Grid reform key for decarbonising auto sector: SMMT

Reforms to the UK’s energy grid are key to decarbonising the automotive sector in the country, according to the Society of Motor Manufacturers and Traders (SMMT).

In its 26th Sustainability Report, the trade body emphasises the automotive sector's strides in reducing its environmental footprint.

The report notes a 2.4% decline in energy required for vehicle production and a 6.2% reduction in average new car tailpipe CO₂ emissions.

According to the SMMT, UK vehicle plants have achieved a record 60.3GWh of renewable electricity generation, largely due to investments in solar panels and wind turbines.

It marks nearly a one-third increase compared to 2023, saving approximately 12,500t of CO₂.

However, the rise in electrified models, accounting for 35.4% of UK new car production in 2024, necessitates more clean energy.

The SMMT added: “With new zero-emission models and gigafactories in the pipeline, overall demand for affordable clean energy is set to grow exponentially.”

In June, the UK’s new car market saw a growth for the second month in a row, with registrations rising by 6.7% to 191,316 units.

Last month, EV registrations reached a 48.5% market share, with battery-electric vehicles rising 39.1% to 47,354 units, accounting for 24.8% of the market share.

Manufacturers are investing in on-site renewable energy generation to reduce reliance on external sources, but lengthy grid connection timelines, averaging nearly 14 years, pose a challenge.

This, SMMT said, requires “changes to planning and the UK’s energy mix”.

Meanwhile, the UK is paying the highest electricity prices in Europe, affecting its competitiveness.

The government’s Industrial Strategy aims to address this, potentially reducing electricity bills by 20%.

The proposed relief on standing charges for battery production and other energy-intensive industries should extend to automotive businesses, the trade body said, adding that this would support their role in achieving net zero and improve competitiveness, given the UK's high electricity prices.

The automotive sector has made significant progress in developing zero-emission vehicles, decarbonising manufacturing, and investing in skills.

With reduced energy costs and improved grid connections, the SMMT believes that the industry could further enhance its low-carbon manufacturing capabilities, fostering job creation and growth in the UK.

"Grid reform key for decarbonising auto sector: SMMT" was originally created and published by Motor Finance Online, a GlobalData owned brand.

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