RIA Submission International Trade Committee inquiry - COP26 and international trade

7 September 2021

Kings Buildings, 16 Smith Square, London, SW1P 3HQ +44 (0)20 7201 0777

International Trade Committee House of Commons London SW1A 0AA

ria@riagb.org.uk www.riagb.org.uk

Dear Committee Members I am writing on behalf of the Railway Industry Association (RIA), to make a submission to your inquiry on COP26 and International Trade.

RIA is the national trade body for over 300 UK rail suppliers, with members representing a large proportion of the rail industry by turnover and reflecting a great diversity of disciplines within the rail sector. Our membership comprises both large multinational companies and also SMEs (around 60% of the membership), based right across the UK. The railways are vital to the country’s economy – every £1 invested in rail generates £2.20 in GVA and the industry supports over 600,000 jobs – providing investment and connectivity to communities spanning the lengths and breadths of the UK, and is an area of exports strength.

In 2018, the UK railway sector exported £800million worth of goods and services. The following year, the Government and industry signed a joint target – the Rail Sector Deal – to double exports by 2025 to £1.6 billion. There is a significant opportunity, with the global rail market estimated to be worth €163bn and expected to grow by over 2% each year until 2023.

Rail is a clean mode of transport – in the UK, it contributes just 1.4% of transport emissions despite carrying 10% of all journeys, and only 0.5% of total emissions. As countries look to decarbonise, with transport continuing to contribute a significant proportion of emissions globally, rail has the potential to be a huge UK green export and investment success story. COP26 presents an opportunity to showcase some of the world-leading expertise and products which could be exported to countries across the world. That is why earlier this year we launched our Rail Decarbonisation 21 campaign – for more information on this, see here.

Firstly, our RIA Trade ‘Asks’ remain relevant to the COP26 Climate Conference: 1. Rail to be recognised as a key export sector, for both goods and services, in the negotiation and delivery of free trade deals.

2. Access to an appropriately skilled workforce and mobility for skilled UK workers – rail industry needs workers at all skills levels to support its ability to compete globally.

3. Consistent application of standards - RIA would want to see mutual recognition/ equivalence and non-discrimination as core principles in all UK trade agreements. This would support the competitiveness of the UK rail supply sector and ensure economies of scale.

4. Smooth cross border trade rules – which minimise cost and delay and avoid trade distortionary tariffs.

5. Public procurement – reciprocal rules on market access and domestic content. As rail is primarily funded by the public purse throughout the EU and internationally, this is a key concern for the UK rail supply chain.

6. Opportunities for collaboration on rail research and development.

Further, as an enabler to support UK exporters get their sustainable and low-cost rail products and services to market, and to help assist other nations reach their decarbonisation targets, we ask the

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Government to continuing supporting small businesses, following the cancellation of the Department for International Trades (DIT) Tradeshow Access Programme (TAP).

The TAP scheme provided a number of small grants to UK SMEs which go directly to the cost of exhibiting at overseas trade fairs, with 194 grants been issued to rail businesses since 2016, grants valued between £1,500 and £2,500. These grants allow SMEs to exhibit at overseas tradeshows and have been used at major rail events like InnoTrans in Germany, AusRail in Australia and Trako in Poland; and it is reported that for every £1 invested by HM Treasury, at least £40 comes back from TAP to UK plc.

For this inquiry, we have also highlighted five ways where the UK railway industry has shown global leadership, and which should be showcased at COP26.

1. Recognise the UK railway industry as an area of export and investment strength Our primary ask is to be recognised as a key export sector, for both goods and services, in the negotiation and delivery of free trade deals. UK rail exports are a real growth opportunity in light of our climate targets and as the UK negotiates a raft of free trade agreements with partners around the world.

The UK also has excellent capability in areas such as design, construction, tunnelling and in manufacturing areas including signalling, and rolling stock. On the latter point, the UK has huge capacity to build and refurbish trains, which could be capitalised on to sell to overseas partners.

RIA has a number of multinational companies in membership, which often invest significant amounts in UK facilities and infrastructure. UK leaders should use COP26 to encourage inward investment into green sectors such as our railways.

2. Support battery and hydrogen export strategies In particular, the UK rail industry has the capability to be world-leaders in developing both battery and hydrogen trains, both of which Network Rail and the Government have recognised as crucial for decarbonising our railways. This expertise will only become increasingly important, and thus, crucially, more in demand in the years to come. On battery power, the UK has truly world-leading capabilities. UK suppliers have developed battery-powered and hybrid trains which are ready to be deployed and with some due to enter service soon. This technology is being shipped across the world, with the potential for more exports. The UK is also leading the development of ‘Very Light Rail’ which will use battery technology to provide clean travel in city centres 1. On hydrogen, there are currently three different hydrogen trains being developed in the UK with trials underway – as detailed in our Hydrogen Briefing here.

Yet, it is important that the Government makes the most of current momentum around low carbon trains, and does not lose ground to our international competitor countries. For example, other countries are already making progress in developing and rolling out hydrogen trains, including Germany, Austria and Sweden to name a few. As we approach COP26, the Government has the opportunity to kickstart the decarbonisation of the railways and showcase our global expertise in this area, through committing to a fleet order of both battery and hydrogen trains.

3. Collaborate on Research & Development and Innovation R&D and Innovation are essential to the railway industry and can drive down costs and increase efficiency, with new ways of working and construction methods. As a sector, rail is already innovative, with a wide range of projects in the pipeline, and with much focus on cutting carbon emissions and resources required in construction. There are many UK-based suppliers who offer innovative solutions to climate challenges, as well as concerted efforts from organisations such as the UK Rail Research and 1

https://riagb.org.uk/RIA/Newsroom/MN/World_first_VLR_rapid_charger_installed.aspx

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Innovation Network (UKRRIN) and Network Rail Research & Development to fund these projects. That is why it is important for the UK to collaborate with other countries on R&D and ensure UK countries have access to future funding and opportunities, such as the EU’s Horizon Europe.

4. Highlight UK industry’s global leadership The UK has demonstrated global leadership on setting science-based targets for reaching net zero and protecting natural environments along its railways. For example, in October 2020, Network Rail became the first railway company in the world to set ‘set the most ambitious science-based targets to limit global warming’ 2. There are also a growing number of supply chain companies who have followed suit and set clear targets to decarbonise, including several Tier 1 companies 3. Moreover, HS2 has committed to reducing carbon in construction by 50% 4. A range of companies are further exporting their services, such as in design, to support environmentally friendly projects overseas 5. The UK Government should use the COP26 Climate Conference to highlight this leadership and experience, which could be exported to countries and business located across the globe.

5. Showcase biodiversity and natural environment projects Both Network Rail and High Speed 2 have made commitments to protecting and even improving biodiversity in areas around project sites and along the railways. In the supply chain, there are lots of innovative solutions to helping vegetation management and biodiversity. And HS2 will be the largest ecological project in the UK, with a huge series of programmes to minimise the impact of the rail line on its surroundings. This gold standard for projects and railway infrastructure operators should be promoted around the world, with the expertise exportable to our partners overseas. _______________________ RIA is happy to provide further information on any of the above issues, or to meet to discuss any matters associated with the Committee’s inquiry. Please do not hesitate to get in touch with RIA PR & Communications Executive if you have any further questions, at alexis.king@riagb.org.uk or on 020 7201 0777 / 07399 042385.

Yours sincerely,

Kate Jennings Policy Director, Railway Industry Association

https://www.networkrail.co.uk/stories/network-rail-sets-world-first-targets-to-combat-global-warming/ For example: Jacobs 4 https://twitter.com/HS2ltd/status/1363830306726371328 5 For example: PriestmanGoode 2 3

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