The government met its legal deadline to publish a new climate action plan this week, with the Carbon Budget and Growth Delivery Plan (CBGDP).
It quantifies how past, present and future policies to cut emissions, and cascading tipping points in clean technology and societal change, could help to close the remaining gap in meeting the UK’s climate targets for the 2030s, on the path to net zero.
This is crucial for the policy certainty needed to underwrite investment in clean tech and electrification. It reaffirms that clean energy is the economic opportunity of the 21st century and frames climate action in terms of improving living standards, creating jobs and securing investment in UK industries.
We’ll be crunching the numbers in our webinar next week, but here are some initial takeaways on the main areas.
Power
The move to clean power has led to by far the biggest emissions reductions of any sector so far, thanks to policies from both Conservative and Labour led governments. Coal-fired power was finally consigned to the history books last year and renewables generated over half of the UK’s electricity for the first time. This will be the foundation for powering the rest of the economy with low carbon electricity. The big challenge for this plan is to accelerate emissions reductions across transport, buildings, industry and agriculture.
Transport
Transport is the largest emitting sector and existing policies to increase sales of electric vehicles (EVs) will lead to major emissions reductions over the next 15 years. The plan appears to have scaled back the short term emissions saving potential the previous government saw in EVs, but changes are likely to be based on more realistic assumptions of their uptake, following a further two years of sales data.
Policy instability hasn’t helped, but the new electric car grant is a step in the right direction, instilling greater consumer confidence and supporting the cleanest vehicle manufacturing. The plan confirms that the government will consult on regulatory options for phasing out the sale of new non-zero emission HGVs by 2035 for lighter trucks, and by 2040 for heavier ones. That’s crucial, as they are the biggest source of surface transport emissions not yet covered by policy, and the consultation must be launched without delay.
Aviation policy is largely focused on tech improvements, such as improved efficiency and sustainable aviation fuel, rather than limiting the growth in demand from frequent flyers, which we think is needed until zero emission technologies are developed.
Heating
Space and water heating in buildings is the second biggest source of emissions. The new plan shows how building regulations and new energy efficiency standards for the rental sector are gradually reducing bills and emissions. But the move away from gas boilers to low carbon electric heating is needed to cut around two thirds of building emissions and reduce our exposure to fossil fuel price shocks. The government has ruled out banning new gas boilers, which had been pencilled for 2035, relying on incentives instead to make electric heat pumps the default replacement choice. The delivery plan has measures to make that happen, including an expanded Boiler Upgrade Scheme, but more should be done to bring down costs, build the skilled workforce necessary and reduce the cost of electricity relative to gas.
Industry
While we wait for the promised Industrial Decarbonisation Plan, Steel Strategy and Circular Economy Strategy, there remains a lack of clarity about how the government will support industry to thrive under the green transition. Significant emissions savings are projected from higher demand for low carbon products and fuel switching, especially through electrification, but the government is yet to demonstrate how it will achieve this, eg there’s no sign of a replacement for the Industrial Energy Transformation Fund, to help with capex costs for business decarbonisation. Here too, energy intensive industries need the cost of electricity to fall before acting.
Farming and land use
Farmers are already suffering with extreme weather, damaging harvests. While the plan proposes measures to support farmers to cut emissions and restore habitats, increasing access to nature and protecting communities against flooding, slow progress means lower emissions savings are projected compared to the previous version of the plan. Downgraded ambition on peatland restoration and woodland creation is also disappointing. But the government pledges to legislate to end the sale of horticultural peat for the first time since coming into office and there are welcome signs the plan will be better joined up with farming policy, referencing measures that the 2025 Spending Review agreed to fund. Now, swift action is needed to implement them.
Resources
The circular economy’s central role in climate action is recognised, with the plan highlighting policies to boost industrial resource efficiency and construction material reuse. The Circular Economy Strategy, expected in the coming months, along with sector roadmaps, will show how ambitious policies will be needed to realise the full environmental and economic potential of an end to throwaway culture.
Methane
The government has published a Methane Action Plan, alongside this delivery plan, following calls spearheaded by Green Alliance. It highlights the importance of urgently cutting emissions of this highly potent greenhouse gas and promises progress on capturing it from landfills as well as fossil fuel standards. But some opportunities have been missed, eg It fails to tackle agricultural methane emissions or better management of leaks in the oil and gas sector.
The priority must now be to get on and actually deliver the climate and growth plan, supporting businesses and households to switch to cleaner technologies and end Britain’s reliance on expensive, polluting fossil fuels.
If you’d like to hear more from our experts on what the plan means for UK climate action and growth, tune into our webinar next Wednesday lunchtime.
Discover more from Inside track
Subscribe to get the latest posts sent to your email.
