Britain is in danger of squandering a golden opportunity to help China reach its ambitious low carbon goals, according to a report from the UK government’s own Energy and Climate Change Committee.

The report urges ministers to put the establishment of energy business links with China “at the heart of government plans to tackle climate change and secure high-value business opportunities for UK firms”.

Committee chairman Tim Yeo stressed that the UK could aid China with a range of low carbon initiatives but warned that current policies risked giving Britain a reputation of being “more talk than action on climate change”.

He said that by “demonstrating low-carbon leadership at home, the UK could punch well above its weight in encouraging major emitters like China towards low-carbon development, but only if ministers can come up with a more focused strategy”.

It is estimated that China could account for half of the world’s CO2 emissions by 2030. This year it set out ambitious plans to reduce the carbon intensity of its economy, boost renewable energy, draft a new climate law and introduce carbon trading.

The energy committee report states that these measures make this the ideal time for the UK to work with China to prepare for a future international agreement on climate change and secure potential opportunities for British businesses in China’s low carbon markets, which are currently worth around £430 billion.

But the report warns that the government’s work in China suffers from a lack of strategic direction. “There are too many small projects focused on too many different areas, rather than a co-ordinated effort to achieve key objectives,” it states.

Instead, say the energy MPs, the government should focus on a smaller number of strategic interventions that are tailored to appeal to Chinese priorities and which build on UK strengths.

It calls on the government to undertake a systematic assessment of the sectors where the UK could have such an advantage and then develop a strategy for their promotion and deployment in China.

One area it highlights is carbon, capture and storage technology. “The development of CCS is both an environmental imperative and a commercial opportunity for the UK,” the report points out.

“Coal is abundant and cheap in China and coal-burning power stations still produce 70 per cent of the country’s electricity. Deploying CCS in China will therefore be crucial to keeping global temperatures within safe limits and could be a substantial export earner if the UK is able to develop CCS expertise early.”

However, the report stresses that the UK’s ability to influence policy in China and to compete for business depends on the reputation of Britain as a credible leader, and it concludes that “the UK has not been as effective as other countries at showing China what the UK has to offer”.

Yeo said: “The UK’s image is unfortunately in danger of becoming tarnished by a reputation of being more talk than action when it comes to climate change.”

“If we want to convince the Chinese that they should be doing business with us in this area, then we will need to strengthen our brand. The government must not allow the UK to fall behind in the high-tech low carbon race by faltering on its commitments to create a low carbon economy here at home.”