SWAGºÏ¼¯

Climate change is a serious threat to the environment, and it can endanger economic security and social wellbeing. It is for these reasons, amongst others, that ambitious targets are being implemented - from lowering emissions and greenhouse gases, to reducing waste and energy. However, achieving these targets will need investment, effort, and commitment from organisations and governments alike.

Manufacturing is a vital source of employment and wealth, but its activities also have a major impact on the environment. As a result, in order to reach the greenhouse gases (GHG) targets set by the 2015 Paris Agreement, manufacturing needs to lower its emissions – and it won’t be easy.

The Paris Agreement, adopted in December 2015 by 195 countries, aims to strengthen the global response to the threat of climate change by “[h]olding the increase in the global average temperature to well below 2 °C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 °C above pre-industrial levels” (UNFCCC, 2015).

The EU objective to reduce GHG from 80% to 90% by 2050 relative to 1990 includes a suggested industry sector ambition of 83% to 87%. To reach such ambitious targets, move towards net zero, and decarbonise manufacturing requires major technological shifts and is much more difficult for energy intensive industries (EII) than other sectors.

Consumer electronics is one such area. Industry provides many of the products that are integral to our daily lives. In particular, products such as laptops, mobile phones and flat-screen TVs are often developed with short lifecycles – perhaps only two to three years – and this can affect how investment and strategic development decisions are made. But it is the decisions made today, that will determine what GHG emission reductions will be achieved by 2050.

The challenges

There are many challenges to decarbonising manufacturing, they include:

• The need to decarbonise processes and products throughout the supply chain.
• Human and physical capital will need to adapt at a faster rate than in the past.
• Reducing the carbon that products use while in use.
• Joining up policies so they are credible and consistent across the range of sectors.
• Carbon pricing (a tax on carbon emissions) is likely to be unpopular.
• Mitigating risks, i.e. disruption and losses, from rapidly changing technologies, policies and markets.
• Direct policy intervention from governments.
• Regulation and standards can increase costs.
• Brexit and Covid-19 means many organisations already have their hands full.
• Not all countries may handle the transition well.

The opportunities

Despite the challenges, there is a momentum that is ready to be built upon when it comes to decarbonising manufacturing. The opportunities are numerous and include:

• Boosting the competitiveness of manufacturing by driving investment.
• Increasing the potential to capture market share.
• Increase in innovation in both new and existing products.
• Develop efficiency-enhancing techniques include real-time digital and smarter tailored technologies.
• Create sustainable knowledge through joint industry/academic/government research.
• Scaling up green production and distribution can reduce costs and make goods cheaper.
• Opportunities to work together as industrial clusters often share infrastructure and resources.
• Countries that invest early go on to greater success.

The benefits

Manufacturing is a vital source of wealth, prosperity, and social value on a global scale and there are several benefits to decarbonising manufacturing:

• Creating and future-proofing jobs.
• Boosting GDP and adding to productive capacity.
• Finding cost-effective solutions to decarbonisation.
• Easing traffic congestion and noise.
• Preventing ecosystem collapse and restoring depleted natural resources.
• Enhancing energy security and reducing energy price volatility.

Towards decarbonisation

There is substantial scope for collaboration that could enable industry sectors to take steps in the short term, and work together in the longer term, to reduce emissions while remaining competitive. Trade associations, manufacturers, academic experts and government are now liaising with each other to develop a series of decarbonisation pathways that will help achieve the objectives set out in the Paris Agreement. This will require consideration of:

• Strategy, leadership, organisational structure, and business case barriers.
• Future energy costs, energy supply security, market structure and competition.
• Industrial energy policy context.
• Life cycle accounting.
• Value chain collaboration and longer term technology options.
• Research, development and deployment (RD&D).
• People and skills.

There is good reason to be optimistic about the transition to green growth and decarbonising manufacturing. Public mood over sustainability and climate change has shifted over the last couple of decades, with many consumers now proactively choosing organisations that are ‘doing the right thing’, and there has already been substantial technological development as we take steps toward decarbonising manufacturing.

You can find out more about this subject then the National Manufacturing Debate hosted by SWAGºÏ¼¯ will address the topic of Decarbonisation: opportunities for the manufacturing sector. The online event brings together manufacturing professionals from a range of sectors to discuss and debate current challenges in the industry, and encourage networking and collaboration across the sector to enable continued and long-term growth.