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LCCI demands radical change in Net Zero challenge

Monday 7 November 2022

The London Chamber of Commerce and Industry (LCCI) has called for action on skills and retrofitting in its response to the Government’s Net Zero review commissioned by the Department for Business, Energy and Industrial Strategy (BEIS). In the evidence it submitted, LCCI outlined its support for the Government’s decision to review the current net zero strategy in order to ensure targets are met in a way that supports businesses, consumers and the UK economy.

As champion of the London business community, LCCI strongly believes that the Government’s approach to net zero must be pro-business and pro-growth to unlock the full productivity of British businesses and, by extension, the UK economy.

In its submission, LCCI included a number of statistics that demonstrate the barriers businesses face when approaching decarbonisation. These included the findings that:

  • Costs are a barrier to firms undertaking different actions to reduce their emissions. Nearly half (44%) of London firms said that initial or higher operating costs are a barrier to using greener technologies (such as more energy-efficient, lower emission technologies).
    • Aside from costs, businesses identified other barriers such as lack of time and resource, lack of alternatives, lack of skills and business priorities being focussed elsewhere.
  • Lack of infrastructure was cited as a major barrier to firms taking action on net zero. For example, electric charging points for vehicles were cited as a fundamental barrier to the transition to lower-emission vehicles. Not only have businesses found high demand for charging points across London, but they have also found that different operators each require their own payment method which is often impractical.
  • Global supply chain issues are causing delays to the delivery of vehicles, which in turn is dampening efforts by vehicle-intensive industries (such as freight) to transition to cleaner vehicles.
    • Challenges such as these are important to consider for policymakers when introducing new measures, as even though they are well-intentioned and the need to urgent action on decarbonisation is understood by companies, the realities may be quite different.
  • ‘Green’ skills shortages are also having an impact on businesses’ ability to reduce their emissions. In LCCI’s Q1 2022 London Skills Survey, just under half (46%) of London firms said that they had little to no access to the skills they need to lower their emissions. This increases to 70% of companies who said they were either currently planning / intending to plan a reduction in emissions.

To address these challenges, LCCI recommended a number of measures to help support firms with decarbonisation. These included:

  • It is vital that the new government makes clear that the commitment to net zero by 2050 will remain in place.
    • Businesses seek certainty from government on the direction of travel for net zero so it is imperative the government leads from the front on this.
  • The Government should be investing in scaling up renewable energy production as part of its drive to net zero by 2050, which should in turn lessen the UK’s reliance on imported energy supplies.
    • Rather than the two being mutually exclusive, energy security and net zero can and should compliment one another.
  • Following on from COP26 in November 2021, the UK must ensure it continues to be a leader on net zero on the world stage.
    • This will present opportunities for UK businesses to export their knowledge, goods and services to all parts of the world in vital areas, such as green finance.

Richard Burge, Chief Executive of London Chamber of Commerce and Industry (LCCI), said: “Aiming for Net Zero is vital for the future of our plant. We must do this by securing a greener, more sustainable future. It is vitally important that this approach continues to be pro-business and pro-growth to ensure the UK remains front and centre on the world stage as a leader on Net Zero. There is still a considerable way to go and without action on skills and retrofitting we will not be able to meet Net Zero. As our Ministers prepare to go to the COP 27 summit in Egypt, they must address the skills and retrofitting challenges at home if we are to really attain the objective of Net Zero”.

You can view LCCI's full response to the review here.