The UK government is one of the few countries to have enshrined its 2050 net-zero emissions targets into law. As part of these measures, public sector and private businesses face new pressures to reduce their CO2 emissions.
What the law says
The Climate Change Act of 2008 meant the UK became obligated to reduce 80% of emissions relative to 1990 levels – but secondary legislation was passed in June 2019, which improved this to a 100% reduction.
This ruling has already been used to challenge the government. The UK Court of Appeal ruled that the government’s favourable statement around the Heathrow airport expansion was entirely unlawful – so it’s not just a guideline ruling but a real, tangible law that can be utilised by courts.
Why does it concern businesses?
The four highest emitting sectors in the UK are transportation, energy supply, business and residential – which means private business is the 3rd most emitting sector. While the UK has achieved a sharp reduction in emissions in the energy supply sector, largely thanks to bold measures such as phasing out coal and investing in renewables, decarbonising private and domestic emissions is more complex.
While private businesses cannot be expected to solve this problem alone, the government does place a certain expectation on them to make significant contributions. Both the ESOS and SECR guidelines are now enforced on businesses across the UK – influencing how a business must now track, report and reduce their carbon emissions.
For many organisations, especially those which are not directly involved in manufacturing or transport, much of the ‘net-zero’ work will happen around them. The government is investing heavily in new renewables, such as hydrogen, and energy suppliers have started to offer solely renewable power. We can also see the phasing out of petrol cars and the introduction of other measures at a country-wide level – all of which contribute to the country’s wider environmental goals. However, there is still a government-mandated onus on businesses to account for their emissions.
By understanding the impact of your business’s activities – including aspects such as logistics, supply chain, transport and property – you can begin building a plan to reduce emissions rather than simply wait to be forced to by the government or even worse, fined under rules such as failing to comply with ESOS Phase 3.
Is net-zero actually achievable?
We must see significant changes across a wide range of sectors for the UK to achieve this goal. Some areas, which rely less heavily on certain industries, will find the goal easier. Wales, for example, will struggle to reduce its emissions due to a reliance on heavy industry. At the same time, Scotland has set its own net-zero target for 2045, due to an enormous renewable wind resource and lots of available land for forestry that will act as carbon offsets.
For the entirety of the UK to reach net-zero, it must meet set ‘carbon budgets’ outlined by the Committee on Climate Change (CCC). While the UK is on track to meet its carbon budget between 2018-2022, it is not quite in-line to hit the 2023-27 or 2028-32 budgets.
Meeting these budgets and the net-zero goal, in general, will incur significant costs for our nation. In 2019, the CCC estimated it would cost £50bn per year, or 1% of the projected GDP, but the Department for Business, Energy and Industrial Strategy instead placed the figure at £70bn per year, and over £1 trillion by 2050.
The economic cost is uncertain, as as the stability of the UK following the Coronavirus pandemic. Ultimately, businesses have a part to play that simply cannot be ignored – as legislation tightens, more scrutiny than ever will begin to fall on companies like yours to decarbonise and help accelerate up the country’s net-zero goals.
If you’d like to begin building a better energy management strategy or find out more about ESOS or SECR, get in touch today, and we can help your business decarbonise in line with the rest of the country.