The manufacturing, transport, and logistics sectors in the UK face significant challenges in meeting sustainability targets while dealing with high energy costs and carbon-intensive operations.

As industries with high energy consumption, these sectors are under increasing pressure to reduce emissions, improve efficiency, and comply with emerging regulations such as the UK's net zero target(1) and EU regulations, including the Carbon Border Adjustment Mechanism (CBAM)(2).

The energy-intensive nature of many manufacturing processes presents a particular challenge. From heavy machinery to large-scale production lines, many manufacturing facilities rely on fossil fuels or inefficient energy systems(3). Similarly, the transport sector, including fleets of trucks and delivery vehicles, is a major contributor to carbon emissions. To meet net zero goals, manufacturers and logistics companies need to  explore electrification of their fleets and shift to greener fuel alternatives(4).

In addition to rising energy costs, manufacturers and logistics providers face increasing pressure to align with clients' ESG expectations. Businesses across the supply chain are now expected to show transparency in their sustainability practices, with carbon reporting becoming a critical part of procurement processes. Companies that fail to meet these standards risk losing contracts or facing reputational damage(5).

Regulatory pressure is also mounting, with stricter emissions regulations and supply chain transparency laws coming into effect in the near future. The introduction of the CBAM, for example, will require companies to track the carbon footprint of goods imported into the EU, which may soon extend to the UK as well(6). This presents an additional layer of complexity for manufacturers and logistics businesses looking to remain competitive in a global market.

For manufacturers and logistics providers, taking action to improve energy efficiency, implement sustainable technologies, and comply with new regulations will be key to staying competitive and avoiding penalties. Investing in renewable energy, electrification, and carbon capture technologies will help these industries reduce their environmental impact while maintaining operational efficiency.

Bibliography

1 Invest 2035: the UK's modern industrial strategy (Accessed May 2025) https://www.gov.uk/government/consultations/invest-2035-the-uks-modern-industrial-strategy/invest-2035-the-uks-modern-industrial-strategy

2 Carbon Border Adjustment Mechanism (Accessed May 2025) https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en

3 Industrial decarbonisation strategy (Accessed May 2025) https://www.gov.uk/government/publications/industrial-decarbonisation-strategy

4 Transport Decarbonisation Plan (May 2025)  (Accessed May 2025) https://www.gov.uk/government/publications/transport-decarbonisation-plan

5 Manufacturers accelerate ESG strategies as customer and supplier requirements increase (Accessed May 2025) https://www.themanufacturer.com/articles/manufacturers-accelerate-esg-strategies-as-customer-and-supplier-requirements-increase/

6 Factsheet: Carbon border adjustment mechanism (Accessed May 2025) https://www.gov.uk/government/publications/factsheet-carbon-border-adjustment-mechanism-cbam/factsheet-carbon-border-adjustment-mechanism