UK warned over cutting carbon emissions from the offshoring of industry

Replacing domestic production processes with imports could do the planet more harm than good, a report says, as Britain attempts to reach net zero by 2050

Emily Gosden, Energy Editor

Sunday October 19 2025, 3.40pm BST, The Times

About a fifth of the emissions savings in British industry over the past two decades have come from “offshoring” production processes, driven by the decline of the North Sea, analysis has shown.

The replacement of domestic oil and gas production with imports from countries like the US and Qatar accounts for 82 per cent of territorial emission reductions in that sector, the consultancy Oxera found.

The majority of reductions in the manufacturing of glass, ceramic, stone and electrical products have also stemmed from the replacement of domestic production with imports, according to Oxera’s report.

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“Policymakers should be mindful that offshoring can not only fail to reduce global emissions but may, in some cases, increase them, both due to the emissions generated by transporting goods to the UK and the potentially higher carbon intensity of production abroad,” Oxera said.

Offshoring is politically contentious, as critics of Britain’s legally-binding net-zero goals argue that heavy industry is suffering from costly green policies and that it is counterproductive to replace domestic industry with imports which may be worse for the planet overall.

Oxera’s analysis covers the period from 2005 to 2022, in which Britain’s annual domestic or “territorial” greenhouse gas emissions fell by 42 per cent — the equivalent of 295 megatonnes of carbon dioxide.

About 14.9 megatonnes of the total — almost 5 per cent — resulted from the offshoring of industrial emissions, Oxera estimated. When considering only industrial emissions, offshoring accounted for 20 per cent of the 76 megatonne decline. “This is equivalent to the annual emissions of approximately 10 million UK cars or to 8.8 million return flights from London to New York,” it said.

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Future Energy Networks, a lobby group for Britain’s gas networks, which commissioned the Oxera report, said: “The relocation of production overseas is significantly undermining our efforts to tackle climate change. British industry has suffered from production being moved abroad. This is coming at significant economic cost through lost jobs and GDP.”

Emma Pinchbeck, the chief executive of the Climate Change Committee which advises the government, has insisted that Britain’s lower emissions were due to “real change in the economy”. She told the Carbon Brief website: “It’s not from exporting or offshoring emissions. It’s largely from displacing coal with renewables.”

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Dr Simon Evans, Carbon Brief’s policy editor, said the Oxera report “confirms that the overwhelming majority (95 per cent) of recent emissions reductions in the UK are real and have not been offshored”.

More than half of the amount Oxera attributed to offshoring — 8.7 megatonnes — stemmed from the decline of North Sea oil and gas production. While the ageing basin has undergone a natural decline, the industry has argued that more could be extracted with a less punitive fiscal regime and friendlier regulation. The Labour government has vowed to end new North Sea drilling, but was reported to be considering small expansions of existing sites.

A spokesman for the Department for Energy Security and Net Zero said: “We’re protecting UK businesses who are leading the way in cutting their emissions. Our reporting on greenhouse gas emissions follows the internationally agreed approach and shows that UK emissions fell 53 per cent between 1990 and 2023, alongside economic growth.

“This reduction far outweighs emissions from UK imports over the same period, and we already measure consumption-based emissions as part of the UK’s carbon footprint.”

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