- Centre for Employment Relations, Innovation and Change
In the UK, the energy intensive or Foundation Industries (FIs) account for around 50 million tonnes of CO2 emissions per year and face huge challenges in achieving net zero. The FIs (which include the metals, chemicals, glass, cement, pulp and paper and ceramics sectors) account for 10% of UK greenhouse gases and thus need to decarbonise at an unprecedented pace to allow the UK to meet its target of net zero emission by 2050.
The FIs are also economically and strategically important to the UK: they contribute £52 billion to the UK economy, or 2.4% of total GDP via the production of 28 million tonnes of materials.
FI materials are all around us: around 75% of the materials we see on a daily basis were made by the FIs. Their products are predominately bought by other manufacturing or construction businesses. For example, glass and cardboard are used as packaging by food and drink manufacturers and steel, cement, ceramics, and glass are used throughout the construction industry.
They are also horizontally integrated and interdependent. For example, the chemical industry produces the caustic soda and sodium hydroxide used in pulp and paper making, and ground granulated blast furnace slag (GGBS) is a by-product of the iron-making industry but is often used as a cement replacement in the production of concrete.
In total, the FI sector employs around 250,000 people. The route towards decarbonisation for these industries is complex and will involve a mix of technological and socio-economic solutions.
Decarbonising FIs will have effects on employment and jobs which are not yet well understood. FI emissions originate from businesses which are located inside industrial clusters, as well as from sites which are considered “dispersed” i.e., located outside geographically concentrated groups of interlinked industries.
In 2020, the UK Government launched the Transforming Foundation Industries Challenge. The aim is to build a collective sense of identity for the FI sectors and foster collaborative action to help make the UK FIs internationally competitive, secure more jobs throughout the UK and grow the sector in an environmentally sustainable way.
Reductions in emissions to date have been made by energy efficiency gains. Further reduction is heavily reliant on future technologies, including the electrification of industrial processes and innovations in hydrogen usage within these sections, and the introduction of Carbon Capture and Storage (CCS).
As electrification and hydrogen infrastructure is proceeding slowly, emissions reductions could take advantage of alternative solutions such as demand reduction, dematerialisation, and new business models.
The UK government plans for decarbonising the industry as a whole focus on specific technological innovations, new infrastructure to support a switch to hydrogen and access to CSS targeted at geographical clusters where industrial emissions are concentrated. However, around half of all industrial emissions and many of the FI businesses are located outside these clusters. Lack of access to these key technologies may threaten their future viability.
Decarbonising strategies for FIs are focused heavily on technological innovations with a limited focus on the skills pipelines needed to ensure adequately skilled workers are available to carry out these projects.
The skills provision challenges FIs face with decarbonisation
Our research draws on government, industry, and academic documents, alongside 25 interviews undertaken specifically for this study, with experts in the glass, cement and steel industries. Through our research, we have identified the main challenges FIs face when it comes to the skills provision needed for net zero:
There are already notable skills mismatches in the FIs. FI employers tend not to be focused on the longer-term needs of developing the skills required for competitiveness in a net zero economy, but on trying to combat the more immediate problems of hard-to-fill vacancies, a homogenous and ageing workforce and associated loss of technical knowledge. There is a lack of understanding of the scope of change needed to meet net zero targets in some parts of the FIs.
There are some problems inherent to the training provision system including a lack of cooperation between FE and HE and FI businesses that hamper the development of adequate training. A more regional approach to skills development would benefit the FIs. Many of the regions where FIs are located have low levels of educational attainment. To ensure workers can benefit from net zero opportunities including the availability of high skilled jobs, more investment in education systems, and access to careers guidance and training is needed. The specific skill sets needed for net zero are unclear as decarbonization pathways remain uncertain.
Strategic planning on green skills is in its infancy and centres around the skills needed for new technologies, while future new business models will require other expertise. For example, retrofitting may lead to less demand for steel but requires experts in retrofit and digitalisation to understand material composition for planning reuse.
Good practice examples of innovation, education and skills programmes are identified and promoted across the FIs, yet the lack of wider systemic supports inhibits the adoption of new approaches at the scale and speed required. This includes the need for more coordination that links support for innovation in FI decarbonisation technologies with related policies (often linked to other economic sectors or consumers) that promote material recycling and reuse.
Our research suggests a number of policy-relevant recommendations regarding the impact of decarbonising the FIs on employment and skills:
Workers do not feel well informed about decarbonisation. Industry-specific carbon literacy training should be offered to help workers understand their critical role in the realisation of net zero.
The decarbonisation of the FIs depends on action taken throughout the FI supply chain. Decarbonisation initiatives and industry-specific carbon literacy training are required both upstream and downstream of FI businesses themselves.
Social dialogue and participation of workers in decarbonising plans are mainly absent from industrial relations processes and need more attention from businesses and trade unions.
The FI workforce is generally ageing and homogenous. The FIs need to better understand worker experiences if they are to attract a younger more diverse workforce.
FI businesses in the UK need to start addressing strategically the skills gap required by a green transition.
Further research should investigate workers’ perspectives on decarbonisation.
For further information, read the report. (“Decarbonising the Foundation Industries and the implications for workers and skills in the UK: The case of steel, glass and cement industries”, September 2022, Dr Ursula Balderson, Professor Vera Trappmann and Dr Jo Cutter.)
Professor Vera Trappmann, one of the co-authors of the report, recently spoke at the ‘Enablers of Transformation in the Foundation Industries’ on this topic.
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