Update: PM’s row-back on net zero will ‘undermine industry confidence’

Prime Minister Rishi Sunak’s leaked plan to delay the phase-out of gas boilers and other net zero goals was greeted with alarm. The PM’s revised plan did little to reassure the industry which has been working to deliver net zero, but it did seek to soften the blow with a surprise increase in the grant available for the Boiler Upgrade Scheme.

The PM said that under the revised plans, the government will:

  • Move back the ban on the sale of new petrol and diesel cars by five years, so all sales of new cars from 2035 will be zero emission. This will enable families to wait to take advantage of falling prices over the coming decade if they wish to.
  • Delay the ban on installing oil and LPG boilers, and new coal heating, for off-gas-grid homes to 2035, instead of phasing them out from 2026. Many of these homes are not suitable for heat pumps, so this ensures homeowners are not having to spend around £10-15,000 on upgrading their homes in just three years’ time.
  • Set an exemption to the phase out of fossil fuel boilers, including gas, in 2035, so that households who will most struggle to make the switch to heat pumps or other low-carbon alternatives won’t have to do so. This is expected to cover about a fifth of homes, including off-gas-grid homes – those that will need expensive retrofitting or a very large electricity connection.
  • Scrap policies to force landlords to upgrade the energy efficiency of their properties, but instead continue to encourage households to do so where they can.
  • Raise the Boiler Upgrade Grant by 50% to £7,500 to help households who want to replace their gas boilers with a low-carbon alternative like a heat pump.
  • Rule out policy ideas that would require people to share cars, eat less meat and dairy, be taxed to discourage their flying, or have seven bins to hit recycling targets – removing worrying proposals that would interfere in the way people live their lives.

In a statement, the government introduced the context for its ‘pragmatic, proportionate and realistic path to reach net zero by 2050’:

The UK has set the most ambitious target to reduce carbon emissions by 68% by 2030 compared to 1990 levels – and is the only major economy to have set a target of 77% for 2035….Thanks to this progress already made, reaching the UK’s 2030 and 2035 targets do not have to come at the expense of British citizens who are continuing to face higher costs of living – particularly as the UK’s share of global emissions is less than 1%. This means some measures that were planned are no longer needed to fulfil them.

The statement added that the Prime Minister has made clear that the plans to meet net zero will only succeed if public support is maintained ‘or we risk losing the agenda altogether, unable to meet our goals.’  It concluded:

The UK will remain the country with the most ambitious, stringent decarbonisation targets in the world even after these changes are made. These changes will not require the UK to change or abandon its upcoming emissions targets and the Prime Minister is unequivocal that we’ll meet our international agreements including the critical promises in Paris and Glasgow to limit global warming to 1.5 deg C.

In announcing the moves, the Prime Minister  said:

This country is proud to be a world leader in reaching Net Zero by 2050. But we simply won’t achieve it unless we change. We’ll now have a more pragmatic, proportionate, and realistic approach that eases the burdens on families – all while doubling down on the new green industries of the future. In a democracy, that’s the only realistic path to Net Zero…We are going to change the way our politics works. We are going to make different decisions. We will not take the easy way out.

The government also unveiled a clutch of other initiatives to help stimulate green policies:

  • The first ever spatial plan for energy infrastructure set out to give industry certainty over where it will be and give every community a say.
  • A “fast track” through the nationally significant infrastructure project planning regime, available for major eligible transmission projects, to ensure they are prioritised, helping businesses and households connect to the grid sooner.
  • A new approach to grid connections, where energy projects that are ready first will connect first – and ultimately get online quicker.
  • The new Green Futures Fellowship, backed by a £150m endowment, to support at least 50 leading scientists and engineers to develop practical, breakthrough green technologies and climate change solutions over five years – building on the £1 billion invested into the Net Zero Innovation Portfolio.

In a clear bid to head off criticism from sustainability groups, politicians and the various industries involved – their initial reaction is here – the Prime Minister concluded:

There will be resistance – and we will meet it. Because I am determined to change our country and build a better future for our children. Nothing less is acceptable.

Conservative MP Chris Skidmore, who was the chairman of the UK government’s review of net zero, was forthright in his response to the original plan

Rishi Sunak still has time to think again and not make the greatest mistake of his premiership, condemning the UK to missing out on what can be the opportunity of the decade to deliver growth, jobs and future prosperity.

Industry bodies and companies reacted equally strongly. David Cowdrey, Director of External Affairs at the MCS Foundation said:

The potential move to relax the ban on gas boilers by 2035 could severely undermine the confidence of heat pump manufacturers, heating engineers, and homeowners, as well as the Government’s own target on heat pumps. Contrary to the rhetoric of a small number of Conservative MPs, heat pumps are overwhelmingly popular with people who have them, are suitable for all housing types, and are supremely efficient in cutting bills and carbon emissions. The fact that the UK remains at the bottom of the European league table for installing heat pumps is in large part due to inconsistent Government policy and failure to set and stick to targets. That has to change if we are going to meet climate change goals.

Nick Coad, Director of Innovation at Wolseley Group underlined the threat to public confidence, warning that the Boiler Upgrade Schemes was already failing to achieve anything like the required take-up. He said:

It was supposed to kick-start a sustainable home heating bonanza and get many of us thinking about swapping out our gas boilers for a heat pump or biomass system. But rather than inspiring and assisting homeowners across the country, the BUS has not received the warm reception that was hoped for. Fewer people applied for the scheme this July than last…People remain at best unaware and at worst totally unconvinced of their benefits. The high hopes seem to have faded.

Nick Coad’s full comments on the subject of industry confidence are here.

Electrotechnical trade body BEAMA has written to the Prime Minister and DESNZ in response, making it clear that delaying progress to Net Zero will be damaging.

BEAMA chief executive Yselkla Farmer said:

Investors need certainty and commitment from Government. UK Net Zero targets represent a huge opportunity for employment and inward investment in the UK energy sector and this is only possible with ambition. The automotive industry and associated infrastructure providers have already brought forward significant investments to meet the 2030 targets and this is ensuring the UK takes a leading role in this sector.  A move by Government to backtrack on these plans will stall investment, and worsen the growing distrust in policy that industry feels today.

She added that a move away from gas and oil can bring financial benefits to consumers’ home energy use if matched with a robust and world leading flexibility market:

This is something we have been aiming to achieve for a number of years…The Government’s own major policy document Powering Up Britain stated just six months ago that it was ‘setting a clear policy framework on energy security and net zero, so businesses can plan and invest with confidence.’ BEAMA hopes Government will remember this and stick to the existing deadlines so all can stop deliberating and get on with the job.