Energising the road to NET ZERO

“The best way to predict your future is to create it.” These words of Abraham Lincoln ring even truer today than they did almost two centuries ago, writes David Sapsted.

Energising the road to NET ZERO

This article is taken from the Autumn 2023 issue of

Think Global People magazine

Click on the cover to access the digital edition.
View your copy of the Autumn 2023 issue of Think Global People magazine.

When it comes to a greener future, creating it now is exactly what UK manufacturers and service  industries are bent on doing, helped by members of a government who, after a stuttering start, are now starting to put their money where their mouths have been. Take, for example, this summer’s decision by Tata Motors – the owners of Jaguar Land Rover – to plough more than £4 billion into building an electric car battery ‘gigafactory’ in Britain, rather than in Spain. The plant, to be built in Somerset and expected to create 4,000 jobs and thousands more in the supply chain, is predicted to be capable of meeting half of the UK’s electric vehicle needs by 2030.Prime Minister Rishi Sunak described Tata’s decision as “testament to the strength of our car manufacturing industry and its skilled workers”. What he did not mention was the reported half-a-billion pounds of funding that was to come from the government.Another milestone in the UK’s ambition of becoming a ‘net zero’ nation within the next 27 years was the installation in August of the first turbines at what is destined to become the world’s largest offshore wind farm. The Dogger Bank wind farm in the North Sea, 80 miles off the Yorkshire Coast, will boast a total of 277 turbines, each 260 metres high, when it is pumping out enough electricity to supply six million homes in three years’ time. Such is the green potential of wind farms that, last month, the government increased by £22 million the subsidy fund to support new renewable energy projects, taking the total budget to £227 million.Similarly, the government gave the green light over summer to millions of pounds of funding for two new carbon capture projects – the Acorn Project at St Fergus gas terminal in Aberdeenshire and the Viking Cluster in Immingham on the River Humber, near Grimsby – which are regarded as vital if net zero is to be achieved.

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The private sector is doing its bit, too. Recent research by the manufacturers’ organisation, Make UK, and cloud business solutions company Sage, showed that 47% of the nation’s manufacturers had adopted digital technology plans to decarbonise their businesses. “Britain’s manufacturers are powering forward in their digital journey towards net zero as the sector moves to reduce energy usage and costs, cut greenhouse gas emissions and boost productivity,” according to the ‘Decarbonisation through Digitalisation’ report.Stephen Phipson, CEO of Make UK, said that Britain’s manufacturers had long been at the forefront of digital innovation globally and that they had now taken significant steps to cut carbon emissions. But, he added: “In order to supercharge that journey,  business needs government to play its part in driving the process forward. To that end, government needs to help them move forward faster by committing to a national rollout of the industrial digitalisation programme, Made Smarter, across the UK and expand its remit to include industrial decarbonisation.“Made Smarter has already delivered amazing successes in helping SMEs boost their productivity through digitalisation and they are ideally placed to pick up the mantle to help decarbonise through digitalisation.”In August, the British Chambers of Commerce (BCC) and Lloyds Bank produced a report proposing three changes needed to help businesses hit net zero. It called on the government to review its support and advice to SMEs on moving to the target; large businesses and institutions to continue to drive behaviour changes in their supply chains; and the government to demonstrate commitment and consistency in its net zero plans.The proposals came on the heels  of a BCC survey of more than 1,000 businesses (96% of them SMEs), which found that nine out of 10 did not fully understand what the net zero target meant for them. In the wake of the survey, the BCC and Lloyds brought together businesses in Chambers of Commerce from Liverpool, Glasgow, NE England, West and North Yorkshire and Birmingham to analyse what needed to change.Shevaun Haviland, BCC director-general, said: “All the businesses we spoke to understand the devastating impact climate change is having on our planet and that sitting this out is not an option. But many smaller firms feel lost in a fog of conflicting information and are reluctant to invest in new technologies when they fear betting on the wrong horse. Mixed messages from government on the importance of net zero are only compounding the problem, as well as a ‘stick’ heavy approach to enforcing change.”Local strategies addressing global challengesCities across the country are doing their best to overcome the problems. Birmingham, for example, launched a Green Innovation Quarter programme this year to oversee a 400-acre development accommodating 250 businesses and 8,000 workers. A joint venture involving the city council, the University of Birmingham and Tyseley Energy Park, the quarter already houses the Birmingham Energy Innovation Centre – a project overseen by the university and the Birmingham Energy Institute – which has created a platform for a whole range of innovation and community engagement activities.“The breadth of projects is enormous, ranging from hydrogen and fuel cells to magnet and battery recycling to energy storage to a business incubator,” said the institute. “This has also been a platform for working with the local community to redevelop the green space and local River Cole in a flagship project for the city.”Manchester, Glasgow, Newcastle and many others – not to mention the green tech innovations in the Oxford-Cambridge corridor – have now embarked on their own ambitious initiatives aimed at overcoming global warming. The prizes from such activities could be huge. Analysis published over the summer by the Confederation of British Industry (CBI) suggested that investment in green-growth projects could boost the UK’s GDP over the next seven years by between £37 to £57 billion.To achieve this, the organisation said businesses needed a “clear and  stable” policy environment; a comprehensive set of tax and other incentives to encourage investment in the green economy; and the creation of an Office for Net Zero Delivery to ensure consistent policies across government departments.Rain Newton-Smith, directorgeneral of the CBI, said: “The UK has always been an undisputed leader in the transition to net zero, allowing it to go further and faster than many other nations. It was the first major economy to sign net zero into law, has a strong track record on emissions reductions, and has a business community that not only backs the transition, but is also ready to seize the commercial opportunities available.“But, in the wake of  the US Inflation Reduction Act and similar moves in the EU, that position is now under threat. With competition for green investment heating up across the globe, the UK faces a race against time to claim the generous growth prizes on offer. That’s why we need decisive action – from government and business – to reclaim our place at the front of the queue.”Concerns that America’s Inflation Reduction Act, which offers $369 billion of subsidies for green infrastructure projects, and the EU’s new green industrial strategy could reduce the appeal of the UK for investment have been voiced by TheCityUK, which represents the nation’s financial and related professional services. The latest research paper on sustainable and green finance from the organisation and data company ICE, ‘Global Carbon Pricing Mechanisms and their Interaction with Carbon Markets’, highlighted the increasingly important role carbon markets are playing in reaching net zero.Looking at the opportunities for the UK to become a world leader in the field, Gordon Bennett, managing director of utility markets at ICE, said: “Environmental markets provide the price signals to efficiently allocate capital across  the carbon cycle and to manage the uncertainties in meeting net zero. The UK is home to where the world’s energy and environmental markets – valued in the trillions – are cleared, as well as being a global leader in decarbonising electricity generation by combining marketbased principles  with thoughtful policy. The UK has a unique position to bring knowledge of environmental markets to a broader audience.”As the late David Bowie observed quite a few years after Lincoln’s remark: “Tomorrow belongs to those who can hear it coming.” UK businesses hope the government is now listening.

Read more trade and enterprise news from David Sapsted in the upcoming Autumn issue of Think Global People magazine. Reserve your copy here.

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