According to the CCC, we can reduce greenhouse gases across all sectors of our economy (including shipping and aviation) by 100% by 2050, from 1990 levels. While it’s encouraging to hear that this target is viable, reaching it will require significant changes to a number of policies – the report states that the current 2040 target for the phase-out of petrol and diesel cars and vans is too late, for example.
How can we reach the new target?
The CCC says that the Clean Growth Strategy provides the right framework for decarbonisation, but it argues that the Government must be more ambitious in their approach and provide clear policies to ensure real progress. The report provides a roadmap to reduce our net emissions to zero by 2050, and it’s clear that our energy system will change fundamentally as we move towards this goal.
Many areas of the economy, such as transport and heating, will need to be electrified to significantly reduce emissions. This will double the demand for power compared to today’s levels, and this additional demand will need to be met by low carbon energy sources. According to the CCC, we could have an electricity system that’s 100% supported by low carbon or renewable sources by 2045 – currently, low carbon sources currently only provide around 50% of our electricity demand.
Decarbonising the UK’s heating system will also be critical to reaching net zero emissions, and the CCC warns this could be a challenge as there are yet to be large-scale trials carried out for either hydrogen or heat pumps. They state that the deployment of heat pumps to replace boilers will need to start before 2030 in order to meet the goal, and we will also need to ramp up the development of district heating and hydrogen technologies.
What will it mean for businesses?
We’re already working towards a low carbon future, and the CCC claims that many of the changes needed to achieve the net zero emissions goals by 2050 would involve limited additional costs to the UK economy. This will still require billions in investment each and every year between now and 2050, however – decarbonising industry alone will take an estimated £5-10bn per year.
The report recommends that the Treasury should review how the transition will be funded and who will pick up the costs, and develop a strategy to help businesses in high carbon sectors. Historically, however, such funding has come from direct taxation of energy, so it’s quite likely that businesses can expect to see an impact on their energy bills. In recent years, non-commodity costs have also risen significantly as the costs of decarbonising our energy system has been passed on to customers – in fact, they now make up around 60% of businesses’ bills.
With this in mind, energy efficiency should be a key focus for businesses now and in the future. Reducing the amount of energy you use is not only the best way to keep your energy bills as low as possible, becoming more energy efficient will also enable you to reduce your carbon emissions and contribute to the overall net zero emissions goal.
If your business is required to comply with ESOS, you should already be working on your energy audit in order to achieve compliance in time for the Phase 2 deadline (5th December 2019). Once you’ve identified your energy savings recommendations, make sure you act on them – this will ensure you’re not spending any more than you should be on your energy.
If you’d like to talk to one of Inenco’s experts about how you can improve your organisation’s energy efficiency and/or protect your business from future cost rises, give us a call on 08451 46 36 26 or email firstname.lastname@example.org.