Decarbonisation Dilemma: Solving the Energy Crisis

Greetings, Net Zero News Community,

In a world increasingly defined by volatility, the energy markets are under relentless pressure, subject to the whims of geopolitical tensions, economic uncertainty, and evolving regulatory landscapes. The ongoing conflict in Ukraine continues to reverberate throughout global gas markets, while tensions in the Middle East pose significant threats to oil and liquefied natural gas supply chains, particularly along crucial maritime routes. Meanwhile, political shifts in major economies such as the United States and the European Union are reshaping energy policies, further complicating the landscape.

For organisations across various sectors, these challenges translate into rising operational costs and heightened exposure to the unpredictable nature of the energy market. Among those most significantly impacted are public sector bodies, which not only grapple with escalating energy costs but are also tasked with achieving ambitious decarbonisation targets. In the UK, we face a legally binding commitment to achieve net-zero greenhouse gas emissions by 2050, and the clock is ticking.

The UK public sector manages the largest property portfolio in the country, encompassing over 300,000 individual properties. Alarmingly, the majority of these public sector buildings still rely on burning fossil fuels for heating, contributing approximately 2% of the UK’s total greenhouse gas emissions. Meeting the net-zero targets is no small feat, but fortunately, dedicated funding mechanisms are in place to support this critical transition.

At Salix, we are committed to assisting the public sector in securing government funding to facilitate ambitious decarbonisation projects, ensuring that financial barriers do not obstruct meaningful progress. We take pride in the strides we’ve made in our mission to support environmental sustainability, working diligently across the public sector and in housing initiatives. Yet, the scale of the challenge remains vast, and the need for coordinated action is greater than ever.

The government aims to reduce greenhouse gas emissions from public sector buildings by a staggering 75% by 2037, compared to 2017 levels. Achieving this ambitious goal necessitates significant investments in energy efficiency upgrades, low-carbon heating solutions, and renewable technologies—all while navigating severe financial constraints.

Inflation has intensified these challenges, with 76% of councils expressing serious concerns regarding the impact of rising costs on project deliverability within the confines of national schemes, as highlighted in a 2024 report by the Local Government Association.

In an energy market riddled with uncertainties, it is imperative for public sector bodies to adopt effective procurement strategies to realise their decarbonisation ambitions. A well-structured procurement approach can secure energy at favourable rates while facilitating the adoption of low-carbon technologies, energy efficiency improvements, and comprehensive contractor implementation.

However, procurement itself can present an additional hurdle for the public sector. Unlike private businesses, which operate with greater flexibility, public sector organisations are bound by rigid procurement frameworks. While these frameworks promote transparency, fairness, and accountability, they can also create challenges, such as complex compliance requirements, lengthy approval processes, and a restricted pool of suppliers. Public sector procurement policies often prioritise cost-effectiveness; for instance, the requirement for a value-for-money approach can sometimes lead to compromises in quality.

The complexities of decarbonisation are exacerbated by the rapidly evolving technology landscape, market uncertainties, and a limited pool of expertise within procurement teams. The necessity for integrated solutions that consider a holistic approach to building efficiency has never been more pressing. Often, sustainability teams, where they exist, are under-resourced and may lack the expertise needed to navigate the complexities of decarbonisation projects effectively.

This challenge is reflected in a 2024 Local Government Association survey, which revealed that 60% of councils have been deterred from applying for government grants due to the substantial time and resources required for the application process. Consequently, decarbonisation efforts remain fragmented, with nine out of ten councils indicating that they lack a sufficient financing plan to achieve net zero by 2050. The longer these projects are delayed, the more emissions continue to accumulate rather than decline.

We firmly believe that targeted funding mechanisms, such as the Public Sector Decarbonisation Scheme, are vital in supporting the public sector, ensuring that they possess the financial resources necessary to execute their decarbonisation initiatives. This scheme provides grant funding specifically for heat decarbonisation and energy efficiency measures in public sector buildings, having already allocated £2.5 billion in grant funding, excluding the current Phase 4 of the initiative.

For further information on these schemes, we invite you to visit our website here. To learn about the impact of our work on local communities, check out our news area here.

The ongoing energy crisis, combined with a lack of expertise, limited resources, rigid procurement frameworks, and unpredictable funding, significantly complicates the path to decarbonisation for the public sector.

Initiatives such as the Public Sector Decarbonisation Scheme provide essential financial support for meeting net zero targets. The high demand for funding through this scheme underscores its necessity, with applications frequently surpassing available resources.

Beyond facilitating immediate carbon reductions, the funding from the Public Sector Decarbonisation Scheme fosters long-term impact—stimulating demand for contractors, consultants, and technical expertise, while simultaneously strengthening the low-carbon economy. By investing in decarbonisation today, the public sector can drive immediate reductions in carbon emissions while nurturing the skills and supply chains essential for a more resilient energy future—leading by example in the transition to net zero.

To discover more about our work at Salix, click here.

This article originally appeared in the March 2025 issue of Energy Manager magazine. Subscribe here.