The UK Department for Business, Energy & Industrial Strategy (BEIS) has commissioned a review of the government’s approach to delivering on its promise to deliver Net Zero by 2050. Below, we take a look at the consultation response from DecarboN8 Seedcorn Researchers, David Tyfield and Matthew Cotton to find out more about the role Freeports could play in delivering Net Zero for the UK.
How can net zero enable the UK to meet our economic growth target of 2.5% a year?
Net zero is a crucial element for achieving the UK’s 2.5% annual growth target. This is graphically illustrated by the challenge within the freight sector, which is the backbone of the economy. The sector currently faces many pressures: having already juggled the challenges of the changes in regulatory regimes from Brexit and the personnel shortages and supply-chain interruptions of Covid, the surge in fossil fuel prices has pushed much of the sector to its limits. The ongoing transformation of the sector by digitalisation is also adding to demands for significant investment.
The UK freight sector contains many small businesses operating on very tight margins and net zero may appear to be simply one further pressure on the sector, but this is to read the situation backwards. It is undoubtedly extremely challenging for many smaller freight businesses to spare the time and resources to tackle net zero. Yet the choice is not between decarbonising their operations and not doing so, but between beginning to decarbonise seriously now (preferably with appropriate support from government) or failing to do so and becoming unable to meet growing business expectations on these issues. Net zero is an opportunity for the wholesale rationalisation of the freight industry and a medium-term opportunity for rebooting growth for the UK economy.
The five ways to reduce carbon emissions from freight transport are:
- Reducing the demand for freight
- Optimising vehicle use and loading
- Increasing the efficiency of conventional freight vehicles in design
- Reducing the carbon content of fuel/power
- Shifting freight to low carbon-intensity modes
What challenges and obstacles have you identified to decarbonisation?
For freight decarbonisation there appears to be a ‘you move first’ stalemate, even between the freight businesses and government. Resolving these complex challenges is not possible through a business-as-usual approach where each of the stakeholders simply takes care of their own operations or concerns. Instead, a new and different approach is needed if meaningful progress is to be made on this agenda.
Similar challenges pertain to realising significant win-wins, for economic regeneration and net zero, from the Freeports. The Freeports had to detail their contributions to net zero in their funding applications, so they have clear strategies to incorporate net zero into their operations. To achieve these goals, the Freeports will need to collaborate with a wide range of local stakeholders, not just from businesses but also from consumers, civic groups, and local authorities.
Place-based decarbonisation is a complex challenge, demanding joined-up strategy and collaboration. Simply inviting business investment does not support the level of expedited decarbonisation needed to reach legislated net zero targets. Investment must be carefully selected and guided. The challenge for the Freeports is that, while they have the potential to enable the kind of collective action and stakeholder collaboration needed, this is not their primary remit, nor can it be their responsibility alone. A broader policy context supportive of the Freeports delivering decarbonisation is needed.
The provision of the infrastructure necessary to support decarbonisation will require significant investment. In an environment where operating costs are increasing and there is considerable uncertainty, it will be difficult to secure the investment needed for low carbon technology, infrastructure, and vehicles. None of these things can be implemented quickly, but the impacts of climate change that are already happening show it is imperative to act quickly to reduce the risk of future disasters.
What opportunities could facilitate the transition in a pro-growth way?
In our research on freight transition associated with the Port of Liverpool, place-based and participatory approaches have proven capable of stimulating significant collective interest. Such an approach can build local momentum for specific practical measures to deliver locally-appropriate transformation of the freight system, bridging the perspectives of the freight sector and (national) government.
This learning could be scaled up across the country, enabling a clear national momentum towards specific technological options for decarbonising freight, and to a broader national rationalisation of freight mobilities.
This could include:
- more use of rail and inland/maritime national shipping, with ports ‘the most under-used infrastructure’ (Peel Ports, at Multimodal 2022) on this island nation;
- right-sizing vehicles depending on movement distance;
- incentivising international trade to service the north of England and Scotland from northern ports.
Our research has observed widespread support for the potential of Freeports to seed localised progress towards competitive clusters in net zero and other cutting-edge industries. Freeports were identified as having the scope to drive joined-up local thinking and planning around the skills, infrastructure, energy, mobility, investment, clustering and innovation universally acknowledged as necessary for a pro-growth net zero transition. Embedding rapid decarbonisation in Freeport development is particularly important given their association with increased demand for freight and commuter transport, and with traditionally high-emitting industries.
Local stakeholders in Liverpool City Region and Teesside highlighted the need for regional economic regeneration driven by Freeports to contribute to a ‘just transition’, with skills programmes to ensure local populations can take up jobs in low-carbon industries and increased local productivity.
In our research, many significant stakeholders told us that Freeports hold potential to imbue regional economies with a new systemic vision and dynamism, needed for place-based decarbonisation. As comparatively new, still-forming, composed of small, close-knit teams with an experimental ‘start-up’ culture and yet also enjoying a significant regional profile, Freeports are also potentially well-placed to play this convening role. Furthermore, the changing circumstances – of global trade and manufacturing, digitalisation of industry, etc. – may provide the novel environment needed to deliver positive transformation.
Which policy ideas will help us reach net zero?
Our research supports the following list of policy agendas as supportive of net zero and local economic dynamism:
- Spatial (to local / combined authority level) and sectoral carbon budgets, with transparent allocation and accounting mechanisms (e.g. re consumption vs. production emissions / source, destination or route allocation for transport emissions), and concomitant devolution of powers, responsibilities and funding to enable achievement of budgets in ways that respond to place-specific opportunities and challenges;
- Greater local devolution, especially of powers and funding to support decarbonising infrastructural investment and redesign;
- Statutory responsibility for local and combined authorities to contribute to national net zero targets and to deliver local targets / carbon budgets;
- Review national guidance (e.g. the Green Book, the National Planning Policy Framework), which, despite recent amendments, unintentionally continue to favour high-carbon solutions e.g. for transport investment decisions;
- Connect tax and regulatory incentives in Freeports, Investment Zones and any future related policies to the delivery of enhanced environmental / decarbonisation standards (e.g. simplified planning processes and tax reliefs will apply only if new buildings exceed building regulations requirements on energy efficiency and vehicles servicing the sites achieve better emissions performance than the fleet as a whole);
- Tighter air quality regulation, including greater support and powers for the introduction of Clean Air Zones;
- Creation by appropriate government departments (e.g. DfT, BEIS) of evidence-based scorecards for net-zero freight options, to assist investment decisions by individual freight sector businesses;
- Broader support for the upgrading of the freight industry, including appropriate infrastructures (e.g. for EV/hydrogen charging, driver facilities, overhead charging on specific roads, etc…) and training institutions (e.g. apprenticeships, dedicated FE college courses etc…);
- Establishing a central freight-data clearing-house or open platform for the sector to share logistics data in good faith, neutralizing the current risk for individual businesses in bilateral trust relationships;
- Better horizontal and vertical integration of policy across Whitehall and between national and local governments, esp. regarding support, across the country not just in the south east, demanding that all infrastructure projects be net-zero future-proofed, e.g. against the massive reduction in fossil-fuelled road traffic that must happen in the next decade;
- Support for freight transition, including through multi-stakeholder and place-based projects and fora, since the freight industry (and especially its numerous small businesses, facing so many other pressures) cannot do this alone, nor even just with the support of government;
- Adopt progress towards carbon budgets as a headline indicator of government achievement, alongside a modified growth indicator (such as New Zealand’s Wellbeing Budget) to provide a more meaningful indication (and therefore driver) for what sectors of the economy are growing, and who is benefitting, enabling more directive and impactful policy responses than a simple focus on aggregate growth.