A Business Guide to Net Zero: What You Should Know

The UK was the first major economy to make a legally binding commitment to reach net zero by 2050, set in law under the Climate Change Act 2008 (2050 Target Amendment) in June 2019.

Whilst this may seem like a long way off, we will need to see bold and tangible action across our businesses, homes and transport to meet this goal over the next ten years.

While 2050 may feel far off, the reality is that the 2020s are the make-or-break decade for climate action. The Committee on Climate Change has warned that every year of delay makes the challenge harder and more expensive to solve. For businesses, this is no longer just an environmental conversation – it’s a question of cost, risk, competitiveness and reputation.

What is the UK doing to decarbonise and achieve net zero emissions?

The Government’s Net Zero Strategy sets out how the country will unlock £90 billion in investment to support businesses and consumers in the clean energy transition. This will include reducing the UK’s reliance on fossil fuels and switching to low carbon travel options like electric vehicles.

There are different official carbon targets for different parts of the UK. Scotland has committed to net zero emissions by 2045, while Wales has aligned with the UK target of 2050 but with ambitions to get there sooner. Northern Ireland has also set a target to reach net zero by 2050 or sooner.

The UK’s path to net zero

The Government’s Net Zero Strategy outlines how the UK will decarbonise the economy, with major investment in clean energy, infrastructure, and technology. Milestones already include the closure of the UK’s last coal-fired power station in 2024 – a symbolic but important step – and more than £40 billion allocated to clean energy and infrastructure in the 2025 Spending Review.

Each nation in the UK has its own statutory target. Scotland is aiming for net zero by 2045, Wales by 2050 but with the ambition to move faster, and Northern Ireland by 2050 or sooner. Across all regions, the expectation is the same: decarbonisation must be embedded into business models, operations, and supply chains.

What net zero means in practice

Net zero means balancing the greenhouse gases we emit with those we remove from the atmosphere. In practice, credible approaches, such as those set out by the Science Based Targets initiative (SBTi), focus first on cutting emissions to the lowest possible level. Any remaining emissions, typically no more than 5–10%, should then be addressed through high-quality, permanent carbon removals, not generic offsets.

This is a more ambitious goal than carbon neutrality, which can be achieved through purchasing offsets without making deep emissions cuts. For businesses, that ambition matters: customers, investors, and regulators increasingly see the difference.

Why this matters for business today

The drive to net zero is not only about meeting government targets. It is about staying competitive in a market where regulation, investor requirements, and customer expectations are moving quickly. Public sector procurement rules such as PPN 06/21 already require suppliers on major contracts to publish a Carbon Reduction Plan. New frameworks like the UK Sustainability Reporting Standards (UK SRS) will soon require detailed climate disclosures from many companies. And according to the UK Net Zero Business Census, almost half of businesses now face customer demands for carbon data.

For many, the question is no longer whether to act, but how quickly they can. Businesses that wait risk losing tenders, market share, and investor confidence to those who are already on the front foot.

What you should know: Even if your business isn’t directly regulated under schemes like the UK ETS, your customers might be and they will pass that pressure down the supply chain. Large corporates and public bodies increasingly require carbon footprint data from suppliers. If you can’t provide it, you risk losing work to a competitor who can.

Carbon pricing and the UK ETS

The UK doesn’t have a straightforward “carbon tax,” but for high-emitting industries, the UK Emissions Trading Scheme (UK ETS) can feel similar. Participants are allocated a quota of emissions each year, based on the best available technology for their sector. If they exceed that allowance, they must buy additional permits on the market — a market where the cap tightens over time, driving prices up.

In 2025, the average carbon price under the UK ETS is £41.84 per tonne of CO₂ and is expected to rise further. For energy-intensive businesses, this can become a significant and volatile cost. Reducing emissions not only cuts this exposure but also builds resilience against future price spikes.

There are simplified options for smaller emitters, such as the Hospital & Small Emitter Scheme and the Ultra-Small Emitter exemption, but most large industrial sites won’t qualify.

Beyond carbon pricing: other shifts to watch

The Carbon Border Adjustment Mechanism (CBAM), due in 2027, will place a carbon price on certain imported goods like steel, cement, and aluminium, affecting businesses that rely on these materials. The UK SRS will demand more comprehensive climate reporting, in line with global standards. Voluntary carbon markets are also under greater scrutiny, making “offset-only” strategies increasingly risky.
Even infrastructure challenges, such as grid capacity delays, are now a factor. Electrification is accelerating, but in some regions, securing a grid connection upgrade can take years – making early planning essential.

Planning without locking into the wrong technology

The best starting point for any business is a clear understanding of its carbon footprint, across all three scopes of emissions. From there, credible targets can be set, with milestones that guide practical action.

Technology choice should follow the need, not the other way around. At AMP, we take a technology-agnostic approach, tailoring solutions to each site. Our Simpsons Malt Energy Centre, for example, uses a combination of an e-boiler and biomass to deliver reliable, low-carbon heat for industrial operations – a solution designed specifically for that location’s needs.

Ultimately, decarbonisation is not just a technical process. It’s cultural. It requires embedding sustainability into how a business operates, engages its people, works with suppliers, and interacts with customers.

How AMP can help

Heat decarbonisation is often the toughest challenge for industrial and commercial sites – and the area where we bring the most value. We assess your energy needs, recommend a bespoke low-carbon solution, and can fund, develop, build, and operate it. With more than 180 low-carbon projects delivered since 2009, we have the experience to help businesses cut emissions without taking on the risk and complexity alone.