require significant additional investment in new generating capacity.
Between 1990 and 2006 the Isle of Man’s GDP increased by 230 per cent, with per capita CO2 emissions decreasing by 3 per cent. This is an almost unique achievement in the developed world.
The Isle of Man has an almost unique set of attributes that allow clean tech businesses to grow and thrive on the island. The island is rich with resources for renewable energy and also has an existing human resource in terms of high-tech engineering expertise and highly experienced corporate service providers. In addition, it has a well-established infrastructure, a highly resilient communications network and a mature financial services sector.
The approximate number of full-time equivalent people employed in the clean tech sector in the Isle of Man was, when the PwC survey was conducted, around 85. This looks set to rise to around 125 by 2014.
The Isle of Man is at the forefront of innovation in the field of clean tech. The government’s Department of Economic Development (DED) launched the TT Zero Clean Emissions Motorcycle Race, the world’s first zero-carbon clean emission motorbike grand prix, as part of the annual Isle of Man TT Races in 2009. The race, now in its third year, is used by the DED as a showcase for the island’s significant clean tech capabilities, as well as encouraging enterprise and innovation.
The Isle of Man is proving particularly attractive for technology companies with valuable IP. All international IP treaties, including the Madrid Protocol and the Patent Cooperation Treaty, are applicable in the Isle of Man.
Respondents to the PwC Survey with IP rights to clean tech favoured the island due to the high levels of protection offered by Manx structures. The island also benefits from having a 0 per cent rate of corporation tax for non banking and property income and has no inheritance tax or capital gains tax.
The Isle of Man government has introduced a number of initiatives to encourage and aid in the development of clean energy technology. Among the initiatives is the 0 per cent Green Business Loan Scheme, designed to lower energy costs for those businesses operating on the island. The scheme offers loans of up to £20,000 towards the cost of projects that improve energy efficiency.
With its efficient tax environment, established precision manufacturing sector, a supportive and experienced professional services sector and a supportive fiscal environment, the Isle of Man is well placed for the development and deployment of clean tech.
The increasing efficiency of existing forms of clean energy technology and the development of new and innovative low-carbon technologies suggest that the clean tech industry in the Isle of Man is set to have a significant economic impact in its quest to become a leading clean tech cluster.
Claire Milne is a partner in the Isle of Man office of Appleby