Efforts to decarbonize industrial processes in the UK, crucial for achieving Net Zero goals, could incur manageable price increases of only 0.8%, according to a study by academics from the University of Bath's Institute for Sustainability. Focusing on the UK as a case study, researchers from Bath and the University of Leeds examined potential scenarios for distributing the costs associated with industrial decarbonization.
The study utilized projections of costs for implementing low-carbon technologies covering all industrial processes in the UK. These technologies include electrification, hydrogen fuel switching, and carbon capture and storage (CCS). The researchers assessed the impact of distributing these costs among industrial sectors, consumers through higher prices, or companies benefiting from the supply chain enabled by these activities.
As industrial processes contribute one-third of global greenhouse gas emissions, the need to decarbonize this sector is pressing for achieving Net Zero targets.
Dr. Sam Cooper, a lecturer in Bath's Department of Mechanical Engineering and co-author of the study, noted that many industrial sectors could absorb the costs with a modest impact on profits, ranging from 2% to 7% by 2050. Even for sectors facing more significant challenges, such as metal production and cement, the impact on profits would be comparable to fluctuations experienced over the last decade.
The study also explored the potential impact of price increases on different income groups and spending patterns, finding that the rises would be shared evenly. It suggested that, on average, final price increases for consumers would be less than 0.8% by 2050 if sectors pass on cost increases to their customers.
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The analysis considered the importance of improving energy and resource efficiency during the adoption of low-carbon technologies. Dr. Steve Allen, senior lecturer in Bath's Department of Architecture and Civil Engineering, emphasized the significance of seizing opportunities to enhance efficiency during investment cycles.
While the study acknowledges the need for sector-specific considerations, it provides an initial assessment that the costs of decarbonizing industrial processes are manageable at a societal level. The findings could influence industrial decarbonization policies as the issue gains prominence on the policymaking agenda.
Dr. Cooper concluded, “This work adds to the evidence that decarbonizing industrial processes can be managed without prohibitive price increases for consumers. However, overcoming other challenges relating to infrastructure, technology supply chains, and investment risks will require coordinated support.”
The study, titled “Meeting the costs of decarbonizing industry—The potential effects on prices and competitiveness (a case study of the UK),” is published in the journal Energy Policy.
