Pathways to net zero for power and industry in the UK

Abstract

Power and industry as CO2 emitters face substantial challenges under carbon targets. While the way forward for power seems well understood, trajectories for industry remain unclear. The implications of sector coupling appear particularly opaque. We model power and industry together as both are connected by the demand for and the provision of negative emissions and electricity. Various abatement options are considered for cement, steel, and refining. We analyse potential pathways for import and export and compare the evolution of industry, the impact on the power sector, the emissions balance, and the CO2 requiring transport and sequestration. Emissions in cement, steel, and refining are reduced by 90% overall, with most optimal technologies requiring CCS. While BAU in industry forces significantly higher amounts of BECCS, other scenarios – including expanding domestic low-carbon production – require only minor adjustments in the design and operation of the power sector. We further explore the possibility of a border tax adjustment as a measure to promote low-carbon production in the UK over high-carbon imports. Sensitivity analysis around a carbon price and negative emissions credit grants insights on which combinations of both yield net zero – or even cumulative net zero – in 2050, as well as which ranges break even for the public sector.