What does the UK’s updated Nationally Determined Contribution mean for net zero?

As we approach COP27, the UK submitted an updated Nationally Determined Contribution (NDC) on the 23 September. This fulfilled the obligation under COP26’s Glasgow Climate Pact that all nations committed must submit enhanced emissions reduction commitments for 2030 (NDCs) ahead of COP27. 

The UNFCCC (United Nations Framework Convention on Climate Change) will assess the revised targets in a “global synthesis report” to be released shortly before COP27. The report will determine the new trajectory ahead of the summit by drawing on all the completed NDCs and examining how the actions (both achieved and planned) impact greenhouse gas emissions. This will be crucial to determine if reductions commitments will bring warming under 2 degrees Celsius by the end of the century. 

What did the UK commit to?

The UK reaffirmed its commitment to reduce UK greenhouse gas emissions by at least 68% by 2030 (compared to 1990 levels) and strengthened the previous supporting information. 

The NDC was updated in four main ways:

1 - Further clarifying that the UK’s target is Paris-aligned.

2 - Setting out an explanation of how net zero by 2050 in the UK will be delivered. This explanation included summarising policies and plans announced since December 2020, such as:

• The Net Zero Strategy that set out how the UK will deliver on the 2050 net zero goal – already submitted to the UNFCCC in October of last year for the UK’s Long-Term Low Emission Development Strategy.
• Other notable policy publications including the Energy White Paper, North Sea Transition Deal, Industrial Decarbonisation Strategy, Transport Decarbonisation Plan, the Hydrogen Strategy, Heat and Buildings Strategy, and Energy Security Strategy.
• Specific measures taken since December 2020 to support decarbonisation of the UK economy, including investor roadmaps for hydrogen and carbon capture utilisation and storage; investment in nuclear; commitment to phase out coal; and an internal combustion engine phase out date.

3 - Building in some broader context of the UK approach to net zero.

• This includes international advocacy, improving gender diversity in the green economy, developing a just transition, green skills and Levelling Up. 
• Regarding the just transition: the Green Jobs Taskforce, the International Just Transition Declaration and Just Energy Transition Partnerships, like the one agreed with South Africa at COP26, were all highlighted as ways to deliver their ambition. 

4 - Progress in expanding the scope to UK’s overseas territories (Bermuda, Cayman Islands, Falkland Islands, Gibraltar) and crown dependencies (Jersey, Guernsey, Isle of Man)

• Just Jersey and Gibraltar are currently included in the UK’s NDC, with the Isle of Man and Guernsey still in progress but expected to be completed soon.

What’s changed for the UK’s long-term approach to net zero?

The update showed that the UK remains ready to adapt its strategy to the changing external environment. The submission noted the change in context due to Russia/Ukraine, with energy prices and inflation rising sharply. It further highlighted the upcoming net zero review to ensure net zero is delivered in a way that “is pro-business and pro-growth”. 

The government is looking to explore more market-based mechanisms to reaching net zero in the long term, including carbon markets. Although the NDC states the UK intends to meet emissions reductions through domestic policy primarily, not Paris Agreement carbon trading mechanisms, it says the UK “reserves the right to use voluntary cooperation under Article 6”. Article 6 mechanisms are frameworks established in the Paris Agreement to allow emissions trading between countries and allow emissions trading between countries and allow for carbon removals to be included in reaching national emissions targets. Since meeting agreement at COP 27, the work to iron out the finer detail of these is ongoing. 

In addition, the NDC notes the continuing emissions reduction opportunity of linking the UK emissions trading system (ETS) to another ETS. This is a promising statement given UK industry and the previously pushed for the improved efficiency and liquidity potential in linking the EU and UK ETS’. 

What does this mean for your business?  

In short, this reaffirms the UK’s commitment to reaching net zero supporting its current ambition and maintaining what is a world leading target for developed economies.  

With COP27 just under a month away, the UK’s NDC is a demonstration of the continued importance the UK has placed on its role in the international climate space. Despite the UK COP26 Presidency ending in a very different context than it started, due to the ongoing pressures of the Russia/Ukraine conflict and the global energy crisis, the commitment to lead by example on net zero ambition persists. With adaptation financing and implementation of the Glasgow COP26 commitments high on the agenda for COP27, there remains a key role for UK businesses to demonstrate that they echo this ambition.

Next month, Tania Kumar, CBI Deputy Director of Decarbonisation, will be attending COP27 to promote the role of the business in the net zero transition. In the coming month, look to our decarbonisation newsletter for updates on our key business takeaways from the summit and for our continued policy work on international climate and nature policy. To find out more get in touch with Charley Roberts.