The Chemical Industries Association and Unite the Union call for Government support to overcome barriers to the Net Zero transition
The UK chemical industry has reduced its greenhouse emissions by over 80% over the past decade. However, there is concern within industry that this reduction was achieved not only through changes in fuel switching and other green methods but due to a decline in production and job losses leaving the UK’s chemical industry at a disadvantage of remaining globally competitive and attracting inward investment.
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The Chemical Industries Association (CIA) and Unite the Union have issued a joint statement expressing concerns over the barriers preventing energy-intensive industries, such as the chemical sector, from delivering the technologies needed to achieve net zero without adequate government support.
The sector is a major exporter of goods and is a significant job creator, with 4,100 businesses employing over 138,000 and supporting more than 500,000 jobs across the UK. Moreover, the industry stands out as the country’s leading investor in research and development (R&D) making up for over 19.7% of total R&D spending and stands as the number one manufacturing sector by productivity. See our regional impact map and Economic Report for more information.
While the UK chemical industry has made significant progress in reducing its greenhouse gas emissions—achieving an impressive reduction of over 80% over the past three decades – it has unfortunately not only been through fuel switching, emission abatement and energy efficiency but through a decline in production and associated job losses. Industry leaders warn that these barriers to transition must be addressed collectively, particularly for energy-intensive and trade-exposed sectors like chemicals, which compete globally for inward investment.
The focus now, according to the joint statement, is on transforming both the methods and materials used in production, while still maintaining global competitiveness. Using 2018 as the baseline year, the UK chemical industry has set ambitious targets to halve its remaining CO2 emissions by 2034 and achieve a 90% reduction by 2050. Achieving these targets will require an enormous collective effort and access to affordable and plentiful alternative energy sources, such as low-carbon electricity and hydrogen.
In addition, the chemical industry will need significant investment in carbon capture and storage infrastructure to eliminate emissions resulting from chemical reactions during production. Reducing reliance on non-renewable resources as feedstocks and delivering materials that can be fully recycled are also critical steps on The Path To Net Zero.
ACTIONS
- Commit to growing and simplifying programmes that enable net zero action, such as the Industrial Energy Transformation Fund (IETF). In particular there should be more stability in funding schemes with less tendency to regularly change methodology.
- Push forward with all cluster projects as and when they are ready to implement, along with a plan to support dispersed sites, so no part of Britain is left behind.
- Deliver a long-term and stable carbon market policy, coupled with effective carbon leakage mitigation measures to allow UK manufacturing to compete during the transition to net zero. Central to this will be a UK Emissions Trading Scheme and a Carbon Border Adjustment Mechanism that allow us to compete internationally.
- Implement policies that prioritise the retention and creation of good, high skilled, well paid jobs underpinned by a sectoral skills legacy as a consequence of increased economic activity and necessary projects aimed at delivering the necessary industry transition to Net Zero”
- Create favourable policy conditions for advanced circular recycling technologies, including recognition of a viable mass balance model to drive investment and growth in a new green tech industry.
- Incentivise net zero investment projects through the prioritisation and acceleration of UK permitting and planning processes.
- Put into action the UK’s long-standing commitment to delivering the lowest cost energy bills for all UK consumers and, beyond Europe, cost competitive prices for energy and trade intensive industries. In particular, to review the UK-only Carbon Price Support (CPS), which inflates UK industrial electricity prices with no environmental or economic benefit.
