Home Business News This is how effective the new net zero package for businesses is

This is how effective the new net zero package for businesses is

by LLB Finance Reporter
6th Feb 24 5:54 am

A multi-million-pound package has been rolled out to help UK businesses cut their emissions and meet the nation’s net zero goals.

As part of this programme, over £190 million will be made available to support businesses making the switch to cleaner and cheaper energy.

Following this news, I’m getting in touch with an expert comment from the business energy experts at Bionic on the details behind this initiative, whether it will really make a difference in helping the UK reach its net zero targets, and more advice for SMEs looking to make their businesses practices greener.

Ed Whitworth, Head of Energy Performance at Bionic said, “As part of this initiative, the Minister for Energy Efficiency and Green Finance has selected 12 winning businesses to receive a combined funding of up to £6 million for the development of strategies aimed at fostering a low-carbon future.

“This funding will allow businesses and their partners to collaborate on initiatives aimed at reducing carbon emissions. They will also gain access to technical advisors who can assist in preparing for the adoption of environmentally-friendly measures.

“The Minister for Energy Efficiency and Green Finance has also unveiled plans to launch a new phase of the Industrial Energy Transformation Fund later in the same month, with an allocation of £185 million as part of the Government’s broader strategy to meet net-zero emissions targets.

“This funding will support companies located outside the major industrial regions of the UK – which contribute to 55% of the country’s industrial emissions – in transforming their operations to run on cleaner and more secure energy sources. Initiatives that will be backed by this fund include the replacement of inefficient equipment, the installation of electric furnaces, and the transition to hydrogen-based technologies.

“Eligible sectors for this support include manufacturing, recycling, and, for the first time, controlled environment horticulture, industrial laundries, and textile renting facilities.”

Will this initiative really make a difference?

Consumption could be lowered  – “This new initiative could help businesses replace their old, energy-hungry equipment with new energy-efficient versions which could lower monthly energy consumption. Not only do energy efficient appliances reduce the amount of energy used, helping to mitigate the excessive use of fossil fuels, they can also help businesses save money on their energy bills.”

Standing charges won’t be affected – “Although the initiative might help businesses cut down on their energy usage, it can’t help bring down the standing charges energy suppliers choose to set. The costs of supplying energy are on the rise for firms, meaning standing charges are likely to keep increasing to ensure profits.

Energy prices are still unstable and if you’re on a variable tariff your prices could fluctuate — we can never can’t predict whether they’ll go up or down. Even though energy efficiency can be improved, fluctuating energy prices are out of our control.”

Taxes and levies could be reduced – “Industrial businesses have the potential to reduce their Climate Change Levy (CCL) payments set by the Climate Change Agreement (CCA) with the Environment Agency. But to receive the discount, businesses must hit their agreed targets to increase energy efficiency and reduce carbon dioxide (CO2) emissions. If they do, they could get a discount on their CCL payments.”

“If winning businesses use the support in the right areas — some could aid in saving the environment and shave money off their energy bills at the same time.”

Apart from government support, how else can my business move to net zero?

“It goes without saying that businesses cannot rely on the Government funding alone to cut their emissions and meet the UK’s net zero targets. As we can see from this new initiative, only 12 businesses will “win” the funding.

Consider a green energy deal – “When you sign up to a green energy deal, your supplier will usually provide electricity that has been produced from 100% renewable sources.

“This increases the sustainability of a business without the expenses of in-house renewable energy technology or a workplace culture change. According to our recent survey of 100 small business owners, 79% of SMEs would not switch to green energy deals as they think they are unaffordable.

“However, renewable energy costs have fallen sharply over the past decade and there is growing evidence that green electricity is actually cheaper to generate than any power generated by fossil fuels.”

Reduce waste – “One of the most basic initiatives you can take is to introduce strategies to minimise waste generation within your business operations. This can include measures like optimising production processes, reducing packaging, and encouraging responsible consumption. If there’s less going to landfills, this benefits the environment.”

Create a greener supply chain – “Work with your suppliers to make your supply chain more sustainable. Encourage them to adopt environmentally friendly practices and prioritise suppliers that share your commitment to sustainability. You can look into buying products that take less energy to make, transport and use as a starting point.”

Recycle and compost – “Establish a robust recycling and composting program within your workplace. Ensure that employees are educated about proper recycling and waste disposal practices. By recycling plastic, paper, cardboard and other materials, businesses are helping to lessen the impact on the environment.”

Improve your energy efficiency – “Improve energy efficiency in your facilities by installing energy-efficient lighting, upgrading equipment, and implementing smart energy management systems. This will help reduce your energy consumption and lower carbon emissions.”

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