UK Nearly Halfway to Net Zero but Most Challenging Part Awaits, KPMG Report Claims

In the UK, early adoption of renewables has seen significant progress on delivering Net Zero, but global challenges and the need “to tackle the harder to abate sectors could see progress stall in the coming years,” according to KPMG’s 2023 Net Zero Readiness Report.

The research highlights how governments and industry “across the globe must deliver transformative change on Net Zero but are currently hamstrung by significant barriers, including geopolitical tensions, a focus on the cost of living, and the need to maintain security of supply, whilst also delivering a fair and ‘just’ energy transition.”

Through conversations with national climate change experts in 24 markets and across six economic sectors, the global report “highlights those countries and sectors that are leading the charge in their progress towards Net Zero, and those where it is taking place more slowly.”

Early UK success now slowed by challenges in harder to abate sectors

The UK, despite almost “halving greenhouse gas (GHG) emissions since 1990, still faces an uphill battle to reduce emissions on transport, buildings, and industry. Collectively these three sectors made up 60% of all GHG emissions in 2022 yet have seen less progress than in the power sector. .”

When it comes to decarbonising heating, “as one example, the UK Government ambition – to install 600,000 heat pumps a year by 2028 – is currently not on track to be met by action.”

The actual installation figure is “around one ninth of this target and lagging some of its European neighbors.”

Similarly, while EV adoption has “been strong with 23% of cars sold in 2022 being electric, progress on aviation and shipping is nowhere near the same level.”

Simon Virley CB, Vice Chair and Head of Energy and Natural Resources at KPMG in the UK, commented:

“In many ways the UK has been a leader in Net Zero policies, with a strong track record on the adoption of renewables, significant progress in reducing dependency on coal, and high reporting standards for business.”

Global progress being hampered by local backlash

Despite incremental momentum and specific successes such as the scaling up of low-carbon energy production from some of the world’s largest emitters, “including the US, China, Brazil, Canada and the EU, progress is constrained by a backlash over the cost of decarbonisation and conflict over its domestic impact.”

In certain markets and sectors, the impact of low carbon projects on local wildlife, biodiversity and communities is triggering a rise in ‘green on green’ conflicts, causing clashes between renewable projects and the local environment.

On an individual country level, meaningful progress is hindered “by opposition to measures that are perceived to have a considerable cost to people’s livelihoods.”

In fast-growing economies, rapidly increasing energy demand is “triggering investment in both low carbon and fossil fuel generation, leaving certain countries, such as India, unlikely to reach Net Zero until 2070, while in China, coal consumption is projected to rise until 2025.”

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