After much anticipation, Boris Johnson has outlined his ‘Ten Point Plan’ for a Green Industrial Revolution, signalling new ambitions for a range of low-carbon technologies, and financial support to help accelerate progress towards net-zero emissions.
The plan aims to support up to 250,000 UK jobs, and to mobilise £12bn of public funding that could leverage more than three times that amount from the private sector.
With stretching targets for the switch to low-emission vehicles, rolling out carbon capture and hydrogen technology, and installing low-carbon heat in peoples’ homes, there are now clear policy goals for businesses to work towards across many of the priorities for reaching net-zero emissions.
What businesses will want to see next is the detail behind this ambition from the government which we will likely see in the coming months as government publishes the Energy White Paper, Net Zero Costs Review alongside a set of sector and technology-specific strategies.
Capturing carbon in our industrial heartlands
The government’s ambitions for deploying carbon, capture, use and storage technology (CCUS) have taken a further step forward today with a new target announced to capture 10MT of CO2 by 2030 (the equivalent of all carbon emissions from the Humber cluster today). This target will aim to be met with two industrial clusters using CCUS by the mid-2020s, and four by the end of the decade. The Prime Minister has committed an additional £200m on top of the £800m promised at the Budget in March, and with more detail on the business models needed to deliver this expected before the end of the year, we are seeing a clear acceleration in the development of this vital technology for net zero. The CBI has continuously supported the development and deployment of CCUS technology around the UK, not just as a means to reduce emissions, but as a way of levelling up the regions and offering thousands of jobs in and out of the industrial clusters.
Bold plans to phase out new petrol and diesel vehicles
It has been confirmed the UK will begin its phase out date for the sale of new petrol and diesel cars and vans for 2030, a full decade sooner than the 2040 date announced only a few years ago. This is perhaps one of the most challenges targets in the plan, with just over nine years to increase sales of ultra-low emission vehicles from around 5% of new sales today, up to 100%. It’s not impossible, with a wide range of new electric models coming to the market giving business and domestic drivers a real choice, but the challenge of upfront cost, charging network access, and transitioning domestic manufacturing means this is where we need to see maximum government and business collaboration to bring this about.
The CBI backed bringing the date forward, but highlighted doing so this soon, would require a real step up in funding and policy support from government. This appears to have been answered, with more than £2bn announced to support the charging infrastructure, grants to support the purchase of new vehicles, and £500m to develop mass production of electric vehicle batteries in the UK. However, details still lack as to how this will be delivered and how it will link into the government’s upcoming Transport Decarbonisation Plan.
Further steps to decarbonise buildings and create a hydrogen economy
The CBI has been highlighting the need to accelerate action on decarbonising buildings, through improved energy efficiency and low-carbon heat technologies, like hydrogen boilers and heat pumps. The PM’s plan contains welcome commitments to extend the Green Homes Grant, enabling more homes to access the funding available, and target the installation of 600,000 heat pumps every year by 2028 – priorities highlighted in the CBI’s recent Heat Policy Commission report and Green Recovery Roadmap publication. Confirmation is also awaited on the potential to bring the Future Homes Standard forward to 2023, which would involve higher energy efficiency standards and low-carbon heat sources for new build homes.
The development of a ‘Hydrogen Town’ by 2030 that could test the large scale use of hydrogen for heating is part of a £500m commitment to support this technology across a range of sectors, including industry and transport, as well as heating. Of that, £240m will be targeted specifically at support for new hydrogen production facilities, and we know that a new Hydrogen Economy Strategy is due to be published next year, which should contain more detail on how this funding will be used to support various forms of low-carbon hydrogen production. In reaching this outcome, government set a target of 5GW of hydrogen production by 2030 for use across sectors.
The launch pad for more detailed policy and delivery
The promise to make the UK the ‘Saudi Arabia of wind’ was already announced, and confirmed again alongside new funding to support the development of new nuclear reactor technologies. Other elements of the plan included commitments to decarbonising aviation and shipping, and public transport and active travel options. Commitments to invest in nature, including planting 30,000 hectares of trees each year were also prominent.
The range of commitments highlight the importance of detailed policy plans to deliver these, including the Prime Minster’s promise that government investment would leverage two to three times more from the private sector. The Energy White Paper publication is a clear priority, and as well as the forthcoming Spending Review due to be delivered by the Chancellor at the end of the month.
Other important strategies that will give more detail on the proposals set out today include the Heat and Buildings Strategy, the Industrial Decarbonisation Strategy, and Hydrogen Economy Strategy, all due in the next few months. An overarching strategy for achieving net-zero is due later next year, as the UK continues to shape domestic policy ahead of the COP26 climate conference, where it needs to demonstrate international leadership as this crucial UN meeting.