Government unveils new Industrial Decarbonisation Strategy

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A blueprint to deliver the world’s first low-carbon industrial sector and over £1 billion to cut emissions from industry, schools and hospitals has been announced by the Business and Energy Secretary.

Building on the Prime Minister’s 10 Point Plan, the new Industrial Decarbonisation Strategy sets out the government’s vision for building ‘a competitive, greener future’ for the manufacturing and construction sector.

Part of the government’s path to net zero by 2050, the new measures seek to create and support 80,000 UK jobs over the next 30 years whilst cutting emissions by two-thirds in just 15 years.

The new strategy will be underpinned by supporting existing industry to decarbonise and encouraging the growth of new, low carbon industries in the UK to protect and create skilled jobs and businesses, as well as giving businesses long-term certainty to invest in home-grown decarbonisation technology, such as capturing and storing carbon emissions from industrial plants, rather than outsourcing industrial activity to high-emission countries around the world.

The blueprint also includes measures to build on the UK’s efforts in moving towards greener energy sources, with an expectation of 20 terawatt hours of the UK industry’s energy supply switching from fossil fuel sources to low carbon alternatives by 2030 – helping industry to increase its use of low carbon energy sources to around 40% of industry’s total energy consumption.

To kickstart the process, £171 million from the Industrial Decarbonisation Challenge has been allocated to nine green tech projects in Scotland, South Wales and North West, Humber and Teesside in England, to undertake engineering and design studies for the rollout of decarbonisation infrastructure, such as carbon capture, usage and storage and hydrogen.

To reduce carbon emissions from public buildings including hospitals, schools and council buildings, £932 million has been directed to 429 projects across England.

The Public Sector Decarbonisation Scheme funds low carbon heating systems, such as heat pumps, and energy efficiency measures like insulation and LED lighting.

The government will also introduce new rules on measuring the energy and carbon performance of the UK’s largest commercial and industrial buildings, including office blocks and factories, in England and Wales.

According to the Government, the move could provide potential savings to businesses of around £2 billion per year in energy costs in 2030 and aim to reduce annual carbon emissions by over 2 million tonnes – approximately 10% of the current emissions from commercial and industrial buildings, the equivalent to removing emissions from a town the size of Doncaster.

The Industrial Decarbonisation Strategy seeks to send a clear signal to the market by setting out how the government expects decarbonisation to happen, while improving investor confidence to unleash the private capital necessary to reach net zero by 2050.

In the process, the government aims to create a framework for new industrial sectors to base themselves in the UK and attract inward investment, while future-proofing businesses to secure the long-term viability of jobs in industrial heartlands.

Other key commitments within the Strategy include:

  • Using carbon pricing as tool for getting industry to take account of their emissions in business and investment decisions.
  • Establishing the right policy framework to ensure uptake of fuel switching in industry from fossil fuels to low carbon alternatives such as hydrogen, electricity or biomass
  • Establishing a targeted approach to mitigate against carbon leakage that meets the government’s domestic and global climate goals, while keeping businesses competitive
  • Developing proposals for new product standards, enabling manufacturers to clearly distinguish their products from high carbon competitors.
  • Exploring the role of coordinated action on public procurement to create demand for green industrial products, helping to drive down costs and allowing a broader market to develop.
  • Using the government’s Infrastructure Delivery Taskforce, named ‘Project Speed’, to ensure the land planning regime is fit for building low carbon infrastructure
  • Working with the recently re-constituted Steel Council to consider the implications of the recommendation of the Climate Change Committee to ‘set targets for ore-based steelmaking to reach near-zero emissions by 2035’.
  • Supporting the skills transition so that the current and future workforce benefit from the creation of new green jobs.
  • An expectation that industrial emissions will fall by two-thirds by 2035, and by at least 90% by 2050, compared to 2018 levels.
  • An expectation that at least three megatons of CO2 is captured within industry per year by 2030, compared to minimal levels at present.

The full Industrial decarbonisation strategy is available on the Government website.