Net zero: A 2024 guide for manufacturers

With the deadline for global net-zero targets drawing closer and the interim goal of a 43% reduction in emissions by 2030, compared to 2019 levels, just six years away, the manufacturing and industrial sector, known for its high energy use, is under significant pressure to reduce its carbon footprint.

This sector is responsible for approximately 20% of worldwide carbon emissions, and reports indicate that 92% of manufacturers now view achieving net-zero as a crucial objective for their business, with 68% having invested in decarbonisation initiatives and an additional 22% planning investments in the coming year.

Despite these positive steps, considerable challenges remain in fully realising decarbonisation goals. Here, Sustainable Industry recommends three critical actions for manufacturers to fast-track and implement effective net-zero strategies.

Digital innovations for net-zero targets

Deloitte’s 2024 outlook for the manufacturing industry suggests that technology will be instrumental in addressing many of the challenges faced by the sector, including economic instability, skill shortages, persistent supply chain issues, and the hurdles associated with net-zero emissions targets.

It's encouraging to see that over 70% of manufacturers are already incorporating technologies like data analytics and cloud computing into their operations, with nearly half utilising IoT sensors, devices, and systems.

Digital twins and 3D modelling are also pivotal for maintaining a competitive advantage and building resilience. Yet, the focus of these technologies is often on decarbonising manufacturing processes and supply chains rather than on the emissions from factory buildings themselves, which are a significant source of the sector’s overall emissions.

Strategic partnerships

Collaboration is another crucial element for accelerating decarbonisation, which manufacturers should emphasise as we move into 2024.

Research from Deloitte shows that manufacturers engaging in external partnerships and joint ventures to meet ambitious emission targets are making notable progress in product decarbonisation, achieving their objectives more swiftly.

Funding opportunities

The ongoing economic uncertainty and high costs pose barriers to implementing decarbonisation strategies for many manufacturers. Yet, decarbonisation investments are not only beneficial for the environment but also for a company's financial health, leading to reduced operating costs, mitigated environmental and financial risks, and improved financing options for future green investments.

Fortunately, various funding schemes are emerging to support businesses in accelerating their decarbonisation plans affordably. For instance, the UK Government recently announced a £4.5 billion package of grants and loans for British manufacturers from 2025, along with a new round of funding from the EU Commission’s Innovation Fund, which has doubled the budget for clean technology manufacturing compared to the previous call.

Additionally, the UK Government’s response to the latest Industrial Energy Transformation Fund (IETF) Phase 3 consultation was released, outlining the support for investments or studies related to on-site infrastructure improvements for energy efficiency or decarbonisation, offering grant funding to cover upfront costs for studies or projects.

The Phase 3 application period is set to open in January 2024, with a final round following in the summer. Further details on the scheme’s scope and eligibility are available.