Local manufacturers have urged ministers to spell out their vision for a green economy to enable firms to invest in the necessary low-carbon technology to achieve it.

EEF, the manufacturers’ body, has urged the Government to outline its aims by the end of 2013.

In a new report, EEF has set out how the Government could realise the potential of key manufacturing sectors and unlock investment in breakthrough technologies to reduce carbon emissions.

It says this would help UK manufacturers to take advantage of significant opportunities to export low-carbon technology to the rest of the world which it believes could boost the UK economy by up to £880 billion between now and 2050.

EEF has warned that the UK’s position as the sixth largest producer and provider of low-carbon goods and services is faltering, with manufacturing output contracting. The report also shows that the UK is placed towards the bottom of the OECD countries in government research spending on climate and energy-related research and development, spending just over one per cent of its R&D budget on energy against an average of almost four per cent.

Andy Tuscher, EEF regional director, said: “The low-carbon economy represents a massive opportunity for manufacturers and a major prize for our economy. If we can build an early lead in key areas we have the chance to export our solutions to the rest of the world.

“But we are currently failing to take advantage of this opportunity to be a world leader in low-carbon goods and services. We need the Government to set out its vision of manufacturing’s place in the low-carbon economy, focus more on innovation and provide greater regulatory stability and predictability to unlock investment in breakthrough technologies that will deliver it.

EEF says six out of ten manufacturers were already developing new processes to improve their own environmental performance. More than half of large companies were developing new products and internal processes to help them and their customers manage climate and environment issues.

But it warned that, in spite of this, the UK’s performance is faltering with manufacturing output in low-carbon goods falling in 2010-11 and the country suffering from a fragmented approach. In contrast, countries such as China, the United States, India and South Korea, who have a strategic policy framework of growing their low-carbon industrial base, all recorded double-digit growth in this area.

EEF says key areas to address include measures to fulfil innovation potential, ensure industry has access to the right skills, obtaining the finance to invest in decarbonising technology and competitively priced electricity. It said a key goal should be a decarbonisation target to match the OECD average.