decarbonisation Archives - Focus - China Britain Business Council

COP26: Will China lead the world in industrial decarbonisation?

James Brodie — Wed, 03 Nov 2021 08:00:54 +0000

In the third article of our COP26 series, we look at how China has the potential to take the lead in cost-effective, scalable solutions to help decarbonise industrial sectors, based on insights from engineering firm Wood

As the eyes of the world turn towards Glasgow, the momentum behind the net zero agenda continues to gather pace. The recent IPCC report, which signalled ‘a code red for humanity,’ underlined the pressing need to move beyond just setting net zero commitments and instead taking concrete actions that drive near-term reductions in carbon emissions.

There’s no doubt that COP26 is being viewed as a bellwether moment. Agreements struck in Glasgow will determine if the world can get on track with the goals set out in the Paris Agreement and avoid the most catastrophic impacts of climate change. And while the scale of the challenge means every country across the globe has a role to play, how large and rapidly growing economies in Asia (China, India and Indonesia) evolve over the next decade will have a particularly significant bearing on whether the promise of a net zero future can be realised.

China’s role at the heart of decarbonisation

China is a particularly interesting case. It’s the world’s largest single emitter of CO2 (albeit not on a per capita basis) and was responsible for 28% of global CO2 emissions in 2020. The country remains heavily reliant on hydrocarbons as a primary energy source, including coal, and its Nationally Determined Contribution (NDC) rating is still inconsistent with holding global warming to well below 2℃.

Given the scale of these figures, it’s clear that any progress that China makes on its own decarbonisation agenda will have a major bearing on global progress. Encouragingly, in late 2020, China committed to binding targets when President Xi set dual goals to achieve peak carbon by 2030 and become carbon neutral by 2060.

Furthermore, in the latest five-year plan (FYP) issued earlier this year, the Chinese leadership set additional targets including a goal to reduce carbon intensity by 18% by 2025 and establish ‘a modern energy system’, including a goal to increase non-fossil fuel primary energy usage to 20% in the same window.

An industrial-scale challenge

China’s industrial sectors merit particular focus. Over the last 30 years, industrial heartlands like Huizhou, Ningdong, Yulin and Ningbo have all played a central role in powering China’s impressive growth story. They remain an important part of the economy today, but the long-term future of industrial clusters across the country will be predicated on delivering the same output with a much-reduced environmental impact.

Take China’s steel industry as an example. The sector accounts for 15% of the country’s total carbon emissions and 60% of global steel sector emissions. Earlier this year, in the city of Tangshan in Hebei province, authorities gave 23 steelmakers a clear choice: cut CO2 emissions or cut production. Increasingly, this will be the choice facing not just steel producers, but companies in other industrial markets including refining, chemicals and manufacturing.

Earlier this year, in the city of Tangshan in Hebei province, authorities gave 23 steelmakers a clear choice: cut CO2 emissions or cut production. Increasingly, this will be the choice facing not just steel producers, but companies in other industrial markets

Recent data from IRENA outlines the scale of the transformation required. By 2050, China must reduce annual industrial emissions by over a third, driving a reduction from 4.5GT to 3GT of CO2 emissions per annum. Companies like Baowu Steel Group and Sinopec are responding to this challenge by setting their own goals, in this case, a target to become carbon neutral by 2050, and many more will follow suit over the coming years as part of a decade of climate action.

Engineering solutions for a net zero world

Across many countries, including China, the near-term pathways to decarbonise industrial activity are not yet clear. While decarbonisation is clearly a business imperative for companies operating in industrial sectors, developing a credible roadmap towards Net Zero is a hugely complex challenge that requires multiple levers to be pulled as part of a blended solution.

Engineering and consulting firm Wood is helping clients to tackle this very problem using its proprietary Decarbonisation SCORE methodology. SCORE is a structured and dynamic process that pinpoints key business drivers, sets targets, maps assets, and identifies the right mix of solutions that can ultimately deliver against emissions goals.

The process can be applied to single or multiple assets, to a portfolio or across a specific geography or region. Given that industrial facilities in China can operate as stand-alone assets, as part of a cluster, or in some cases, as part of an ‘industrial city’, this optionality is key. Here’s what SCORE stands for:

SUBSTITUTE
Switch fuel or feedstocks to renewable or less carbon-intensive sources. Two good examples here are switching electricity provision to a renewable source like wind power, or considering the use of renewable and bio feedstocks. In Harlow, Essex, specialist data centre Kao Data took the initial steps towards achieving its own net zero ambitions when it became the UK’s first data centre to transition all its backup generators to HVO (Hydrotreated Vegetable Oil) fuel in July 2021.

CAPTURE
Employ carbon capture or emissions control technologies to substantially reduce or eliminate harmful emissions.

OFFSET
Consider assets or product portfolios on a country or company-wide scale and explore opportunities to compensate in other areas for the carbon emissions that cannot be easily removed. Offset solutions can divide opinion but in our experience, they provide important flexibility particularly in industrial sectors where some emissions are more challenging to address.

REDUCE
Adopt a holistic approach to asset optimisation including energy efficiency, digitalisation and smart maintenance strategies to avoid potential emissions at source. Some of these represent ‘quick win’ opportunities while other steps will involve more comprehensive asset repurposing.

EVALUATE
Apply a structured and ongoing evaluation process to drive continuous improvement towards net zero.

Data-driven emissions reductions

Earlier this year, China officially launched its national carbon emission trading scheme (ETS). It demonstrates China’s commitment to climate action and, given that the country is the largest carbon market in the world by volume, it has the potential to be transformative. As new regulations come into force and markets for offsetting and trading emerge, data quality and auditability will be key, from basic operations all the way through to strategy definition.

Wood deploys a real-time emissions monitoring and management tool called ENVision to provide high frequency, streamlined and automated data on emissions profile and regulatory calculations. The ability to derive insight is predicated on having access to quality data and this will be increasingly important in achieving emissions reductions and net zero targets.

Given the scale and complexity of the China market, it is vital that industrial clients track their real-time emissions footprint and performance metrics so that a clear, auditable and accurate view of emissions can be presented to regulators, operators and stakeholders.

An opportunity to lead the world

Chinese companies and Chinese-invested companies are world leaders in manufacturing wind turbines, solar panels and battery storage solutions for electric vehicles. For example, established in 2016 by Beijing’s SDIC power, Edinburgh-based company Red Rock Power is pursuing green energy in the UK with a wind portfolio that includes two of Scotland’s largest offshore wind farm projects, two onshore wind projects in the West of Scotland and an operational onshore wind farm in Sweden.

Given the vast scale of its industrial footprint, it also has a tremendous opportunity to lead the way in the development of cost-effective, scalable solutions to help decarbonise industrial sectors. Market analysis shows that many of the technologies required to deliver a net zero world still cost a premium. However, as these technologies are scaled, there are significant cost reduction opportunities. In this respect, China has a natural advantage over other markets. The volume of industrial cluster developments across the country means China can create a domestic market, learn at home and then take this expertise across Asia and to the rest of the world.

The level of investment being made in energy transition technologies across China highlights the opportunity here. Within the carbon capture and storage space there is real momentum, with IHS Markit data indicating China could add eight more large-scale CCUS projects by 2025. This is only going to grow, with BCG analysis suggesting that 100% adoption of CCS technology will be required for in-house power generation and heat production if China’s industries are to align with a Net Zero future.

“China has promised the world to reach carbon peak by 2030, and to become carbon neutral by 2060. Along the carbon neutral and energy transition roadmap, thermal storage technology plays an instrumental role in optimising renewable energy utilisation.”
– Tianyue Li, Business Development Manager, Sunamp Ltd

Investment in hydrogen technology is also accelerating – the country will account for two-thirds of the world’s electrolysers by the end of 2022, and more than 20 provinces and 40 cities in China have published development plans worth trillions of yuan for new hydrogen energy facilities.

According to Chinese media group Caixin, the China Hydrogen Alliance estimates the output value of the country’s hydrogen energy industry will reach $152.6 billion by 2025, and the country’s hydrogen demand will reach 35 million tons – accounting for at least 5% of China’s energy system by 2030.

Another area where China has a competitive advantage is around its research and development programme. The country is investing heavily in both ‘new’ innovation and in scaling some of the existing technologies that will need to be much more widely adopted to deliver a low-carbon future.

Collaboration opportunities for the UK and China

Today, some of the most progressive industrial decarbonisation projects being delivered are in the UK in communities like Humberside, Teesside and South Wales. The launch of the UK’s industrial decarbonisation strategy in March 2021 means policy is now in place that will unlock the funding required to move these projects forward into the delivery phase.

Our work on Humber Zero to create a zero-carbon industrial cluster is a great example of industrial decarbonisation in action. Covering multiple assets including refineries, power plants and pipeline infrastructure, the decarbonisation solutions being applied on the project include green hydrogen via electrolysis, blue hydrogen via advanced steam methane reforming, post-combustion carbon capture on combined cycle gas turbines, steam boilers and refinery process units, as well as energy efficiency improvements across the various assets.

In total, the decarbonisation masterplan will help to save over 8 million tonnes of CO2 per annum, as well as creating a sustainable platform for industrial growth, economic development and new job opportunities.

While this is a best-in-class example of a project of this nature, the size of the UK means there are a limited number of projects of this scale that will be commissioned. In a market like China, there’s a much larger canvas to work on. This presents an opportunity to embrace some of the early lessons that emerge from major programmes like the Northern Endurance Partnership on Teesside or Zero Carbon Humber and use this to shape their own net zero industrial revolution across the country.

The UK and China have a long history of successful collaboration. World-leading cable solution provider Ningbo Orient Wires and Cables recently replaced a 33kV subsea cable running from Ardmore, Skye to Beacravik, Harris in Scotland, offering increased capacity of between 8 to 10 MW and enabling the offshore floating wind farms to keep providing green energy.

Now with another intensive round of climate negotiations complete, a global mindset and collaborative spirit that has long characterised UK-Sino relations will be key to securing the collective commitments required to help bring to life the promise of a net zero future.

Click here to read CBBC’s Targeting Net Zero: The Role of UK-China Business Report

The post COP26: Will China lead the world in industrial decarbonisation? appeared first on Focus - China Britain Business Council.

COP26: How UK-China businesses can combat climate change

James Brodie — Tue, 02 Nov 2021 07:00:30 +0000

In the second of our COP26 series, KPMG examines the increasing need for international cooperation to support Chinese companies’ business transformation to fit the future low-carbon economy and achieve sustainable growth. There are opportunities for China and the UK to work together across aspects of policy, infrastructure, technology, financing and best practice sharing

As the 26th Conference of the Parties (COP26) approaches, the signs of climate change are ever more visible around us. July 2021 was the hottest single month the world has ever experienced; while record heatwaves hit Canada and North West America in June, wildfires have raged as far apart as California, the Mediterranean and Siberia, and severe flooding has hit many parts of the world.

Amidst a gathering sense of emergency, the report in August from the United Nation’s Intergovernmental Panel on Climate Change (IPCC) warned starkly that the situation has become “code red for humanity”. Its assessment concluded that some effects of climate change such as continued sea level rise are irreversible at least for centuries – but that, if the world can reach Net Zero by the middle of the century, it is not too late to avoid the worst impacts of climate breakdown.

It is clear that the entire global community must pull together and every nation must stretch itself to make the biggest contribution it can. That being the case, what are the particular challenges and opportunities in front of the UK and China – and what potential is there for the two nations’ business communities to support and invest in each other as part of the effort?

The two countries are in quite different positions as they each face up to the challenges ahead. KPMG’s Net Zero Readiness Index, published in October and comparing the likelihood of 32 major economies reaching Net Zero by 2050, places the UK at number two while China is further back at number 20. This is because the two economies are at different stages of development, with China having to accelerate its industrialisation phase and at huge scale. See our separate box-out section for a fuller analysis of the Index findings.

The UK, which accounts for under 1% of global emissions, has already enshrined in law its commitment to achieve Net Zero by 2050. To enable this, it has further set what the government describes as “the world’s most ambitious climate change target” of cutting emissions by 78% by 2035 compared to levels in 1990. This would take the UK more than three quarters of the way towards hitting Net Zero by 2050. The UK’s major achievement to date is the decarbonisation of its power sector and the simultaneous shift to renewables. The carbon intensity of the power sector has fallen from 481gCO2/kWh in 2010 to 181gCO2/kWh in 2020; while renewables’ share of power generation has risen from around 7% to over 40% in the same period.

The government has also announced some significant plans and aspirations for the coming years, such as the creation of four major industrial clusters for carbon capture usage and storage (CCUS) and hydrogen production by 2030; a ban on the sale of new internal combustion engine (ICE) vehicles from 2030 as the nation moves to electric; the full rollout of smart meters to help households more efficiently manage their energy usage and support the transition to a more flexible energy market by the end of 2025; and a potential ban on the sale of new gas-fired boilers by the mid-2030s in favour of hydrogen and heat pumps.

With a 10 Point Plan for a green industrial revolution setting the over-arching framework and an Industrial Decarbonisation Strategy in place, together with a recently published Hydrogen Strategy, the UK has many of the building blocks in place – but still has a long way to go if it is to deliver on its ambitions, as the Climate Change Committee warned in its latest progress report to UK parliament.

The next phase of decarbonization in the UK will involve changes in almost everything we do: the cars we drive, the way we heat our homes, our travel patterns, how we use our land, what we eat. — Simon Virley, Vice Chair and Head of Energy & Natural Resources, KPMG

One challenge is the need – in common with all developed economies – to bring citizens with them on the journey and bring about changes in how people live, as Simon Virley, Vice Chair and Head of Energy & Natural Resources at KPMG in the UK observes: “The next phase of decarbonization in the UK is going to be much more intrusive than what has come before. It will involve changes in almost everything we do: the cars we drive, the way we heat our homes, our travel patterns, how we use our land, what we eat. There needs to be much greater engagement with the public on the choices ahead and what we can all do as individuals and in our communities if we are to get to Net Zero at least cost and ensure a Just Transition.”

China, meanwhile, has a population about 25 times the size of the UK and accounts for around 30% of global carbon emissions. However, its carbon usage per head of population is around half that of the United States and is also considerably lower than that of some other Western economies. While its fossil fuel usage is still growing, China has pledged that this will peak in 2030 and then decline, with a Net Zero target of 2060. It is backing this up with real action – already being the world’s largest producer of renewable energy. In 2020, it had solar power capacity of 254,355 megawatts, far ahead of the US in second at 75,572, and it had triple the wind power installations of any other country too. China hopes that a quarter of its energy will be produced from non-fossil fuel sources by 2030 – and many analysts believe it may hit that target early.

China’s commitment to reducing carbon is becoming clearer. Xie Zhenhua, China’s special envoy on climate change, has spoken publicly of the imminent release of a top-level design of China’s so-called “1+N” policy framework for reaching peak carbon and carbon neutrality targets together with specific action plans for key emitting sectors. China also opened a national carbon emissions trading scheme in July 2021 covering more than 2,000 power plants, with plans to add other industrial sectors.

With China producing a significant proportion of the world’s carbon emissions, its progress in reducing carbon is clearly of huge importance in itself. China has also taken steps to embed sustainability practices into its international Belt and Road infrastructure initiatives – with the Ministry of Commerce and the Ministry of Ecology and Environment jointly releasing in July an updated set of green development guidelines for overseas development and investment. With an emphasis on compliance with international practices, the guidelines reflect encouraging aspirations for higher environmental and green investment standards. More recently, China’s President Xi Jinping made the surprise, but most welcome, pledge at the UN General Assembly in September that China would stop financing coal-fired projects abroad.

Since President Xi’s announcement of China’s top-level commitments in September 2020, Chinese companies have started committing to or setting science-based targets to reduce greenhouse gas emissions through the application of innovative energy saving initiatives and technologies, increased use of renewable energy, etc. — Daisy Shen, Partner, Climate Change and Sustainable Development, KPMG in China

China indeed has a crucial role to play in enabling the global community to drive down carbon, as Simon Virley explains:
“China can leverage immense economies of scale and reach price points that other countries simply can’t match. We have seen that with solar, and the same can be true of other low carbon technologies, like electric vehicles and hydrogen. The lower the cost of these green technologies, the easier it will be to maintain public buy-in around the world for the energy transition.” By extension, this means there is significant potential for UK and Chinese businesses and investors to work together in the coming years in the pursuit of a common goal.

On the UK side, there is an opportunity for London to build on its pre-eminent position as a financial services centre and become the global centre for carbon trading. The various carbon trading schemes in existence around the world will need to be linked up at some point – and London could fit the bill. There is clear potential for the UK to become the standard setter for green finance – how to define it, verify it and audit it. Alongside this, the UK could become the leading pioneer for climate risk disclosures and reporting. There will be significant opportunities for UK professional services organisations in providing consulting, legal, assurance and accounting advice around these and related areas to businesses in China, and opportunities for testing, inspection and certification organisations too.

Other export opportunities for the UK to China include offshore wind where the UK has built up considerable expertise around the integration of wind into national energy systems and the skills and services needed to support that. Smart energy systems are another fertile potential area, with UK businesses like Octopus Energy developing leading-edge systems that utilize smart technology and AI to optimize energy usage and efficiency across different needs. The UK could also lead the way – and make some in-roads in China – around carbon capture technology as well as the shift to low carbon heating.

On the Chinese side, there has been some significant investment already into UK renewable energy, particularly offshore wind, and in the UK’s nuclear industry and smart grid networks. There are likely to be increasing opportunities to invest in UK infrastructure projects such as the construction of its planned Carbon capture, utilisation and storage (CCUS) clusters. China already has a strong track record of investment into major UK energy and infrastructure projects and this can continue in Net Zero related endeavours, bringing mutual benefit – generating a return for Chinese investors and bringing down the cost of capital for the UK.

UK-Chinese links should include collaboration over the scaling of new green technologies. It will not be possible to meet Net Zero targets by solely relying on the technologies available today. Britain has a strong track record in ground-breaking scientific R&D; China has the ability to scale new technologies to market. Finding synergies through co- operation could unlock success.

Then there is energy transition. Major oil and gas businesses have become leaders in decarbonising their business models and diversifying away from hydrocarbons towards renewable energy sources, although they themselves recognise there is a long way to go. The UK’s oil and gas industry can export its knowledge and experience around this, including to the Chinese super-majors. There are win-wins to be gained here on both sides.

The UK and China have a strong trading history with each other. UK financial institutions and businesses in other sectors are benefitting from reforms and license approvals designed to increase foreign investment into China; while Chinese businesses have historically found the UK to be a welcoming and cosmopolitan place to do business.

There should be a focus on continuing and indeed increasing this where climate action is concerned, as Simon Virley says: “For the first time ever, we have China, the EU, the UK and the US all committed to Net Zero. Chinese companies are already investing heavily in the low carbon sector in the UK as the UK seeks to meet its Net Zero target, whilst a growing number of UK companies are investing in China. So, we have a great platform on which to build collaborative partnerships between the UK and China on the low carbon technologies and financing solutions needed to meet the global challenge of climate change.”

Daisy Shen, Partner, Climate Change and Sustainable Development, KPMG in China, echoes this sentiment: “Since President Xi’s announcement of China’s top-level commitments in September 2020, the momentum has accelerated. Chinese companies have started committing to or setting science-based targets to reduce greenhouse gas emissions through the application of innovative energy saving initiatives and technologies, increased use of renewable energy, etc. There is an increasing need for international cooperation to support Chinese companies’ business transformation to fit the future low-carbon economy and achieve sustainable growth. There are opportunities for China and the UK to work together across aspects of policy, infrastructure, technology, financing and best practice sharing.”

Now, through COP26 and beyond, we need to use the opportunity to deepen collaboration between the UK and China on the Energy Transition in key areas such as:

Offshore wind
Hydrogen
Carbon capture
 Electric vehicles
Smart energy platforms
Carbon trading
Climate risk reporting

Focus on hydrogen/decarbonisation

The UK government’s Hydrogen Strategy envisages a “world-leading hydrogen economy” supporting over 9,000 UK jobs and unlocking £4bn investment by 2030. The government predicts that 20-35% of the UK’s energy consumption by 2050 could be hydrogen-based. A twin-track approach is planned – bolstering blue hydrogen and CCUS production through four industrial clusters whilst also supporting the development of green electrolytic hydrogen. Companies such as ITM Power are already leading the way in green hydrogen using Proton Exchange Membrane (PEM) technology – such technological innovation could become a significant export for the UK.

China is one of the biggest manufacturers of green hydrogen technology with a particular emphasis on alkaline technology. However, alkaline technology is suited to large-scale baseload industrial electrolysers, whereas PEM technology works better with intermittent renewable technologies such as solar and wind which will give it an increasingly prominent role in global deployment. China is also a leader in hydrogen fuel cell technology – hydrogen being potentially a key power source for heavy transportation, where electric batteries are less viable. There are already some 7,000 hydrogen fuel cell buses in operation in China.

With the UK’s clear hydrogen focus, and China’s 14th Five Year Plan labelling hydrogen a “frontier” area that the country pledges to advance, there could be scope for the two nations to cooperate and cross-invest.

Focus on renewable energy

Several of China’s generation companies (gencos) have already made investments into renewables in the UK, such as:

SDIC which acquired Edinburgh-based Red Rock Power in 2016
CGN has extended its nuclear partnership with EDF to onshore wind assets
China Resources Power, subsidiary of the Hong Kong-based conglomerate China Resources Group, has invested in a major operating offshore wind project alongside the Norwegian energy giant Equinor

More broadly across Europe:

CGN has been highly active since 2015
China Three Gorges has built significant stakes in a wide range of Renewables assets including offshore wind, both through its participation in EDP and relationship with Energias de Portugais Renewables (EDPR); and also on a stand-alone basis
We have observed several further major gencos actively seek to enter the European Renewables market as they look to achieve their own international growth KPIs in Renewables

Looking in the other direction, a few western strategic energy companies are active in China:

EDF has a partnership with China Energy Investment Corporation (CEI), focused on 502 MW of offshore wind projects in China.
Other major western oil & gas companies are already well established in China and may well be considering extending operations to offshore wind, in line with their strategic growth ambitions

The focus for many of the major European (in particular) offshore wind developers is in neighbouring markets in the region – Japan, South Korea, Taiwan. Given the exciting growth potential of the Chinese offshore wind market, requiring an enormous scale of capital and strategic capability, it would be really positive to continue this trend of partnering across the major offshore wind activities.

Supply chains, meanwhile, are relatively settled. China already manufactures the great majority of the world’s solar panels. Of the world’s ten major wind turbine manufacturers, three are Chinese and these mainly supply their own national market. Of the other seven, some have factories in China.

Focus on clean transportation

With both countries already embracing progressive plans for EV adoption, but with battery life and range still potentially limiting factors, there may be scope for the nations to cooperate on R&D development in order to explore new battery technologies and chemistries, as well as to establish an effective circular economy in the battery value chain. As well as extending battery life, more cost-effective methods of recycling batteries – and/or extracting the valuable metals from them for re-use – are needed. There are also opportunities to drive cooperation across many areas of the mobility ecosystem.

Then there is hydrogen, which may have a key role to play as the powertrain for heavy and industrial vehicles. China leads the way in hydrogen buses. The UK has a leading hydrogen and low/zero-emission bus maker in Alexander Dennis (that uses hydrogen fuel cells from Chinese manufacturer BYD), while operators like First Bus have launched hydrogen fleets in some locations. There will be scope for closer ties between China and the UK in this growing area.

KPMG Net Zero Readiness Index 2021

KPMG’s Net Zero Readiness Index (NZRI) considers 103 indicators that are key drivers to achieving Net Zero in each of the 32 countries studied.

The UK ranked second in the NZRI, and China 20th. The top five countries were Norway, UK, Denmark, Sweden and Germany. Other major jurisdictions include the US (13th), Australia (14th) and Russia (25th).

China

China’s target of peak carbon emissions before 2030 and Net Zero by 2060 may be later than the dates pledged by many other countries in the NZRI, but they mean the country would move from peak carbon to Net Zero in three decades – about half the time of other countries.

China already has the world’s highest level of renewable energy capacity of 925GW in 2020, around three times as much as the US. It added 72GW of wind and 48GW of solar in 2020, both big increases on 2019. Despite this effort only 33 percent of its electricity came from low carbon sources in 2018, highlighting the need for the country to continue its rapid expansion of renewable generation.

Some key companies in high-emission sectors have announced timetables and goals to achieve carbon neutrality through measures covering energy consumption, energy efficiency and increasing use of renewables.

China is rated second among the 32 countries in the research on agriculture and land use, due to factors including relatively low consumption of dairy per person, and strong performance on limiting food losses and waste.

The country is ranked fourth in the transport sector, partly due to the high availability and use of public transport, having developed the world’s longest high-speed rail network over recent decades. China also has the world’s largest electric vehicle market, with 5.4 million in use in 2020 – nearly half of the global fleet. China’s national target is to have ‘new energy’ vehicles making up 20 percent of new car sales by 2025.

UK

Cross-party political support and clear legally-backed targets have enabled the comparatively swift decarbonisation of the power sector in the UK, with the country ranking second in the electricity and heat sector. The last coal-fired power station is due to close by 2024 and the proportion of renewable energy used in electricity production rose from 7 percent in 2008 to above 40 percent in 2020.

Progress is also being made on converting industrial processes to using hydrogen and carbon capture, with the UK ranking third in the industry sector. On transport, overall adoption may be low at present, but electric cars and small vans are increasing in popularity; their lifetime costs may now be comparatively lower than fossil fuel alternatives, which the government has banned the sale of after 2030 (with new heavy good vehicles banned from 2040 at the latest).

However, regarding public engagement, most of the work which will directly affect citizens is yet to come. Despite mandatory building energy certification and high levels of household energy security which contribute to the country’s fourth-placed rating in the buildings sector, many Britons live in poorly-insulated houses which were built many decades ago and around nine in ten are heated by natural gas. The government says that 600,000 homes a year will need to install a heat pump by 2028, while its Climate Change Committee puts the figure at 1 million annually by 2030. However, last year only around 30,000 heat pumps, which usually require the retrofitting of better insulation to be effective, were installed.

Click here to read CBBC’s Targeting Net Zero: The Role of UK-China Business Report

The post COP26: How UK-China businesses can combat climate change appeared first on Focus - China Britain Business Council.