Industrial and Commercial (I&C) sectors typically use large amounts of energy. Due to their heavy reliance on fossil fuels, these industries - which are vital to the UK’s national and regional economies - represent some of the most challenging areas to fully decarbonise by 2050.
Key insights
Annual Industrial and Commercial energy demand in 2050

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The commercial sector is more straightforward to decarbonise than the industrial sector since most emissions come from heating and lighting, which can be reduced by investing in efficient lighting and low carbon heating. In contrast, some industrial sub-sectors are difficult and/or costly to decarbonise, because of their reliance on high grade heat for industrial processes.
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In the commercial sector, electrification is frequently more cost-effective than hydrogen for decarbonising heating, even in System Transformation. Our updated modelling shows that electric heat pumps do not necessarily need the high levels of thermal efficiency previously assumed, to be cost-effective compared to hydrogen boilers.
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The industrial sector - which is one of the most polluting, emitting 13% of UK emissions in 2020 - will need to switch to low or zero carbon energy sources like electricity or hydrogen to achieve net zero. This will require a significant transformation of infrastructure.
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Small amounts of natural gas may be needed to some extent in all net zero scenarios for industrial sub-sectors that are particularly difficult or costly to decarbonise. Emissions from this will need to be abated using carbon capture, usage and storage (CCUS) or offset via negative emissions.
Where are we now?
In 2020, the Industrial and Commercial sectors accounted for around 500 TWh of energy demand, equivalent to 83 MtCO2e.
This made up approximately 35% of total energy demand in Great Britain (GB) and 17% of the UK’s greenhouse gas emissions.