Manufacturing is a key driver of the UK economy, representing more than half of exports, employing some 2.7 million people and contributing GBP191 billion. But many of the sectors that make up the industry depend on carbon-intensive processes and, taken together, they represent around 12 per cent of the UK’s direct greenhouse gas emissions. Within that, the largest emitting sectors are chemicals, iron and steel, and cement. These form the focus of a new report produced by UCL’s Institute for Sustainable Resources, in collaboration with HSBC, which considers the options for decarbonisation in UK manufacturing.
UK manufacturing emissions have fallen by 57 per cent from 1990 levels – largely through structural changes and efficiency improvements – but reaching the targets set out in the Sixth Carbon Budget, which are necessary to meet the overarching government target of Net Zero by 2050, will be challenging. In a sector facing global competition and economic pressure from decades of under-investment, the report finds that radical change, supported by strong policy intervention and clarity, is essential for the UK to achieve its decarbonisation goals and secure the economic benefits of transition.
Based on information from national and global literature, and policy reviews, alongside interviews with businesses from the key emitting sectors, the report presents three potential futures for UK manufacturing:
- Muddling Through – whereby the UK lags behind in decarbonisation and takes a hesitant or cautious approach to change.
- Failure to Deliver – where the UK fails to meet its own targets and the industry loses out to overseas competition.
- Forging Ahead – a proactive decarbonisation strategy leads to rapid change and makes the UK an attractive place for low-carbon manufacturing.
The report points to clear and strong commitment from UK manufacturers for decarbonisation. Whilst it highlights the challenges, it also sets out how the UK manufacturing sectors of steel, cement and chemicals can reduce their net emissions of greenhouse gases towards zero and secure the opportunities that ‘forging ahead’ offers. This is the most responsible and promising way forward, but is not for the faint-hearted. For each sector the report dives into the industry today, options for decarbonisation, regulatory drivers, policy recommendations and business models for the transition towards net zero, helping to create a UK manufacturing industry that can thrive in a global, low-carbon economy.