Report: UK almost halfway to net-zero but toughest challenges lie ahead

This is according to the ‘Net-Zero Readiness’ report from KPMG, examining steps taken by 24 countries and key economic sectors to reduce greenhouse gas (GHG) emissions.

The report notes that despite nearly cutting GHG emissions in half since 1990, the UK is grappling with the challenge of further reducing emissions in the transport, buildings and industry sectors, that collectively accounted for 60% of all GHG emissions in 2022.

Additionally, it highlights that the progress in mitigating the emissions from these harder-to-abate sectors has lagged behind that observed in the power sector.

The report emphasises that the UK Government’s aim to annually install 600,000 heat pumps by 2028 is significantly off target. Nevertheless, Prime Minister Rishi Sunak recently extended the deadline for banning oil boilers in off-grid homes from the initial 2026 to 2035.

Moreover, despite accelerated electric vehicle (EV) adoption, constituting 23% of 2022 car sales, progress in aviation and shipping lags far behind.

KPMG UK’s energy and natural resources vice chair Simon Virley CB said: “In many ways the UK has been a leader in net-zero policies, with a strong track record on the adoption of renewables and high reporting standards for business.

“But past achievements are no guarantee of future success, and we are seeing many other nations catch up on the technology and policies needed, creating greater competition for green investment.”

Last month, the Institute for Public Policy Research (IPPR) warned that the UK is failing to seize the economic advantages presented by the global shift towards a net-zero carbon future, primarily due to the lack of a green industrial strategy.

REA: sustainable progress requires policy certainty

Moreover, the Association for Renewable Energy and Clean Technology (REA) has published a report highlighting that the UK’s current policy priorities lean more towards short-term political considerations, resulting in heightened investment uncertainty.

The report emphasises that for investors to be drawn to the UK’s energy transition, there must be clear patterns of governance and regulatory stability. Presently, these signals are not strong enough to instill confidence in potential investors.

Respondents to the survey, forming the basis of the report, believe that introducing measures equivalent to the US Inflation Reduction Act would accelerate progress towards the energy transition in the UK.

The REA emphasises that slowing down the energy transition could have severe long-term financial consequences.

REA’s policy director Frank Gordon said: “Recent rolling back on some green policies in the UK has seen a decline in both public and political confidence regarding the energy transition as illustrated in the report.

“Significant action from the Government to remove the barriers facing our industry is essential: proper long-term planning; prioritising and accelerating market reforms; and urgently addressing current investment barriers – all are desperately needed to help put the UK on the right path.”

Recent studies indicate that by establishing a strong green industrial sector through investments and policy backing, the UK could potentially add £72bn to Gross Value Added (GVA), safeguard more than 450,000 jobs, enhance supply chain stability, and generate economic growth nationwide.