Meeting the Net Zero challenge: bringing innovation to industry

Image
Engineers in front of city skyline

The event was run in tandem with the just published results from the initial Phases One and Two of the Industrial Energy Efficiency Accelerator (IEEA), figures which indicate that from the 16 demonstration innovative cross-sector projects supported, up to 40.6TWh of energy could be saved by 2031.

The core focus of discussions centred on how innovative technologies are crucial in helping companies make the emissions cuts necessary to achieve Net Zero while reducing cost.  

About the summit

“What was clear out of COP26 is that industry really has grasped that the time to start action is now” said Dr Mark Taylor, Deputy Director for Energy Innovation at BEIS, in his opening keynote. 

As a significant contributor to the UK’s greenhouse gas (GHG) emissions (15%), third only after transport and energy production, to keep industry on track to achieve Net Zero, emissions will need to fall two thirds by 2035 and 90% by 2050 . 

This view was echoed by Paul McKinney, Senior Manager at the Carbon Trust, who stated that “…the journey from innovation through to deployment replication almost always takes longer than expected,” adding that “we want to encourage companies not to think “what do I start doing in 2025” …but actually be planning and piloting technologies now.”

“The challenge for industry is now much, much greater since the Climate Change Act was changed in 2019”, said Julia King, Baroness Brown of Cambridge, and chair of the Carbon Trust

The range of elements, including electrification, hydrogen, and carbon capture, that are required to drive down emissions to meet the Net Zero reduction by 2050 is diverse, and complex. However, in the early stages, at least up to 2030, the biggest contribution is likely to come from energy and resource efficiency, she said.

Though the various sectoral abatement strategies are crucially important, and complex, there “is one consistent message,” Baroness Brown added, “that there will be big contribution from energy and resource efficiencies…but we will need new technologies to support that, and we need to start demonstrating these right now, so they will be ready when we need them for future decarbonisation.” 

“I love energy efficiency … it is the circular economy in practice. If you can reduce the waste, it's good for business and good for the environment,” stated Wouter van Tol, Head of Government, Community Affairs & Sustainability at DS Smith. “But we know how far we can get with this” he added. “We will not hit our science-based target or Net Zero if we [only] continue on that path. We need to look at which technologies are available now, we need to look at the investment horizon, and what transition will be needed in the future to hit those targets.”

“What we need to do changes over time, it is a roadmap…if we wait for a silver bullet, such as hydrogen, to save the day, then we will already miss our science-based target for 2030,” answered van Tol, when asked how decarbonising would work for a manufacturing business. 

Having the right environment is critical to incentivise industry and manufacturing to make these reductions. This includes ensuring appropriate regulatory and reporting frameworks, providing the right incentives to stimulate innovation, and increasing collaboration and sharing of information – especially what works and what doesn’t. 

For many sectors, such as water management and processing, the measurement of GHG emissions and target setting are relatively young, and the understanding of options for emissions reduction is still growing. United Utilities Director of Environment, Planning and Innovation, Jo Harrison, highlighted that the constantly developing understanding around both Scopes 1 and 2, as well as Scope 3 (value chain) emissions   (for which they recently set a science-based target), needs further collaboration and shared learning across the value chain, including amongst suppliers, if we want to drive innovation and develop the right technology. 

If companies want to get a hold of their Scope 3 emissions, greater clarity, as well as uniform standards and reporting of emissions at the operational level, will help incentivise upstream suppliers to do the same, said Professor Sam Turner, Chief Technology Officer at the High Value Manufacturing Catapult (HVMC)

A key message to industry here was that emissions reduction and reporting of this will be a market opportunity, not just a responsibility or cost saving. “This needs to be industry led…so start with resource efficiency on your journey to Net Zero, across Scopes 1, 2 and 3,” he added. “A clear way of reporting embodied emissions means you can start to contract and procure against those standards at every stage in the value chain because they will win business on it…making the market pull through the way they report, is very important,” he continued.  

A joined up approach across government was raised as a challenge by Jo Harrison, when discussing the potential unintended consequences of pursuing one innovation over another in the effort to reduce emissions. “If we (industry or government) chase only one indicator, like CO2, then you could make very bad policy decisions, or really bad business decisions”, agreed van Tol. 

Dr Taylor recognised that there can be risks associated with new regulations, and therefore “an honest and full dialogue between government and the full range of industry is critical to ensure we develop informed policy and regulation,” he added. The carbon risk of investments turned the conversation towards the financial implications of emissions reduction. Access to Scope 3 data presents a big challenge to companies, investors, and managers alike, highlighted Lindsay Smart, Head of Sustainability at investment manager Triple Point. Disclosure requirements for Scope 1, 2 and 3 emissions for investors have added pressure and raised further challenges.  

“Anything that can help businesses and asset managers in the investment chain understand the importance of data on carbon and efficiencies is hugely important…we can have greater confidence in the quality of the asset,” she said. “Consistent, long-term policy from government…gives us confidence.”

De-risking technology investment, as demonstrated by the IEEA, is where government’s traditional role has laid, both in accelerating deployment, but also identifying where the UK can play a leading global role, such as creating exportable solutions, said Professor Turner. “Targeting innovation funding in those spaces, such as R&D, is a core role for government,” he added. 

Continuing the conversation on the role of government, Dr Taylor did not underplay the scale of the challenge, nor the commitments made. “There is a huge amount of work to be done…and government has taken on massive commitments to deliver industrial clusters in carbon capture, and needs to develop business models for hydrogen,” he said, emphasising that “it is very difficult to do this in the timeframe, with other competing commitments, without collaboration and help from industry.”

The IEEA

A major centre point of the summit was to showcase the results of Phases One and Two of the IEEA, which funds operational-scale demonstration projects of near-to-market energy and resource efficiency technologies. The latest figures indicate that in addition to the significant energy savings estimated by 2031 [by these 16 industrial technologies], the cumulative carbon saving over ten years would be 10MtCO₂e, the equivalent of powering 12% of the UK's electricity consumption for one year [2019], and supporting the mission to accelerate to Net Zero. Encouragingly, half of the projects are now ready to commercialise.

The IEEA is now open again for applications for Phase Three. For further details, please visit www.carbontrust.com/ieea