Net zero: We have the tools, now we need the ambition

Posted on 16 Nov 2020 by The Manufacturer

Launching a new sustainability study with Make UK, E.ON CEO, Michael Lewis, outlines how the actions of industry will define the UK’s success in reaching net-zero targets by 2050.

The UK has an ambitious – and legally binding – target of net zero emissions by 2050, the first country in the world to do so. And it is the actions of manufacturing in particular that will define our success.

That is a significant task for an industry dealing not only with the challenges and the aftermath of the COVID-19 crisis, but also global competition and a drive to improve productivity. And yet during the crisis, UK manufacturers have demonstrated their resilience and adaptability, not least in rising to the challenge of answering the nation’s call for help in making vital medical equipment.

E.ON CEO, Michael Lewis
Michael Lewis, CEO, E.ON

I am in no doubt we will overcome this. But while the response to COVID-19 rightly remains the priority for most in the short term, the UK’s net-zero target remains the key challenge for our future.

It is heartening to see from this research, undertaken shortly before the COVID-19 crisis fully emerged, that industry awareness of net-zero is high, that manufacturers are investing in energy efficiency and seeing the commercial benefits.

The fact that 40% of manufacturers report increased margins, and 30% increased competitiveness, as a result of sustainability initiatives vindicates the case for green investment.

A strategic imperative

But there is progress to be made, and our report with Make UK outlines barriers we need to overcome to further investment as reported by manufacturers, notably cashflow and profit margin impacts, as well as payback periods on investments.

The crisis has demonstrated that collaboration and cooperation across government, industry and society can transform how our economy operates. Working together to implement a green recovery, which demonstrates that the transition to a low-carbon economy, is not only possible but also makes economic sense.

Some solutions may be relatively straightforward: ending increases to business rates caused by investing in decarbonisation technology, for example. Others may be more complex; ensuring industry can create value from the positive impacts they can have on the energy system with new technologies.

This article first appeared in the November issue of The Manufacturer.

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The first step is being clear the UK remains on a long-term trajectory to net-zero emissions which is not going to be abandoned or ignored and will provide a competitive edge for those who change and adapt soonest.

Our industries, together, have a pivotal role

It is positive to note so many manufacturers continue to secure better deals by renegotiating energy contracts, but it remains the case that focusing on unit rates is only half the issue. The bigger emphasis still needs to be on managing overall costs – that means the volume of energy you consume rather than the simpler pence-per-unit.

Our report with Make UK also underlines a greater role for the energy industry in tackling a lack of expertise among customers on what is possible through energy efficiency. This remains one of the key barriers preventing businesses from making progress in this area and will become more important in the future energy world of smart and personalised solutions.

Whatever the size of your business, and your progress in becoming more sustainable, there is much that can be done. We now offer 100% renewables-backed electricity to business customers of all sizes, which for some might be a vital first step towards that more sustainable and personalised energy system.

From there solutions scale rapidly; from high-efficiency LED lighting, HVAC upgrades and building management systems through to solar panels and battery storage, electric vehicles, heat pumps, and onsite generation.

We must hold our gaze firmly on the net-zero target and deliver a green recovery. Manufacturers will need to play their part as end customers and supply chain partners look to improve and decarbonise. Now is not time to down tools, but to advance the effort to reach net zero by 2050.

CLICK HERE to download your copy of the Towards a Net-Zero Carbon UK Manufacturing Sector report

*Header image courtesy of Shutterstock