PN 01/22 Water companies need to go further to cut carbon emissions


Water companies in England and Wales should go further to reduce emissions from future infrastructure projects, according to expectations set out by the regulator Ofwat today.

In a position paper on net zero ambitions, Ofwat welcomes the Water UK 2030 Routemap on carbon as an important step towards the industry being net zero by 2050. However, to achieve that goal, the paper highlights that water companies must go beyond what is proposed in the Routemap by also tackling embedded carbon emissions; carbon that is emitted while infrastructure is being built.

The paper calls on water companies to align their plans to national government net zero targets in England and Wales, and highlights that greenhouse gas (GHG) emissions from companies should first be reduced and eliminated before they use offsets to reduce their emissions. In developing their approaches to net zero, companies will need to ensure their plans are clear, transparent and capable of being understood by the wider public. This is crucial as it will allow stakeholders to appropriately support and challenge companies on their path to net zero, with a focus on achieving best value for customers and the environment.

John Russell, Senior Director of Policy at Ofwat, said:

“Water companies need to be in the best position possible to achieve their net zero targets and address the challenges that come with that. We welcome the sector’s ambition, but we need water companies to tackle and comprehensively report on their carbon emissions if they are to make the changes needed to sustain and improve the environment. We will be working with the sector to further develop reporting requirements to ensure the sector delivers on net zero.”

Ofwat have set out clear statements on these key issues so that companies can plan appropriately for their net zero strategies, particularly as they develop their plans for PR24. This position paper is also intended to stimulate discussion with Ofwat on how the regulator can support the sector in reaching net zero targets.