UK Backtracks On Key Green Policies

Authored by Tsvetana Paraskova via OilPrice.com,

The UK government announced this week a new approach to achieving the net-zero 2050 target, softening some of the key policies as the cost-of-living crisis is at its worst in a generation and a general election is looming next year.  

Prime Minister Rishi Sunak delayed a ban on gasoline and diesel cars by five years and scrapped policies to force homeowners to make expensive energy efficiency upgrades. The UK’s target to achieve net-zero emissions by 2050 remains intact, but not at “unacceptable costs” for families, Sunak said in a speech at Downing Street on Wednesday.  

While the 2050 net-zero target stays, some intermediate targets, and some policies were either delayed or scrapped as UK residents (and voters) are trying to cope with a cost-of-living crisis with food and energy prices soaring while Sunak’s Conservative Party is trailing Labour in the polls by some 20 percentage points.

Sunak said the UK needs to change the debate on how to achieve net zero—from two extremes now to a more realistic debate.

“This debate needs more clarity, not more emotion,” he said.

“We’ll now have a more pragmatic, proportionate, and realistic approach that eases the burdens on families,” the PM said.

One of the most specific policy changes is a delay of a ban on the sale of new gasoline and diesel passenger cars—from 2030 to 2035.

The UK raised the cash grants for replacing gas boilers under the Boiler Upgrade Scheme by 50% to $9,210 (£7,500), but “We’ll never force anyone to rip out their existing boiler and replace it with a heat pump,” Sunak said.

The government will not force any homeowner to make expensive upgrades to increase the energy efficiency of their homes, either.  

The PM also confirmed that his government would “not ban new oil and gas in the North Sea, which would simply leave us reliant on expensive, imported energy from foreign dictators like Putin.”

Energy industry associations expressed concern that the shift in policies would further damage the UK’s competitiveness in attracting investments in green technologies. Carmakers overall had a mixed reaction, with some welcoming the delay of the gasoline and diesel ban to 2035 and others criticizing the government for the lack of consistency.

Ford UK, for example, said that “the UK 2030 target is a vital catalyst to accelerate Ford into a cleaner future.”

“Our business needs three things from the UK government: ambition, commitment and consistency. A relaxation of 2030 would undermine all three,” said Lisa Brankin, Ford UK Chair.

Stellantis said that “clarity and reasonable anticipation are important,” while Volkswagen Group UK noted that “Regardless of the policy adjustments announced today, we urgently need a clear and reliable regulatory framework which creates market certainty and consumer confidence, including binding targets for infrastructure rollout and incentives to ensure the direction of travel.”

Simon Williams, head of policy at the UK’s motoring organization RAC, described the delayed ban as “disappointing” and said, “pushing back the ban from 2030 to 2035 risks slowing down both the momentum the motor industry has built up in switching to electric powertrains and ultimately the uptake of electric vehicles.”

Emma Pinchbeck, chief executive at the trade association for the UK energy industry, Energy UK, commented on the shift in net-zero policies,

“It’s strange to cite our world-leading progress in reducing emissions and developing low-carbon technologies and then decide that is a reason for slowing down, and risk surrendering that position and those opportunities to other countries.”

“The Prime Minister also talked about the cost to households but it can’t be emphasised enough that what has hit people in the pocket hard over the last 18 months – through record energy bills, the resulting effect on inflation and the cost-of-living – has been the cost of oil and gas. By slowing efforts to reduce our dependency, we do leave our economy and our people at the mercy of volatile expensive fossil fuels for longer,” Pinchbeck added.

RenewableUK association’s chief executive Dan McGrail said,

“Today’s announcements will undoubtedly knock investor confidence, as many green technology leaders are now nervous about the increasing uncertainty around net zero policies in the UK.”     

“The Government is going to have to outline clear measures to restore market confidence in the Autumn Statement, not least to ensure that we can compete against the USA, Europe and China for investment at a time when the global race to build new renewable energy projects has never been more intense,” McGrail noted.