At a glance: Everything announced by the UK Government for ‘Green Day’
The UK Government published more than 2,800 pages of documents on Thursday (30 March) outlining plans to improve energy security, green the finance system and make its net-zero strategy lawful. Here, we round up the key announcements at a glance.
For weeks, there have been whisperings from across Whitehall that the UK Government was planning a major day of green economy announcements before March is out. The occasion has been dubbed ‘Energy Security Day’ officially and ‘Green Day’ unofficially.
Indeed one of these announcements, an updated Net-Zero Strategy, was mandated by the High Court to be delivered before the close of the month.
The Strategy was last year ruled unlawful on the grounds that the Government did not forecast the emissions impact of its policies, and on the grounds that third-party forecasts put the impact far short of what would be needed for the UK to meet its legally binding climate targets.
The Climate Change Committee (CCC) subsequently concluded that Ministers had only published “credible” policies to deliver a third of the emissions cuts needed through to mis-century.
Beyond legal obligations, today’s announcements have also provided an opportunity for the Government to respond to mounting pressure to realise the economic benefits of an orderly transition to net-zero. The publication of Chris Skidmore’s landmark Net-Zero review and the launch of multi-billion cleantech subsidy packages in the US and EU are key contributors to this pressure.
The general consensus is that, while the Government has brought forward some welcome measures today, a great many hundreds of its new pages recap on – or even rehash – existing policies and commitments. We will be taking a deep dive into the likely emissions and economic impact of the packages soon; in the meantime, this article rounds up all the key announcements.
Energy Security Plan
The Energy Security Plan was the first announcement to be delivered to the press. It is separate from and builds upon last year’s Energy Security Strategy.
There are some notable exemptions from the Plan. There are no new measures to expand onshore wind, for example, and no direct response to US and EU subsidy packages. This response, Chancellor Jeremy Hunt has stated, will now come at the Budget in Autumn.
More surprisingly, perhaps, is the fact that Drax was not awarded ‘track one’ status for its bioenergy with carbon capture and storage (BECCS) work at its Selby power plant. It had been seeking this certainty before pressing ahead with investment in the £2bn programme of work. Drax has now stated that it will enter into more detailed 1:1 discussions with Ministers to help progress the work using a new BECCS business model, currently in development thanks to a new consultation launched on Green Day.
And Government did not, as some reports speculated it might, use Thursday to approve new oil and gas fields including Equinor’s controversial Rosebank – one of the largest untapped fields in the North Sea. However, Climate Minister Graham Stuart has told the Commons that this should not be taken as a sign that the Government definitely won’t approve Rosebank.
Among the measures that were included in the Plan are:
- An extension of the ECO levy, which funds improvements to the energy efficiency of social and low-income homes
- A new £30m heat pump investment accelerator scheme
- An extension to the boiler upgrade scheme to 2028
- The creation of British Nuclear, a new independent body to oversee nuclear generation
- A list of the first government-backed renewable hydrogen projects
- An extra £10bn for UK Export Finance, with a focus on clean energy
A response to the CCC’s 2022 annual net-zero progress report
As noted in the introduction, the CCC’s latest annual progress report to Parliament concluded that two-thirds of the emissions reductions the UK is legally bound to deliver by 2050 will likely not be delivered in current policy frameworks. The report slammed Ministers for “scant progress” across the board, with particularly slow rates of decarbonisation in sectors including home heating and agriculture.
The Government has published a full response to the CCC’s findings. It makes reference to many of the policies announced in the Energy Security Plan and updated Net-Zero Growth Plan (more on that below), arguing that these are sufficient to allay many of the CCC’s concerns. However, in some parts, it points to policies which were released well before the CCC started work on its report last year.
Linked to the response to the CCC are new documents, almost 200 pages in length, on delivering against the UK’s forthcoming carbon budgets. The documents acknowledge that the UK is still not on track to deliver carbon budgets five and six, but argue that the fourth budget will be met.
A response to Chris Skidmore’s Net-Zero Review
Published in January, the independent Net-Zero Review report, entitled ‘Mission Zero’, made 129 recommendations for delivering a more “pro-business, pro-growth” pathway to net-zero by 2050. It was commissioned by Liz Truss and drawn up by Chris Skidmore MP.
The Government marked Green Day by publishing a response to each and every recommendation in full. Skidmore will doubtless be disappointed that the Government will not be establishing an ‘Office for Net-Zero Delivery- an arms’ length body tasked with ensuring collaboration between departments. The response argues that the new Department for Energy Security and Net-Zero is sufficient, in that the Government now positions energy security and the net-zero transition as “two sides of the same coin”.
Other measures that the Government has declined to enact include ending routine oil and gas flaring by 2025 and legislating for all non-domestic buildings to reach Energy Performance Certificate (EPC) grade ‘B’ or higher by the same deadline.
Recommendations that have been taken on board include:
- A target for the UK to host 70GW of solar by 2035
- The creation of a new forum for industry regulators to collaborate on net-zero
- ‘Rebalancing’ levies on gas and electricity, to ensure that running electric heat and transport is more affordable
- The establishment of Great British Nuclear
Many of these changes are being undertaken through the updated Net-Zero Strategy, now being called the Net-Zero Growth Plan.
The Green Finance Strategy
The UK is aiming to become the world’s first ‘net-zero financial centre’ – an ambition first announced in 2021 by then-Chancellor Rishi Sunak.
The Treasury has this week published its first new Green Finance Strategy since 2019, but the Strategy does not, as many had hoped, contain a finalised green taxonomy. This was originally due by the end of December 2022 but the Government has argued that it needs more time to get it right.
The new Strategy does include, however:
- A commitment for the UK to be the ‘best place in the world for raising transition capital’
- Consultations on mandating transition plans from large businesses in high-emission sectors
- Measures to streamline and join-up corporate reporting standards, with a focus on Scope 3 (indirect) emissions
- Confirmation of plans in the works to dramatically scale up climate adaptation finance
- The UK’s first set of principles for nature-based investments
- Fiduciary duty reform to better reflect how environmental sustainability is being demanded by businesses and individuals when choosing financial products
- A renewed focus on getting more workers into green finance careers
Read edie’s full coverage of the Green Finance Strategy here.
Fresh measures to decarbonise transport
Transport has been the UK’s highest-emitting sector since 2016, when it overtook power generation. Covid-19-related lockdowns aside, emissions from the sector have continued to grow.
The Government has confirmed that the Transport Plan is not yet ready but did bring forward some steps to tackle emissions from road transport and aviation.
On road transport, the official launch was hosted for bids for a share of £381m of funding under the Local Electric Vehicle Infrastructure Fund (LEVI). First confirmed last year, the LEVI will provide funding to local authorities to help them roll out charging infrastructure. Only £8m has been allocated before, so this is a significant uplift in funding.
The Department for Transport (DfT) has also opened consultations on a zero-emission vehicle (ZEV) mandate to support its 2030 ban on new petrol and diesel car sales. ZEV mandates require auto manufacturers to ensure that an ever-increasing proportion of the vehicles they make are zero-emission.
As a minimum, the Government is proposing that new 22% of new cars sold in 2024 should be zero-emission in 2024. The consultation seeks to bin down exact targets. Also under consultation is the extent to which manufacturers should be allowed to ‘borrow’ or ‘trade’ numbers with each other to meet their requirements; and whether manufacturers should get extra numbers for manufacturing vehicles that will be shared. The consultation closes on 24 May.
On aviation, the DfT has opened the second round of its Advanced Fuels Fund, intended to support projects that will manufacture alternative aviation fuels from sources such as waste. The latest round includes £165m.
Additionally, the Department has opened a second round of consultations on the forthcoming Sustainable Aviation Fuel (SAF) mandate, which will require airlines to use an ever-increasing share of SAF in fuel blends. This consultation runs until 22 June.
With the Government having already decided on initial blending requirement percentages and timelines (starting with 10% in 2030), this new consultation will cover post-2030 targets and the specific design of the scheme, including enforcement measures.
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