Womble Bond Dickinson

By Sebastian Briggs and Anthony Alderman, Partners at Womble Bond Dickinson

In 2019, the government set a legally binding target which requires all greenhouse gas emissions to be net zero by 2050. As a city, Southampton must reduce its carbon emissions by 62% by 2025 to keep on track with national targets.

Southampton City Council has already highlighted various cost-effective solutions to achieve 40% of the total target reduction which could reduce the city’s energy bill by £62m, and create significant employment opportunities. However, the government’s recently announced fossil fuels campaign, which is set to include lifting the ban on fracking and expanding drilling for oil and gas, could have a detrimental impact on the UK’s net zero efforts.

In our recent research white paper with Cornwall Insight, we analysed different energy markets and gathered expert insights as to the UK’s progress in the energy transition. The report, ‘The UK and the energy transition: Leading the way?’ draws on lessons from around the globe and identifies that, whilst the UK is well placed to reduce carbon emissions, several challenges must be overcome to meet net zero targets, let alone lead the way.

WHERE TO START?

There are several opportunities identified within the report that can be capitalised upon should the challenges be addressed. Firstly, that the UK’s strong reputation as a friendly environment for energy and infrastructure investment acts as an extremely attractive prospect for external investors. The robust and transparent UK legal system also offers a desirable foundation for investment and new technology. Lastly, the UK possesses a unique geographical location supporting offshore wind and ambitious domestic climate targets.

THE UK ON A GLOBAL STAGE

In addition to highlighting the opportunity energy transition presents for the UK on a global stage, the research brings to the forefront the domestic, economic and job opportunities associated with onshoring the supply chain for renewable energy developments. As the cost-of-living crisis continues to challenge consumers and businesses alike, over reliance on an international supply chain could become a barrier to the energy transition progress.

The factors impacting the UK’s energy transition are ever-changing and unpredictable, as demonstrated within the report. It is difficult to make decisions in an environment which is constantly in flux – which is why this data and insight should be invaluable for a market currently in a period of change.

HOMEGROWN POTENTIAL

After years of delay, we are now forging ahead in carbon capture, utilisation and storage (CCUS) and hydrogen. Due to being one of the UK’s busiest ports and emitting approximately 2.6 million tonnes of carbon each year, the Southampton Water Project will investigate the feasibility of developing a hydrogen super-hub at the Port of Southampton to help produce and distribute hydrogen across the South Coast of England.

This project will scope the site’s suitability as a centre of excellence for hydrogen production and distribution, CCUS, as well as other green technologies. Should this plan be put into practice, Southampton could become a world benchmark for decarbonising whole industrial areas.