Government rejects calls from MPs to boost net-zero reporting requirements

The Environmental Audit Committee (EAC) has confirmed today (23 February) that the Government has rejected its string of recommendations to deliver quarterly reporting on key green policies, including decarbonisation implementation as it rolls out new oil and gas licenses in the North Sea.

MPs had raised concerns that the issue of new fossil fuel licences could send mixed signals to the market about the Government’s appetite for decarbonisation. The Government has rejected the calls to set an end date to new oil and gas licensing in the North Sea and on transition plans.

The EAC had also called for a mandate for companies to have transition plans in place for net-zero targets, warning that corporates had too much leeway to avoid disclosure currently. The Government declined to engage with this recommendation.

The EAC’s Committee Chair, Rt Hon Philip Dunne MP, said: “The UK is a global leader in efforts to embed environmental improvements into finance and across the wider economy. But this is no time for any complacency: the Committee warned in November that mixed signals from Government in terms of net zero policy risked undermining further progress.

“From mandatory transition plans to offering companies greater clarity on net zero investment in sectors across the economy, there is plenty the Government can be doing to enhance the UK’s standing. So much of the journey to Net Zero Britain hinges on the private sector playing a key part and the Government must be clear and unwavering in setting out the roadmaps for achieving its environmental objectives.”

Despite the rejections, the EAC welcomed the progress on the Boiler Upgrade Scheme, which had a £1.5bn injection in funding in December. It also notes that consultations on voluntary carbon markets and carbon border adjustment mechanisms (CBAMs) are expected in early 2024.

The EAC is also awaiting the chance to feedback on the results of long-awaited consultations on transition plans, involving the Financial Conduct Authority, the shaping of a green taxonomy and an investment roadmap for nature that was due in 2023.

List of rejections

Back in 2023, MPs on the Environmental Audit Committee (EAC) published a report recommending a string of bold, short-term interventions to transition away from fossil fuel production and use in the UK.

The EAC recommended a formal end date for new licences for oil and gas fields. A report published by the International Energy Agency (IEA) in 2021 concluded that any new fossil fuel extraction capacity, beyond that agreed by the end of the year, would jeapordise the transition to a net-zero energy system by 2050.

The EAC had also recommended a ban on flaring in the North Sea, in a bid to cut methane emissions from the oil and gas sector.

The Department for Energy Security and Net-Zero published an official response two months later, confirming that none of the recommendations will be taken on board.

More recently, the EAC has called for a string of changes to the carbon budget implementation programme. The Government believes it has “over-delivered” on its previous carbon budget commitments, and can therefore afford to pursue a more incremental decarbonisation pathway going forward. Both the EAC and the Climate Change Committee have warned against this approach.