Manufacturers must be consulted if the UK is to ever hit ‘net zero’

The Committee on Climate Change’s (CCC) report advises that a net-zero emissions target by 2050 for the UK is technically possible.

Net-zero would replace the previous target, an 80% emissions reduction from 1990 levels by 2050. The proposed new target (and the current one; the CCC noted that legislation is insufficient for the existing target) will only be achievable if stable policies to reduce emissions are swiftly introduced.

While it may be technologically possible, is it realistic for industry to hit net-zero? And if it is, will it impact competitiveness given that energy prices are already double that of some European countries?

“The predicted costs range from £5-10bn a year for industry to become net-zero. Those costs won’t fall across industries and sectors equally, the impacts will be far greater on some, so while it’s possible it will be very expensive,” Roz Bulleid, head of climate, energy and environment policy at Make UK, said to The Manufacturer.

Keeping competitive

The costs for manufacturing are significant; a coherent strategy alongside support will be needed to meet the challenges a net-zero future brings.

“To achieve this goal change is needed, fuel switching to hydrogen or other sources and a lot more carbon capture storage systems,” Bulleid says. “It is more a question of, ‘can we do this without impacting our competitiveness?'”

Decarbonisation impacts energy intensive industries in two ways. Firstly through direct emissions, for example the steel sector emits carbon dioxide as a by-product of its process. While it previously received some relief from carbon costs through the EU emissions trading system, that has since been halted until a Brexit withdrawal deal is agreed.

The freezing of this has already affected the steel industry; last month British Steel was forced to take out a £100m loan from the government to pay its carbon bill.

Secondly, there is the indirect impacts through electricity consumption. “The steel industry in the UK is already operating at a major competitive disadvantage, with UK power prices being 51% higher than in Germany and 110% than in France, adding to this burden is not a realistic option,” commented, UK Steel director general, Gareth Stace.

“At an estimated abatement cost of £100 per ton of CO2, and currently no ability to pass this on in sales, it is clear the costs of decarbonisation cannot be shouldered by the steel industry alone while remaining internationally competitive,” he adds.

Industry wants to decarbonise

The ceramic industry is another energy intensive sector that will be impacted. It welcomes decarbonisation and wants to work with government to achieve net-zero.

“Industry leaders want to be closely involved in working with government to make sure these changes take place. Consultation with energy intensive users like ceramic manufacturers is a critical step,” says Laura Cohen, chief executive of the British Ceramic Confederation.

The steel and ceramic sectors are just two of many that are pushing to play their role in the new low carbon economy; but worries still remain.

Cohen continued, “We are concerned. As we decarbonise, more goods bought and used in the UK are now being produced overseas, predominantly from non-EU countries. This greater dependence on imported products, demonstrates offshoring of emissions from UK to non-EU countries, and this needs to be acknowledged as a global responsibility which requires an international solution.”

It is vital to keep this infrastructure in the UK, as these industries play an integral part of numerous supply chains in Britain and across the world.

On whether we can achieve net-zero, Bulleid says, “It depends on the policies in place as to whether we can finance this. It is important to keep these industries onshore, we don’t want to see them offshore and then potentially there would be a net increase of problems as a result. Yes it is possible, but we can’t say if it will happen.”