20 April 2015

Fifth Carbon Budget and Welsh Manufacturing

EEF Presentation

Committee on Climate Change: Wales Meeting

Cardiff

Paul Byard and Richard Warren

April 2015

Welsh Manufacturing: Key facts

• 155,800 jobs in the Welsh manufacturing sector

• Manufacturing represents 11.0% of workforce

• Manufacturing accounts for 15.8% of GVA of Wales

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11%

7.80%

Wales UK

Manufacturing workforce as proportion of total

15.80%

10%

Wales UK

Manufacturing as proportion of economy

Welsh Manufacturing: Key facts

• Between September 1999 and September 2014, the number of manufacturing workforce jobs in Wales fell by 25.6 per cent, compared to a fall of 36.3 per cent across the UK

• Wales accounted for £13.1bn of goods exports in 2014 – this was 11% down on the value of goods exports in 2013. Welsh export amounted to 4.6% of the UK total.

• Manufacturing output in Wales rose by 2.2% in the year to 2014q3 compared to 2.6% reported for the UK

• Sectors contributing to growth in Wales included food and transport, but larger declines were reported in machinery and rubber, plastics and non-metallic minerals.

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Manufacturing in Wales

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0

50000

100000

150000

200000

250000

300000

1990 2000 2008 2010 2015 2020 2025

Employed in Manufacturing

Employed in Manufacturing

Skills Gap Increasing

End User Emissions in Wales and the UK

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16.7% 16.4%

35.1%

4.6% 2.3%

19.0%

-1.3% 2.8% 4.4%

9.7%

23.0%

31.0%

1.9% 3.3%

25.0%

-0.9%

4.5% 2.5%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Sector emissions as proportion of total: Wales and UK

Wales UK

Industrial Energy Efficiency Potential

• 42 TWh of ‘socially cost effective’ energy efficiency savings available by 2020

• DECC estimates that only 17% of this will be achieved by current policy mix

• This compares to 29 TWh available in commercial and public sector where 64% will be delivered by current policy mix

• CCC 2014 report notes significant policy gap in 2020s

Energy Intensive Manufacturing in Wales

• 2 steel plants

• 1 oil refinery

• 5 paper mills

• 2 cement plants

• 15 chemicals plants

• 3 Ceramics plants

- Direct emissions from EII sites 11-12 MtCO2e per annum, a quarter of Welsh total

- 15-20% of the total emissions from UK EII sector

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2050 Industrial Decarbonisation Roadmaps

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• 18mth Project

• 8 ‘heat intensive sectors’ covering 2/3rd of industrial emissions

• DECC, BIS, Industry, NGOs and academics

• The report finds that a 30% reduction in emissions can be achieved by grid decarbonisation and energy efficiency

• A further 40% savings may be possible with employment of a range of technologies – importantly does not include any economic considerations

• Identifies key technologies, RD&D and possible next steps for industry and government

2050 Industrial Decarbonisation Roadmaps: BAU

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2050 Industrial Decarbonisation Roadmaps: Max Potential

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20 April 2015

Thank you

Richard Warren

Senior Energy Policy Adviser

EEF

Direct: 020 7654 1561

Email: rwarren@eef.org.uk