With no significant announcements for climate change in the last two budgets and following the Chancellor’s UK Government’s 2018 Budget, the industry was poised for some good news for the green economy. Whilst there were some positive pledges, the avoidance of some issues has caused a mixed reaction across the industry.
The key announcements were as follows:
- The plastic packaging tax – the Chancellor declared that the UK will lead the world with the introduction of a new tax on the manufacture and import of plastic packaging which contains less than 30% recycled plastic.
- Freeze on the carbon price – The carbon price rate will remain frozen at £18/tCO2 for 2020-21. From 2021-22, the Government will seek to reduce the CPS rate if the total carbon price remains high.
- EU ETS following ‘no deal’ Brexit – the UK would introduce a Carbon Emissions Tax applying to all stationary installations currently participating in the EU ETS from 1 April 2019 at a rate of £16 per tonne of CO2 emitted above an installation’s emissions allowance.
- £20m will be provided to boost plastic use and recycling – £10m will be set aside for more for plastics development and £10m to create innovative approaches to increase recycling and reduce litter.
- Climate Change Levy (CCL) on gas increase – CCL paid by businesses for gas usage is to rise to the same level as electricity. The levy will increase 60% of the electricity main rate by 2021-22, while the electricity rate will be lowered in 2020-21 and 2021-22 to bring this into line.
- New business energy efficiency fund – £315m of investment for an Industrial Energy Transformation Fund to support energy-intensive companies to make the low-carbon shift and increase energy efficiency. The Government has pledged to consult on creating a new Business Energy Efficiency Scheme, focused on smaller businesses.
- Fuel duty frozen – Fuel duty has been frozen again for the ninth successive year.
- Air pollution and flood management funding – £13m will be made available to tackle risks from floods and climate change and the expansion of the flood warning system. In addition, £20m funding will be given support local authorities to meet air quality obligations.
- Investment in tree-planting – £60m will be spent on reforesting Britain, planting millions of trees across the country. A £10m project will be rolled out to plant new street and urban trees and £50m will be used to purchase credits from landowners who plant woodland.
- Oil and gas – Taxes will remain at current levels alongside a pledge to make the UK, and in particular Scotland, a world-leading expert on decommissioning oil rigs.
One notable disappointment was the ruling out of the disposable cup levy following a consultation on the issue concluding that this would not be effective in encouraging widespread re-use.
In the wake of the 2018 Budget announcement, where the only notable announcements related to plastic and trees, focus must now fall on the Government to strengthen and implement its Clean Growth Strategy and provide specific commitments on how the UK will meet its carbon targets. Nothing short of bold action from the Government on this topic will silence the concerns that the government is currently failing to act sufficiently to stem the progression of climate change.