Frazer-Nash Consultancy unveils its new report: From Silos to Systems: Optimising Fuel-Switching, Efficiency and CCUS for Industrial Decarbonisation.
The UK's industrial decarbonisation challenge is increasingly one of system coordination rather than technology deployment. While significant progress has been made in developing low-carbon technologies and supporting policy frameworks, the greatest opportunity now lies in optimising how fuel-switching, energy and resource efficiency, and carbon capture, utilisation and storage (CCUS) interact as part of a single integrated system. A whole-system approach can help balance affordability, decarbonisation, resilience and resource efficiency, while avoiding fragmented investment decisions, infrastructure bottlenecks and unnecessary costs.
Key points covered in this report:
- Fuel-switching will be critical for industrial decarbonisation, particularly through electrification and low-emissions fuels such as hydrogen. However, large-scale deployment will increase pressure on electricity networks, critical material supply chains and supporting infrastructure, highlighting the need for careful system planning
- Energy and resource efficiency should be treated as the starting point of industrial decarbonisation pathways. Reducing demand through efficiency measures, industrial symbiosis and circular economy approaches lowers the scale of generation, network and carbon management infrastructure required across the system
- CCUS remains essential for managing residual and process emissions, particularly in sectors such as cement, chemicals and heavy industry where emissions cannot be eliminated through fuel-switching alone. However, CCUS should complement rather than substitute wider decarbonisation efforts
- The greatest value is delivered when all three pillars are deployed together. Hybrid pathways that combine efficiency, fuel-switching and targeted CCUS deployment are likely to deliver lower system costs, improved resilience and reduced unnecessary build-out than approaches centred on a single technology pathway
- Flexibility is a critical enabler of system optimisation. Demand-side response, energy storage, digital technologies and flexible infrastructure will be essential to integrate growing electricity demand, support hydrogen deployment and maximise the value of low-carbon energy systems
- Industrial decarbonisation requires stronger system governance and coordination. Existing institutions provide many of the foundations needed, but greater alignment of infrastructure planning, market design, supply chain development, workforce planning and investment decisions will be required to optimise outcomes across the whole system
To realise these benefits, the recommendation is to adopt a whole-system decision framework that assesses interventions against affordability, decarbonisation, resilience and efficiency, while considering interactions across infrastructure, market policy, digital systems, and supply chains and skills.
Applying this framework can help identify the shape that key policy levers should take to enable system integration, including coordinated infrastructure planning, integrated market design, innovation support, and regulation and standards.
The report also highlights the need for stronger institutional coordination across government and delivery bodies, alongside the development of a clearer system-orchestrator function to improve investment sequencing and trade-off management.
Finally, it emphasises that successful implementation will depend on building the delivery capabilities needed to translate system thinking into action, including systems analysis, pathway modelling, techno-economic assessment, infrastructure planning, stakeholder coordination and programme delivery expertise. Together, these measures can create the conditions for a more coordinated, cost-effective and resilient industrial decarbonisation pathway.
