Industry leads the way in the decarbonisation revolution
Make UK reports that nearly half of manufacturers have implemented their decarbonisation plans despite challenging economic conditions.
Britain’s manufacturers are leading the charge towards net zero and decarbonising their businesses as the sector moves to slash greenhouse gas emissions, cut energy use and switch to renewable and sustainable energy sources.
According to new research published today by Make UK, the manufacturers’ organisation, and technology company Siemens, manufacturers have moved the decarbonisation of their businesses up the priority ladder despite unprecedented economic challenges, with eight in ten companies saying it is now of high or medium importance. The research – ‘Decarbonising Manufacturing – Challenges and Opportunities (bit.ly/MakeDecarbMf) shows that companies are accelerating efforts to decarbonise due to rising energy costs, the need to do the right thing and the rising cost of raw materials.
Nearly half (46%) of manufacturing companies are already implementing their decarbonisation plans, while a further quarter will start decarbonising within the next 12 months. An additional 17% aim to begin the process in the next 24 months.
Great strides have been made, but barriers remain, with smaller companies still lagging behind. One-third (31%) of manufacturers said decarbonising their business is a high priority and a further half (49%) said it is a medium priority. However, larger businesses (with over 1000 employees) were still more likely to report decarbonising as a high priority, with a further 28% saying it is a medium priority. Whereas mong smaller firms (with 10-249 employees), just 21% said decarbonising the business was of high priority.
Energy efficiency is seen as key to achieving decarbonisation, with almost half of manufacturers (47%) telling us they have already adjusted their business practices to cut energy consumption in response to the energy price hikes in 2022. The outbreak of hostilities in Ukraine supercharged activity, with three-quarters of manufacturers speeding up energy efficiency and decarbonising measures. And just over a third of businesses surveyed said they had already saved money by decarbonising, which resulted in improved productivity through streamlining processes.
However, manufacturers face barriers to decarbonising their operations, with the cost of upgrading or replacing capital equipment (cited by 42% of manufacturers) topping the list. One in three (31%) said they were concerned about remaining cost competitive, and the same number cited the rising costs of energy for fuel switching as the main barrier to change. A quarter are held back by the challenge of decarbonisation of transport and logistics, with 23% saying decarbonisation of their supply chains is a real challenge for them moving forward as they are not in direct control here.
A third of manufacturers agree that the strategies and initiatives that Government has announced on decarbonisation will help them, but to date, Make UK has found that understanding and take up of that support has been mixed.
