Decarbonising manufacturing: challenges and opportunities

decarbonising manufacturing

Decarbonising manufacturing is a key goal of Britain’s manufacturers as they seek to slash greenhouse gas emissions, cut energy use and switch to sustainable energy sources.

Decarbonising manufacturing has become a priority despite unprecedented economic challenges, with eight in ten companies saying it is now of high or medium importance. Latest research by Make UK and Siemens 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.

According to their new report, Decarbonising Manufacturing – Challenges and Opportunities, Nearly half (46 per cent) of manufacturing companies are already implementing their decarbonisation plans while a further quarter will start decarbonising within the next 12 months. An additional 17 per cent aim to begin the process in the next 24 months.

Energy efficiency is seen as key to reducing emissions with almost half of manufacturers (47 per cent) telling us they have already adjusted their business practices to cut energy consumption in response to the energy price hikes in 2022.

Two in five companies said that installation of onsite renewable electricity or heat had been helpful in mitigating against the high cost of grid-supplied energy and was helping them to meet their decarbonisation goals. The implementation of new Industrial Digital Technologies grew in momentum during the pandemic with companies having to find new ways of remote working almost overnight. Some 13 per cent  of manufacturers said they are now using IDTs as a focus of their decarbonisation pathways. Although this is somewhere off where we need to be, we are beginning to see more and more companies digitalise to decarbonise.

Just over a third of businesses surveyed said they had already saved money as a result of emission reduction – through improved productivity by streamlining processes. And with a company’s ‘green credentials’ increasingly under the spotlight from customers, 16 per cent said they saw increased sales thorough access to new markets as a direct result of emission reduction their business. A further 14 per cent said that reducing emissions had also helped them access specific finance routes for new projects.

The real cost of upgrading or replacing capital equipment comes in top of the list of challenges to decarbonisation of operations for 42% of manufacturers, with 31% saying they are 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 lack of internal resource is an issue for some companies alongside a lack of appropriate skills.

Data collection is challenging but is key to further emission reduction with 59% of manufacturers already measuring their direct electricity consumption and a further half are also measuring their consumption of gas and other fossil fuels. The focus on decarbonisation is further demonstrated by the fact that 41% of manufacturers questioned are already measuring outright the emissions they make directly from production processes and emissions they made indirectly through buying energy from a supplier (scope 1 and 2 emissions). Two in five companies are already measuring the emissions from their supply chain (scope 3 emissions) with a further quarter planning to do so within the next 12 months.

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