Net Zero Explained

The globe wrapped in lights
19 Nov, 2021
Category: green focus
Reading Time: 15 minutes

You understand the urgent need for businesses to reduce greenhouse gas emissions, but what exactly is Net Zero?

Net Zero means no longer contributing to the amount of greenhouse gases released into the atmosphere. Achieving Net Zero means reducing your emissions as much as possible as soon as possible, along with balancing out any emissions we’re unable to reduce any further by off-setting an equivalent amount.

This year has seen a surge in global companies and governments declaring their Net Zero commitments. The term Net Zero has been widespread in Media, Political, Corporate and Academic discussion, and carries a strong call to action, embracing the need to halt global emissions under dynamic climate leadership. At a time of global climate emergency, the public is increasingly demanding urgent action to alter the effects of climate change, with deadlines for achieving Net Zero becoming a symbol of a new approach to how we collaborate with natural resources long into the future.

Under the 2015 Paris Agreement, 197 countries agreed to maintain global temperature rises well below 1.5C to avoid the worst impacts of climate change. In order to achieve this, experts say Net Zero must be reached by 2050.

A definition of Net Zero

Unlike terms such as carbon neutral, there is no common definition of Net Zero. However, when defining Net Zero status for a company, this broadly suggests achieving a state in which company activities within the production chain result in no detrimental impact to the climate from greenhouse gas emissions.

Greenhouse gases like carbon dioxide (CO2) are released when we burn oil, gas and coal for our homes, factories and transport. These gases cause global warming by trapping the sun's energy. Meanwhile, rapid deforestation across the world means there are fewer trees and plants to absorb CO2.

A company may work towards Net Zero status by analysing production chains with the aim of reducing greenhouse gas emissions, in line with science-based 1.5°C guidelines, and by balancing the impact of any necessary greenhouse gas emissions by off-setting an appropriate amount of carbon removals.

All businesses have an opportunity to ensure the current commitment to Net Zero targets results in meaningful outcomes for the planet.

What’s the difference between Gross Zero and Net Zero?

Gross zero would require us to prevent all emissions, which isn’t realistically possible across all sectors of our lives and industry.

Net Zero looks at overall emissions, allowing for the removal of any unavoidable emissions, such as those from aviation or manufacturing. Removing carbon could occur via nature, as trees remove carbon dioxide from the atmosphere, or through changing industrial processes.

Which sectors are most affected by Net Zero?

The Transportation industry; Energy (electricity generation from fuels including coal, oil and natural gas); Business (electricity); and Residential (heating) are the four highest emitting sectors in the UK. Combined, these sectors account for around 78% of our current emissions.

The Paris Agreement

The Paris Agreement, sometimes referred to as The Paris Climate Accords, was a positive turning point for putting environmental action to work on a global scale. This provided a pathway for individual accountability towards collective climate goals, with transparent monitoring and regular reporting.

The world leaders of 195 nations agreed to focus on substantially reducing their individual global greenhouse gas emissions in an attempt to cap the global temperature increase to 2 degrees Celsius above preindustrial levels, while pursuing the means to limit the increase to 1.5 degrees.

This global focus reminds us of our individual responsibility to reduce our negative impact on the planet. Both as organisations and individuals, we are able to decrease our carbon footprint with simple everyday choices which determine the amount of carbon we release into the atmosphere, which is dependent on a huge number of factors.

Taking our daily activities into consideration and reviewing our processes in line with the government deadline, from manufacturing and producing, packaging and transporting, the more energy required, the larger the carbon footprint of that process.

Whether that relates to becoming more conscientious about the food we consume, to reviewing the methods used within our business to deliver goods, or starting by making simple changes, such as switching to a green energy supplier, GEAB work alongside UK government initiatives, including the UK Business Climate Hub which supports SMEs to halve their emissions by 2030, bringing them in line with the UK’s 2050 net zero target.

What was COP26?

COP stands for Conference of the Parties. The 2021 United Nations Climate Change Conference, known as COP26, was the 26th United Nations Climate Change conference, held at the SEC Centre in Glasgow, Scotland, from 31 October to 13 November 2021. The president of the conference was UK cabinet minister Alok Sharma.

The focus of meetings like COP26 is to try to encourage every country to stay involved in tackling climate change. During COP26, 200 countries were asked to present plans to reduce emissions by 2030.

The world is warming because of emissions from fossil fuels used by humans, like coal, oil and gas. Extreme weather events such as heatwaves, floods and forest fires, all linked to climate change are intensifying. The past decade was the warmest on record and governments agree urgent collective action is needed.

Under the 2015 Paris Agreement, countries were asked to make changes to keep global warming "well below" 2C - and to aim for 1.5C - in order to prevent a climate catastrophe.

The goal is to keep cutting emissions until they reach Net Zero targets in 2050.

How will countries be made to meet their Net Zero pledges?

For the most part, any commitments made at COP will have to be self-policed. Only a select few countries are making their pledges legally binding. However, as moves towards Net Zero accelerate, it will hopefully encourage countries to respect deadlines.

In theory, it would be possible to impose sanctions on countries which fail to do so, but this could be counter-productive, or cause nations to withdraw from international agreements.

Is carbon neutral the same as Net Zero?

Net Zero refers to achieving a state of carbon neutrality when carbon dioxide emissions are effectively reduced to zero. This can be achieved by balancing emissions of carbon dioxide with its removal through carbon off-setting, or by eliminating emissions associated with transportation, energy production, agriculture, and industry.

Carbon off-setting schemes are a highly effective approach to investing in environmental projects to offset our carbon emissions, from planting trees to supporting communities to develop sustainable solutions which will deliver ongoing clean-energy solutions.

In the UK, around 18% of the total carbon emissions relate to the practices of commercial businesses, while smaller businesses can find themselves unsure about how to make changes and whether to adopt new, less environmentally-damaging technology.

Making a more conscious effort to be aware of our impact, and starting by making small lifestyle and workplace changes, can make a considerable difference towards hitting our environmental targets.

If you’re looking for ways for your business or organisation to make sustainable changes or reach net zero, have queries over the kinds of new technologies which may benefit your business, or require basic advice on concerns within your industry, GEAB can help your company to reassess your current processes, and manage the implementation of more effective, and energy efficient operational methods.

Will Net Zero put an end to CO2 emissions?

It would be impossible to completely eliminate all emissions, so those which remain have to be compensated for, or offset, for example, by planting trees.

Almost every country has embarked on tree planting as a cheap and effective way of reducing carbon, there may not be enough space for the number of trees required.

Carbon capture and storage has also been suggested as another solution.

This involves using machinery to remove carbon from the air, then solidifying it and burying it underground. However, the technology is still emerging, very expensive and as yet unproven.

What will Net Zero mean for individuals?

Reaching Net Zero will involve a personal commitment to take accountability for habitual patterns and the option to make smarter, climate conscious decisions. Investing in EV, eating less red meat, holidaying closer to home, and choosing renewable energy sources, are some of the ways you can lower your personal carbon footprint.

What has the UK government committed to do towards Net Zero?

The government's Net Zero strategy includes providing £620m in grants for electric vehicles and charging points, plus £350m to help the UK transition from petrol. Grants of up to £5,000 for householders to install low-carbon heat pumps. £625m for tree planting and peat restoration, and more investment made into carbon capture and storage hubs.

The government have also announced a ban on new petrol and diesel cars from 2030, and that all UK electricity will come from renewable sources by 2035.

What have other countries promised?

More than 130 countries have pledged to reach Net Zero before 2050.

However, despite China currently identified as the biggest producer of CO2 in the world, the country is aiming for self-proclaimed ‘carbon neutrality’ by 2060.

The third-largest producer of oil worldwide, Russia, has also pledged to reach Net Zero by 2060, although Putin recently dismissed the risks posed by rising temperatures.

US President Joe Biden criticised the Russian and Chinese leaders for not attending the recent COP26 summit in Glasgow.

The world's fourth biggest emitter of CO2 after China, the US and the EU, India has pledged to reach Net Zero by 2070. Some of the world's most heavily populated countries, including Indonesia, haven't made any commitment to Net Zero.

What is climate change?

The warmest 20 years on record have been in during last 22 years according to the World Meteorological Organisation. The warmest during the period of 2015 to 2018.

Global average temperatures are now 1℃ higher than in the pre-industrial era. A degree doesn’t sound like much difference, but the reality is that incremental warming is having a negative impact, and if these trends continue, there are predictions of global temperatures increasing by as much as 3-5℃ by 2100.

This rise in global temperatures brings erratic weather patterns, including heatwaves, floods and severe storms, loss of polar ice and rising sea levels. These will only get worse if global warming intensifies.

Climate change is being triggered by higher levels of greenhouse gases in the atmosphere. Their name derives from the greenhouse effect they create by warming the Earth’s surface and the air above it. This is caused by gases that trap energy from the sun.

Carbon dioxide is the most dangerous and abundant greenhouse gas.

Why Net Zero matters to your business

To deliver on the UK’s legally binding Net Zero 2050 target, businesses are required to take action to contribute to the welfare of the environment. Climate change is the number one economic and social threat to the world, but there is widespread confusion surrounding Net Zero and climate action.

What’s the difference between the various terms used to describe decarbonisation and sustainability?

Net Zero means achieving a balance between the greenhouse gases emitted into the atmosphere and those removed from it. Meanwhile, the Carbon Trust defines a Net Zero company as one which “sets and pursues an ambitious 1.5°C aligned science-based target for its full value-chain emissions. Any remaining hard-to-decarbonise emissions can be compensated using certified greenhouse gas removal.”

Unlike a gross zero target, where all emissions are zero, Net Zero considers some residual emissions from hard to remove areas.

Net Zero and carbon neutrality are often confused, but the main difference is that offsets are acceptable to achieve carbon neutral status. Net Zero permits some certified methods of emissions removal, such as carbon capture and storage or nature-based solutions such as tree planting.

Taking sustainability one step further, carbon negative (sometimes referred to as climate positive) reduces an organisation’s carbon footprint to less than neutral by removing more CO2 from the atmosphere than it emits. To reach Net Zero emissions from homes, transport, farming and industry there are three key areas of the decarbonisation of power, transport and heat.

Are greenhouse gas emissions (GHG) the same as carbon emissions?

Carbon dioxide (CO2), or carbon, is the most significant greenhouse gas (GHG) which accounted for 81% of total UK greenhouse gas emissions in 2019. The other main GHGs are water vapour, methane (CH4), nitrous oxide (N2O) and ozone.

CO2 is often misinterpreted as an expression for all greenhouse gases. A more accurate way of refering to greenhouse gases is to use the term carbon dioxide equivalent, (CO2e). This is useful in providing the carbon equivalent impact of any greenhouse gas.

These gases occur naturally in the Earth’s atmosphere, where they absorb and re-emit heat. Burning fossil fuels and other human actions are increasing GHG levels – causing global warming and climate change.

The biggest progress is being made across electricity and heat production by introducing energy efficiency measures and generating energy from renewable sources. Working towards a Net Zero future means everyone, from suppliers to businesses and households, has to make a vital contribution. GEAB assist businesses to do exactly that, working alongside your business to identify energy-saving opportunities, help to lower emissions, and present a range of alternative suppliers to compliment your business requirements and budget.

How soon does my business need to take action on carbon reduction?

Taking your first steps towards carbon reduction, however small, is essential. Businesses who ignore their Net Zero planning at this stage will miss out on the potential savings of green innovation incentives, and the enhanced reputation with customers that going green delivers.

While the scale of Net Zero may appear daunting, it can be broken down by your GEAB strategic account manager into manageable steps to simplify the decarbonisation process. Low cost actions such as installing Smart meters and other energy efficiency measures, such as LED lighting and building management controls help to start your journey.

Are carbon reduction and Net Zero targets relevant to SMEs?

The sheer global scale of the SME sector makes small to medium-sized businesses ideally placed not just to support, but to lead changes towards the green economic recovery. As reports such as the latest findings from OECD reflect, becoming more sustainable will increasingly make greater business sense as SME customers become more concerned about the environmental impact of everything they buy.

As smaller operations, SMEs and start-up businesses often underestimate the value of their contribution towards supporting the UK's Net Zero targets. Sustainable measures aren’t just for larger businesses, and don’t have to mean making huge changes or investments. Discover how a greener approach is now a more customer-focused approach which encompasses active and consistent environmental awareness.

Sustainable practices should now be viewed as standard practice across your business wherever possible, with a greener approach becoming transparent to your customer-base, resulting in a positive investment which can only be beneficial to the future of your business.

All types and sizes of organisations have an important role to play in reducing their carbon footprint. Employees, customers, suppliers, shareholders and investors expect you to demonstrate environmental credentials. Demonstrating a green sensibility is an increasing pre-condition of winning new contracts, and governments are also driving action through increasing regulation and green incentives. So, managing your energy efficiently for cost and carbon reduction makes good business sense.

A great example is switching to electric vehicles. New technology and falling costs has introduced EV to organisations of all sizes, from small to medium businesses, to large corporations with huge fleets. GEAB are able with help and advice to assist your business towards EV installation.

Is it enough to use carbon offsets to decarbonise my business?

Carbon-offsetting by purchasing renewable energy plays a vital role in reducing emissions, but it won’t take you to Net Zero. It’s important to merge green energy procurement with energy management measures to improve your financial and environmental performance.

Will going green increase costs for my business?

As businesses and organisations work with GEAB to focus on cost and operational efficiencies, they will find managing energy efficiency can provide financial and environmental gains.

There are many low and zero-cost carbon efficiency measures which quickly reduce emissions while helping to manage energy costs. Influencing employees to improve energy saving behaviour in the workplace costs your business nothing, while installing energy monitoring and control systems drives efficiency and can be implemented with little expense.

GEAB can also advise across government grants, tax efficiencies and finance options available to support your business with green initiatives.

More advanced energy technologies, such as solar and data capture are more accessible and affordable, and can offer positive and predictable returns on investment. Depending on your requirements, flexible finance options can support your efforts, with GEAB advisors contacting your business with regular updates.

Put your carbon reduction plans into action

Going green isn’t just necessary in terms of climate change, building energy sustainability into your business strategy can help support your business as a viable, green brand.

There are many potential pathways to carbon reduction and achieving Net Zero. GEAB can advise on the actions available to reduce your carbon footprint, such as moving to electric vehicles, switching to energy from renewable sources and implementing low-cost energy efficiency measures.

Start making changes today. GEAB are here to answer your questions, assist with ways to implement greener options, and work with your organisation to achieve Net Zero. Call and speak to our team today, on from 9am-5pm, Monday to Friday, on 0800 084 3477.

Frequently asked questions

What is Net Zero?

Net Zero refers to the balance between the amount of greenhouse gas which is produced, versus the amount which is removed from the atmosphere. We will reach Net Zero status when the amount we add is no more than the amount subtracted. The UK hopes to obtain this status by 2050.

What is meant by Carbon Footprint?

The term carbon footprint refers to the amount of carbon dioxide released into the atmosphere due to the specific activities of an individual, an organisation, or within a community. The UK aims to reduce these harmful emissions in line with the 2050 Net Zero target to create a more sustainable future.

What is the Climate Change Levy (CCL)?

The Climate Change Levy is an environmental tax which was introduced in 2001 and applies to businesses in the industrial, public services, commercial and agricultural sectors. The CCL is charged against taxable commodities for heating, lighting and power purposes to non-domestic consumers.

What grants are available for EV infrastructure?

Funding schemes are available to support EV rollout, including the UK's Plug-In Grant scheme for vehicle funding, along with the Workplace Charging Scheme (WCS), a voucher-based scheme to support charging points. Your GEAB advisor will access your suitability for these schemes, along with all relevant financial incentives and funding options.

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