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Patient Capital The Risk of Losing Britain’s Climate Innovators

Britain’s clean technology sector is under pressure to move faster. Rising energy insecurity and geopolitical instability have sharpened the focus on domestic capability, with recent reporting from Reuters noting that tensions involving Iran are accelerating the global shift towards low carbon energy. For UK companies working on industrial solutions, the demand is clear. The question is whether the financial system is set up to support them. 

The patient capital gap in UK climate tech

Much of the concern centres on how innovation is funded. Climate technologies, particularly those involving hardware, take time to develop and even longer to scale. That does not sit easily with an investment model that often looks for returns within a few years. 

Patient capital is frequently put forward as part of the answer. In simple terms, it means funding that stays the course. It supports businesses through long development cycles, technical setbacks, and the slow process of building commercial markets. Bodies such as British Patient Capital, a wholly owned commercial subsidiary of British Business Bank plc, have been set up to address this gap, but founders and investors say the shortfall remains significant. 

Manshu Agarwal, Partner at Colbridge Ventures, says the issue is widely understood but not yet resolved. 

 “Climate and deeptech businesses are building physical systems. That takes time, capital, and a tolerance for uncertainty. If the investment horizon is too short, those companies will struggle to stay and scale in the UK.”

When a working solution still isn’t enough 

A case in point is Metier Technologies, an Oxfordshire engineering business focused on zero emission heavy vehicles. The company is led by James Budgett, 72, and John Humphrey Gunn, 84. Between them, they have invested £6 million of their own money into developing a hydrogen powered heavy duty truck. 

The vehicle has passed its MOT and is now road legal. It is designed to replace diesel in freight and urban fleets, offering an option for operators who need range and fast refuelling. 

Gunn has spent decades building and backing companies, including ventures that have reached unicorn status, giving him a track record in scaling innovation successfully. He sees the current environment as a barrier rather than a support. “We have taken this from engineering through to a working vehicle on the road. The challenge now is not the technology, it is the funding environment around it,” he says. 

Budgett is more direct about the policy landscape.

 “The Government’s £1 billion focus on electric heavy vehicles is understandable, but it risks missing part of the picture. Hydrogen has a role in heavy duty transport, particularly for long distance work, and that is not reflected in the current level of support.”

The Government’s recent announcement to support the roll out of electric vans and trucks and to install electric chargers is to be welcomed by those companies that can use electric vehicles.  

 “However, EV does not work for all companies, or organisations. There is a misguided belief that H2 will only work for long distance large trucks. Consider what might happen if the emergency services had electric vans and trucks and the power grid goes down, at a time when they are really needed.”

Growing international interest in hydrogen ICE

Metier is seeing increased interest in H2 Internal Combustion Engine (H2 ICE) technologies and the company’s strategic route to opening the H2 market for both trucks and vans. Budgett believes recent interest from UK, EU, US, Australia has been triggered by energy security. 

“The UK Government’s support for levelling out the price of hydrogen through the HAR scheme is welcome,” says Budgett. “However, if support were given to H2 ICE new and repowered vehicles, alongside H2 fuel, there would be a much quicker route to zero carbon and trace NOx and at much less cost to the Government. The EU are and we are having to focus our business there.” 

The concern among both founders is that public funding may not translate into domestic industrial growth. Without conditions tied to UK production or supply chains, they argue that investment can flow to established manufacturers overseas. Gunn points to China as an example of where that capability already exists. “If the supply chain sits elsewhere, that is where the benefit will go,” he says. 

Metier is already setting up operations in Europe. The company expects that as funding follows, jobs will too. As many as 500 roles could move over time. For a business with a 40-year history in the UK, it is not a decision taken lightly. 

Capital leaves before companies can grow 

The underlying issue is not unique to one company. Venture capital remains a dominant source of growth funding, but its structure tends to favour businesses that can scale quickly. Software fits that model. Industrial technology does not. Funds operate on fixed timelines, and pressure to deliver returns shapes where capital is deployed. 

Gunn has seen these cycles before. Coverage in The Independent in the 1990s described his role in building high growth ventures during earlier investment booms. He believes the UK still has the technical expertise to lead, but the financial framework has not kept pace. 

 “There is no shortage of engineering talent here. The difficulty is backing it through the stages where the real value is created.”

Data from the British Business Bank and the OECD has highlighted persistent gaps in later stage funding, particularly for capital intensive sectors. Industry figures also point to a tendency for investment to favour asset light businesses, leaving manufacturing and infrastructure technologies competing for a smaller pool of capital. 

Hannah Scott, Chief Executive of Oxfordshire Greentech, says the effect is visible across the region. 

 “We have strong clusters of innovation around the UK, particularly in areas like transport and energy, often with world-leading universities at the heart. The issue is not starting companies; it is keeping them here as they grow. Access to the right kind of patient capital is a big part of that.”

The debate is also shaped by competing technology pathways. Battery electric vehicles have attracted significant investment and policy backing. Hydrogen continues to be explored for applications where batteries are less practical, particularly in heavy goods and long-haul transport. The Advanced Propulsion Centre has supported work across both areas, but industry participants say the balance is uneven. 

Metier’s view is that hydrogen will become more competitive as production scales and costs fall. The company argues that total cost of ownership could move closer to diesel over time, particularly for operators with demanding duty cycles. 

For policymakers, the challenge is not simply choosing technologies but ensuring that viable options are given the chance to develop. Decisions taken now will shape where production, skills, and intellectual property are located in the future. 

There is broad agreement that the transition to low carbon systems is accelerating. Less certain is whether the UK will capture the economic benefits. For companies such as Metier, the direction of travel is becoming clearer. 

 “We would prefer to build this in the UK,” Gunn says. “But the business has to go where it can grow.”

About Mixology PR

Mixology PR is a specialist communications consultancy working with innovators, pioneers and change-makers across climate tech, clean energy, fintech, engineering and the built environment. We help ambitious businesses build the visibility that supports fundraising, partnerships and growth. To learn more about our work in the climate and sustainability sector, visit our insights page or read about our PR Accelerator Programme with Oxfordshire Greentech.

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