UK pledges two-thirds cut in industrial CO2 pollution by 2036

By Jessica Shankleman on 3/17/2021
UK lawmakers set a path for their net-zero 2050 goals.
UK lawmakers set a path for their net-zero 2050 goals.

(Bloomberg) --The UK government revealed plans to slash the amount of carbon dioxide spewed out by factories and other industrial processes by two-thirds within the next 15 years.

The Industrial Decarbonization Strategy, published March 17, is part of the UK’s ambition to effectively eliminate greenhouse gas emissions by 2050. The Department for Business, Energy and Industrial Strategy allocated more than 1 billion pounds ($1.4 billion) to projects that can help drive down emissions in hospitals and schools, as well as factories.

Cutting emissions from industry is one of the toughest areas in the fight against climate change. Some processes like oil refining, chemical and steel production rely on fossil fuels and can’t be easily be switched to renewable electricity.

The new strategy sets an expectation for industry to switch 20 terawatt-hours of its energy from fossil fuels to low carbon sources by 2030. That’s equivalent to 17% of all renewable energy generated by the UK in 2019.

Ultra-high temperatures have conventionally been produced by burning coal or gas. That now has to change and the government is betting on the development of hydrogen to help replace fossil fuels, especially in energy-intensive industries.

Industrial demand for hydrogen could be as much as 16 terawatt-hours a year by 2030 and 86 terawatt-hours by 2050, according to the government. Industrial gas consumption was about 102 terawatt-hours in 2019, the latest data show.

The 1 billion pounds of funding seeks to try to get “private enterprise to do the heavy lifting,” Business and Energy Secretary Kwasi Kwarteng said on BBC radio Wednesday. “We’re trying to create incentives for private investors to go down the energy transition route.”

The latest announcement on pollution and climate from Prime Minister Boris Johnson’s government comes as lawmakers from around the world call for more ambition ahead of November’s crucial United Nations climate talks in Glasgow.

The government also committed to:

  • Work with the steel industry to see if it is possible for ore-based steelmaking to reach near-zero emissions by 2035
  • Require that at least 3 million tons of CO2 is captured within industry per year by 2030
  • Industrial emissions falling by at least 90% by 2050 compared to 2018 levels

There’s pressure on the UK to lead by example, an aspiration that has been called into question over its plans to build a new deep coal mine in northern England.

On Wednesday, Kwarteng said there were now “compelling reasons” not to allow the coal mine in Cumbria to go ahead. In the past he’d argued the mine will help the steel industry become greener because it will allow steel plants to use coal dug up at home rather than importing emissions.

Planning permission for the mine will now be subject to a public inquiry following concerns that it would derail the UK’s efforts to meet its target for net-zero emissions.

The news also comes as the government seeks to revamp its industrial strategy. Earlier this month, Kwarteng scrapped a panel of high-profile business advisers that was set up about two and a half years ago to advise the government on its industrial strategy.

“Government must also fully embrace the opportunities to save carbon through more efficient use of products and materials; the lowest carbon product is one you don’t make at all,” said Caterina Brandmayr, head of climate policy at think tank Green Alliance. “We now need fast action to turn these promises into a suite of concrete policies.”

The UK plans to work out in the coming years how to make sure that its climate ambitions don’t affect the competitiveness of its industry. For the foreseeable future, it plans to primarily use free allowances in its carbon market to achieve that. Those are carbon permits handed out to industrial companies that would be threatened by international competitors that don’t have to pay to pollute.

Longer term, the UK is looking at other options as well. That could just be through diplomacy, working directly with other countries and with multilateral organizations. But it could also do something to imported products that would level the playing field between foreign companies that aren’t covered by a carbon price and domestic companies that are.

While the UK is vague in its strategy about what that policy could be, it is reminiscent of a proposal being talked about in the European Union to impose a tax on imports to adjust for carbon emissions.

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