Low Carbon Manufacturing Challenge Fund: business regulatory impact assessment

This business and regulatory impact assessment (BRIA) for the Low Carbon Manufacturing Challenge Fund considers the impacts of the Fund on businesses in Scotland.


Option 1: do nothing

Do nothing is not an option due to the:

Option 2: Implement the LCMCF

Sectors and groups affected

Those likely to be affected by the introduction of the LCMCF will be as follows:

  • manufacturing businesses, employees, contractors, trade unions, suppliers, customers will be directly affected;
  • every person in Scotland will be indirectly affected.


Option 1: There are no benefits. Failure to support the Scottish manufacturing sector to transition to low carbon manufacturing will result in:

  • longer term damage to business competiveness and profitability as customer/consumer interest increasingly turns to sustainably produced goods manufactured by wider UK and global competitors;
  • a detrimental long term impact on global ecosystem resilience, and Scottish employment and health.

Option 2: Benefits will be as follows:

  • every person, as well as future generations, will be indirectly benefited through improved ecosystem resilience, employment and health;
  • manufacturers located in Scotland will be better placed to compete domestically and globally in a net zero, circular economy;
  • Scottish manufacturers in receipt of funding will become more resilient, productive and sustainable;
  • potential to build on Scotland's existing reputation for green industry support, attracting new businesses, and existing businesses looking to expand in, or relocate, to Scotland;
  • it is anticipated businesses will directly benefit:
    • with cost savings through collaboration and sharing of equipment, facilities, contacts and expertise;
    • with access to new markets and customers through low carbon manufacturing processes such as remanufacturing and the development of new by-products from recovered waste;
    • by a circular economy reducing the risk of disruption from geopolitical issues, global trade tensions or climate change;
    • through improved relationships with suppliers, employees, local communities and shareholders through mutually beneficial circular strategies;
    • through stronger brand reputations from low carbon manufacturing processes and products;
    • by attracting and retaining talent and investors;
    • by increasing the opportunity for existing businesses, whose products are at risk of becoming obsolete due to increased demand for sustainable products, to diversify;
  • the initial shift towards the production of capital goods, such as equipment, machinery and buildings, will result in an increased demand for construction and labour from the non-manufacturing industry sectors;[5]


Option 1:

  • no implementation costs for Scottish Government;
  • longer term cost to businesses through being uncompetitive domestically and globally;
  • businesses having to meet all of the costs of transitioning to low carbon manufacturing;
  • affecting company's ability to attract and retain talent and obtain investment;
  • longer term cost to ecosystem resilience, employment and health;
  • Scottish Government failure to meet statutory requirement to meet net zero target.

Option 2:

  • the Scottish Government will provide capital funding totalling £26 million to develop low carbon solutions via the LCMCF;
  • it will likely be a mix of direct funding and challenge type competitive funding;
  • there will be an expectation of match funding from the project partners to support resource and/or capital elements;


Email: midamp@gov.scot

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