Net-zero greenhouse gas emissions target year: information and analysis

Section 5: The implications of setting a net-zero target date of 2050 now

Going beyond the advised target of 90% by 2050 at this time would imply also going beyond the advised target levels for 2030, 2040, and all the annual targets from 2021 onwards. The chart below shows the targets both advised by the CCC and included in the Bill introduced by Government, alongside a straight-line trajectory from the 2020 target to a net-zero target in 2050 (it should be noted that a curved line, with more or less effort in earlier years, could also lead to net-zero by 2050).

To commit to targets beyond the limit of technical feasibility would, as previously noted, mean:

• paying other countries to reduce emissions on our behalf, instead of focussing purely on domestic effort
• removing some sectors from the target
• making legally binding commitments that are dependent on as yet undeveloped technological advancement and cannot be properly scrutinised
• taking steps that would have a substantial detrimental impact on people’s wellbeing and the economic growth of Scotland

Pay other countries to act on our behalf or remove some sectors from the target

Scotland’s progress in reducing emissions to date has been entirely based on domestic action to reduce emissions at source, in Scotland. The alternative is to pay for other countries to take action on Scotland’s behalf through the purchase of international carbon offset credits.

International credits are generated through mechanisms set up under the UNFCCC Kyoto Protocol and this Parliament’s 2009 Act places tight statutory limits on the extent that they can be used to meet targets in Scotland. The Bill strengthens those limits further. The Bill means that credits cannot be used to meet targets at all, unless Ministers bring forward secondary legislation which the Parliament then approves, to allow a maximum of 20% of the year on year change to be accounted for by credit purchase. Based on current information, that limit means that less than 0.2 megatonnes per year can be accounted for in this way for any year from 2020 to 2050.

One approach to achieving a net-zero target by 2050, and the higher annual and interim targets from 2020 onwards that would imply, would be to revisit this approach and follow the example of countries such as Sweden. Sweden’s legislation allows for up to 15% of the overall target to be made up through credits. If Scotland followed this approach, come the 2040s more than 50 times the limit proposed in the Bill could be accounted for through credits.

The estimated cost of using credits to make up the gap between what is technically feasible domestically here in Scotland and a net-zero target in 2050 would be around £15 billion over the period to 2050 ^[2] . This expenditure would need to be found from other areas within current and future Scottish Government budgets and would have little or no economic benefits to Scotland.

A further change that could be made to increase the feasibility of achieving a net-zero target by 2050 before a credible pathway can be demonstrated would be to remove some sectors from the target. Scotland is unique in including a fair share of the emissions from all of its international aviation and shipping in the scope of targets, so removing this would increase consistency with other leading countries. Some European countries also do not include sectors covered by the EU-Emissions Trading Scheme in their domestic targets.

The Scottish Government does not consider the use of credits or the removal of sectors to achieve a net-zero target to be either credible or to be the best use of resources at this time and believes Scotland should continue to set world-leading targets based on domestic action.

Making legally binding commitments that are dependent on as yet undeveloped technological advancement and cannot be properly scrutinised

As mentioned above, the CCC’s advice that Scotland could potentially achieve a 90% target by 2050 is based on a modelled scenario that includes substantial deployment of new negative emissions technologies such as carbon capture and storage, or bioenergy with carbon capture and storage.

Carbon capture and storage is a process whereby the CO ₂ produced by combustion of fossil fuels and industrial processes is captured and transported offshore for safe and permanent storage in depleted oil and gas fields or deep saline aquifers. By using carbon capture and storage, energy can be generated and other products such as plastics, cement and steel can be produced using fossil fuels with minimal greenhouse gases being emitted to the atmosphere.

Bioenergy with carbon capture and storage goes further as energy is produced while greenhouse gases are actively removed from the atmosphere. Biomass, such as maize or rapeseed, is grown as an input to the combustion process. While growing, the biomass absorbs CO ₂ from the atmosphere. The emissions from combustion are then captured and stored.

To achieve a 90% emissions reduction target by 2050 Scotland will need commercial-scale deployment of carbon capture and storage to begin in the 2030s. To achieve net-zero emissions by 2050, the scale of carbon capture and storage, with or without bioenergy, would need to be far greater and begin much sooner.

Studies indicate that the cost of industrial carbon capture and storage could be up to £330 per ton of CO ₂ captured, depending on which industry and process it is being applied to. As the volume of emissions captured increases, more expensive processes need to be deployed, with removing the remaining emissions becoming more technically challenging. The cost of capturing emissions at the scale of those associated with refining and petrochemical activity at Grangemouth, for example, could be £230 million per annum or more ^[3] . These cost estimates exclude transportation and monitoring, which will be significant. The capital cost of building a 1 GW (similar in scale to Peterhead) gas fired carbon capture and storage power station could be up to £2.7 billion.

Taking steps that would have a substantial detrimental impact on people’s wellbeing and the economic growth of Scotland

Tackling climate change and reducing emissions requires adaptation by industry to a low or zero carbon future. The CCC’s advice on a 90% target suggests that the sectors of the Scottish economy where any substantial emissions are likely to remain in 2050, after achieving a 90% reduction in emissions, would be agriculture, aviation and maritime transport, and industry. Of these, emissions from agriculture will be the largest.

Agriculture

It is not possible to produce food without generating greenhouse gas emissions.

There are various steps underway to reduce emissions through altering farming practices and these are supported through schemes such as the Knowledge Transfer and Innovation Fund, the Farm Advisory Service, and Greening payments. In addition, research into the role of genetics and feed additives in reducing emissions from livestock, the role large-scale slurry fed anaerobic digesters, and methods for the use and storage of manures and slurries is all underway.

Requiring reductions in emissions from farming beyond what can be achieved through efficiency and technology would mean reducing the amount of food produced in Scotland.

In particular, committing to substantial further reductions in agricultural emissions would imply livestock farming, for both meat and dairy production, becoming unviable in Scotland.

This would have serious implications for Scotland’s food and drink industry, reducing or even eradicating exports of Scotch Beef and Lamb. Without accompanying policies to force radical changes to the diets of individuals and households in Scotland, to reduce or eradicate the consumption of meat and dairy in Scotland, the result would be near total reliance on imports for these products. While this may mean a reduction in emissions in Scotland, it could result in increased emissions elsewhere, particularly given that other countries may not have efficient farming practices in place and the goods would all require to be transported.

Transport

There is no doubt that by 2050 our transport system will have been transformed, and not just in how vehicles are powered. Our ambition to remove the need for petrol or diesel powered vehicles by 2032 is the first step in achieving the almost complete decarbonisation of road transport by 2050. For cars and light vans, there is a clear technology pathway to decarbonisation by 2050 – through battery electric vehicles and hydrogen fuelled vehicles. With zero-emissions at the tail pipe and a strong tie in to renewable electricity generation, switching to these vehicles will play a major role in reducing emissions. We are putting steps in place now to achieve that ambition, including having one of the most comprehensive charging networks in Europe, soon to be reinforced by the Electric A9, financially supporting the take up of ultra-low emissions vehicles, increasing support for active travel and encouraging the use of low carbon means of travel where possible – including exploring increased use of rail freight.

Internationally, the decarbonisation of road transport is gathering pace, and according to Bloomberg, a number of international forecasts of electric vehicle uptake have doubled in recent years. Evidence also indicates the pace of technology development is increasing, with forecasts indicating that plug-in electric vehicles could be price comparable to combustion engines by 2025.

The Scottish Government’s ambitions for Ultra Low Emission Vehicles are in step with these trends. Around a quarter of road transport emissions come from vehicles other than cars and vans. This includes heavy commercial vehicles, buses, and motor cycles. The technology to decarbonise heavier vehicles is less advanced and it is more difficult to predict the pace or direction of innovation. The necessary technological advancements will require concerted action by the international community and vehicles suppliers to drive innovation and bring down costs. With 50% of miles driven in Scotland being in rural areas, a move to zero emission vehicles before the cost of technology has come down could raise the costs of goods and services, and would hit those in rural areas hardest.

In the CCC’s scenario for 90% emissions reduction by 2050, the only transport emissions remaining will be from aviation and shipping.

It is not currently possible to plan for deep reductions in aviation emissions while also protecting Scotland’s international connectivity and the services to our rural and island communities. This is because of the lack of certainty about the potential for zero emission aircraft.

For ferries, the actions we are already taking to reduce emissions are around alternative fuels and better operating efficiencies. We are committed to developing the ferries of the future as technology develops. We are currently building vessels which are hybrid electric or Liquefied natural gas ( LNG), which reduces emissions using up to date technology, and we are encouraging better operating efficiencies. Ferries have a lifetime of around thirty years, so to achieve zero emissions by 2050 we would have to start replacing the current fleet now. But the technology does not currently exist to do this in an effective, cost efficient way that would not compromise vital lifeline services, with the impact on island communities that would result.

Industry

In addition to power generation and oil refining, processes that build ships, or that manufacture products such as cement, pharmaceuticals, paper and pulp, textiles, glass, ceramics, iron, steel and renewables, all emit greenhouse gases. Food and drink production, including whisky distillation, is also responsible for carbon emissions. The manufacturing sector accounts for 7% of total employment, is responsible for 52% of Scotland’s exports and 55% of business expenditure on research and development.

Many opportunities exist to reduce emissions from industrial processes and the Scottish Government is actively working with industry to identify and act on those opportunities. Support to decarbonise the fuel and heat required by industry is provided through a variety of means including the Low Carbon Infrastructure Investment Programme, the Scottish Manufacturing Advisory Service (managed by Scottish Enterprise and Highlands and Islands Enterprise), Resource Efficient Scotland (managed through Zero Waste Scotland), and Sector Plans and Sustainable Growth Agreements (being developed by Scottish Environment Protection Agency ( SEPA)).

Through Zero Waste Scotland and with the help of EU funding, the Scottish Government plans to provide £18 million to support manufacturing businesses to unlock their circular economy potential, including grants of between £20,000 and £1 million to small and medium-sized enterprises ( SMEs) through the Circular Economy Investment Fund. Over the next year, support will also be offered through the £8.9 million Lightweight Manufacturing Centre to help manufacturing businesses use new lightweight materials which reduce energy use. This is the first step towards the development of the National Manufacturing Institute which aims to put Scotland at the forefront of advanced manufacturing technologies, research and development, and skills.

To achieve a 90% target by 2050 all organisations with the ability to improve efficiency and implement decarbonisation measures will have already done so and carbon capture and storage will have been successfully integrated into processes where possible.

The ability to further improve efficiency and implement additional decarbonisation measures will be different from industry to industry and between large and small enterprises whose capacity to make and invest in the necessary improvements will vary. Going beyond a 90% target significantly increases the risks that smaller or medium sized enterprises will be unable to make changes required of them. It also increases the risk that businesses will relocate operations to other countries with less ambitious climate change targets. As a result, global emissions would not be reduced, and may even be increased, in addition to Scotland’s economy being harmed.

Businesses currently considered by the EU to be at risk of relocating, such as the manufacturing of chemicals, employ over 91,000 workers in Scotland, have an annual turnover of around £19 billion, and account for over 45% of all Scottish international exports ^[4] .

The steel sector directly employs some 1,800 people in Scotland and provides materials for building and maintaining transport infrastructure, hospitals, schools and other public buildings, as well as the renewables sector.

The impact on jobs would likely be felt most strongly in particular regions. For example, there would likely be impacts on the chemical industries around Falkirk, aerospace around Prestwick, textiles in the Borders, whisky in rural areas and aluminium production in Lochaber. Communities reliant on employment at energy intensive gas plants or oil terminals in locations such as St Fergus or Shetland could be impacted. Likewise, supply chain clusters such as the oil and gas sector in Aberdeen and Aberdeenshire, would be adversely affected.

The Scottish economy has much to gain from being in the vanguard of the transition to a low carbon economy. Stretching but technically feasible targets will help drive new industries and services with the potential to create jobs and wealth across Scotland and new export and investment opportunities. But going beyond that could jeopardise the business confidence and investment necessary for that transition to take place and our ambition to create sustainable and inclusive economic growth.