The long awaiting Net-Zero Strategy has finally been published following long delays. The strategy details how the UK will decarbonise and aims to transform every sector of the global economy. It incorporates all previous climate change commitments and builds on these with new pledges. The timing of the publication is clearly intended to align with the commencement of COP26 in Glasgow on 31 October 2021.
The focus of the document is how the Government will spend earmarked funding to deliver employment growth and reducing emissions from the built environment, power, transport, and heavy industry.
The Prime Minister introduced the document as the UK’s path to ending its contribution to climate change – a route which is ‘paved with well-paid jobs, billions in investment and thriving green industries’. The need to rebuild following the impact of the Covid pandemic on the UK was at the forefront of his mind with his pledge to ‘build a defining competitive edge in electric vehicles, offshore wind, carbon capture technology and more, whilst supporting people and businesses along the way.’
The Government has pledged £26 billion in capital investment to support New Zero developments – some of this funding was introduced in the Ten-Point an unveiled last year with support for the introduction of up to 190,000 jobs by 2025 and 440,000 by 2030. This will be supported by up to £90bn of private investment by 2030 to deliver on the key points.
There is significant focus on power with the Government plans to end fossil-fuelled electricity generation by 2035 which will be enshrined in law. There will be 120,000 jobs created by 2030, utilising between £150-£270bn of public and private investment. The Prime Minister’s vision to accommodate 40GW of offshore wind by 2030 is restated and is seen as a cornerstone of the strategy alongside the recent announced target for 1GW of floating offshore wind by 2030. This will be supported by £380m in funding and is likely to be deployed in the North and Celtic Seas. The Strategy also sets aside £120m for a Future Nuclear Enabling Fund to support the de-carbonisation of the National Grid with future nuclear technologies, including Small Modular Reactors on the agenda.
The strategy is clear that it will not be possible for all sectors to reach Net Zero through utilising electrification. The strategy recognises the role that hydrogen can play to provide low-carbon energy and will halve emissions currently produced from oil and gas. The Government claims that the UK can deliver 5GW of hydrogen production capacity by 2030 supporting up to 10,000 jobs by 2030 in fuel supply. The Strategy commits to mobilising between £20-30bn in investment to support this.
The Industrial Decarbonisation and Hydrogen Revenue Support (IDHRS) Scheme has already been set up with the remit to fund new hydrogen and carbon-capture clusters. The Strategy outlines that up to £140m will be provided has been earmarked, to include up to £100m to provide contracts to supply 250MW of electrolytic hydrogen production capacity in 2023 with additional funding in 2024. There will be a separate hydrogen sector strategy early next year which will build on the Government’s previous announcements to support different aspects of hydrogen production.
The oil and gas industries are to be regulated through a revised strategy to reduce emissions and to address the numerous legal challenges the Government has faced over its oil and gas policies with green groups calling for further caps in production and increased investment in renewables.
The official Heat and Buildings Strategy was launched on 19 October 2021 and is reiterated in the Strategy. The Government will support up to 100,000 green jobs across the built environment middle of the decade, increasing to 175,000 by 2030 with around £200bn to support this. As detailed in the Heat and Buildings Strategy, the Government will aim for all new heating appliances in homes and commercial premises produce reduced emissions by 2035 facilitated through a £450m boiler upgrade scheme for dwellings as part of a wider £3.9bn funding package.
With regard to transport, The Government has already stated its commitment to end the sale of new petrol and diesel cars by 2030 and all cars must be Net-Zero capable by 2035. The Net-Zero Strategy builds upon these commitments, by ensuring car users have an effortless transition to electric vehicles.
The strategy makes provision of £620m for zero-emission vehicles and the required EV infrastructure along with a further £350m, in addition to the existing £1bn Automotive Transformation Fund (ATF) will support the electrification of UK vehicles. No additional funding is provided for low-carbon Heavy Goods Vehicles despite the continuing trials taking place. Alongside electrifying vehicles, there is £2bn to ensure half of journeys in and around towns and cities, are walked or cycled by 2030, and £3bn to support new zero-emission bus networks and a net-zero rail network by 2050.
In other areas, the Government will also aim to “incentivise cost-effective abatement” across heavy industry to be delivered through the UK Emissions Trading System with the Government consulting on a cap consistent with net-zero. The Strategy also outlines aims for the UK to remove emissions from the atmosphere, contributing to its net-zero target. The Government will also utilise around £20bn in funding to deploy at least 5 MtCO2 /year of engineered (greenhouse gas removals) GGRs by 2030. At least £750m will be also spent by 2025 restoring approximately 280,000 hectares of peat in England by 2050 and trebling woodland creation rates in England.
There are a number of disappointments within the strategy. It is clear that there will continue to be a reliance on making the right decisions rather than utilising regulation to deliver results. The Government has placed some focus on energy efficiency upgrades for the built environment but there is little discussion around how buildings standards and the role they can play in improving the efficiency of housing and commercial building stock. Also given that transport is the UK’s highest emitting sector and there has been little progress in decarbonisation in recent years it is clear that the intention to make all cars Net Zero capable is not enough.
Whilst the Strategy is a bold statement committing huge numbers in funding aiming to deliver significant changes to achieve the Government’s Net-Zero target, there are a number of Green Groups who do not think that the measures detailed in the strategy will be sufficient to deliver the required action to achieve Net-Zero in the UK by 2050. Whether that is the case, remains to be seen but it is clear that the UK is looking to lead the way ahead of COP26 to drive action and secure a successful outcome of the conference.