CCC 2022 Progress Report

The UK greenhouse gas emissions were 447 MtCO2e in 2021, which is 47% below the1990 levels and on track to achieving the 4^th carbon budget target (Figure 1). 

The CCC report highlights encouraging developments in the EV car and renewable energy sectors, both which are supported by robust policy frameworks. On the other hand, major policy gaps are identified in relation to industrial resource efficiency and electrification, engineered GGR options, and decarbonisation of smaller operations that are outside the UK ETS. Therefore, better risk management and contingency planning will be vital to ensure the ambitions are achieved on time. More demand-side measures and efficiency improvements are also recommended. Furthermore, the report advocates the costs and benefits of the low-carbon transition to be distributed fairly, while also guaranteeing energy affordability.

Key near-term policy recommendations linked with industrial decarbonisation are summarised below:

Bioenergy:

• Address the sustainability of the biomass supply required to support the rapid and sustainable deployment of BECCS (for power and biofuels).
• Reduce reliance on imports by increasing domestic biomass supply as part of wider land-use changes.

Engineered Removals:

• Take legislative steps to allow for engineered removals to count towards achievement of UK carbon budgets.
• Clarify which bodies and departments hold responsibility for delivering at-scale deployment of engineered removals.
• Finalise the Industrial Carbon Capture (ICC) business model to enable final investment decisions on the first ICC projects in Q1 2023.
• De-risk the future Carbon Capture and Storage project pipeline by launching the next cluster selection process in 2022 to enable final investment decisions on Track 2 projects from 2024.
• Finalise and deliver the Transport and Storage Regulatory Investment business model in 2022. Additionally, promptly begin the process of awarding permits and construction of the necessary infrastructure.
• Publish plans for monitoring, reporting and verification systems for engineered removals.

Hydrogen:

• Finalise the design of the hydrogen business model and Industrial Decarbonisation and Hydrogen Revenue Scheme (IDHRS) in 2022 to deliver funding to the first hydrogen production projects in 2023.
• Establish funding mechanisms to support the development of 10 GW of low-carbon hydrogen production by 2030.

Electricity

• Publish a comprehensive long-term strategy for achieving 95% low-carbon electricity by 2030, on the path to full decarbonisation by 2035.
• Review Electricity Market Arrangements and develop a strategy on market design for a fully decarbonised, resilient electricity system in the 2030s and onwards.
• Identify and address potential key supply chain bottlenecks for delivering up to 50 GW of offshore wind by 2030, including for investment in ports, adequate vessel capacity, manufacturing capability and floating wind. Take opportunities to link supply chain action to key decision points in offshore leasing and Contract for Difference auctions.
• Remove legacy policy costs associated with the historical deployment of less mature low-carbon electricity generation from electricity prices.
• Publish a strategic framework identifying the network requirements for Net Zero, and the changes needed to ensure investments in resilient infrastructure are identified, planned, consented and built-in sufficient time to accommodate increased demand and generation.

 

Manufacturing:

• Consult on plans to implement, by 2030 or earlier, Carbon Border Adjustment Mechanisms (CBAM) and mandatory minimum climate-related standards on imports of selected manufactured products and energy.
• Create a clear incentive for manufacturing facilities not currently covered by the UK ETS to switch to low-carbon energy sources by reforming the suite of energy and carbon policies, which could include changing the Climate Change Levy rates for electricity and gas.
• Set ambitious recycling targets for 2030 and beyond.

 

Fossil fuel supply

• Develop minimum emissions-intensity standards for domestic oil and gas production by the next licensing round. In development, seek to ensure a consistent measurement approach with emerging international measurement standards.
• Make data on oil and gas production and emissions-intensity publicly available in a way that is consistent with the UK greenhouse gas inventory and differentiates between new and existing assets.
• Clarify plans and responsibilities for electrification of oil and gas infrastructure through integration with the offshore wind planning process and/or onshore grid, so that by 2027 new oil and gas platforms can achieve zero emissions from operational energy use.

 

 

https://www.theccc.org.uk/wp-content/uploads/2022/06/Progress-in-reducing-emissions-2022-Report-to-Parliament.pdf