Research and analysis

Net Zero Strategy baseline: covering note

Updated 7 March 2022

1. Introduction

1.1 Background

The government published its Net Zero Strategy: Net Zero Strategy: Build Back Greener on 19 October 2021, setting out the UK’s plans for meeting net zero emissions by 2050, and its carbon budgets along the way. The tables published alongside this note contain details of the ‘baseline’ ^{[footnote 1]} projections against which the Net Zero Strategy indicative delivery pathway to 2037 is assessed. The delivery pathway set out in the Strategy is an indicative trajectory of emissions reductions which meets our targets up to the sixth carbon budget ending in 2037. It is designed only to provide an indicative basis on which to make policy and plan to deliver on our whole-economy emissions targets. The exact path we take is likely to differ and must respond flexibly to changes that arise over time. The baseline projections are projections of what we would expect to happen in the absence of the additional measures set out in the Net Zero Strategy.

We have published details of the Net Zero Strategy (NZS) baseline in the same format as the annexes to our standard annual updates to help users understand the projections and compare with previous BEIS projections. The most recent full update to BEIS energy and emissions projections is Updated Energy and Emissions Projections: 2019 (EEP 2019) published in October 2020.

1.2 Scenarios

Annexes A to L contain details of the NZS baseline projections. The NZS baseline is equivalent to the BEIS ‘reference case’ energy and emissions projections scenario for all sectors except refineries. Policy assumptions remain as set out in Annex D of EEP 2019. The NZS baseline projections therefore include only government policies which have been implemented, adopted, or planned ^{[footnote 2]} as of August 2019.

Refineries projections in the NZS baseline were aligned with Climate Change Committee (CCC) assumptions to reflect the impact of UK and global decarbonisation under a net zero consistent world scenario. They are therefore lower than would be the case under EEP standard reference case assumptions. See EEP 2019 Annex C IPCC category 1A1b for refineries emissions in the EEP 2019 reference case.

For Annex A, we provide projections using both standard National Communications sectors as well as Net Zero Strategy categories which structure the analysis in the Strategy itself. We have also extended Annex C to include non-CO2 gases.

In addition to the NZS baseline projections, we will publish an update to Annex O, containing illustrative net zero consistent electricity demand and generation scenarios for Great Britain. These align with the power sector scenarios used in the Net Zero Strategy and show technically feasible pathways consistent with achieving the UK’s Nationally Determined Contribution (NDC) in 2030, the sixth carbon budget (CB6) in 2033-37 and net zero in 2050. The power sector scenarios do not necessarily indicate a preferred outcome, but do illustrate the mix of properties likely to be required for a power system consistent with our NDC, CB6 and net zero targets.

1.3 Global Warming Potentials

Emissions of each greenhouse gas (carbon dioxide, methane, nitrous oxide, fluorinated gases) are expressed in terms of carbon dioxide equivalent (CO2e), recognising the different global warming potentials (GWP) of the different gases. Figures for GWPs are set out in Intergovernmental Panel on Climate Change (IPCC) Assessment Reports (AR).

In this publication, NZS baseline projections are presented under three different 100-year GWPs: AR4, AR5 with (climate-carbon) feedback and AR5 without feedback, except for Annex C: Carbon dioxide emissions by IPCC category where all figures are in CO2 and therefore do not change under these different GWPs. EEP 2019 projections, included again in this publication for comparison, are only presented under AR4.

Projections on an AR4 GWP basis are consistent with EEP 2019 and the UK 1990-2019 GHG Inventory and are provided for comparison. Projections on an AR5 GWP basis are presented under both with and without feedback methodologies consistent with the NZS, reflecting the uncertainty on future international GHG emissions reporting at the time of the NZS publication. For further information on the NZS approach to GWPs, see page 308 of the NZS (technical annex).

Following publication of the NZS, it was agreed by the international community at COP26 that GHG emissions shall be reported under the Paris Agreement transparency framework using 100-year AR5 GWPs without climate-carbon feedback.

2. Updates and changes from EEP 2019

2.1 Changes between EEP 2019 and the Net Zero Strategy Baseline

The main changes from EEP 2019 are set out in the Net Zero Strategy Technical Annex in Table 2 on pages 312 to 313 of the Net Zero Strategy. These include developments in the evidence base and some methodological improvements and corrections brought forward from the next full update of the EEP. Some further detail around key assumption updates is provided below.

2.2 Updates to macro-economic assumptions

Demographic assumptions such as population and household numbers are the same as in EEP 2019 (See Annex M).

Economic growth assumptions have been updated to align with the following sources:

• GDP growth rate projections for 2019-2024 are from the central scenario from the Office for Budget Responsibility (OBR) Fiscal Sustainability Report - July 2020, Table 2.2
• GDP growth rate projections for 2025-2040 are from the OBR March 2020 Economic and Fiscal Outlook - long term economic determinants.

Price assumptions are the same as those in EEP 2019 (see Annex M) with the following exceptions:

• Power sector modelling used updated estimates of past actual fossil fuel prices and traded carbon prices in 2019 and 2020 and updated carbon prices.

2.3 Other changes between EEP 2019 and the Net Zero Strategy Baseline

Historic years have been aligned to the UK 1990-2019 Greenhouse Gas Inventory for years up to and including 2019. This aligns with data throughout the Net Zero Strategy.

Projected years have been adjusted to include the estimated impact of the IPCC Wetlands Supplement which was implemented in the UK 1990-2019 GHG Inventory for the first time in 2021 and has a substantial impact on emissions levels in the LULUCF sector.

3. Annexes

• Annex A: Greenhouse gas emissions by source
• Annex A Net Zero Strategy Categories: Greenhouse gas emissions by Net Zero Strategy categories
• Annex C: Carbon dioxide emissions by IPCC category
• Annex C: (Non-CO2): Greenhouse gas emissions excluding carbon dioxide by IPCC category
• Annex E: Primary energy demand
• Annex F: Final energy demand
• Annex G: Major power producers’ generation by source
• Annex H: Major power producers’ cumulative new electricity generating capacity
• Annex I: Major power producers’ total electricity generating capacity
• Annex J: Total electricity generation by source
• Annex K: Total cumulative new electricity generating capacity
• Annex L: Total electricity generating capacity
• Annex O: Net Zero and the power sector scenarios (for publication in due course)

1. Please note that the Net Zero Strategy baseline differs in definition from the EEP “baseline scenario” presented in standard EEP publication annexes. The latter only includes policies that existed before the Low Carbon Transition Plan of July 2009). ↩

2. This equates to expired, implemented, adopted, and planned policies as defined by the United Nations Framework Convention on Climate Change (UNFCCC), see Part II, Section V(A) paragraph 13, page 83. This is a UNFCCC ‘with additional measures’ (WAM) scenario. Annex D gives details of the policies we include. ↩