Carbon dioxide emissions fell by just 2.5% across the UK during 2018, the slowest decline since 2012, according to Ofgem’s annual state of the market report.

Last year’s reduction was down from a 3% decrease during 2017, with transport remaining the largest emitter of greenhouse gases despite a 3% dip.

The report showed renewables accounted for a third of electricity generation last year, and the energy regulator is due to publish its new corporate strategy early next year, which will lay out how the watchdog aims to help decarbonise the market at the lowest cost to consumers.

Ofgem chairman Martin Cave said it was important to recognise the progress made so far on decarbonisation but also the challenge that lies ahead.

“The UK has reduced its emissions of greenhouse gases since 1990 at a greater rate than any other advanced economy. But progress may be stalling just when we need to step up our efforts.”

Ofgem’s report also revealed that medium-sized companies now supply 20% of consumers with their gas and electricity.

Switching rates have risen to 20% and hit an all-time high, with medium-sized suppliers benefitting the most from customers shopping around.

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The Government has given the go-ahead for four new gas-fired turbines at Drax power station despite the Planning Inspectorate saying the proposal should be blocked due to climate change impact.

The turbines are to replace coal-fired units and explaining her decision, Energy Secretary Andrea Leadsom said fossil fuel generation will still be needed as the UK looks to decarbonise and that she also took energy security and affordability into account.

As well as having battery storage the new gas plant would be engineered to allow carbon capture equipment to be fitted in the future. But environmental group ClientEarth said the approval of Drax would take the industry’s carbon emissions considerably over their projected limit.

The group's lawyer, Sam Hunter Jones, said: “The UK has already (approved) more gas capacity than the government’s own forecasts estimate will be required through to 2035.”

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Campaign group Climate Action 100+ has called for a “step change” in how companies respond to reducing their carbon dioxide emissions to net zero.

The organisation, which represents 370 global investors with more than $35 trillion in assets under management, is engaging with 161 companies, together accounting for two-thirds of global industrial greenhouse gas emissions.

Stephanie Maier, Director of Responsible Investment at HSBC Global Asset Management and steering committee member at Climate Action 100+, said: “We are now at a tipping point – a significant number of companies have made bold commitments to achieve net zero emissions, with others increasingly following suit.”

The group’s first progress report said 70% of its focus companies had set long-term carbon dioxide reduction targets.

Yet only 9% of the businesses have targets that are in line with or go beyond the Paris goals.

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Energy regulator Ofgem has selected Jonathan Brearley, its current Executive Director for Systems and Networks, as its next Chief Executive.

Brearley will take over from Dermot Nolan, who will stand down at the end of February. Nolan’s contract had been extended by a year so he could lead the introduction of the price cap.

Ofgem Chairman Martin Cave said: “Jonathan’s many years of experience in the energy industry and of climate change mean that he is well placed to ensure that Ofgem plays a key role in delivering a net zero economy at the lowest cost to consumers.”

Before joining Ofgem, Brearley worked at the UK Government’s Department of Energy & Climate Change, having previously served at the Office of Climate Change, where he was the director leading the development of the Climate Change Act.

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Green Investment Group (GIG), formerly the Green Investment Bank, is launching a Carbon Score tool to assess the impact of more than 40,000 wind and solar projects.

More than 60% of the world’s wind and solar sites will be covered by the tool, which will draw on data from Bloomberg New Energy Finance.

Asset owners and managers will be able to use the data to assess their carbon reduction impact, while customers will be able to identify opportunities to buy high-impact clean power.

GIG said the new tool would help to address current shortcomings in integrating climate-related risks and opportunities into investment decisions.

This issue was recently highlighted by the Climate Finance Leadership Initiative.

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