The United Kingdom likes to present itself as a climate leader. Official figures show emissions down by some 300 million tonnes, one of the steepest declines in the developed world. It is a number ministers reach for often. It is also, on closer inspection, largely an accounting artefact.

In a recent interview, economist Catherine McBride set out the uncomfortable arithmetic. Against that 300 million tonne reduction, Britain now imports roughly 180 million tonnes of emissions embedded in foreign goods. The emissions did not disappear. They moved. And while the UK has spent two decades reorganising its economy around the target, global emissions have risen by around a trillion tonnes since 1990. Britain’s sacrifice has been real. Its effect on the climate has not.

This is the central problem with UK energy policy as currently designed: it has been remarkably effective at relocating industrial activity, and remarkably ineffective at reducing the emissions that activity produces.

The emissions that didn’t fall, they moved

Much of Britain’s genuine emissions reduction happened in the 1990s, and it happened for reasons that had little to do with climate policy. The “dash for gas” replaced coal in electricity generation because gas was cheaper and cleaner, a market decision rather than a regulatory one. Methane emissions fell largely because of better landfill management, not because of changes on farms.

What has driven reductions since is different in kind. Britain has increasingly stopped making things and started buying them from abroad. When a steelworks closes in Wales and the steel is imported from Asia instead, the UK’s emissions ledger improves while the planet’s does not. This is offshoring dressed up as decarbonisation, and it carries a sting in the tail: many of the countries supplying those goods are developing their own middle-class consumers who will, in time, want to keep that production for themselves.

How carbon costs hollowed out manufacturing

The mechanism matters. From 2005, the UK began loading carbon costs onto domestic producers that its trading partners did not impose. The predictable result was that energy-intensive manufacturing migrated to jurisdictions without those charges. Carbon border adjustment mechanisms, which would level the field by taxing the embedded carbon in imports, are only now being introduced in the UK and EU, roughly twenty years after the distortion began. They arrive too late to undo the offshoring they might have prevented.

The cost gap is compounded by electricity policy. To shield households from price rises for political reasons, Britain has pushed a disproportionate share of energy costs onto industrial users. UK manufacturers consequently pay more for electricity than competitors in Germany or France, even as policy demands they electrify.

Steel is the cautionary tale. The shift to electric arc furnace technology, viable abroad where power is cheaper, is uncompetitive in Britain precisely because of high electricity costs. One commercial electric arc furnace has already closed; another survives largely on defence contracts and basic recycling. An industrial strategy that prices its own producers out of business is not a strategy at all.

A dangerous dependence

Hollowing out domestic production would matter less if Britain’s import channels were secure. They are not. Around 75% of UK gas imports arrive by pipeline from Norway, with about 20% as LNG from the United States and smaller volumes from Qatar and Peru. The UK has North Sea gas but no LNG export terminals, so it cannot easily ship or sell gas abroad, or build the flexible infrastructure that would cushion a supply shock. Geopolitical disruption, such as threats to Gulf facilities near Qatar, could move global prices sharply, and Britain would be a price-taker.

The vulnerability runs through the whole supply chain. UK fertiliser production has collapsed under high gas prices: one plant closed in 2022 and the other now imports ammonia, with direct consequences for farm productivity and food security. Diesel is increasingly refined abroad, notably at large, specialised refineries in Rotterdam, leaving Britain reliant on European priorities staying aligned with its own. Energy, trade and food security are not separate files. They are one system, and the UK has weakened several links in it at once.

The crunch is coming

The strain will only grow. Britain wants to lead in artificial intelligence and data centres, which demand vast, reliable electricity, at a time when its grid leans heavily on intermittent renewables and faces a genuine risk of summer blackouts. Several US states have already paused new grid-dependent data centres over exactly these concerns. Transmission adds further cost, with Scottish wind generated far from where power is consumed.

Nuclear is the right long-term answer but the wrong short-term one: even the recently approved small modular reactors will take years to deliver, while demand rises now. McBride’s more provocative suggestion is to look again at coal, not the polluting plants of memory, but modern, fast-ramping stations with carbon capture of the kind China is building in as little as two years. Britain has thermal and anthracite coal that could support industrial uses such as battery-materials production. The same realism applies to transport: rather than betting everything on electric vehicles whose batteries depend on Chinese supply chains, cleaner combustion fuels, such as the hydrogen-enriched petrol developed by Porsche, may cut emissions sooner and more cheaply.

Scarcity by choice

Most striking of all is how much of Britain’s energy insecurity is self-imposed. The North Sea holds substantial reserves, yet permission to develop new fields is severely constrained. The Jackdaw and Rosebank projects were approved only after fifteen to twenty years of delay, and now face renewed legal and regulatory scrutiny that could postpone them again. That uncertainty deters precisely the investment the country needs, including the LNG terminals that would provide export capacity and emergency resilience. Meanwhile, crude refined abroad and returned to the UK market is sometimes misrepresented by campaigners as exports, when it is simply part of an integrated supply chain.

The case for pragmatism

The conclusion is not that climate goals are worthless, but that the current framework mistakes the appearance of progress for the substance of it. The world keeps emitting more. Britain has deindustrialised, weakened its energy security, and put its food supply at greater risk, while the emissions it claims to have cut have largely been shipped overseas.

A serious energy policy would align trade, industry and energy strategy with market realities rather than ideological targets: diversified supply, domestic production where it makes sense, modern coal and nuclear alongside renewables, and an end to the regulatory paralysis blocking the North Sea. The alternative is to keep exporting Britain’s industry, and calling it progress.

This article draws on Catherine McBride’s interview on UK energy, industry and trade. Watch the full discussion on our channel, and sign up to the GBBC newsletter at gbbc.uk for evidence-based analysis promoting UK industry, enterprise and innovation.