UK sets out 10-point plan for 'green industrial revolution'

Out-Law News | 18 Nov 2020 | 6:09 pm | 5 min. read

The UK government has published its priorities for future investment in clean energy, transport and energy efficiency, designed to support the country's 2050 'net zero' emissions target and support up to 250,000 new jobs.

Prime minister Boris Johnson pledged £12 billion in government investment into the 10-point plan, which includes commitments on offshore wind, low carbon hydrogen production, electric vehicles and nuclear. The government is also seeking to attract significant private investment in support of its plans.

Funding announcements include an additional £200 million for carbon capture and storage (CCS), taking the total to £1 billion; up to £500m for new hydrogen production facilities and home trials in the use of hydrogen for heating and cooking; and £525m to help develop large and smaller-scale nuclear plants and advanced modular reactors. The government has also confirmed that a ban on the sale of new petrol and diesel cars and vans will be brought forward to 2030, with additional investment planned to support the transition to electric vehicles.

Energy, environment and climate change experts at Pinsent Masons, the law firm behind Out-Law, cautiously welcomed the announcements, but warned that the transition to net zero would require substantial investment and a joined-up approach.

Paul Rice said: "Whilst the energy sector has an important role to play in helping the UK meet its net zero objectives, other crucial industries and sectors across the economy are being left to work out how best to reduce their emissions on a private sector basis".

"The government needs to do much more to coordinate all of this and intervene where necessary," he said.

Rice Paul

Paul Rice

Partner, Head of Climate Change Advisory

Whilst the energy sector has an important role to play in helping the UK meet its net zero objectives, other crucial industries and sectors across the economy are being left to work out how best to reduce their emissions on a private sector basis.

Writing in the Financial Times, Johnson said that he would "establish Task Force Net Zero committed to reaching net zero by 2050", although no details have been announced of this task force's membership and duties. Robbie Owen of Pinsent Masons suggested that this could be done by formalising the role of the Committee on Climate Change (CCC), which reports annually to the government with its views on the UK's progress towards meeting its carbon targets.

"The creation of a single purpose Net Zero Commission backed by government would provide the required resources, expertise, focus and statutory powers to make the enormous and challenging progress required across all sectors over the next 10-15 years if we are to have a realistic hope of and plan for reaching net zero by 2050," he said.

The prime minister announced ambitious offshore wind power generation plans last month, at the Conservative Party's virtual party conference. The latest announcement confirms an increased 40GW target by 2030, although planning expert Gareth Phillips of Pinsent Masons said that reaching these targets would require grid updates, an expedited consent process and a "strategic approach" to habitat compensation measures, as well as targeted subsidies through the Contracts for Difference (CfD) mechanism.

The additional funding for CCS would be used to create two carbon capture 'clusters' by the mid-2020s, with another two to follow by the end of the decade. CCS will play an essential role in the transition to net zero, as it will allow for unavoidable emissions to be removed from the atmosphere. The government also intends to increase rewilding and tree-planting efforts to remove carbon from the atmosphere, planting 30,000 hectares of trees every year by 2025.

Green finance, cleaner public transport, more cycle lanes, 'zero emission' air and shipping and investment in energy efficiency measures for schools and hospitals also form part of the announcement. The government is also targeting domestic energy efficiency improvements, extending the Green Homes Grant voucher scheme by a year and funding trials of the use of hydrogen for heating and cooking. A 'hydrogen neighbourhood' will be established in 2023, followed by a 'hydrogen village' by 2025 and an aim for a 'hydrogen town' before the end of the decade.

Stacey Collins of Pinsent Masons said: "The high-level financial commitments on CCS and hydrogen are important, but they need to be swiftly followed by the detail of exactly how they will be realised. Only then can business and industry start to fully embrace the net zero pathways that the government is laying out".

"Hopefully, that detail will be available before the end of this year, along with the long-awaited energy white paper, so that those early developers/adopters of CCS/hydrogen technologies have enough information to make the required investment decisions to accelerate those low-carbon options," he said.

On the announced investment in hydrogen, Collins added: "It’s great to see that the government is aiming to support the potential deployment of low-carbon hydrogen in industry, transport, power and homes. However, there is still a lack of detail on how that deployment might be realised, which means the pathways to embracing low-carbon hydrogen remain fairly unclear. To achieve the Government’s 2030 objective we need to get into the details/practicalities swiftly".

"The commitments to a hydrogen neighbourhood, village and - ultimately - town are really ambitious, as there are considerable technological, and practical, challenges to overcome. There are already a few pilot and developing schemes that are well advanced in terms of seeking to create a hydrogen grid, in place of a gas grid, to service domestic properties. If the government's targets are realised then this would represent a huge step forward toward the sizeable challenge of decarbonising domestic heating," he said.

Collins Stacey Nov_2019

Stacey Collins

Partner

The high-level financial commitments on CCS and hydrogen are important, but they need to be swiftly followed by the detail of exactly how they will be realised. Only then can business and industry start to fully embrace the net zero pathways that the government is laying out.

The plan also includes commitments to advance nuclear power as a clean energy source. The prime minister referred to both traditional large scale power plants and small "next generation" advanced modular reactors in his announcement.

Nuclear energy expert Graham Alty of Pinsent Masons welcomed the commitment. "The key now will be for the government to engage in a meaningful way with the businesses that want to be part of making it happen," he said.

"Clear policies and tangible strategic investments by the government will be needed to provide the mandate for the private sector to invest in the land, people, technology and manufacturing needed to remobilise the new build industry. These investments can support the drive to achieve net zero alongside other low carbon energy sources; and can be integrated with alternate use of high temperature heat in industrial processes, such as desalination and the production of green hydrogen," he said.

The government has brought forward the planned date of the ban on the sale of new petrol diesel cars and vans from 2035 to 2030, although the sale of 'hybrid' cars and vans able to "drive a significant distance with no carbon coming out of the tailpipe" will be permitted until 2035. It also intends to consult on the phase-out of new diesel HGVs and transitioning to zero emission freight.

Additional funding has been committed to support increased uptake of electric vehicles. This includes £1.3bn for more charge points across England; £582m worth of grants to incentivise consumers to purchase zero or ultra-low emission vehicles; and nearly £500m to develop and scale-up the production of batteries in England's manufacturing hubs of the Midlands and the North East.

Peter Feehan of Pinsent Masons said that electric vehicles and hybrids now accounted for a similar proportion of the UK motor vehicle market as diesel engine equivalents.

"The transition has begun, but the infrastructure to support a full electric vehicle network by 2030 just isn't there at the moment," he said. "The government needs to focus on helping the market create greater change by ensuring the UK has an integrated fast charging network which can cope with increased demand, charge rapidly and reduce waiting times at popular charging destinations - we really need to solve this if we want to smooth the transition."

"The other point is customer experience: we must focus on ease of access and promote contactless payment to ensure we make the experience as easy as filling up with petrol. Creating the ease of comparison with the old will create the comfort in the new," he said.