How do energy companies manage carbon emissions?

How do energy companies manage carbon emissions?

As regulatory requirements tighten up in relation to carbon emissions, energy companies are evolving to make sure their operations are compliant. However, the industry as a whole still isn’t transitioning quickly enough and there is a building need for change in the energy sector. 

The energy industry is a key focus for carbon reduction because it builds and operates the power plants that generate the energy for consumption. It can make decisions that prioritises renewable energy over fossil fuels, moving us closer towards a net zero future, in which no recorded greenhouse gases are emitted by society.

But how are businesses within the energy sector approaching this challenge? Some are approaching as the next step in their carbon reduction journey and are transitioning to renewable energy sources, as well as improving efficiency, while others are turning to more advanced solutions like carbon capture and storage. 

We take a look at what methods energy companies are employing to manage and reduce their carbon emissions. 

Transitioning to cleaner energy sources

One key shift that the energy industry can undertake in a carbon reduction effort is to switch to green energy sources. 

Shifting from fossil fuels to renewables like wind and solar

While fossil fuels will likely remain a part of the energy mix for some time to come, the energy industry can alleviate our reliance on fossil fuels by prorotising green energy methods of generation over fossil fuels. This includes investing in emerging technology, It also means giving the public greater access to green energy solutions - this might include making green tarrifs available for carbon-conscious consumers. 

The importance of nuclear energy in a low-carbon grid

Thought public perception does not always favour nuclear power as a green energy source due to the toxic waste byproducts it generates during operation, it is considered a low-carbon energy solution. This is because it creates almost zero carbon emissions during energy production. It also doesn’t produce noticeable levels pf greenhouse gases or other associated chemicals like fossil fuel alternatives.

Exploring the role of green hydrogen and biofuels

Alternative fuels, such as green hydrogen and biofuels can offer a different option for consumers opting to avoid fossil transport fuels. The energy industry needs to invest in the research and development of these technologies so that more successful case study models are available to ensure future projects. Green hydrogen, while an expensive low-carbon option, is a viable source of energy for vehicles, while biofuels offer a transport fuelling solution using plant and animal biomass.   

Technological solutions for carbon management

As renewable energy matures as a sector, so does the connectivity technology that enables it. We take a look at some of the burgeoning technological solutions for carbon management.

Carbon capture, utilisation, and storage (CCUS)

For big energy consumers, such as heavy industry and aviation, relying solely on renewable energy isn’t a realistic solution due to the intermittency of the technologies. Luckily there are some technological developments that can help these sectors reduce their carbon footprint through other methods. Caught at the source and then buried deep underground, carbon capture, utilisation, and storage (CCUS) allow carbon emissions to be captured, stored and even used afterwards. CCUS gives heavy energy users a viable option to reduce carbon emissions without reducing the amount of energy consumed for vital operations.

Smart grid technology

The smart grid will revolutionise how the grid operates, giving the energy industry greater autonomy the operational efficiency of the grid as a whole. Digitalisation will allow technologies such as the Internet of Things (IoT) to be applied to plants and transmission networks, giving energy companies access to colossal amounts of data to help streamline operations, reveal consumer behaviour and predict plant downtime or energy bottlenecks. The integration of AI will allow energy companies to make sense of this Big Data, forecasting predictions around supply and demand due to plant operation and consumer habits to help optimise energy distribution and efficiency.

Energy storage

Due to renewable energy’s intermittency as a fuel source, it’s paramount that the energy industry adopts current and future energy storage options to help to integrate intermittent renewables and bank power from these renewable sources. The role of batteries involves stabilising the grid through bolstering the supply of banked energy when renewable output is low, but demand is high. It will also allow consumers to become prosumers, which allows consumers of energy to also generate their own energy through mini-arrays such as solar or wind, or to bank energy using e-vehicles as storage solutions, storing energy at off-peak times when prices are low and selling back to the grid during high demand periods at a higher price. 

Improving efficiency

Our current infrastructure isn’t fit for purpose and needs some serious upgrading in order to allow energy companies to offer low-carbon alternatives to energy consumers. Changes include operational improvements and modern infrastructure with the end goal of reducing carbon emissions.

Strategic approaches to corporate decarbonisation

For businesses to truly move towards decarbonisation, carbon reduction needs to be at the heart of business as usual and future strategies. Energy companies need to create credible, measurable goals: this could be in the form of education and using research and development to set measurable, science-based targets. Investing in research and development is key, with a push for next-generation clean energy technologies paramount to the success of decarbonisation.

It could also be via the method of carbon offsetting and credits, mechanisms that allow the carbon market to manage emissions that cannot be eliminated, while supply chain management will addressing emissions beyond a company's direct operations.

But these changes come at a cost, and challenges include the financial hurdles of transitioning away from outdated, legacy infrastructure. Legislation can go some way to help alleviate these financial pressures, and there is a real need for supportive government policies and international cooperation, such as streamlined regulation and legislation as well as policies that offer grants or incentives for adopters or green solutions.

Decarbonising energy is a systems challenge, not a single technology bet. Progress depends on accelerating renewables, valuing firm low-carbon options, scaling storage, and deploying digital tools that make grids smarter and cleaner. For hard-to-abate demand, CCUS and low-carbon fuels provide pragmatic pathways while infrastructure is modernised. Success hinges on measurable targets, investment in R&D, transparent reporting across Scope 1–3, and policies that de-risk capital and reward emissions cuts. With disciplined execution, the sector can deliver reliable, affordable power while driving deep, durable emissions reductions.