A substantial step forward, or huge letdown? The green economy reacts to the Net-Zero Strategy
The UK's Net-Zero Strategy is finally here, but the reaction to the nation's blueprint to decarbonisation ranges from those believing it provides much-needed clarity for business to others claiming it does nowhere near enough to drive all parts of the economy to net-zero by 2050.
So, the Net-Zero Strategy is here, and not a moment too soon. With just days to go until COP26, the UK Government has unveiled a broad, encompassing strategy outlining how the nation will decarbonise in order to reach net-zero by 2050 at the latest.
The 368-page document outlines how spending will be prioritised to deliver job growth while reducing emissions from transport, power, heavy industry and the built environment.
The policies and spending brought forward in the Net Zero Strategy mean that since the Ten Point Plan was introduced last year, the Government has introduced more than £26bn in capital investment geared towards net-zero.
The Strategy claims this will support up to 190,000 jobs by 2025, and up to 440,000 jobs by 2030, and leverage up to £90bn of private investment by 2030.
But does it offer enough insight and clarity to provide confidence amongst green groups and businesses to invest in net-zero solutions and markets? The reaction has been overwhelmingly welcoming, but not all are convinced it goes far enough.
Here, edie rounds up the positive initial reaction and those who have been left wanting more urgency, clarity and ambition on the drive to reach net-zero.
Chris Stark, Chief Executive of the Climate Change Committee:
“We didn’t have a plan before, now we do. This is a substantial step forward that lays out clearly the government’s ambitions to cut emissions across the economy over the coming 15 years and beyond. It provides much more clarity about what lies ahead for businesses and individuals and the key actions required in the coming decades to deliver a Net Zero nation. It also gives the UK a strong basis to be president of the forthcoming COP26 summit. The critical next step is turning words into deeds. We have begun to assess the strategy in more detail and the extent to which the policies proposed in this strategy deliver their ambition.”
Eliot Whittington, Director, UK Corporate Leaders Group (CLG UK):
“This is a bold response to the climate crisis indicating both the UK government’s commitment to driving down climate impacts and transforming our economy. As we head into both the G20 and COP26 summits, the Net Zero Strategy sets a high standard for others to emulate,
“The breadth of issues included shows an understanding of the systemic nature of the threats we face where every part of daily life, the UK economy and infrastructure has its part to play in protecting us from the worst changes in climate. This range also demonstrates the massive opportunities for innovation, job creation and skills development to build back greener and put the UK on track to meet its ambitious climate targets. The level of investment outlined in the 350-page document is significant.
“There is no doubt this is a positive step by the UK but just how big a step, offering what level of certainty to the economy to move quickly in tandem, is yet to be fully analysed.”
David Smith, Chief Executive of Energy Networks Association, which represents the UK and Ireland’s energy networks:
“The Prime Minister has made it clear that customer choice is a central component of the Net Zero Strategy. The variety of technologies being developed and deployed for heat, transport, buildings and industry provides this exact choice.
“With regulation to support strategic, early investment, our energy networks will unlock Net Zero by connecting these technologies and making sure the right infrastructure is in the right place at the right time.”
Bruce Davis, co-founder and Managing Director, Abundance Investment:
“Abundance is pleased to see the Net Zero strategy acknowledging the importance of supporting the public to contribute to funding our net-zero future, and the role Abundance is playing in this, alongside the Green Finance Institute, through a new type of municipal investment – Local Climate Bonds. These will provide a low-risk fixed return investment enabling citizens to mobilise their money to help tackle climate change in their area.”
Will Martindale, group head of sustainability, Cardano Group:
“Today’s announcement is a welcome step-change in our fight against climate change. Before today, we had a commitment, but no plan. Today we have a plan, and that’s welcome.
“The Ten-Point Plan, along with the Treasury review on net-zero and the green finance roadmap, draw a fragmented policy agenda together into a more cohesive, whole government strategy.
“We now look ahead to next week’s budget and, indeed, COP, where attention will turn to what is our best, and possibly our last, chance to secure international action to limit global warming to well below 2C.”
Tom Greatrex, chief executive, Nuclear Industry Association:
“It is very welcome to see the Government commit new money to the development of nuclear projects and set out its intention to bring Sizewell C to a Final Investment Decision. We need to invest quickly to clean up the grid by 2035 and ensure our energy security, so we look forward to seeing details of this new fund, money for small modular reactor deployment and legislation for Regulated Asset Base financing coming forward soon.”
David Wright, chief engineer, National Grid:
“In the lead-up to COP26, the UK has certainly raised the bar on ambition to tackle climate change – and we now need to see what this means in practice. Today’s Strategy builds on the Ten-Point Plan, the Energy White Paper and a number of strategies that have been published in recent months, outlining what is needed to deliver a net-zero future.
“Now, the focus needs to be on implementation and investment in infrastructure and technologies. We’re at a critical stage in the journey where net-zero is possible with the technologies and opportunities we have today and, in order to deliver on this, we have to accelerate and ramp up efforts to deploy long-term solutions at scale.”
Matthew Farrow, director of policy, Association for Consultancy and Engineering (ACE):
“The four net-zero policy documents just published represent the largest amount of net-zero policy ever published in a single day by the UK government and they contain a level of ambition that would have been unthinkable just three years ago. It is fair to say that both government and business activity on net-zero is picking up speed, and the government’s approach of backing a range of technologies while seeking to bring down technology costs is broadly sensible. Likewise, the attempt to balance maintaining public support while delivering regulatory clarity is clumsy but politically understandable.
“The next few years really are make or break, however, and the hard work is only just beginning. The challenge is to convert to the broad outlines we now have for technology choices and rollouts into actual physical deployment across millions of households and thousands of communities. Furthermore, this must be done in a joined-up way. The engineering and consultancy sector will be crucial in delivering this.”
Robert MacLeod, chief executive, Johnson Matthey:
“I am delighted to see the emphasis on the critical role for hydrogen – both CCS-enabled and electrolytic – in the Strategy. The technologies to achieve this are ready to be deployed at scale, with the potential to exceed the 5GW of low carbon hydrogen production set out in the Ten-Point Plan. Johnson Matthey is committed to working with government and industry to help deliver the long-term vision set out in this Strategy.”
Sir John Armitt, Chair of the National Infrastructure Commission:
“The Strategy sets out a range of commitments and timescales for action. It is both hugely ambitious and has to be delivered. The priority now is to get on with it.
“It is encouraging to see a commitment to developing a whole new industry to remove greenhouse gases from the atmosphere, which the Commission has recommended needs to be put in place over the next decade if we are to meet our international climate obligations. The Strategy indicates broad agreement with the Commission’s proposals for how this market should be regulated and financed, and we look forward to seeing further details in due course.”
Philip Dunne MP, Environmental Audit Committee (EAC) chairman:
“Biggest polluters paying, consumer choice, harnessing innovation and supporting the most vulnerable: the Government’s priorities in its Net Zero Strategy are very welcome.
“Achieving net-zero carbon emissions is not going to happen overnight, but this major strategy document is a promising start to enable industries across our economy to get engaged. During our Committee’s work over the last 18 months, we have consistently stressed the need for industry to be given strong demand signals that net zero is worth investing in. There is every indication that this strategy, with its policies on electric vehicle manufacturing and charging, along with emphasis on carbon capture and storage, will indicate to the market that net-zero Britain is an investible proposition.
“The overarching strategy is one thing: the detail of how we deliver these objectives is critical.”
James Watson, head of decarbonisation, Osborne Clarke:
“Well, the much-vaunted Net Zero Strategy has landed. The ambition is certainly there. Let’s hope in months and years to come the necessary policy, incentives, finance and innovation come together to make it a reality. Brave decisions and leadership in the private sector will determine whether this is a success in the UK and beyond. The Prime Minister and Government team need to now really focus on the detail.”
Ed Birkett, senior research fellow, energy and environment, Policy Exchange:
“The next big test for the Government is to put in place the details of the policies that are needed to keep us on track for our ambitious 2030 and 2035 carbon reduction commitments.
“We’re delighted to see that the Government is putting a California-style Zero-Emission Vehicle (ZEV) mandate at the heart of its plans to decarbonise transport. This is exactly the sort of policy that’s needed to achieve net-zero by 2050 as cheaply as possible.
“The next big challenge with cleaning up transport is to make sure that there are plenty of public chargepoints across the whole of the UK. We would like to see competitive auctions, similar to those that we have for offshore wind, targeting areas that don’t have enough chargepoints.”
Adam Morton, chair of Sustainable Aviation:
“The ambition for aviation underpinning today’s Net Zero Strategy announcement is very welcome and a substantial step forward. In particular, the £180m funding to support the development of Sustainable Aviation Fuel plants will play an important part in making SAF usage at scale a reality.
“A UK SAF mandate can also work but only if the supply exists and if fuels are affordable, which is why in addition to today’s positive announcement, we need the right policies, such as a price mechanism, to bridge the price gap between SAFs and fossil jet fuel, and for these to be announced as early as possible.
“We look forward to more detail on the journey to aviation decarbonisation in the upcoming Jet Zero Strategy, including on the delivery of the other key elements of our roadmap to Jet Zero, such as increased support for hydrogen and electric aircraft and delivering airspace modernisation and innovative carbon removal technologies.”
Sam Hall, Director, Conservative Environment Network:
“The Government has today set out a detailed plan to put the UK on track to deliver our world-beating climate targets. This is a big boost to UK climate leadership ahead of COP26 and to the green economy as we emerge from Covid. It’s especially welcome to see the focus on jobs and fairness at the heart of the strategy, as these will be essential for cementing public support for net-zero.”
Frances O’Grady, General Secretary, TUC:
“The UK can be a world leader in creating good, green jobs. But this strategy is a huge let down. The government has failed to implement many of the main recommendations of its own green jobs taskforce – just two weeks before it hosts the UN climate change conference.
“That’s not the way to show global leadership – it’s self-sabotage. Today’s spending commitments will do little to address the yawning investment gap needed to get British industry ready for net-zero. Unless ministers do more to future-proof and decarbonise energy-intensive industries, hundreds of thousands of jobs in UK manufacturing and supply chains will be in jeopardy. We cannot let that happen.”
Nicolette Bartlett, chief impact officer, CDP:
“The UK’s new net-zero strategy is expected to be a bold, comprehensive, and forward-looking policy piece that ties together the Government’s green ambition, but it must be seen as the minimum of what needs to be done.
“The strategy is reflective of the momentum of corporate progress we have seen this year and outlines policy which seeks to drive down emissions, tackle climate impacts and reverse ecosystem degradation. Alongside the Net-Zero strategy, next steps for mandatory sustainability-related disclosure in the UK are expected to be announced, beyond the current TCFD Roadmap.”
Darren Jones, chair, BEIS Committee:
“The Government is failing to recognise the scale and pace of change required to meet our climate change targets. Ministers can’t just keep re-announcing the same promises and listing them all out with a repackaged name – they need an actual strategy that sets out the important role the state must play in our net-zero transition.”
Katie White, executive director of advocacy and campaigns, WWF:
“We are finally seeing the UK Government set out a positive vision for net-zero, sending a clear signal to every sector of the economy on their role, but we are still lacking the full suite of policies and increased funding to close the gap between climate promises and action.
“With COP26 just around the corner, the Prime Minister can’t afford to stop here – he must ensure every department builds on this ambition, including the Treasury. The Chancellor must step up and ensure public finances support the transition, by adopting a Net Zero Test for Government spending in the forthcoming Spending Review.The UK can’t afford to stand still – every climate promise must be kept. Future generations won’t forget, and they won’t forgive those who fail to act while there’s still time.”
Chris Turner, campaign director, Better Business Act:
“The Government’s Net-Zero Strategy comes at a critical time for businesses and world leaders in the fight against climate change. Commitments from the government are necessary to shape the direction of the transition to Net Zero but we won’t get there unless business fully embraces this evolution and is given the support it needs to do so.
“To create a green industrial revolution, we need to hardwire net-zero into the DNA of UK business. This means updating our company law so that business decision-makers are empowered to make the necessary decisions to decarbonise, aligning profitability with the interests of society and the environment. The Better Business Act, an amendment to section 172 of the Companies Act so the interests of shareholders are aligned with environmental goals, would change that. Our coalition of nearly 800 businesses urges policymakers to consider this in the upcoming audit and corporate governance reform so that UK businesses are aligned with the government’s Net Zero targets. The amendment would transform the way Britain does business so that every company takes ownership of its environmental impact, removing obstacles from what must be a united fight against climate change. ”
Gordon Mackerron, professor of science and technology policy, University of Sussex Business School:
“The possibility to have one more large nuclear plant brought to a final investment decision by 2024 will depend on a radically new funding structure. Using a regulated asset base model would mean consumers would take on most construction risk, allowing investors a more or less guaranteed rate of return, and/or the Government putting up some taxpayer cash.
“Since the much-delayed Energy White Paper last year, it has become clear that developments at two of the only three plausible big-reactor sites – Wylfa (abandoned by Hitachi) and Bradwell (paused for a year by EDF/China General Nuclear) – are now effectively no longer in contention.
“Only a further Hinkley replica at Sizewell seems at all possible, and large institutional investors have recently made clear they will not put up any of their own money for this.
“Significantly, and credibly, Government makes no mention of any further ventures along the large-nuclear path.”
Valentin Vogl, researcher at the Science Policy Research Unit (SPRU) at the University of Sussex Business School:
“The Government’s requirement of a 63 – 76% reduction in carbon emissions by 2035 from industry clearly could not be met by the UK steel industry in its current position.
“Integrated steel mills such as the UK’s two sites in Scunthorpe and Port Talbot operate on major investment cycles. Every 15-20 years, production is stopped to undertake a large investment, the main purpose of which is to reline the blast furnace.
“To achieve carbon emission reductions of 63% and net-zero in the long-term, the UK industry has two options: carbon capture and storage (CCS) or steel production based on a mixture of recycling and hydrogen. These technologies can only be implemented during a production stoppage.
“If a single blast furnace in the UK is relined without implementing either of these measures, the whole industrial sector carbon reduction target is at risk considering steel is the largest industrial emitter in the UK.”
Nick Molho, Executive Director, Aldersgate Group:
“The evidence is clear that the transition to net-zero emissions is a major opportunity to deliver economic growth and trigger job creation in multiple sectors of the economy throughout the country. Whether we achieve this in practice is ultimately down to the decisions we take today, and having a clear policy plan in place is critical. Today’s Net-Zero Strategy is an important step forward towards achieving this.
“The Strategy sets a clear overall direction for the UK economy, recognises the critical importance of public policy signals to attract private sector investment and contains positive measures in the power, transport and heating sectors. The commitment to fully decarbonise the power grid by 2035 will provide an essential bedrock to cost-effectively cut emissions in many parts of the economy and reduce exposure to fossil fuel price fluctuations. The commitments to kickstart the electric heat pump market, introduce mandates to scale up zero-emission vehicle production and increase investment in local on-street residential charging are particularly welcome.”
“There are a number of areas where further policy clarity is required to put the UK on course to meet the Sixth Carbon Budget. These include putting in place clear regulatory targets and fiscal incentives to drive investment in energy efficiency retrofits, which is essential to ensure a cost-effective roll-out of low carbon heating, lower household energy bills, and reduce demand on the UK’s power grid.
Whilst the ambition to develop four low carbon industrial clusters by 2030 is positive, upcoming consultations will need to result in clear business models to support the scaling up of carbon capture and storage, hydrogen and electrification in industry. Greater attention should also be paid to connecting dispersed industrial sites – such as cement, glass and ceramics – with the low carbon infrastructure that will be deployed in industrials clusters. Beyond the commitments on tree planting and peatland restoration, the Environment Bill should be used to set a broader and more ambitious set of nature restoration targets, underpinned by ambitious environmental improvement plans, to help the UK adapt to climate change and deliver much needed negative emissions.”
“Looking ahead, it is important that the Government continues to focus on the ‘people dimension’ of the net-zero transition. This should include a clear strategy to put in place quality standards and information campaigns to support citizens throughout the transition to low carbon heating. Following the recommendations of the Green Jobs Taskforce, this should also include the development of a comprehensive low carbon skills strategy that will ensure that both the current and future workforce are equipped to seize the employment opportunities created by the transition to a net-zero emissions economy.”
Tom Burke, chair, E3G:
“New nuclear power can do nothing to help the UK achieve a net-zero power system by 2035. It will, however, take away a huge amount of public investment from things that could get us to net-zero cheaper and faster. If nuclear is at the heart of our trip to net-zero, then it is a rotten heart.”
Mats Persson, Partner in EY Parthenon:
“The Strategy demonstrates clear ambition and puts the UK at the forefront of the global race to net-zero. However, the documents reveal two critical questions that have to be addressed sooner rather than later, if the UK is to achieve its carbon ambitions.
“Firstly, who pays? The government, businesses and consumers are still largely expecting the others to foot the bill, particularly on the supply side, illustrating the need for more collaboration on innovative public-private commercial models.
“Secondly, declining fossil-fuel production is out of sync with the speed at which low carbon energy alternatives are coming online, risking significant supply constraints. While some uncertainty around delivery and technologies, particularly around homes and heavy industry, is inevitable, there needs to be a clearer sense of the right sequencing to anchor the Strategy in sound supply- and demand-side economics.”
Ben Margolis, director, The Climate Coalition:
“Despite extensive promotion as world-leading, the Strategy falls well short of what is needed, and of what the public expects. Where well-thought-out and deep investment is required to urgently achieve decarbonisation in the UK and show diplomatic leadership ahead of COP26, what has been committed merely scratches the surface. People up and down the UK are urging a move away from fossil fuels, toward an economy that protects them, and is ready to face the climate challenges of the future.
“The public mandate for decisive and ambitious action from the government has never been stronger. However, what’s increasingly clear is that ahead of the UN climate conference, Boris Johnson continues to promise the public the equivalent of a three-course meal of climate action, but his Chancellor is only willing to stump up for a meal deal.”
Sam Nadel, head of government relations, Oxfam:
“Solid progress has been made today, but let’s not pretend this is mission accomplished.
“One key omission is the absence of any commitment to end new licences for oil and gas exploration, and to phase out production. With plans for a new coal mine in Cumbria and the approval of the new Cambo oil field near Shetland hanging in the balance, the Government’s stated priority of encouraging other countries to phase out coal looks very shaky.
“This strategy sets the bar high compared with many other countries, but the Prime Minister’s ambition to ‘lead the world’ does not end here. The COP26 climate summit is 12 days away and yet pledges by other governments to cut greenhouse gas emissions put us on course for an increase in global emissions by 2030. The long-standing [G7] target to provide $100bn in climate finance also remains unmet.”
Dan Dowling, PwC partner and net-zero expert:
“Achieving net-zero by 2050 will require innovation and transformation at an unprecedented scale and speed, with new delivery models needed to achieve the scale of change set out in the Strategy.
“This level of scaling is beyond the reach of the government alone and businesses, policymakers, organisations and consumers all need to take a more assertive approach, to collaborate with a shared sense of urgency.
“PwC estimates that £400bn will need to be invested in green infrastructure and renewable energy sources over the next ten years if the government’s 2050 target is to stay on track. The government’s investment will catalyse some of the early action needed, but more will be needed as the strategy evolves.
“Alongside investment in the green industrial revolution, investment in skills and local delivery models will be key, especially to help tackle the levelling up agenda by harnessing the best assets of the whole of the UK. The scale of the challenge is immense but with the right investment in green skills and technology we have the opportunity to create a new and green economy.
“It’s an exciting opportunity for the UK to lead the world on the biggest economic transformation of our lifetimes. The targets are challenging, as is the environment in which they need to be delivered, but also a chance to build a country that’s truly fit for the 21st Century.”
Dr Nina Skorupska chief executive, the Association for Renewable Energy and Clean Technology (REA):
“We are pleased that the Government will implement a progressive ZEV Mandate and increase support for EV charging infrastructure, sustainable aviation and measures on peat restoration and woodland growth.
“This continues to send a clear message to industry and consumers that zero-emission vehicles are the future of road transport in the UK. Having clearly defined zero-emission vehicle sales targets for automotive manufacturers will allow industry to accurately forecast growth in zero-emission vehicle sales. This will provide the confidence needed to increase private investment in EV charging infrastructure, improving the quantity and quality of the UK’s growing EV charging infrastructure network. On CCUS, we are pleased to see funding confirmed for two clusters and an ‘industrial decarbonisation and hydrogen revenue support scheme’ (IDHRS).
“There is much work to be done across the economy to prepare for net-zero and this is, therefore, a vital strategy, which we look forward to seeing develop in the coming years.
“More broadly, however, this Strategy does not move us much further forward from last year when the Energy White Paper and Ten-Point Plan were published. Then, we welcomed the ambitions laid out, but said there now needed to be real detailed and wide-ranging support in order to meet them.
“While I welcome and support the ambitions laid out in the Strategy, I am increasingly concerned by the lack of meaningful progress on a whole range of issues.
“We need to see clear routes to market; a holistic circular economy approach; support for a range of cleantech and renewable technologies; best practice standards; tax reform to unlock investment, such as the removal of VAT on renewables and cleantech; and we need more flexibility and investment in the energy system and grid networks.
“There is still time for the Government to make a substantive move on net-zero. The upcoming Spending Review is a chance to deliver the investment needed to make the energy transition a reality.”
Cllr Sam Corcoran, climate change spokesperson, the County Councils Network:
“Today’s Strategy is an important milestone for decarbonising the country. The document emphasises the important role of local authorities in helping to deliver net-zero, but it lacks detail on whether any new grant funding to support councils is included within the strategy.
“New announcements on extra funding for people to retrofit their homes, to increase electric vehicle charging points, and for greener infrastructure will all have a tangible impact, but the County Councils Network’s recent report on achieving net-zero in county areas warned that emissions in rural and county areas were decreasing slower than other parts of the country – and recommended a substantive increase in funding to address this.
“If the Government is to hit its net-zero target, it has a ready and willing partner in county authorities. But we cannot decarbonise on a shoestring, and government needs to move away from what has been an overly-city focused on reducing emissions. COP26 provides the perfect opportunity to reset the dial and focus on our county areas.”
Matt Mace and Sarah George
© Faversham House Ltd 2022 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.