UK unveils major blueprint to spend £1bn to cut emissions from industry, schools and hospitals

The new Industrial Decarbonisation Strategy sets the vision for the world’s first low carbon industrial sector, slashing emissions by two-thirds in just 15 years

Big Zero Report 2023

The UK Government has unveiled an ambitious blueprint to deliver the world’s first low carbon industrial sector and more than £1 billion to reduce emissions from industry, schools and hospitals.

The new Industrial Decarbonisation Strategy, which builds on the Prime Minister Boris Johnson’s Ten Point Plan for a Green Industrial Revolution published last year, sets out the government’s vision for building a competitive and greener future for the manufacturing and construction sectors.

The measures are expected to create and support 80,000 jobs over the next 30 years whilst cutting emissions by two-thirds in just 15 years.

The new strategy will support existing industry to decarbonise as well as encourage the growth of new, low carbon industries in the UK to protect and create skilled jobs and businesses, as well as give businesses long term certainty to invest in home-grown decarbonisation technologies, such as those that can capture and store carbon emissions from industrial plants.

It also includes measures to build on the UK’s efforts in the transition to greener energy sources, with an expectation of 20TWh of the UK industry’s energy supply switching from fossil fuels to low carbon alternatives by 2030, helping industry to increase its low carbon energy use to around 40% of total energy consumption.

In addition, the government intends to introduce new rules on measuring the energy and carbon performance of the largest commercial and industrial buildings, including office blocks and factories, in England and Wales.

The move is estimated to provide savings to businesses of around £2 billion per year in energy costs in 2030 and aim to reduce annual carbon emissions by more than two million tonnes – around 10% of the current emissions from commercial and industrial buildings, equivalent to removing emissions from a town the size of Doncaster.

Other key commitments

Some of the other key commitments within the strategy include plans to use carbon pricing as a tool for getting industry to take account of their emissions in business and investment decisions, establish the right policy framework to ensure the uptake of fuel switching in industry from fossil fuels to low carbon alternatives such as hydrogen, electricity or biomass and establish a targeted approach to mitigate against carbon leakage that meets the government’s domestic and global climate goals.

It also commits to develop proposals for new product standards, enabling manufacturers to clearly distinguish their products from high carbon competitors, explore the role of co-ordinated action on public procurement to create demand for green industrial products and use the government’s Infrastructure Delivery Taskforce, called ‘Project Speed’, to ensure the land planning regime is fit for building low carbon infrastructure.

In addition, it will work with the recently re-constituted Steel Council to consider the implications of the Climate Change Committee’s recommendations to set targets for ore-based steelmaking to reach net zero emissions by 2035, support the skills transition and include expectations that industrial emissions will fall by two-thirds by 2035 and by at least 90% by 2050 and that at least three megatons of CO2 is captured within industry per year by 2030.

UK to deliver “world’s first” low carbon industrial sector

Business and Energy Secretary Kwasi Kwarteng said: “We were the first major economy to put into law our target to end our contribution to climate change and today we’re taking steps to be the first major economy to have its own low carbon industrial sector.

“While reaching our climate targets will require extensive change across our economy, we must do so in a way that protects jobs, creates new industries and attracts inward investment – without pushing emissions and business abroad.

“Ahead of COP26, the UK is showing the world how we can cut emissions, create jobs and unleash private investment and economic growth. Today’s strategy builds on this winning formula as we transition low carbon and renewable energy sources, while supporting the competitiveness of Britain’s industrial base. Backed by more than £1 billion investment, today’s plans will make a considerable dent in the amount of carbon emissions emitting from our economy and put us on the path to eliminate our contribution to climate change by 2050.”

Kickstarting the process

Around £171 million from the Industrial Decarbonisation Challenge has been allocated to nine green technology projects in Scotland, South Wales and North West, Humber and Teesside in England, to undertake engineering and design studies for the rollout of decarbonisation infrastructure, such as carbon capture, usage and storage (CCUS) and hydrogen.

In addition, around £932 million has been directed to 429 projects across England to reduce carbon emissions from public buildings, including hospitals, schools and council buildings, with the Public Sector Decarbonisation Scheme funding low carbon heating systems, such as heat pumps and energy efficiency measures like insulation and LED lighting.

The funding is being provided to the Greater Manchester Combined Authority to decarbonise 15 bodies of the Greater Manchester public estate, Leicester City Council to upgrade 93 buildings including 56 schools, Hertfordshire County Council to upgrade 182 council buildings, including 74 schools and 23 emergency service buildings and the Hull University Teaching Hospitals NHS Trust to install solar panels, heat pumps and new roof insulation.

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