This Post has been submitted by Climate Scorecard United Kingdom Country Managers Thomas Christensen and Gwenyth Wren
UK climate change target and progress
The UK has a 68% emissions reduction goal by 2030 (NDC) and a 78% by 2035 compared to 1990 levels, as well as a 2050 net zero goal. It has brought emissions down 44% between 1990 and 2019. Renewable electricity generation has more than quadrupled since 2010 and between 2008 and 2018, the energy sector saw the biggest fall in emissions as the UK abandoned coal burning. This is followed by the waste sector, which started capturing methane emissions, and industry where efficiency improved. By comparison, emissions from the transport and agriculture sectors have not significantly changed.
Two of the biggest challenges to the UK’s decarbonization goals
While emissions from the heat and electricity production sector have dropped significantly within the last decades and are continuing to drop, emissions from the residential sector have remained steady, even increasing slightly in the last few years. With more than 80% of homes connected to the gas grid, heating remains one of the most difficult sectors to decarbonize.
A 2018 report commissioned by the National Infrastructure Commission, a government agency, found that decarbonizing Britain’s heating infrastructure could cost as much as £450 billion ($586 billion).
In his 2021 book How to Avoid a Climate Disaster, Bill Gates cites that the average retail price per gallon for natural gas in the US between 2015 and 2018 is one dollar, while the price of electrofuels (such as hydrogen) is $5.3, a Green Premium increase of 425%.
Aviation and shipping
Like residential heating and cooling, emissions from the transport sector have remained extremely steady throughout the last decades.
The updated 2035 Sixth Carbon Budget released in Spring 2021 officially enshrines the share of international aviation and shipping/freight emission reduction as a new commitment for the UK.
Globally, commercial passenger flight activity has grown by about 2.5-fold (5% per year), while CO2 emissions rose by 50% (2% per year), representing around 3% of total global emissions. The IEA’s report on aviation highlights that more effort is needed for one of the most difficult sectors to decarbonize due to rising demand, the industry’s bureaucracy and the physics of flight. Although there have now been more than 200,000 flights using aviation biofuel blends, overall alternatives to jet kerosene represent a small share (<0.1%).
The International Maritime Organization (IMO) estimated that GHG emissions from international shipping in 2012 accounted for some 2.2% of anthropogenic CO2 emissions and that such emissions could grow by 50-250% by 2050. In 2018, the IMO released a new target, to reduce all GHG emissions by at least 50% by 2050 compared to 2008. This was the first ever international climate goal for the shipping sector and set to be revised in 2023.
Bill Gates cites that the average retail price per gallon in the United States is $2.22, while electrofuels cost $8.80, signifying a green premium 300% increase. As these are largely international sectors, prices in the UK are not significantly different. This large green premium is due to a rapidly dropping efficiency (or near impossibility) of operating aviation and maritime transport commercially with electricity and batteries.
The UK is still an oil and gas importer. On June 4, the UK struck a trade deal with Norway, Liechtenstein, and Iceland to eliminate tariffs as one of its post-Brexit geopolitical developments. Twenty-two percent of all Norwegian exports go to the UK, with high demand for oil and gas, fish and seafood and industrial goods. In 2019, the UK’s imports of oil products stood at 33 thousand kt, while its exports were at -22 thousand kt. By comparison, the UK’s transport sector consumes around 40 thousand kt per year.
The UK has a long way to go in observing its moratorium on overseas fossil fuel investment. On December 12, the UK announced to end direct support of overseas fossil fuel projects, however this was followed by listed exemptions, one being continued support for fossil gas projects overseas if the recipient country has a climate plan that is in line with reaching net-zero emissions by 2050. The CDC group, the UK government’s development finance institution, had at least $987m (£711m) invested in or committed to fossil fuel projects in 2019, and is not explicitly obliged to follow the government’s new policy in light of “exceptional circumstances’’ such as acute development need. In 2019, UK lenders provided loans and underwriting services worth $30.3bn (£21.9bn) to companies that sold or burned coal, or provided coal industry services.
The UK doesn’t count the carbon footprint of international travel and imported goods. The Climate Change Commission (a UK government independent, statutory body) recommends that the UK keep track of emissions based on the consumption of goods from overseas. However, the UK has the opportunity at COP26 to advocate for carbon border adjustments (carbon taxes on imports – to take into account the carbon generated by their manufacture) and introduce border requirements on the efficiency, recyclability and sustainability of imported goods.
The UK has ambitious goals for hydrogen, still a nascent renewable energy sector. The North Sea Transition Deal from March 24 aims to decarbonize the offshore oil and gas sector, primarily through hydrogen and CCUS technologies. It committed a $22 billion investment to roll-out these technologies. Meanwhile, the border North Sea region is seeing a fast-growing offshore wind sector, which could support up to 90,000 jobs by 2030, and the UK government is seeking to capitalize on this growth by fostering skill force development to ensure a stronger transition. However, hydrogen demand is mainly concentrated in refining and chemical industries, and the scale-up needed to replace natural gas usage still faces significant technical challenges. Harnessing the decarbonization potential of hydrogen in the United Kingdom requires more ambitious policies and incentives for consumers.
For home heating, the UK can stop connecting new homes to the gas grid and encourage existing homeowners to move to energy efficient alternatives such as hydrogen boilers, where hydrogen is directly blended into the national grid as a replacement to gas, without people needing to buy new heating or cooking appliances.
Ironically, there is a long-term shift towards fewer heating degree days in the UK, due to the escalating impact of global warming. A year as warm as 2020 would historically have been expected only once every 90 years, whereas climate change has increased the likelihood to once every other year.
The UK is planning to introduce a sweeping policy replacing all gas boilers with low-carbon options in 2025. Heating will have to come through heat pumps that absorb or extract heat from outside or in the ground and run on electricity. Furthermore, policies such as the United Kingdom Climate Change Act can mandate the adoption of hydrogen technologies in new applications, and hydrogen production to help stimulate this shift.
In a letter advising the UK Government on compatibility of onshore petroleum with UK carbon budgets, the Climate Change Committee (which had initially developed the Sixth Budget and 78% reduction recommendations) recommends that the UK should adopt a policy to limit the greenhouse gas emissions from the production/supply of fossil fuels consumed in the UK (including natural gas) irrespective of where the emissions occur, for instance through the implementation of minimum standards or border carbon tariffs on imports.
Concerning aviation fuels, UK-based airlines and airports can prove their commitment to reducing GHG emissions by setting goals for efficiency improvements, integrating GHG emissions costs into ticket prices, adopting sustainable fuels and setting emissions reduction targets. The UK government must work closely with the International Civil Aviation Organization, the UN agency responsible for international aviation activity. The option of integrating emissions in ticket prices can generate revenues to foster low-carbon innovation and to address potential socio-economic competitiveness issues suffered differently by airlines. Major carbon pricing schemes such as in the EU ETS have implemented such schemes in other sectors. However, since the UK has left the EU ETS, it now has the opportunity to develop such a scheme on its own.
The Committee on Climate Change recommended that the UK’s domestic and international shipping emissions could be reduced through fleet efficiency improvements, electrification especially in ports through greater shore power offering and finally through the deployment of zero-carbon fuels.
The Rt Hon Kwasi Kwarteng MP Secretary of State, Department for Business, Energy & Industrial Strategy 1 Victoria Street SW1H 0ET