Energy and Climate Change

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The UK chemical industry faces challenges due to high and rising energy costs, impacting its international competitiveness. Despite success in deploying renewable electricity, the industry now faces higher prices compared to global competitors due to pass-through costs including carbon pricing, renewable power subsidies, and network capacity increases. The sector relies on lower gas prices for competitiveness, but fears rising costs if asked to pay for decarbonising the heat supply like the electricity grid.

The CIA collaborates with members, government, and regulators to insulate the industry from energy transition costs while transitioning to a net-zero energy system. To mitigate emissions, the industry plans fuel-switching to hydrogen or electricity and retrofitting carbon capture equipment. CIA works to ensure supportive policies for these investments and to prevent net-zero transition costs from harming manufacturers.

Position Statements

Gambling on our low carbon future: Finance and the UK ETS

2026-02-05T17:03:00+00:00

The UK Emissions Trading Scheme (UK ETS) is one of the UK’s key industrial decarbonisation policies. It works on a ‘cap-and-trade’ principle. A cap is set on the total amount of greenhouse gases that can be emitted by sectors covered by the scheme. The cap is then reduced over time ...

Position Statement
Why is the cost of heat, particularly Natural Gas so critical to the UK’s Chemical Sector?
Natural gas is a key feedstock for many core chemical processes. Methane from gas is used to produce hydrogen (via steam methane reforming), and it supplies essential inputs for products such as ammonia (fertilisers), methanol, ethylene and other basic petrochemicals — the building blocks of countless downstream products across agriculture, ...
Position Statement
British Industry Competitiveness Scheme: Good news but more is needed
A sharp look at why the Government’s new British Industry Competitiveness Scheme is a welcome step, but still falls far short of what UK manufacturers need to stay globally competitive.
Position Statement
Free allocation’s role in decarbonisation
The CIA recognises that carbon pricing can incentivise decarbonisation, but only where there is also effective carbon leakage mitigation. Because clean manufacturing comes with a ‘green premium’, until there is a global carbon price, or comparable decarbonisation ambition elsewhere, placing a higher carbon cost on UK manufacturers will only increase the risk of carbon leakage. Industry needs carbon leakage mitigation that reflects the UK’s industrial decarbonisation pathway.

Be part of it

Members are invited to get involved with our various energy and climate change strategy groups, networks and issue teams, which include: Energy and Climate Change Policy Network, Industrial Emissions Policy Issue Team, Sustainability Strategy Group , Environment Network.

For further information, or to express an interest in joining, please contact our team Nishma Patel at PatelN@cia.org.uk or Rich Woolley at WoolleyR@cia.org.uk.

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