Close policy gaps now or risk missing net-zero, E.ON and CBI warn UK Ministers
Electricity provider E.ON has released a new report showing how current policy frameworks leave the UK off-track to deliver its net-zero target by 2050, the day after the Confederation of British Industries (CBI) called on Ministers to "make 2021 the boldest year of net-zero action".
E.ON’s report, entitled ‘The Carbon Countdown: Road to 2030’, looks at the current levels of emissions from homes, business buildings and cities – and how these are likely to change by 2030 and then 2050.
Across all areas analysed, the UK is off-track to deliver net-zero in the scenario in which no policies change. The report urges the Government to ensure that its roadmap for delivering net-zero, with sector-specific targets and policies, is published ahead of COP26 as planned, as this will give actors across the value chain the confidence needed to invest accordingly.
Specific issues currently suffering from policy gaps include scaling up low-carbon heating solutions and delivering a green skills pipeline. On the former, the report outlines how annual heat pump sales will need to reach 600,000 by 2028 and one million from 2030, up from 30,000 at present. To help individual householders make the transition, the report argues, a sell-by date for gas boilers should be created, as it already has been for new petrol and diesel cars. At the same time, district heating will need to be considered for new developments in urban areas and new local ‘zoning plans’ should be drawn up to maximise potential reach. In the best-case scenario posed by E.ON, one-fifth of UK heating needs are met with district heating by mid-century.
The forthcoming Heat & Buildings Strategy should provide clarity on whether the UK Government shares this approach. It had been due out last Autumn but faced delays due to Covid-19 and due to a decision to pair the issues into one overarching strategy.
E.ON’s report also couples heat with buildings. It recommends that regulations are toughened to ensure that all new properties – residential and commercial –are required to meet net-zero standards immediately. The current Future Homes Standard mandates this requirement from 2025 onwards, for all homes and some commercial buildings. Cities including London have argued that the Standard is less strict than their existing frameworks.
Also posted by E.ON are ‘building renovation passports’, telling householders of the changes that will need to be made to their properties over the next 10-15 years, and a simplification of retrofitting schemes supported by the Government and/or local authorities. The Green Homes Grant, announced in 2020, notably closed with less than 10% of the £2bn of promised funding spent. The Government cited difficulties with finding enough traders able to deliver eligible works.
“The next decade will be critical if we are to meet 2050 targets; the decisions we take in the years between now and 2030 will determine whether we are able to gain sufficient momentum to achieve success,” E.ON's chief executive Michael Lewis said.
“If you ask people whether they want a cleaner, more sustainable future, the answer will invariably be ‘yes’. In that regard, we are, as a nation, together in a shared purpose. What most people don’t know is, at our current pace, we haven’t got a hope unless Government catalyses faster tangible change.
“Net-zero by 2050 is achievable. With the right investment climate, business will positively respond and bequeath a more sustainable future to our children that will secure long-term economic benefits for the country as we increasingly benefit from homegrown energy production. We all have a moral responsibility to play our part to make sure we get there and address this climate crisis.”
MPs on the Public Accounts Committee (PAC) released a report in March accusing the Government of having “no credible plan” to deliver its long-term climate target.
The report from E.ON comes just a day after the CBI – Britain's biggest business group – issued a fresh rallying cry to Ministers on climate action.
In a speech opening the Confederation’s virtual Road to Zero conference on Monday (14 June), director-general Tony Danker said Departments must act now to “fill in the blanks of the Government’s existing plans as rapidly as possible”. By leading by example, he said, they can catalyse the transition towards low-carbon heating, green transport, climate-friendly buildings and a sustainable financial system.
"In the next few weeks, business needs government to publish the UK's first-ever Heat and Buildings Strategy, Transport Decarbonisation Plan, Hydrogen Strategy, and the Treasury's Net Zero Review," Danker said.
"But it's not enough to release these strategies into the ether and hope that's enough. The pace of delivery must be relentless and speed of our progress intensifying all the time."
The CBI would, specifically, like the Transport Decarbonisation Plan to commit the UK to develop seven gigafactories for the electric vehicle (EV) sector. Coventry City Council is planning to host one such facility by 2025.
Other policy asks from the CBI include the confirmation of timeframes for the next offshore wind leasing round; a requirement for all new boilers to be hydrogen-ready by 2025 and clarity on energy efficiency grants and loans for homeowners and landlords.
“With the world soon to be on our doorstep, now is the time for the UK to step up and make the big plays,” Danker said. “Taking nothing less than unprecedented, unstoppable action in the next five months to ensure the legacy we sow in Glasgow far outlasts our leadership of COP26.”
Danker’s speech builds on the CBI’s recently-launched ‘Seize the Moment’ campaign, launched last month in the hopes of uniting business in the push for a green recovery from Covid-19.