Insight
The United Kingdom’s industrial sector is a vital contributor to the economy and employment, accounting for 17% of the nation’s greenhouse gas emissions in 2021. While emissions from the sector have decreased significantly since the 1990s, challenges remain in transitioning to low-carbon practices. The UK’s decarbonisation strategy is supported by flagship initiatives like Hynet NorthWest and extensive funding opportunities for low-carbon technologies and industrial transformation.
Industry GHG Emissions
In 2021, the UK’s Industrial Processes and Product Use sector reported emissions of 32.2 million tonnes CO2-equivalent, making it the third-largest contributor to the nation’s greenhouse gas emissions. This represents a 60% decline from 1990 levels, driven by reduced fuel consumption and technological advancements. Metal production and the use of substitutes for ozone-depleting substances (ODS) were the largest contributors, each accounting for over 10 million tonnes. Emissions from energy-related fuel combustion in manufacturing industries and construction totalled approximately 40.7 million tonnes CO2-equivalent, reflecting ongoing efforts to improve efficiency and reduce carbon intensity.
Economic Relevance of Sectors
Chemicals & Refining
Annual net turnover (2021):
77.6 billion £
Number of employees (2021):
103,000
Export value (2021):
41.8 billion £
Biggest companies based on turnover:
Croda International, Johnson Matthey, ExxonMobil
Metals Including Iron and Steel
Annual net turnover (2021):
17.8 billion £
Number of employees (2021):
71,000
Export value (2021):
27.7 billion £
Biggest companies based on turnover:
Tata Steel, British Steel
Industrial areas:
Port Talbot, Scunthorpe
Main export markets:
Europe (43%)
Cement & Lime
Annual net turnover (2021):
0.7 billion £
Number of employees (2021):
2,000
Export value (2021):
0.1 billion £
Biggest companies based on turnover:
Breedon Cement, Cemcor, Tarmac, Heidelberg Materials, Aggregate Industries
Decarbonising the UK’s Industry – Funding Opportunities
The Net Zero Innovation Portfolio (NZIP) provides funding for low-carbon technologies and systems, with approximately 150 million £ allocated to industry projects between 2020 and 2023. Specific accelerators include the Industrial Energy Efficiency Accelerator (10 million £), the Industrial Fuel Switching Accelerator (57.5 million £), and the Industrial Hydrogen Accelerator (20 million £). The portfolio also supports the development of CCUS technologies through the Accelerating CCUS Technologies (ACT) initiative.
The Green Industries Growth Accelerator (GIGA) program increases investment in low-carbon manufacturing supply chains, with 390 million £ allocated for offshore wind and electricity networks, 390 million £ for CCUS and hydrogen, and 300 million £ for nuclear fuels. Additionally, the Industrial Energy Transformation Fund (IETF) offers 500 million £ for energy efficiency and low-carbon technology projects in high-energy-use businesses, with funding available until 2028.
Relevant Policies and Roadmaps
The UK’s Industrial Decarbonisation Strategy, published in 2021, is the cornerstone of its efforts to reduce industrial emissions, which account for one-sixth of territorial emissions. The strategy focuses on local decarbonisation plans for dispersed industrial sites and implements demand-side measures such as product standards, labelling, and green public procurement. The Carbon Border Adjustment Mechanism (CBAM) further supports industrial decarbonisation by addressing carbon leakage and encouraging international cooperation.
Knowledge Sharing, Research, and Demonstration Support
The Industrial Decarbonisation Research and Innovation Centre (IDRIC), based at Heriot-Watt University, supports a range of research projects and provides a Knowledge Hub for sharing insights and best practices. This initiative plays a crucial role in driving innovation and collaboration across industries to achieve the UK’s net-zero targets.
Flagship Projects
The Hynet NorthWest cluster is a leading initiative aimed at advancing industrial decarbonisation in North West England and North Wales. The project includes the development of a CO2 pipeline, offshore transport and storage systems, and hydrogen infrastructure. It focuses on producing low-carbon hydrogen and implementing carbon capture and storage (CCUS) technologies. The Hynet NorthWest Cluster Plan, completed in March 2023, outlines a roadmap for integrating renewable energy, hydrogen, CCUS, nuclear energy, and smart grids to foster clean growth in the region.
