Decarbonising Process Heat: Flexible Industrial Solutions for Net Zero

Why Net Zero Policy Volatility Matters for UK Industry

When the UK committed to achieving net zero emissions by 2050, it became a global leader in climate ambition. Early optimism, however, has given way to mixed messages and shifting policies that have disrupted confidence and slowed progress.

Short-term volatility on this journey was inevitable and that's precisely the moment we're in now. Political headlines add to the uncertainty, but the ultimate destination remains clear.

Recent research by London Stock Exchange Group reinforces this clarity, showing that over 80% of asset owners globally – typically long-term investors – have integrated sustainability into their investment strategies, with climate change and the energy transition ranked as top priorities.

Yet uncertainty has real costs. Back in 2015, the UK was poised to deliver Europe's first large-scale carbon capture and storage (CCS) plant, capturing emissions beneath the North Sea. Last-minute funding withdrawal cost the UK its early advantage and since then, similar disruptions have repeatedly occurred, leaving industries cautious about committing to net-zero technologies.

The Shifting National and International Debate

Recently, the national debate around net zero has become even more uncertain. While Labour leader Keir Starmer hosted an energy summit at Lancaster House to reaffirm commitments, opposition voices are growing louder.

Richard Tice of Reform UK, who has criticised current net-zero policies as “stupid,” saw his party achieve notable gains in recent council elections, perhaps capturing a slice of public opinion. Former Prime Minister Tony Blair has also questioned the practicality and affordability of current approaches.

Internationally, debates around net zero have become equally divided. In the United States, the Trump administration previously withdrew from climate agreements and criticised net-zero policies as economically harmful.

Following his inauguration in January 2025, Trump further intensified this stance by signing Executive Orders pledging to “drill baby drill,” emphasizing fossil fuel expansion. By contrast, the European Union continues to reinforce its commitment, with stringent policies supporting renewable energy and emissions reduction targets firmly in place.

“Each year of delay not only increases future compliance costs but also risks making current equipment obsolete, locking companies into outdated technology.”

These political shifts and international contrasts add another layer of uncertainty, further underscoring the importance of adopting flexible, resilient solutions for industry.

Current Policy Landscape and Economic Context

Current policy initiatives include:

• The Sixth Carbon Budget: A legal commitment for the UK to reduce emissions by 77% (compared to 1990 levels) by 2035. However, government advisers warn we are off track.
• UK Emissions Trading Scheme (ETS): Companies pay for allowances to emit CO₂, currently priced at around £50-60 per tonne. These prices are expected to rise sharply as emission caps tighten.
• 20% Hydrogen Blend: Plans are in place to blend hydrogen into the existing natural gas grid (known as admix), but detailed rules won’t be finalised until at least 2026.
• Hydrogen grid capacity: 10GW hydrogen capacity on the grid by 2030, with at least 5GW being low-carbon hydrogen.
• Industrial Energy Transformation Fund (IETF): Grants available to industries investing in energy efficiency and low-carbon heating projects. The latest round quickly ran out of funds, highlighting high demand and limited support.

Meanwhile, economic pressures continue to mount:

• Interest rates remain high, significantly increasing project financing costs.
• Import duties from the US and EU on industrial materials and clean-tech equipment are pushing up prices.
• UK energy prices remain significantly higher than in competitor countries, squeezing budgets for electrification and modernisation. 

Why Waiting Is Risky

Given these economic and political pressures, delaying investments can pose significant risks to industries.

UK industries emitted nearly 53 million tonnes of CO₂ in 2023 – around 14% of national emissions. Under current targets, these emissions must fall by around a third by 2030. Each year of delay not only increases future compliance costs but also risks making current equipment obsolete, locking companies into outdated technology.

A recent example of this uncertainty is the shifting deadline for phasing out new petrol and diesel vehicles. Initially set for 2030, the date for hybrid vehicle sales was recently pushed back to 2035. This change disrupted automotive industry investment plans, creating unease, delaying innovation and illustrating the practical consequences of unclear policy signals.

How Can Industry Respond?

Understanding these risks highlights the urgency of practical and flexible solutions.

Industrial emissions fall into three categories:

• Scope 1: Direct emissions from burning fossil fuels for process heat.
• Scope 2: Indirect emissions from purchased electricity.
• Scope 3: Indirect emissions from supply chains and raw materials.

For industrial plants, tackling Scope 1 emissions is often the most pressing challenge, as these directly result from core operational processes. Addressing these effectively requires technologies and strategies specifically designed to adapt as policies and fuel availability evolve.

Protecting Yourself from Policy Shifts

With policy uncertainty now the norm, industry leaders are increasingly turning to flexible technologies that reduce the risks of changing regulations and fuel availability. For heating systems, multi-fuel burners that can seamlessly switch between natural gas, hydrogen, biofuels, or biogases provide crucial protection.

“Flexible, multi-fuel heating systems provide industries with a practical way forward, protecting investments and allowing steady progress towards net-zero.”

An example of this flexibility is Dunphy Combustion’s axial air-flow burner:

• Covers a wide power range (100 kW to 80 MW).
• Can operate on up to four fuels simultaneously or independently.
• Achieves exceptionally low emissions – NOₓ below 30 mg/Nm³ on natural gas and below 80 mg/Nm³ on hydrogen.
• Winner of the King’s Award for Innovation in 2025 for its low NOₓ hydrogen/natural gas burner.

Case study: Northwest Food Manufacturer, 2024

Practical evidence supports the technology's effectiveness. A food processing plant recently upgraded their system to Dunphy’s dual-fuel burners. The plant subsequently ran one dryer line on 100% hydrogen for four consecutive weeks without hardware changes.

Results included:

• 13.5% reduction in gas consumption due to digital control systems.
• Significant electricity savings through digitally modulated fans.
• Compliance with stringent NOₓ emission limits, including the Medium Combustion Plant Directive.
• Proven capability by running fully on hydrogen without additional modifications.

Hydrogen Economics: A Rapidly Improving Outlook

While policy uncertainty has posed challenges, the economic case for hydrogen is strengthening. Over the past three years, the cost of hydrogen production has decreased significantly. In 2020, hydrogen was approximately eight times more expensive than natural gas. By 2023, this gap had narrowed to about twice the cost of natural gas.

This trend is expected to continue. According to the Energy Networks Association, green hydrogen produced from renewable power is projected to reach cost parity with natural gas plus carbon pricing by 2030, around £44/MWh. This shift is driven by declining renewable energy costs, technological advances in electrolysers and increasing carbon pricing, making hydrogen-ready infrastructure economically sound.

“Over the past three years, the cost of hydrogen production has decreased significantly.”

Making Your Business Case Clear

To secure internal approval for investments in flexible technology, demonstrate both financial benefits and future risk mitigation:

1. Ensure net zero understanding: Making sure stakeholders are starting from a common level of understanding of net zero landscape, end goals and business’ role in the transition.
2. Audit your heat demand: Size equipment accurately to avoid unnecessary future costs.
3. Value fuel flexibility: Specify dual-fuel or hydrogen-ready equipment to eliminate future risks and stranded assets.
4. Stack incentives: Combine grants, tax allowances and emission trading savings to reduce paybacks dramatically.
5. Design for hydrogen blending today: Specify burners compliant with current hydrogen-ready standards (EN 676:2024).

Staying Ahead by Staying Flexible

History has repeatedly shown the costs of policy flip-flopping – from losing our lead in carbon capture to hesitant investments in clean heat technology today. Flexible, multi-fuel heating systems provide industries with a practical way forward, protecting investments and allowing steady progress towards net-zero.

Choosing adaptable equipment now ensures you remain resilient to changing policies, consumer behaviours and a changing climate.

FAQs: Decarbonising Process Heat

Why is process heat a key focus for industrial decarbonisation?
Process heat often accounts for the majority of Scope 1 emissions in industry. It's essential to production but also highly carbon-intensive, making it a top target for decarbonisation efforts.

How does policy uncertainty affect industrial net-zero plans?
Changing deadlines and unclear regulations (e.g. hydrogen blending rules or phase-out timelines) create investment hesitation. Delays can lead to higher future costs and obsolete equipment.

What’s the benefit of using multi-fuel or hydrogen-ready burners?
They allow sites to switch between fuels like natural gas, hydrogen and biofuels without hardware changes. This protects investments and ensures compliance as energy policy evolves.

Are hydrogen-based heating systems cost-effective yet?
Hydrogen is becoming more viable. Its price has halved since 2020 and is expected to reach parity with natural gas (including carbon costs) by 2030, according to the Energy Networks Association.

What policy and financial tools can support decarbonisation?
Tools include the UK Emissions Trading Scheme (ETS), Industrial Energy Transformation Fund (IETF) grants, and tax incentives. These can significantly reduce payback periods for low-carbon tech.

What is an example of successful hydrogen use in industry?
A UK food plant ran a dryer line on 100% hydrogen using Dunphy’s dual-fuel burner for four weeks—without modifying the hardware. It also reduced gas use and electricity consumption.

How should companies plan for flexible heat decarbonisation?
Start by auditing heat demand, specifying EN 676:2024-compliant equipment, and building a business case that includes carbon costs, future fuel switching, and stacked incentives.