Understanding the challenge of net-zero and decarbonisation

Achieving net-zero emissions may seem daunting and an insurmountably large challenge, requiring a major step-change in every aspect of an organisation’s operations. However, the reality is that an effective net-zero strategy should be at the core of any responsible business. Here, we lay out just what the process of decarbonisation and the journey to net-zero means to the UK as a whole, as well as the potential cost benefits of acting promptly.

What is net-zero?

The first step on the path towards achieving a net-zero future is to understand what it entails.

In July 2019, the UK Government responded to growing public focus on climate change by committing to net-zero greenhouse gas (GHG) emissions by 2050, locking the UK into achieving an overall balance between emissions to atmosphere and those removed from it.

Doing so requires dramatic carbon reduction through a combination of clean energy generation and greater efficiency, as well as effective carbon capture, removal and storage.

The scope of this transformation covers all aspects of the UK economy, with major changes required across buildings, industry, transport, aviation, shipping, agriculture, land use, waste and energy generation, amongst others. Alongside this a fundamental paradigm shift in public attitudes and values regarding our individual interaction with and impact on the environment is required.

In some carbon-intensive sectors, such as aviation or manufacturing, achieving zero emissions may be prohibitively expensive, too complex or otherwise not possible. A collective net-zero target allows for these residual emissions, providing that they are balanced by carbon reduction elsewhere. Any and all opportunities for decarbonisation need to be identified and capitalised on.

Removing carbon emissions can be achieved in a number of ways, both through natural processes and via engineering. One of the most common methods is via afforestation and reforestation, creating effective, natural carbon sinks. Negative carbon technologies include Carbon Capture and Storage (CCS), which captures emissions associated with fossil fuel use before they are released to the atmosphere and allowing it to be stored underground. A Government taskforce on CCS found that up to 90% of the carbon emissions from burning fossil fuel can be captured in this way, however the technology remains in the early stages of the innovation process.

The scale of the challenge

The UK has already made significant progress towards decarbonisation, with overall emissions falling by 40% compared to our baseline of 1990 levels (Committee for Climate Change 2019 Progress report).

However, Ofgem warned in February 2020 as part of their Decarbonisation Action Plan that there are still significant challenges remaining. A particular onus was placed on reducing emissions associated with heating, transport and heavy industry. As an example, with the ban on gas-fired heating in new build homes from 2025, more than 23 million homes will require new, more energy-efficient heating systems, including heat pumps (National Grid Future Energy Scenarios).

National Grid forecasting suggests that the use of electric vehicles will require growth from 230,000 vehicles on the roads today to 35 million by 2050 to meet GHG reduction targets. ScottishPower predicts that the cost of network upgrades to support those vehicles will run as high as £48 billion, requiring 25 million new EV charge points.

Decarbonisation, the process of reducing the carbon intensity of the energy we use, including both electricity and gas, is a crucial step towards wider 2050 net-zero objectives. National Grid indicated that they believe it is achievable but requires immediate action across all key technology and policy areas. 

National Grid ESO’s 2019 Future Energy Scenarios report stated that the electricity grid will be required to operate using only zero carbon generation. The wider power sector will need to deliver net negative emissions through the use of technologies such as biomass with CCS, while the gas system will need to be transformed to accommodate hydrogen. Significant digitisation of legacy infrastructure will also be required to provide visibility and enable optimisation of the energy system. Collectively, these measures are forecast to cost the UK around £286 billion in the runup to 2050.

A near zero-carbon power system in 2050 is expected to cost about the same as a high carbon alternative, providing clean energy alongside co-benefits including improved air quality and low-carbon industrial opportunities.

Why it pays to act now

For many businesses, the major concern surrounding the need to progress towards net-zero emissions is likely one of cost. Whatever stage of that journey your particular organisation is on, it is likely that savings are there to be unlocked, alongside achieving carbon reductions. Simply put, both the cleanest and cheapest unit of energy is the one you don’t use. Improved energy efficiency should naturally be at the core of any coherent carbon reduction plan, bringing with it the potential for significant cost and carbon savings.

While there is a growing range of decarbonisation technologies and options available, including CCS and reforestation, initial focus should be on whether there are still emissions improvements that can be made elsewhere through improved efficiency or the use of cleaner energy, including on-site generation. A growing range of financial packages and support for clean technologies offer a range of funding solutions, able to be scaled to accommodate a particular organisation’s energy objectives, available funding and appetite for risk.