- UK businesses are capitalising on growth in energy transition sectors, by supporting China with its transition.
- New report highlights case studies of how UK businesses, across all sectors, are cooperating with Chinese firms in efforts to tackle climate change
- China has a population about twenty-five times the size of the UK and accounts for around 30% of global carbon emissions.
- Climate action report highlights the further opportunities for UK business in China as it transitions towards a low carbon future.
- Over the past decade, UK exports to China have more than tripled to over £30bn, making China UK’s third largest trading partner.
Targeting Net Zero: The Role of UK-China Business, a new report authored by members of the China Britain Business Council (CBBC) and principal sponsor KPMG launches today.
Focussed on 5 key themes – Energy, Adaption and Resilience, Cleaner Transportation, Green Finance, and Nature – the report sets out key opportunities for business and case studies of how UK and Chinese firms are already working together to drive the low carbon transition, through their investment, their technologies, and their services.
Opportunities include London building on its pre-eminent position as a financial services centre and becoming the global centre for carbon trading; how the UK can become a standard setter for green finance; capacity and technical opportunities for UK expertise across sectors; and opportunities for UK professional services to ‘export’ their expertise. This is notwithstanding the already strong record of Chinese firms investing in low carbon sectors and Initiatives in the UK, bringing mutual benefit, such as sharing of technologies, significant economies of scale and decreasing the cost of capital.
Amongst case studies demonstrating the opportunities that cooperation between UK and Chinese businesses presents are Sunamp, London Stock Exchange, CGN, Alexander Dennis, China Resources Power, XAG, Wood Plc, Met Office and HSBC.
Red Rock Power Ltd and its expertise in offshore wind is also amongst firms involved. The Edinburgh-based renewables firm was founded by Beijing’s SDIC Power in 2016 and has more than tripled in size since. The UK has the world’s largest installed capacity in offshore wind, while China last year alone increased its wind capacity by 60% – enough electricity to power the every home in the UK three times over.
Another highlight is the UK-China Green Finance Taskforce, co-established by the City of London Corporation and China Green Finance Committee, and now with 13 Chinese and UK financial institutions. The Taskforce has announced the formation of the Secretariat for the Green Investment Principles for the Belt and Road (GIP), which now has 40 signatories with overall assets amount to over $48 trillion (USD) worldwide.
KPMG’s Net Zero Readiness Index, comparing the likelihood of 32 major economies reaching Net Zero by 2050, places the UK at number two while China is further back at number 20. This reflects the different stages of development of the two economies.
But both the UK and China have set ambitious targets for themselves under the Paris Agreement. China has committed to reach peak emissions by 2030, to become carbon neutral by 2060. Meanwhile the UK was the first major economy to commit to Net Zero by 2050.
At a time when many UK companies are facing tough trading conditions at home and internationally, the China opportunity is more important than ever for UK businesses and jobs especially in relation to the UK’s post Covid recovery.
The report highlights the benefits to the UK economy and importance of a healthy trade and investment relationship with China, with it expected to become the world’s largest economy by 2030.
Attending a dinner to mark the report launch during COP26 in Glasgow, Scottish Government Minister for Business Trade, Tourism and Enterprise, Ivan McKee, said:
“Tackling climate change is one of the biggest issues that the world is facing. COP26 has provided opportunities for government, business and communities from around to the world to engage in these issues and provide solutions.
“The ‘Targeting Net Zero’ report is an excellent example of how Chinese and British businesses can work together to support and achieve Net Zero targets. Scotland has a range of strengths in the energy transition sector, including hydrogen and low carbon projects, and we look forward to sharing our knowledge and finding opportunities for further collaboration with businesses in China.”
Andrew Seaton, China-Britain Business Council Chief Executive, said:
“Today’s report shines a light on the importance of strong and positive business and trade relations with China.
“British firms are already doing important work with and in China in low carbon technologies. But there is much more to do. .
“The world’s eyes are on COP26 in Glasgow. China is currently the world’s largest carbon emitter. Its transition towards a zero carbon future is critical for the global climate effort.
And it is a transition whichs offers Immense opportunity for UK business. And not just for large companies, but for all British firms – some of the most innovative in the world – of all sizes, in all sectors, and across all regions of the UK.”
Simon Virley, Vice Chair and Head of Energy and Natural Resources at KPMG UK, said: “Climate change is a global problem requiring global solutions and new forms of collaboration around the world. Innovation in new low carbon technologies will be key to solving the climate crisis. The ‘Glasgow Breakthrough’ priorities identified at COP26 are all critical to meeting the Paris Agreement targets.
“The UK-China Road to Net Zero report highlights the key areas where UK and China businesses can work together and lead the world as we make the transition to a Net Zero economy.”