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Did you know that the industrial sector accounts for about 16% of the UK’s total greenhouse gas emissions? That’s equivalent to the emissions of more than 20 million cars on the road. If we want to tackle climate change and achieve net zero emissions by 2050, we need to decarbonise our industries as soon as possible.
But what does industrial decarbonisation mean and how can we do it? In this blog post, we will explain the UK’s Industrial Decarbonisation Strategy and how it aims to reduce emissions from the industrial sector by 90% by 2050. We will also discuss the key policies and measures to support industrial decarbonisation, such as carbon capture and storage, hydrogen production, electrification, energy efficiency, and circular economy. Moreover, we will provide some examples of low-carbon technologies and innovations that are being developed or deployed in different industrial sectors. Finally, we will explore the benefits and challenges of industrial decarbonisation for businesses and society.
By reading this blog post, you will learn about the UK’s vision for a low-carbon industrial sector by 2050 and how you can get involved in the green recovery and contribute to the net zero goal. Whether you are a policy maker, an industry leader, a researcher, an investor, or a consumer, you will find valuable information and insights on industrial decarbonisation in this blog post.
Overview of Industrial Decarbonisation Strategy and its Objectives
What is industrial decarbonisation and why is it necessary? Industrial decarbonisation means reducing the amount of carbon dioxide (CO2) and other greenhouse gases (GHGs) that are emitted from industrial processes, such as manufacturing, refining, or chemical production. Industrial decarbonisation is necessary for tackling climate change and achieving net zero emissions by 2050, which means balancing the amount of GHGs that are emitted with the amount that is removed from the atmosphere.
The UK is a global leader in decarbonisation with a net zero goal by 2050 and 5-yearly carbon budgets, and a plan to reduce economy-wide GHG emissions by at least 68% by 2030, from 1990 levels. The industrial sector plays a key role in this plan, as it accounts for about 16% of the UK’s total GHG emissions. To decarbonise the industrial sector, the UK government published the Industrial Decarbonisation Strategy in March 2021, which is the first strategy of its kind by a major economy.
The Industrial Decarbonisation Strategy sets out the government’s vision for a prosperous, low-carbon UK industrial sector by 2050. It provides the industry with the long-term certainty it needs to invest in decarbonisation and to remain competitive and productive. It also aligns with the wider net zero agenda and the UK’s commitments under the Paris Agreement and COP26, the United Nations climate conference held in November 2021.
The main objectives of the Industrial Decarbonisation Strategy are:
- Supporting existing industries to decarbonise while remaining competitive and productive
- Enabling new low-carbon industries to emerge and grow in the UK
- Creating new jobs and skills in the green economy
- Leveraging private sector investment and innovation in low-carbon technologies and solutions
- Aligning with the wider net zero agenda and the UK’s commitments under the Paris Agreement and COP26
Key Policies and Measures to Support Industrial Decarbonisation
How can the government support industrial decarbonisation and ensure that it works for everybody and every region? The Industrial Decarbonisation Strategy outlines a range of policies and measures that the government has introduced or plans to introduce to help the industry reduce its emissions and transition to a low-carbon future. Some of the key policies and measures are:
- Establishing industrial decarbonisation clusters across the UK, where multiple industries can collaborate and share infrastructure and resources for low-carbon solutions. The government has set a target of ensuring that there will be at least four low-carbon clusters by 2030 and at least one net zero cluster by 2040. The government has also launched the Cluster Sequencing process, which will determine the order and timing of deploying carbon capture, usage and storage (CCUS) and hydrogen networks in industrial clusters.
- Providing funding and incentives for industrial decarbonisation projects, such as the Industrial Decarbonisation Challenge, which will invest up to £170 million in innovation projects to accelerate the deployment of low carbon technologies in industrial clusters; the Industrial Energy Transformation Fund, which will provide £315 million to support energy efficiency and decarbonisation measures for energy-intensive industries; and the Contracts for Difference scheme, which will include a new auction pot for less established renewable technologies, such as offshore wind, floating offshore wind, tidal stream, geothermal, biomass with CCUS, and advanced conversion technologies.
- Developing regulatory frameworks and standards for key technologies for industrial decarbonisation, such as CCUS, hydrogen, and electrification. The government will publish a CCUS business model to provide revenue support for CCUS projects and a CCUS infrastructure fund to cover capital costs of shared transport and storage infrastructure. The government will also publish a UK hydrogen strategy to set out how it will support the development of a low-carbon hydrogen economy and a hydrogen business model to provide revenue support for hydrogen production projects. The government will also work with the industry to develop an electrification action plan to identify barriers and opportunities for electrifying industrial processes.
- Promoting energy efficiency and demand reduction measures, such as improving process design, equipment performance, and waste heat recovery. The government will provide guidance and support for the industry to conduct energy audits and implement energy management systems to identify and realise energy savings opportunities. The government will also introduce a new industrial energy efficiency scheme to incentivise investment in energy efficiency technologies. The government will also explore options for increasing the uptake of waste heat recovery technologies, such as providing financial support or setting minimum standards.
- Encouraging circular economy practices, such as reducing material use, increasing recycling and reuse, and using bio-based or renewable materials. The government will implement the resources and waste strategy, which aims to minimise waste, promote resource efficiency, and move towards a circular economy. The government will also support the development of bioeconomy clusters, which can use biomass or biogas from organic waste or crops as a renewable energy source or feedstock for various industrial applications. The government will also work with the industry to develop a circular economy action plan to identify barriers and opportunities for circular economy practices in different industrial sectors.
Examples of Low Carbon Technologies and Innovations for Industrial Decarbonisation
What are some of the low-carbon technologies and innovations that can help industry decarbonise and achieve net zero emissions by 2050? The Industrial Decarbonisation Strategy identifies four key technologies that can enable the transition to a low-carbon industrial sector: carbon capture and storage (CCS), hydrogen production, electrification, and bioenergy. These technologies can help industry switch away from fossil fuel combustion to low carbon alternatives, as well as capture and store or use the remaining emissions.
Here are some examples of how these technologies are being developed or deployed in different industrial sectors:
- rbon capture and storage (CCS) involves capturing carbon dioxide (CO2) from industrial processes and transporting it to a secure underground storage site. CCS can reduce emissions from energy-intensive industries, such as iron and steel, cement, refining, and chemicals, by up to 90%. For example, the HyNet North West project aims to capture CO2 from industrial sites in North West England and North East Wales and store it in depleted gas fields in Liverpool Bay. The project also plans to produce low-carbon hydrogen from natural gas with CCS and use it as a fuel or feedstock for various industrial applications.
- Hydrogen production involves using renewable energy sources or natural gas with CCS to produce hydrogen, which can be used as a low-carbon fuel or feedstock for various industrial applications. Hydrogen can reduce emissions from industries that rely on high-temperature heat or chemical reactions, such as iron and steel, cement, refining, and chemicals. For example, the Zero Carbon Humber project aims to produce low-carbon hydrogen from natural gas with CCS at a new power plant in the Humber region and use it to decarbonise industrial processes, such as steel making at British Steel’s Scunthorpe site. The project also plans to capture CO2 from industrial sites in the Humber region and store it in an offshore saline aquifer.
- Electrification involves switching from fossil fuels to electricity from renewable sources or low-carbon grids for heating, cooling, or powering industrial processes. Electrification can reduce emissions from industries that use electricity-intensive processes, such as aluminium, paper, and glass. For example, the Electrified Roadmap project aims to demonstrate the feasibility and benefits of electrifying industrial processes in the West Midlands region, such as electric arc furnaces for steel making, induction heating for forging, and electric boilers for steam generation. The project also plans to assess the impact of electrification on the local electricity network and identify potential solutions.
- Bioenergy involves using biomass or biogas from organic waste or crops as a renewable energy source or feedstock for various industrial applications. Bioenergy can reduce emissions from industries that use biomass or biogas as a substitute for fossil fuels or materials, such as cement, chemicals, and paper. For example, the BioBridge project aims to develop a bioeconomy cluster in Scotland that can use biomass or biogas from organic waste or crops as a renewable energy source or feedstock for various industrial applications, such as anaerobic digestion for biogas production, pyrolysis for biochar production, and fermentation for bioplastics production. The project also plans to create new markets and opportunities for low-carbon products and services.
Benefits and Challenges of Industrial Decarbonisation for Businesses and Society
What are the benefits and challenges of industrial decarbonisation for businesses and society? Industrial decarbonisation can bring significant benefits for businesses and society, such as:
- Reducing greenhouse gas emissions and mitigating climate change impacts. Industrial decarbonisation can help the UK achieve its net zero targets by 2050 and contribute to the global efforts to limit the rise in global average temperature to well below 2°C, preferably to 1.5°C, above pre-industrial levels. This can help avoid the worst effects of climate change, such as extreme weather events, sea level rise, biodiversity loss, and food insecurity.
- Enhancing competitiveness and productivity by lowering energy costs and improving resource efficiency. Industrial decarbonisation can help businesses reduce their energy bills and improve their operational efficiency by adopting low-carbon technologies and solutions, such as energy efficiency measures, waste heat recovery, and circular economy practices. This can also help businesses gain a competitive edge in the growing global market for low-carbon products and services.
- Creating new markets and opportunities for low-carbon products and services. Industrial decarbonisation can help businesses diversify their product portfolio and access new customers and markets by offering low-carbon products and services that meet the increasing demand and expectations of consumers, investors, regulators, and stakeholders. This can also help businesses create new revenue streams and enhance their reputation and brand value.
- Generating new jobs and skills in the green economy. Industrial decarbonisation can help create new jobs and skills in the green economy by supporting the development and deployment of low-carbon technologies and solutions across different industrial sectors. This can also help address the skills gap and support the reskilling and upskilling of workers in the industrial sector.
- Improving air quality and public health by reducing pollution. Industrial decarbonisation can help improve air quality and public health by reducing the emissions of pollutants, such as nitrogen oxides (NOx), sulphur dioxide (SO2), particulate matter (PM), and volatile organic compounds (VOCs), from industrial processes. This can help prevent or reduce the adverse effects of air pollution on human health, such as respiratory diseases, cardiovascular diseases, cancer, and premature death.
However, industrial decarbonisation also faces some challenges for businesses and society, such as:
- High upfront costs and risks associated with investing in low-carbon technologies and solutions. Industrial decarbonisation requires significant capital investment in low-carbon technologies and solutions, such as CCS, hydrogen production, electrification, and bioenergy. These technologies are often at an early stage of development or deployment and may have high technical or commercial risks. Therefore, businesses may face barriers to access finance or incentives to invest in these technologies.
- Lack of adequate infrastructure and supply chains for low-carbon solutions. Industrial decarbonisation depends on the availability of adequate infrastructure and supply chains for low-carbon solutions, such as CCUS networks, hydrogen pipelines, electricity grids, biomass feedstocks, etc. However, these infrastructure and supply chains are often underdeveloped or insufficient to meet the demand or potential of low-carbon solutions. Therefore, businesses may face challenges to access or integrating these solutions into their operations.
- Regulatory uncertainty and policy inconsistency across different levels of government. Industrial decarbonisation requires a clear and consistent regulatory framework and policy support across different levels of government, such as national, regional, local, etc. However, these regulatory frameworks and policies may vary or change over time depending on the political or economic context. Therefore, businesses may face uncertainty or inconsistency in their planning or decision-making for industrial decarbonisation.
- Potential trade-offs between environmental, economic, and social objectives. Industrial decarbonisation may involve trade-offs between environmental, economic, and social objectives, such as reducing emissions versus maintaining competitiveness; creating new jobs versus displacing existing jobs; using renewable resources versus impacting biodiversity; etc. Therefore, businesses may face dilemmas or conflicts in balancing these objectives or addressing the potential negative impacts of industrial decarbonisation on some stakeholders or regions.
- Potential carbon leakage or displacement of emissions to other countries or sectors. Industrial decarbonisation may lead to carbon leakage or displacement of emissions to other countries or sectors if some businesses relocate their operations or outsource their production to countries or sectors with lower environmental standards or costs. This may undermine the overall effectiveness and fairness of industrial decarbonisation and create competitive disadvantages for businesses that remain in the UK or adopt low-carbon solutions. Therefore, businesses may need to consider the global and cross-sectoral implications of industrial decarbonisation and seek international cooperation and coordination to address this issue.
Future Outlook and Recommendations for Industrial Decarbonisation
What is the future outlook and trends for industrial decarbonisation in the UK and globally? Industrial decarbonisation is expected to accelerate and expand in the coming years, driven by various factors, such as:
- Increasing demand and support from consumers, investors, regulators, and stakeholders for low-carbon products and services. Industrial decarbonisation can help businesses meet the growing expectations and requirements of their customers, shareholders, lenders, insurers, governments, and civil society for reducing their carbon footprint and enhancing their environmental performance. This can also help businesses avoid potential reputational risks or legal liabilities associated with high-carbon products or activities.
- Accelerating innovation and adoption of low-carbon technologies and solutions across different industrial sectors. Industrial decarbonisation can help businesses harness the opportunities and benefits of low-carbon technologies and solutions that are being developed or deployed across different industrial sectors. These technologies and solutions can help businesses improve their efficiency, productivity, quality, and resilience. They can also help businesses create new value propositions or business models that can differentiate them from their competitors.
- Expanding collaboration and cooperation among different actors within and across industrial clusters, regions, countries, etc. Industrial decarbonisation can help businesses leverage the synergies and economies of scale that can arise from collaborating and cooperating with other actors within and across industrial clusters, regions, countries, etc. These actors can include other industries, suppliers, customers, infrastructure providers, research institutions, trade associations, local authorities, etc. They can help businesses share knowledge, resources, infrastructure, markets, etc. for low-carbon solutions.
- Aligning with the global net zero agenda and contributing to the COP26 outcomes. Industrial decarbonisation can help businesses align with the global net zero agenda and contribute to the outcomes of COP26, the United Nations climate conference held in November 2021. COP26 aims to accelerate action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change. These goals include limiting global warming to well below 2°C, preferably to 1.5°C; increasing climate resilience; mobilising finance; and enhancing international cooperation.
- Holding businesses and institutions to account. COP27, the UN climate conference held in November 2022 in Sharm el-Sheikh, Egypt, closed with a breakthrough agreement to provide loss and damage funding for vulnerable countries hit hard by floods, droughts and other climate disasters. This was widely lauded as a historic decision, as it recognized the need for finance to respond to loss and damage associated with the catastrophic effects of climate change. COP27 also maintained a clear intention to keep 1.5°C within reach and urged countries to update their nationally determined contributions (NDCs) by 2023. These decisions create a strong incentive for businesses and institutions to reduce their greenhouse gas emissions and support climate action.
- Making the pivot toward implementation. The COP27 cover decision, known as the Sharm el-Sheikh Implementation Plan, highlights that a global transformation to a low-carbon economy is expected to require investments of at least USD 4-6 trillion a year. Delivering such funding will require a swift and comprehensive transformation of the financial system and its structures and processes. The plan also calls for scaling up innovation, technology development and transfer, capacity-building, education and public awareness. These actions will enable countries to implement their NDCs and long-term strategies, as well as enhance their adaptation and resilience capacities.
What are some recommendations or tips for businesses that want to pursue industrial decarbonisation? Industrial decarbonisation requires a strategic and proactive approach from businesses that want to achieve net zero emissions by 2050. Some recommendations or tips for businesses are:
- Conducting a carbon audit or assessment to identify their current emissions sources and hotspots. This can help businesses measure their baseline emissions and understand their carbon footprint across their value chain. This can also help businesses identify their key drivers and opportunities for emission reduction.
- Develop a decarbonisation plan or roadmap that sets clear goals, targets, and actions. This can help businesses define their vision and ambition for industrial decarbonisation and align it with their overall business strategy. This can also help businesses prioritise and implement the most effective and feasible actions for emission reduction.
- Seeking funding and support from government schemes or programs for industrial decarbonisation. This can help businesses access to finance or incentives to invest in low-carbon technologies and solutions, such as the Industrial Decarbonisation Challenge, the Industrial Energy Transformation Fund, and the Contracts for Difference scheme. This can also help businesses reduce the costs and risks associated with low-carbon investments.
- Engaging with stakeholders and partners to share best practices and learn from others. This can help businesses benefit from the knowledge and experience of other stakeholders and partners who are involved or interested in industrial decarbonisation, such as other industries, suppliers, customers, infrastructure providers, research institutions, trade associations, local authorities, etc. This can also help businesses build trust and confidence in their decarbonisation efforts and outcomes.
- Monitoring and reporting their progress and impact on industrial decarbonisation. This can help businesses track and evaluate their performance and impact on industrial decarbonisation and identify areas for improvement or adjustment. This can also help businesses communicate and demonstrate their achievements and contributions to their stakeholders and partners.
To sum up, this blog post has explained:
- Industrial decarbonisation is cutting emissions from industry to fight climate change and reach net zero by 2050.
- The UK has a strategy to help industry decarbonise with policies, funding, standards, and technologies.
- Industrial decarbonisation can benefit businesses and society by saving money, creating jobs, and improving health.
- Industrial decarbonisation also faces challenges such as costs, infrastructure, uncertainty, and trade-offs.
We hope you enjoyed this blog post and learned something new. If you want to know more or get involved in industrial decarbonisation, please visit the government website or contact us. Thank you for your time and attention. Please share your feedback or comments below.
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If you are interested in working with us or want to learn more about our services, please visit our website at www.enertherm-engineering.com or contact us today. We would love to hear from you and discuss how we can help you achieve your industrial decarbonisation goals. Don’t miss this opportunity to join the green industrial revolution and make a positive impact on the environment and society. Contact us now and let’s get started!