Policy Recommendations to Enhance Small-to-Medium-Sized Enterprise Support for Achieving the UK’s Net Zero Targets

In the UK, SMEs account for 99.9% of the business population, with from 43% to 53% of UK business emissions coming from SMEs. However, SMEs face specific barriers in relation to net zero targets, such as a lack of knowledge about strategies to achieve net zero targets. Despite the ongoing lack of a formal decarbonisation plan for SMEs, various types of projects have been designed to help SMEs to move towards the UK’s net zero target. The Eastern New Energy (ENE) project received funding from the European Regional Development Fund (ERDF) to support SMEs across significant economic areas of the UK, namely the East of England, to help address the barriers that prevent SMEs from decarbonising. The project provided a range of measures, including raising their level of knowledge and providing technical support to help with SME decarbonisation. Following the completion of our targeted support activities, semi-structured interviews (n = 21) were conducted with SME beneficiaries to evaluate the effectiveness of the support with the ambition of providing some policy recommendations based on understanding how national and strategic support can be effective for a diverse, often unconnected ecosystem of businesses. The findings from the interviews indicated that engagement in the ENE project had positive impacts on the SMEs’ understanding of net zero, or how to start their journey towards decarbonisation by identifying their source of emissions and learning how to calculate them. However, accounting for emissions from Scope 3 activities, transition costs and building restrictions were the main barriers that undermined the ENE recommendations. Our research concludes that in designing engagement projects and support, one needs to acknowledge such restrictions and barriers, which requires government interventions to cover all aspects of the SME decarbonisation journey, from nuanced and responsive policy making to developing bespoke knowledge transfer and supporting low-carbon material provision that can support a decarbonised marketplace.