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Future of Manufacturing Q4 2022

We can deliver net zero with a resilient manufacturing sector

iStock / Getty Images Plus / Sabrina Bracher

Mark Pawsey MP

Conservative MP, Rugby and Co-Chair, All-Party Parliamentary Manufacturing Group

Claudia Jaksch

Chief Executive Officer, Policy Connect

By matching the most efficient operator in their sector, manufacturing companies — on average — would be 24% more profitable, generate 30% more jobs and report a 9% reduction in greenhouse gas emissions.

The Covid-19 pandemic has disrupted almost every aspect of the UK’s manufacturing sector, from procurement and staffing to supply chains and fulfilment. Businesses were impacted in three ways: lockdown restrictions reduced on-site productivity, overseas supply chains broke down and countries all over the world entered recession, leading to plummeting demand.

Reliance on manufacturing

As many sectors suspended operations and furloughed staff, the UK manufacturing sector was asked to continue to deliver essential goods, such as food, Personal Protective Equipment (PPE) and medical supplies — including domestic production of the Oxford-AstraZeneca vaccine.

Alongside this challenge, the Government has legislated for the UK to reach net-zero greenhouse gas emissions by 2050 with a series of set milestones. Currently, the country is not on track to meet its fourth and fifth carbon budgets, which set emissions reduction targets for the period between 2023 and 2032. Under the sixth carbon budget, the UK will as a whole need to deliver a 78% reduction in carbon emissions by 2035, and the manufacturing sector will have a crucial role to play in decarbonising if this is to be achieved.

Improving efficiency can help the manufacturing sector deliver on the Government’s net-zero target.

Sector adjustments

Policy Connect published its ‘Manufacturing Resilience’ inquiry in 2021, which focused on how the sector can adapt to challenges and become more productive, resilient and sustainable as it builds back from the pandemic.

Improving efficiency can help the manufacturing sector deliver on the Government’s net-zero target. This will not be easy, particularly as many production processes including chemicals, cement, glass and steel are energy-intensive and difficult to decarbonise.

The Government’s Industrial Decarbonisation Strategy set out in 2021 provides an indicative roadmap for how this will be achieved, especially within the UK’s regional industrial clusters. These will be the first to benefit from emissions reduction technology, such as carbon capture, usage, storage and hydrogen fuels.

However, there will be challenges for dispersed sites which will need to decarbonise through more traditional means. This could include enhancing energy and resource efficiency.

Future design

Key recommendations include the development of a national advice and support service, building on the Government’s successful ‘Made Smarter’ pilot and developing resilience within manufacturing businesses. Policy Connect, the All-Party Parliamentary Manufacturing Group and the Manufacturing Commission will set out a programme to tackle these issues, including the future of the manufacturing workforce and designing for net zero.

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