Overview
As our new Demystifying Net Zero Paper underlines, there has never been a simultaneously more optimal, nor more critical time for the UK to fulfil its climate ambitions. Global soft power currently rests upon the UK ahead of its leadership of the COP26 with the biggest opportunity to determine our environmental future. In this decisive moment, manufacturing’s ability to spearhead the transition to net zero is needed more than ever.
Ambitious Targets
The desire to embrace net zero, reducing and offsetting all carbon emissions by 2050 is clear, providing endless opportunities for manufacturing to strengthen resilience, ‘build back better’ and pioneer international green transformation, ensuring it’s become a priority for the rising majority of members. But it is a monumental task, with manufacturing currently responsible for around 11% of all GHG emissions, requiring both urgent and comprehensive action, as outlined in BEIS’ ambitious targets to cut emissions by 2/3 by 2035 and 90% by 2050.
With over three quarters of manufacturers intending to set net zero targets in the next 24 months but only 2 in 10 being close to achieving these targets- manufacturing’s recognition and capability must be transformed into action. Make UK’s commitment, as outlined in our Demystifying Net Zero Paper, is to guide this transition by turning barriers into opportunity.
Accelerating the Path to Net Zero.
Importantly, the short-term measures taken to build pandemic resilience have laid the necessary groundwork for action. Since the net-zero priority for industry focuses upon mitigating (e.g. removing) emissions, manufacturing's next step is to identify their carbon emissions today so they can set their targets.
Carbon emissions come from three scopes of operation, those produced directly by businesses themselves or indirectly by the energy suppliers and the ‘invisible’ emissions created and controlled by other entities in the value chain.
Make UK understands that the path to Net Zero is challenging. In being an adaptive process, there is no single defined route, but there are definite starting blocks- that many members have already implemented. These include introducing low-cost process and energy efficiency measures, changing behaviours, creating a green fund, building improvements and finally, offsetting the remaining emissions. Make UK is also currently working with Inspired Energy to transpose these starting blocks for the overall sector into a comprehensive roadmap to further provide direction to members.
There is a range of necessary government actions that can mobilise manufacturing’s net zero achievements.
Data Knowledge gives control
Net Zero is dependent upon knowledge to chase waste and track carbon emissions - key to this is accurate data collection.
Whilst continued parliamentary focus upon developing the 4IR and wider digital technology is thus integral, it’s important to recognise the low-hanging fruit. The vast majority of manufacturers do not yet have submeters, so by supporting manufacturers to introduce this simple effective solution, government can act to improve data collection immediately of submetering.
Clarity regarding energy alternatives
Manufacturers’ efforts to tackle net zero can only go so far without the ‘greenification’ of their power supplies to tackle indirect emissions.
However, with the current decarbonisation strategy lacking certainty about whether its supply, timeline and budget will match net zero ambitious, or meeting the realistic needs of high or energy- intensive dispersed manufacturing. It’s clear then that government must rehaul the energy and pricing system to create a universal, holistic approach.
Unless this is addressed and clarity and coherence provided, this could significantly hinder efforts to achieve net zero targets.
Publishing Carbon Footprint
Combating direct and indirect emissions, whilst vital, are only part of the solution, as the bulk of manufacturing’s emissions arise from the value chain.
As these represent the interwoven emissions throughout manufacturing, each individual effort to reduce emissions is vital. A universal effort to achieve net zero, creating inclusive benefits of reduced costs and increased effectiveness of manufacturing’s value chain is needed.
However, the sheer size of the value chain and infancy of the green economy make it appear a daunting task with only 14% of members engaging with their supply chain. But with almost all members being inclined to once being made aware of the importance of this, it’s clear that transparency can boost engagement and with it, credibility. Therefore, every manufacturer committing and reporting on its own carbon emissions is key to the overall net zero objective.
While a small proportion of the manufacturing sector have themselves already begun to report on their net zero commitments, thus influencing the ethos of voluntary reporting and updating- government could strengthen this by extending the mandatory reporting requirement to more companies – but only if procedures for SMEs to do so are eased.
National Funding
As manufacturing tackles net zero, the key constraint upon their green innovative capabilities is funding. The support of investment, environmental levies and tax incentives is failing in core aspects. Funding is failing to translate into commercialisation and to include the bulk of SME manufacturers, levies offer unfair eligibility criteria and tax incentives are not aligned with investment cycles.
Therefore, what is needed is for government to match needs, through a streamlined national funding system, accessible to all companies of all sizes, an inclusive levies system and extended tax incentives.
Expertise/Knowledge
The cultural transition into net zero is a steep task, despite manufacturing’s evident good will and the lack of coherence and coordination in government’s current plans cloud its net zero ambition. It’s clear that government must impart a sense of urgency and provide a clearer, personalised direction for manufacturing to confidently embrace it.
By engaging more with manufacturers, Government would be able to build upon the 10-point plan with key, defined strategies that meet the specific needs of manufacturers. By creating a centralised point of reference, imagined potentially through an official net zero website, including signposting to specialised training, Government could facilitate access to green manufacturing knowledge and build upon it.
What’s Next?
The Demystifying Net Zero Report summarizes what the manufacturing sector needs to achieve net zero. It rings the alarm bell of climate change, whilst pragmatically providing guidance on effective solutions. Now it is a matter of implementing these solutions, but industry need help to get kickstarted. The power rests in the hands of government to help mobilise manufacturers’ intentions with the right set of policies and enable its manufacturing industries to demonstrate their readiness to achieve the country’s ambitious net zero targets.
Net Zero is dependent upon knowledge to chase waste and track carbon emissions - key to this is accurate data collection.