Conclusion 4

We are not convinced that achieving the net zero target is sufficiently embedded in the oversight and regulation of the water industry. The process of building the new infrastructure needed is energy-intensive. Each of the different types of infrastructure water companies can invest in will have differing carbon costs as well as financial costs. The Department has a major part to play in achieving net zero by 2050 and described it as the challenge of our generation. We are told that both water companies and the Environment Agency have committed to net zero by 2030 but it is not clear how this will be achieved or how carbon footprints are taken into account in the planning process and in Ofwat’s methods for assessing options. The Department says that it is working with Water UK, the trade association for water companies, to look at how to embed this in the water resource planning process. Recommendation: Ofwat should write to us within three months setting out how it will ensure water companies take full account of carbon emissions in appraising the options available to them.