The CCC claims the majority of UK workers ‘will see no major impacts from the energy transition’ unless the UK government takes a more active role with stronger policies to harness the potential and manage risks, aimed at creating a net zero workforce.

Currently, the largest changes are occurring in sectors with a core role in the delivery of the energy transition, impacting about one fifth of the total workforce.

The CCC notes that two thirds of these core workers are in sectors which have good potential for significant employment creation in the transition. There are estimated to be opportunities for 135,000 to 750,000 jobs in areas such as buildings retrofit, renewable energy generation, electric vehicles and battery manufacture.

Around 7% of workers will see a ‘gradual redirection of their products and services’, as they are largely employed in sectors transitioning from the use of fossil fuels to low-carbon methods, like the cement and steel industries.

Less than 1% of UK workers are in high-emitting sectors that are likely to ‘phase down over the transition’. These include oil and gas ‘where extraction must decline’, says the CCC.

Lord Debden, Chairman of the CCC, insists on the need for the government to give more support: ‘The UK has committed to net zero. The only question is whether the government intends to get there in a way that benefits workers or leaves them behind. This is a unique moment to tailor our approach to skills and jobs, in the certainty of achieving the legal goal. A net zero workforce means secure employment for the future. This is an opportunity for the government to bring real meaning to “levelling up”,’ he said.

Rising carbon offset costs could challenge UK businesses
In other news, a new report from PwC forecasts that the cost of corporate carbon offsetting could double by the end of the decade, and increase by a factor of thousands, under a carbon capture scenario by 2050 where businesses race to meet net zero targets.

PwC estimates that FTSE 350 companies publicly reported purchases of voluntary carbon offsets totalling £38mn in 2022. Based on current pricing models, its analysts have calculated that by 2030, this same volume of offsets would cost companies £135mn. What’s more, if prices continue to rise as expected until 2050, then the cost of the same volume of offsets may peak at £365mn.

However, the report identifies that 80% of the volume of offsets reported to have been purchases in 2022 were classed as ‘avoidance offsets’, derived from projects such as deforestation, mixed and renewable energy projects. Indeed, there is growing momentum that only removal offsets (ie those generated from projects that extract and permanently store CO₂) should be permitted.

In this scenario, PwC has calculated that the same volume of voluntary offsets purchased in 2022 for £38mn would cost £438mn by 2030 (a 1,051% increase). Prices are expected to peak in 2037, where the cost of current FTSE 350 purchases would rise to £2.6bn.

Although the purchase volume of offsets varies by industry, the energy sector reported the highest purchases of voluntary offsets in 2022, amounting to £27mn.

The PwC analysts point out that companies do not routinely disclose what they pay for carbon offsets due to commercial sensitivity. ‘However, this lack of transparency makes it difficult for investors and other stakeholders to gauge how these risks might affect individual companies’ net zero transition plans,’ they note.

Clean air switchgear on the horizon
In further news on the clean tech front, the UK’s largest electricity distributor, UK Power Networks, is currently installing its first ‘clean air’ gas insulated switchgear (GIS) operating at 132,000 volts, which is free of SF6 (sulphur hexafluoride) – commonly used as the main method of insulation in high voltage electrical equipment.

SF6 is one of the most potent greenhouse gases contributing to global warming and has approximately 22,800 times the global warming potential of CO₂.

The ‘clean air’ equipment is being installed as part of a substation upgrade in Lews, East Sussex. The project forms part of UK Power Networks’ ambition to reduce use of SF6 for new switchgear across all voltage ranges where alternatives are available on the market.

Barry Hutton, Director of Asset Management at UK Power Networks, says: ‘Switchgear plays a vital role in the safe and secure distribution of electricity to homes and businesses. Over time, we want to make use of environmentally friendly technology to support a net zero carbon future.’

UK Power Network is committed to reducing all its Scope 1, 2 and 3 emissions by 25% by 2028 from a 2018/2019 baseline.