The UK water sector is responsible for 1% of UK greenhouse gas (GHG) emissions. This accounts for almost a third of all UK industrial and waste process emissions.

At the same time the Government has a commitment to deliver net zero by 2050 along with an interim target to cut emissions by 78% by 2035. Its net zero strategy makes reference to reducing wastewater emissions as part of the net zero transition. Ofwat, the water regulator for England and Wales, has committed to strengthening the sector’s approach to net zero.

Ofwat published its Draft Methodology for the price control (PR24) on 7 July, and as part of this consultation it has published a Frontier report on how the framework for net zero incentives could be set at PR24.

Frontier’s work has influenced Ofwat’s proposals on its net zero incentive framework in several ways:

• Use of bidding mechanisms to support emissions reductions in the short and long term;
• Separation of emissions types within the incentive framework; and
• Integration of net zero benefits within wider enhancement assessment frameworks.

Interested stakeholders now have an opportunity to review these proposals and use them as an opportunity to deliver their net zero ambitions. This includes commitments on operational emissions set out in the sector’s Net Zero 2030 roadmap.

For more information, please contact media@frontier-economics.com or call +44 (0) 20 7031 7000.