The need for tech to support industrial decarbonisation

Industrial decarbonisation is a critical imperative in the global efforts to mitigate climate change. Decarbonising industry requires technology adoption and integration. For industry to do this, the UK government must provide the right policy and regulatory incentives. Only then will the UK have hopes of reducing emissions and reaching net zero ambitions.

We believe that digital technology offers significant opportunities to support the net zero transition, climate adaptation, and a healthy and clean environment. Indeed, by 2030, digital technology can cut global emissions by 15%. Cloud computing, 5G, AI and IoT have the potential to support dramatic reductions in carbon emissions in sectors such as transport, agriculture, and manufacturing.

In 2021, the UK marked the world's first major economy to present a net zero Industrial Decarbonisation Strategy. This set out how the UK planned to go about decarbonising UK industry as a core part of the government's ambitious plan for a green industrial revolution. Critically, marking the aim for emissions to fall by around two-thirds by 2035, and by at least 90% by 2050 and ensuring UK businesses expand into new and growing markets in a low-carbon markets. But little was mentioned of the role that digitalisation and emerging technologies can play within this.

Led by Chris Skidmore MP, Mission Zero, the Independent Review of Net Zero, recognised there are economic opportunities for industrial decarbonisation, through demonstrating and deploying new green technologies which the UK can manufacture and export. But the report did not shy away from the challenges that remain, including energy efficiency, unique challenges for energy intensives (EIIs) to decarbonise, carbon pricing, and the skills needed to support the transition.

The industrial sector is a major contributor to greenhouse gas emissions. According to the Energy & Climate Intelligence Unit (ECIU), the industry is responsible for around a quarter (23%) of global emissions, meaning that along transport (also 23%) it has the second-highest sectoral emissions behind energy generation systems. Addressing this issue requires the integration of advanced technologies.

As Mission Zero outlined, 'technology and digitalisation can help to reduce emissions and energy consumption, improve environmental monitoring and facilitate better policy design'. Showcasing the overall economic opportunity for technology within the economy, techUK's Digital Economy Monitor showed that between 2010 and 2019 the sector's contribution to the UK economy grew by 26.5%, with government figures showing the digital sector added £150.6 billion to the UK economy, 7.6% of total gross value added (GVA). This is further crucial for sustainable economic growth that drives down emissions and forward net zero ambitions.

For instance, beyond the measured GVA impact of the tech sector, it is estimated that adoption of smart grid and smart meters could reduce total consumer energy bills by £354 million in 2030; and a smart, flexible energy system built on clean-digital tech could reduce total costs by up to £50 billion a year by 2050.

New innovations in digital and investment to scale emerging tech will be key to delivering the level of decarbonisation required to meet the UK's net zero commitments. But digital technologies are not being harnessed at scale, and there must be better integration between digital and green innovations.

While the UK government has provided some incentives, including R&D tax relief and making full expensing permanent, and expansion of the Made Smarter programme nationally in the Autumn Statement 2023. Along with existing grants and funding, for instance, the UKRI's Industrial Decarbonisation Challenge, £219 million between 2019 and 2024 to support the development of low-carbon technologies and infrastructure. All towards reducing the carbon emissions from energy-intensive industries, such as iron and steel, cement, refining, and chemicals. More must be done to leverage the role of digitalisation and technology to support industrial decarbonisation.

This year, with an expected General Election marks a key opportunity for the UK government to embrace the role of digital technology.

techUK works with businesses and stakeholders to develop effective policy and regulatory solutions to promote the digitisation of the economy and drive productivity and inclusive growth. We believe digital technology offers significant opportunities to support the net zero transition, climate adaptation, and a healthy and clean environment. Cloud computing, 5G, AI and IoT have the potential to support dramatic reductions in carbon emissions in sectors such as transport, agriculture, and manufacturing.

This January, we will be launching a sprint campaign, including roundtables, insights and more, to explore the pivotal role that technology plays in the decarbonisation of energy intensive industries (manufacturing, construction etc).

To get involved, or further information, reach out to Mia Haffety, Programme Manager - Telecoms and Net Zero.

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By 2030, digital technology can cut global emissions by 15%. Cloud computing, 5G, AI and IoT have the potential to support dramatic reductions in carbon emissions in sectors such as transport, agriculture, and manufacturing. techUK is working to foster the right policy framework and leadership so we can all play our part. For more information on how techUK can support you, please visit our Climate Action Hub and click ‘contact us'.