The current energy crisis threatens UK industry and manufacturing – but cheaper gas is not the answer in the long term. What’s needed is a fundamental change to the way we run our factories, says Innovate UK’s Dr Ben Walsh.
The current spike in energy prices poses a huge problem for the UK. While rising home-heating costs and failing energy suppliers are grabbing headlines, an even bigger – and longer-term – energy crisis is looming within the UK’s Foundation Industries.
The foundation industries produce the materials that form our way of life. Glass, paper, cement, ceramics, metals and chemicals underpin everything we do, where we live, how we travel, and how we communicate – as the name suggests, they are the foundation of our modern society.
They are also economically critical: worth £52bn, they contribute more to the UK economy than aerospace, and are vital to UK manufacturing and construction sectors, as well as the cornerstone of employment in many of the UK’s most deprived regions.
However, with processes that involve extreme heat and transportation of tens of millions of tonnes of material, the foundation industries are energy hungry. The current increase in energy costs has caused a massive headache that needs sorting, but the focus on today’s prices is masking a more pressing global trend.
Even if the price of gas falls next week to match those of both European and worldwide competitors, the crisis for these industries will remain. The solution lies not in cheaper gas, but in reducing their need for energy in the first place.
Changes at the heart of industry
The foundation industries create approximately ten percent of UK carbon emissions and 222 million tonnes of waste annually. As we move towards a low-carbon economy, this cannot continue. The challenge is to manufacture products using less material, with production processes that eliminate waste and CO2, and to redesign products to be re-used, remanufactured, and recycled.
These will not be simple tweaks and adjustments. It requires, quite literally, changes to the building blocks of our society. We’ve been making bricks, for example, in pretty much the same way for 9,000 years: clay hardened by the high temperature of a fire. Of course, there have been developments in technology, but it is not enough. We have to do things differently, if we are to break away from our reliance on fossil fuels.
On top of that, the majority of businesses in this sector are not huge multinationals but small and medium sized enterprises – and smaller businesses are less likely to innovate. Over a third of businesses within the foundation industries had not introduced new products or processes in the last three years.
Driving a more circular approach
It’s never been more important to invest in research and development in this sector. This is why the Transforming Foundation Industries Challenge exists. Launched in 2018 as part of the government’s Industrial Strategy Challenge Fund, we are investing £66m to drive innovation in these sectors.
Funding for businesses isn’t the only important thing we’re bringing. In industries that have traditionally operated in isolation, we are fostering collaboration which will lead to greater benefits both within industry and to society. For example, can the heat from a steel blast furnace be captured and used to heat water for local homes? Simultaneously removing households’ reliance on gas for heating and providing an income for the factory.
Our projects are exploring how to harness and use what would traditionally be lost up a chimney or discarded as a by-product. In South Wales, for example, we are working with a large group of companies – including steel, construction materials and paper manufacturers – to look at how the waste from one business could provide the raw material or energy for another. Such collaborations drive forward energy and material synergies across and beyond their traditional supply chains.
Sustainable solutions to the energy crisis
These are not sticking-plaster remedies designed to patch fluctuations in gas prices, but long-term solutions to a problem that isn’t going away. Three quarters of the materials in our towns and cities are produced by foundation industries; they are not something we can live without.
Nor do we want to see them offshored to other countries. Not only is it morally questionable to pass the carbon buck onto other countries, but the sector is of fundamental importance to the UK’s manufacturing supply chain. Relying wholly on imports would put the UK at potential disadvantage when, as we have seen in other sectors, national markets become more important than international ones.
The answer to the energy crisis is innovation in, and collaboration between, our foundation industries, accelerating development of products and processes that require less energy and produce less waste. We need to transform these industries in a way that makes them environmentally, economically, and socially sustainable – and we need to do this at pace.