The issue

Reducing our CO₂ emissions and helping our customers and suppliers do the same is a key priority for Tarmac. Climate change is both a challenge and an opportunity for our business, our customers and the wider construction industry.

Scientific research indicates that over the last 250 years changes in the Earth’s climate have been caused by increases in man-made greenhouse gas emissions into the atmosphere. These increases are believed to be responsible for increased global temperatures that may lead to more extreme weather conditions, increased risk of flooding and rising sea levels. The environmental, social and economic consequences of climate change have the potential to profoundly affect our daily lives and the way we do business. Opinions differ on the extent of the issue but Tarmac is committed to taking responsibility for its environmental impacts.

The Climate Change Act of 2008 established a legal obligation for the UK to reduce its greenhouse gas emissions. The Government has targets to reduce these emissions by 34% by 2020 and 80% by 2050, compared to 1990 levels. To manage and drive this transition, the Act introduced five-year carbon budgets that are based on advice from the statutory Committee on Climate Change. The first four carbon budgets are:

 

The UK Carbon Plan

To meet its ambitious climate change targets, the Government seeks to transform the UK economy while ensuring secure, low carbon energy supplies. Their proposals for achieving this are explored in the 2050 Pathways analysis, updated in spring 2011. In December 2011, the Government published its Carbon Plan, which sets out its programme to achieve the emissions reductions committed to in the first four carbon budgets up to 2027.

The plan outlines a series of actions to be taken in four main areas:

• low carbon buildings
• low carbon transport
• low carbon industry
• low carbon electricity

This strategy presents significant business opportunities for Tarmac, our customers and the wider construction industry, but there are also many challenges that we must address.

Read more about the 2050 Pathways analysis

Read more about the UK Carbon Plan

Government action

The EU and UK Governments are introducing a series of regulations and initiatives aimed at driving improvements in energy efficiency. These regulations include: the EU Emissions Trading Scheme, Carbon Reduction Commitment, Climate Change Agreements, changes to the Building Regulations energy-efficiency requirements for homes and buildings, initiatives such as Zero Carbon Homes and Zero Carbon Buildings, the Green Investment Bank, the Green Deal and the Renewable Heat Incentive, among others.

The UK Government is also acting to deliver on its targets and carbon plan by encouraging investment in low carbon electricity. It recently announced a new carbon price floor (CPF) of £16 per t CO₂ in 2013, rising to £30 per t CO₂ by 2020 for fossil fuels used for electricity generation, which gives power generators the incentive to invest in low carbon electricity generation, such as renewables and nuclear. However, the CPF will add direct cost to the end user and increase manufacturing costs, adding to the risk of making it cheaper to produce overseas, resulting in carbon leakage. In its 2011 autumn statement, the Government announced measures aimed at reducing some of the risk of carbon leakage for energy intensive industries, but these do not compensate for the full effects of the CPF.

The CPF could disproportionately impact energy-intensive industries such as cement and lime producers. Although there are some concessions in place for these producers, they do not compensate for the full impact of the CPF.

The Low Carbon Construction Innovation and Growth Team

The Low Carbon Construction Innovation and Growth Team (IGT) was set up by the Government in 2009 to review the opportunities for the UK construction industry in a low carbon economy and to examine the UK’s potential to be a world leader in this sector.

In a recent report, published in November 2010, the IGT estimated that the construction industry can influence 48% of UK emissions of greenhouse gases and described our industry’s pivotal role in supporting overall targets for emissions reduction.

The report summarises the key challenges facing companies in the construction industry as follows:

• to de-carbonise their business
• to provide people with buildings that enable them to live more energy-efficient lives
• to provide infrastructure that enables the supply of clean energy and sustainable practices in other areas of the economy

In 2011, the Government launched a collaborative industry initiative called the ‘Green Construction Board’ (GCB), with a remit to drive forward the IGT’s 65 recommendations as well as wider construction industry sustainability issues. Tarmac is actively supporting this work programme.

Read more about the UK Low Carbon Construction Plan (PDF)

Read more about the work of the Green Construction Board

A changing marketplace

European and UK Government action to address climate change has resulted in a plethora of regulations, standards, codes and initiatives that impact on Tarmac, our customers and our supply chain. These are driving major changes in our marketplace, which are set to continue into the future.

Our products have an important role to play in helping industry and wider society respond to the challenges of climate change and the creation of a lower carbon economy because their use helps to lower the carbon emissions from homes, buildings, roads and other infrastructure. Investment in new energy infrastructure, low carbon homes and buildings, and adaptation to climate change effects, such as flooding, represent significant opportunities for our business.

However, to realise this opportunity, Tarmac must rise to the challenge that climate change brings to our business.

We enable UK industry and wider society to respond to the impacts and challenges of climate change, by helping our customers select the most sustainable product and design for their application, and by providing more resilient and durable materials. This includes providing transparent carbon footprint information about our business, materials, products and services.

As a responsible business, we continue to manage and comply with increasing carbon legislation. We are also aware of the need to ensure our business continues to operate effectively in the event of climate change impacts, such as disruption caused either by more severe weather events or by increased flooding and rising water tables, which could affect access to mineral reserves.

While Tarmac fully supports the drive to cut carbon and operate in a more energy-efficient way, we work with industry and the Government to address the risks and challenges faced by business from the incremental impact of the various carbon and emissions legislative measures, to ensure that the UK manufacturing sector remains competitive.

Read more about government and other public bodies.