​UK Needs Unified Energy Strategy to Hit Net Zero Targets, Warns Energy

​UK Needs Unified Energy Strategy to Hit Net Zero Targets, Warns Energy

Industries Council

The recently released Energy Manifesto for the supply chain, by the Energy Industries Council (EIC), the UK's largest energy trade association and one of the world's biggest, offers a clear and urgent call to action: the UK needs a comprehensive and unified energy strategy to meet its net zero targets. The manifesto underscores several critical areas where current policies are falling short and provides detailed recommendations to drive the UK's energy transition and enhance competitiveness of the country's diversified and knowledgeable supply chain, which made of thousands of companies, mostly small and medium-sized enterprises.

One of the central themes of the manifesto is the need for an integrated supply chain. Currently, about 83% of the UK's energy supply chain relies on oil and gas, with 44.7% of that diversified into renewables and net zero technologies. However, currently, UK policies often encourage siloed supply chains, which is counterproductive as it fails to utilise the full capacity and capabilities of UK energy businesses. The EIC asks that this integrated supply chain, and cross technology working within companies, is reorganised and strategies implemented which allow the supply chain to transition easily, not be penalised for working in renewables and oil and gas. But they can't transition without work to go into.

The EIC stresses the need for clear and consistent project pipelines and investment timelines to ensure a smooth transition to renewable energy. Businesses require certainty on a five-year rolling basis to secure shareholder approval for investments. Unfortunately, the current project approval process lacks the defined regulations and economic predictability seen in the oil and gas sector. The manifesto asks for detailed energy roadmap that outlines the timelines for various projects across different technologies and regions. The idea is that this would help investors and policymakers identify credible timelines, bottlenecks, capacity, and skills shortfalls.

Increased support for the UK's energy sector in international markets is another issue addressed by the manifesto. The UK must become better at facilitating access to more markets, especially within the energy sector. Companies usually ask for direct engagement with embassies and trade missions that can market their capabilities to different geographies while also communicating existing opportunities, regulations, facilities, and the like in the host countries. The document points out that the current support systems, including UK Export Finance (UKEF), are not meeting the needs of the supply chain. Improvements in on-the-ground support in foreign markets and a reassessment of UKEF offerings are essential to ensure that UK companies can compete effectively on the global stage.

Maintaining the UK's leadership in the global energy market is yet another key aspect of the manifesto. The EIC calls for better alignment of domestic and international policies to support the UK's energy supply chain. This involves ensuring that regulatory frameworks are designed to enable competitiveness and addressing the pain points post-Brexit, such as the movement of people and tariffs. The UK must also focus on attracting and retaining investors by delivering energy transition projects at a faster pace.

The EIC's Energy Manifesto provides a well-researched and detailed framework for driving the UK's energy transition. It is based on extensive proprietary data, industry reports, and interviews with dozens of leaders and influencers across the energy sector. The recommendations within the manifesto are clear: the UK needs a unified, integrated approach to energy policy that leverages existing capabilities, provides clear investment timelines, enhances international trade support, and aligns domestic and international policies.

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