The Carbon Border Adjustment Mechanism (CBAM)
14 min
Level
In this article, we break down what the EU CBAM is, how it works, and what businesses need to do to comply.
ESG / CSR
Industries
MEASURE
ACT
COMFORM
Decarbonisation: what it is and why it matters
Level
“ Time is running out. The 2024 Global Carbon Budget estimates that only 235 gigatonnes of carbon dioxide (CO₂) can still be released into the atmosphere if we’re to have a 50% chance of limiting global warming to 1.5°C. At the current pace, that limit could be reached in under six years. ”
This makes decarbonisation one of the most urgent challenges we face.
Decarbonisation is the process of systematically reducing carbon emissions across all areas of the economy – from how we generate power to how we build, manufacture, and transport. It’s about moving away from fossil fuels and reshaping our systems around low carbon energy sources and more sustainable alternatives.
But what does that actually look like in practice, and how can businesses start making real progress?
In this article, we explore:
- What decarbonisation means – and why it’s more urgent than ever
- How emissions reached today’s levels and the science behind the climate crisis
- Why decarbonisation matters for people, the planet, and the global economy
- The key shifts needed across sectors to reach net zero
- What the UK is doing to meet its climate targets
- Practical ways companies can start decarbonising – and how Greenly can help
What is decarbonisation? An overview
Note: Decarbonisation refers to the process of reducing carbon dioxide emissions caused by human activity, particularly those from burning fossil fuels like coal, oil, and natural gas. The goal is to shift towards a low-carbon economy powered by renewable energy sources such as wind, solar, and hydro, and supported by cleaner technologies and sustainable practices.
“ According to a McKinsey report, 83% of global carbon emissions come from energy consumption. Every year, more than 34 billion tonnes of CO₂ are released into the atmosphere, and cutting those emissions is essential to stabilising the climate. ”
Decarbonisation isn’t a single action, it’s a long-term transformation of how we generate energy, produce goods, move people and resources, and grow economies. And it’s the cornerstone of efforts to limit global warming and build climate resilience.
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How did we get here?
To understand why decarbonisation is so urgent, we need to look at how global emissions reached their current levels.
Industrial Revolution: Human activity significantly increased the concentration of greenhouse gases in the atmosphere, primarily through burning fossil fuels like coal, oil, and gas. These fuels powered global economic growth and industrialisation but at a steep environmental cost.
1750: Atmospheric CO₂ levels were around 280 parts per million (ppm). Today, this has risen to over 420 ppm – the highest concentration in at least 800,000 years, driving rising global temperatures, melting ice caps, and widespread ecological disruption.
2024: Despite decades of warnings, emissions continue to rise. 2024 marked the highest carbon emissions on record, with approximately 41.6 billion tonnes of CO₂ released globally – including 37.4 billion tonnes from fossil fuels alone.
Important: The science is clear: unless we reverse this trend, we risk locking in irreversible climate impacts. Decarbonisation is no longer optional – it’s essential for building a liveable future and preventing further global warming.
Which sectors most urgently need to decarbonise?
“ Not all sectors contribute equally to climate change. In fact, just a handful are responsible for the majority of global emissions. Understanding where emissions come from helps us focus decarbonisation efforts where they’ll have the greatest impact. ”
Below is an infographic adapted from the World Resources Institute showing global greenhouse gas emissions by sector and end use.
To dig deeper, explore the sectors below to learn why they matter – and what needs to happen to decarbonise them.
Energy – 75.7%
The largest contributor to global emissions. Most energy still comes from burning fossil fuels like coal, oil, and natural gas.
Agriculture – 11.7%
A major source of methane and nitrous oxide, largely from livestock and fertilisers.
Industrial Processes – 6.5%
Sectors like steel, cement, and chemicals are energy-intensive and hard to decarbonise.
Waste – 3.4%
Organic waste in landfills emits methane, while incineration releases CO₂ and nitrous oxide.
Land Use Change and Forestry – 2.7%
Emissions result mainly from deforestation, peatland degradation, and land conversion.
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Why do we need to decarbonise?
Decarbonisation is essential not only to stabilise the climate but also to protect human health, preserve ecosystems, and ensure long-term economic resilience. The cost of inaction is growing, and the consequences of continued emissions will be felt across every part of society.
Here’s what’s at stake:
| Reason | What’s at risk | Key facts |
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Climate stability
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Higher emissions drive global warming, resulting in extreme heat, droughts, wildfires, floods, sea level rise, and ecosystem collapse. |
According to the IPCC, limiting warming to 1.5°C requires a 45% cut in global emissions by 2030 and net zero by 2050.
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Human health & safety
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Climate change increases respiratory illness, heat stress, food and water insecurity, and disaster-related deaths – especially in vulnerable regions. |
WHO projects 250,000 additional deaths annually (2030–2050) from climate-related causes. Global South communities face 15× higher disaster mortality.
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Economic resilience
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Unchecked warming disrupts infrastructure, supply chains, agriculture, and markets – with escalating financial losses. |
Climate inaction could cost up to $69 trillion globally by 2100. Decarbonising early is the most cost-effective option.
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Environmental protection
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Rising temperatures and CO₂ levels are accelerating biodiversity loss, coral bleaching, desertification, and freshwater shortages. |
A 10 cm rise in sea levels could displace 10 million people. Heavy rainfall events become 70% more likely at 2°C warming.
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The evolution of decarbonisation
Decarbonisation hasn’t always been a mainstream policy goal. The idea has gained traction over the decades, shaped by scientific findings, political milestones, and growing global awareness of climate risks.
Below is a timeline of key moments that have brought decarbonisation to the forefront of international action:
1988 – IPCC is established
The Intergovernmental Panel on Climate Change (IPCC) is formed by the United Nations to assess scientific knowledge on climate change and its environmental and socio-economic impacts. Its reports become the foundation for international climate policy.
1997 – Kyoto Protocol
The Kyoto Protocol becomes the first legally binding global agreement to reduce GHG emissions. It focuses on industrialised countries and marks a turning point in global climate diplomacy.
2015 – Paris Agreement
195 countries adopt the Paris Agreement, committing to limit global temperature increases to well below 2°C – and ideally 1.5°C – above pre-industrial levels. The agreement makes decarbonisation a global policy goal for the first time.
2018 – IPCC 1.5°C Special Report
The IPCC publishes a landmark report showing the stark difference between 1.5°C and 2°C of warming. It warns of severe risks even at 2°C and calls for global emissions to fall by 45% by 2030, reaching net zero by 2050.
2021 – UNEP Emissions Gap Report
The United Nations Environment Programme (UNEP) reveals that existing national pledges are not enough, setting the world on a path toward 2.7°C of warming. The report calls for stronger decarbonisation commitments.
2023–2024 – Record emissions, shrinking carbon budget
Global carbon emissions reach an all-time high. The 2024 Global Carbon Budget warns that only around 235 gigatonnes of CO₂ remain for a 50% chance of limiting warming to 1.5°C – a budget that could be exhausted in under six years.
What is needed to achieve decarbonisation?
Decarbonisation isn’t just about switching from fossil fuels to renewables – it’s about transforming every part of the economy. From how we generate power to how we design our energy system, build infrastructure, move goods, and consume resources, every sector must evolve. Here are the six critical shifts that will define the path to net zero:
1. Transition to renewable energy sources
Decarbonising the power sector is priority number one. This means rapidly expanding renewable energy sources like wind power and solar power, and using clean electricity generated from these sources to power heating systems, electric vehicles, and industrial systems. Energy efficiency is also a crucial aspect of decarbonising this sector.
2. Transform heavy industry
Steel, cement, and chemical sectors rely on high-temperature processes. Clean heat, green hydrogen, electrification, and carbon capture will all play a role, but need rapid scale-up and investment.
3. Decarbonise transport
Road transport must shift away from fossil fuels to EVs, supported by robust charging infrastructure and renewable energy. For aviation and shipping, the focus is on sustainable fuels and efficiency improvements.
4. Cut building emissions
Energy efficiency is key. As one of the core energy efficiency sectors, buildings need better insulation, low-carbon heating, and smarter energy use. Scaling up retrofitting and phasing out gas boilers will be essential.
5. Regenerate land and nature
Agriculture, forestry, and land use must shift from being emission sources to carbon sinks. Solutions include regenerative farming, afforestation, peatland restoration, and carbon sequestration through improved land management.
6. Build a circular economy
A shift toward reuse, recycling, and better product design can reduce upstream emissions and material demand. Circular systems and extended producer responsibility will be essential.
“ All of these shifts require more than just technology – they demand clear policies, public investment, private sector leadership, and strong accountability to keep climate goals on track. ”
Decarbonisation in the United Kingdom
The UK has long been seen as a frontrunner in climate policy. It was the first G7 country to commit net zero greenhouse gas emissions by 2050 into law, backed by robust legislation like the Climate Change Act (2008) and the Environment Act (2021). These provide a strong legal framework that not only mandates emissions cuts but also holds the government accountable via regular carbon budgets and independent oversight.
“ Between 1990 and 2021, the UK reduced its carbon emissions by 48% – the fastest rate among G7 countries – while growing its economy by 65%. Much of this early success was driven by the decarbonisation of the power sector, particularly the shift away from coal-fired power generation. But as the UK enters the next phase of its net zero journey, progress is becoming harder to sustain. ”
Key policies: Net Zero Strategy and beyond
📜 2021 – Net Zero Strategy
The UK government launched Net Zero Strategy: Build Back Greener, detailing sector-by-sector pathways to achieve net zero by 2050, aiming to support the UK’s ambition to lead on climate action.
⚡ 2023 – Net Zero Growth Plan
Introduced measures to scale up low-carbon technologies including heat pumps, electric vehicles, and carbon capture solutions, reinforcing the net zero trajectory.
🏛️ 2024 – Labour Government
New legislation strengthened climate commitments:
- Creation of Great British Energy, a publicly owned clean energy company.
- Boost in green industrial investment and home insulation initiatives.
- Support for nature-based climate solutions.
🚗 2030 – Petrol & Diesel Car Ban
Reinstated the ban on the sale of new petrol and diesel cars, reversing the delay introduced by the previous government.
How is the UK progressing against targets?
According to the Climate Change Committee’s (CCC) July 2024 assessment, the UK has met all three of its carbon budgets to date – a sign of strength in its legal and institutional framework. However, this success has largely come from the electricity supply sector. Over the next three carbon budgets, over 75% of required reductions must come from other sectors like transport, buildings, land use, and agriculture – areas where progress is still too slow.
In 2023, the amount of carbon emitted fell at a faster rate than in the previous seven years, but this was mainly due to reduced gas demand, not sustained climate action. Key indicators are now off track:
🚗
Electric vehicles
Battery electric cars made up 16.5% of new sales in 2023, falling behind CCC’s recommended pathway. Electric van uptake is even lower.
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Renewables
Offshore wind installation slowed, and both solar and onshore wind roll-outs need to accelerate dramatically to meet 2030 targets.
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Heat pumps
Only 60,000 were installed in 2023. This needs to rise to over a million annually by the end of the decade.
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Nature-based solutions
Tree planting and peatland restoration are significantly behind schedule.
Renewed momentum?
While many of these challenges stem from past policy delays and mixed signals, including the weakening of energy efficiency and heating targets in 2023, the new government has an opportunity to reset the UK’s trajectory and achieve net zero by 20250.
“ The CCC now estimates that only one-third of the emissions reductions needed to meet the 2030 target are supported by credible plans. But positive momentum is building, with stronger leadership and clearer messaging beginning to emerge under the new administration. ”
The way forward
With just a few years left to meet its 2030 and Sixth Carbon Budget targets, the UK needs to rapidly scale action across all sectors. The CCC’s top recommendations include:
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Making electricity cheaper to support industrial and residential electrification
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Removing planning barriers for onshore wind, EV infrastructure, and heat pumps
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Accelerating the decarbonisation of industry and public buildings
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Scaling up tree planting, peatland restoration, and carbon removals
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Finalising strong business models and market signals for clean energy investment
“ The UK has the legal tools, institutional strength, and public support to lead on decarbonisation and achieve its zero net emissions goal – but delivering on that potential will depend on sustained investment, cross-sector coordination, and an unwavering commitment to long-term climate goals. ”
How to decarbonise your company
Businesses play a vital role in tackling climate change. According to the Carbon Majors Database, just 57 companies are responsible for 80% of global greenhouse gas emissions – a powerful reminder of the impact the private sector can have.
The good news? With the right strategy, decarbonising your business isn’t just possible – it can unlock new opportunities, boost resilience, and help future-proof your operations.
Here are five practical ways to get started:
Before you can cut the greenhouse gas emissions produced by your company, you need to understand where they’re coming from. A full carbon footprint assessment is the essential first step. It shows you which activities, suppliers, and systems consume energy and drive the bulk of your emissions, so you can start targeting the right areas.
At Greenly, we help companies of all sizes measure and manage their emissions. Get in touch to see how we can support your decarbonisation journey.
Once you know your baseline, it’s time to define where you want to go. Set SMART goals – specific, measurable, achievable, relevant, and time-bound – and link them to KPIs so you can track your progress over time.
Clarity here is key: your targets should be ambitious but achievable, and aligned with recognised frameworks like the Science Based Targets initiative (SBTi).
Decarbonisation isn’t just about compliance – it’s a chance to build a more future-ready business. From reducing operational costs to attracting ESG-focused investors and new customers, the benefits go beyond emissions alone.
Companies that move early tend to lead. By investing in climate action now, you’ll build resilience, unlock innovation, and stay ahead of incoming regulation and shifting market expectations.
Your people are key to making your sustainability goals stick. Get them involved early – from ideation to implementation – and create space for collaboration, creativity, and ownership.
Build buy-in with transparent communication, offer incentives, and celebrate milestones along the way. When your team feels empowered, sustainability becomes part of your culture, not just a checkbox.
Decarbonisation isn’t a one-off project – it’s a long-term shift. That means embedding it across your operations, procurement, product development, and reporting, and prioritising more energy efficient systems and processes wherever possible.
Align your sustainability goals with broader business objectives, and regularly review your progress to stay on track.
Digital tools to help your company decarbonise
Modern decarbonisation strategies are powered by technology. From tracking emissions to planning reduction pathways, software platforms make it easier for businesses to transition to low-carbon operations.
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Carbon footprint tracking: Software like Greenly automates data collection and calculation of Scope 1, 2, and 3 emissions.
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Scenario analysis: Tools simulate how different reduction strategies (e.g., switching energy sources) impact emissions.
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Regulatory reporting: Software ensures compliance with frameworks like CSRD, SECR, and upcoming IFRS sustainability standards.
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Supplier engagement: Platforms map and monitor emissions across the supply chain to target Scope 3 reductions.
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Continuous monitoring: Dashboards provide real-time tracking, making progress visible and actionable.
👉 Greenly’s platform combines all these capabilities, helping businesses not just report emissions but actively reduce them with tailored decarbonisation plans.
Quick answers to common decarbonisation questions
Decarbonisation is the process of reducing carbon dioxide (CO₂) emissions from human activities, mainly by replacing fossil fuels with renewable energy and improving energy efficiency.
Global emissions reached record highs in 2024. Without rapid decarbonisation, we risk locking in irreversible climate impacts, including rising temperatures, extreme weather, and ecosystem collapse.
Energy production (electricity and heat), transportation, heavy industry, agriculture, and deforestation account for the majority of emissions worldwide.
Businesses can measure their carbon footprint, set clear reduction targets, switch to renewable energy, improve efficiency, and engage suppliers to reduce Scope 3 emissions.
Yes – Greenly helps organisations measure, report, and reduce their emissions. Our experts guide you through carbon footprinting, sustainability reporting, and creating actionable net zero strategies.
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How can Greenly help you decarbonise?
Decarbonisation doesn’t have to be overwhelming. At Greenly, we help streamline the process, giving you the tools, insights, and support you need to track, understand, and reduce your emissions across your entire business.
Here’s how we support your climate journey:
| Our Services | What You’ll Gain |
|---|---|
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Measure your emissions with confidence
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We help you calculate your Scope 1, 2, and 3 emissions – accurately and efficiently. With our platform and expert guidance, you’ll gain a clear view of your carbon footprint and know where to focus your efforts. |
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Take action with a clear plan
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Once your emissions are measured, we help you to build a custom action plan – whether that’s switching to lower-emission suppliers, improving energy efficiency, adopting low-carbon solutions, or reducing waste. Our climate experts support implementation every step of the way. |
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Tackle Scope 3 and supply chain emissions
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Scope 3 emissions often account for up to 90% of a company’s total footprint. We help you:
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Understand your product’s full impact
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Our Life Cycle Assessment (LCA) services evaluate the environmental impact of your products from cradle to grave. This gives you credible data to improve sustainability performance, transparent insights for customers and stakeholders, and a competitive edge in a climate-conscious marketplace. |
Want to find out how Greenly could support your decarbonisation goals?
Contact our team to learn more about how we can help you reduce emissions and work towards a low-carbon future.
Sources:
- Global Carbon Budget, GCB 2024 Report
https://globalcarbonbudget.org/gcb-2024/ - McKinsey & Company, The Net-Zero Challenge: Accelerating Decarbonization Worldwide
https://www.mckinsey.com/capabilities/sustainability/our-insights/the-net-zero-challenge-accelerating-decarbonization-worldwide - Greenly, What Was the Industrial Revolution’s Environmental Impact?
https://greenly.earth/en-gb/blog/ecology-news/what-was-the-industrial-revolutions-environmental-impact - World Meteorological Organization, WMO Report Documents Spiralling Weather and Climate Impacts
https://wmo.int/news/media-centre/wmo-report-documents-spiralling-weather-and-climate-impacts - World Meteorological Organization, Record Carbon Emissions Highlight Urgency of Global Greenhouse Gas Watch
https://wmo.int/media/news/record-carbon-emissions-highlight-urgency-of-global-greenhouse-gas-watch - United Nations, Climate and Health – Climate Change and Health Risks
https://www.un.org/en/climatechange/science/climate-issues/health - Intergovernmental Panel on Climate Change (IPCC), SROCC Chapter 4: Sea Level Rise and Implications
https://www.ipcc.ch/srocc/chapter/chapter-4-sea-level-rise-and-implications-for-low-lying-islands-coasts-and-communities/ - Greenly, The UK Climate Change Act: Everything You Need to Know
https://greenly.earth/en-gb/blog/company-guide/the-uk-climate-change-act-everything-you-need-to-know - UK Government, Powering Up Britain: Net Zero Growth Plan
https://www.gov.uk/government/publications/powering-up-britain/powering-up-britain-net-zero-growth-plan - Greenly, Net Zero Strategy: What Is It and How Can You Implement It?
https://greenly.earth/en-gb/blog/ecology-news/net-zero-strategy-what-is-it-and-how-can-you-implement-it - Climate Change Committee (CCC), Progress in reducing emissions – 2025 report to Parliament
https://www.theccc.org.uk/publication/progress-in-reducing-emissions-2025-report-to-parliament/ - The Guardian, Just 57 Companies Linked to 80% of Greenhouse Gas Emissions Since 2016
https://www.theguardian.com/environment/2024/apr/04/just-57-companies-linked-to-80-of-greenhouse-gas-emissions-since-2016 - Greenly, Carbon Footprint: Calculate, Reduce, and Offset Your Impact
https://greenly.earth/en-gb/blog/company-guide/carbon-footprint-calculate-reduce-and-offset-your-impact - Greenly, Greenhouse Gas Emissions: Scopes 1, 2 and 3
https://greenly.earth/en-gb/blog/company-guide/greenhouse-gas-emissions-scopes-1-2-and-3
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