PM announcement on net zero: a setback for UK green investment

Amidst intense media interest and speculation, the Prime Minister announced a “new approach” for the government in how it pursues the UK’s net zero goals – with several new policies underpinning the change. It's unsettled businesses, who are concerned by the signalling in the PM’s speech that the government is rolling back on ambitious commitments to tackle emissions and secure green investment. 

Extension of the phase-out date for petrol and diesel vehicles could impact long-term investment plans 

The most significant and eye-catching of the policies was the extension of the phase out date for internal combustion engine vehicles from 2030 to 2035. The PM conceded that he expected electric vehicles to be as affordable as their fossil fuel equivalents by the end of the decade, but said he didn’t want to restrict consumer choice during that period.  

For firms investing in the sector though, the 2030 phase-out date was regarded as a “gold standard” policy, setting us apart from international competition and providing a clear demand signal on a realistic timeframe. Alongside the proposed mandate for EV sales, it has been cited as an important factor in recent investment announcements in vehicle and battery manufacturing facilities. Businesses will have to assess how the new phase-out date impacts their long-term investment plans and will seek clarity on implication for the sales mandate. For their part, Labour have confirmed they would revert to a 2030 phase out day should they come to power at the next General Election. 

Reneging on energy efficiency standards is at odds with affordability push 

The PM also scrapped plans to introduce minimum energy efficiency standards for homes in the private rented sector, which would have helped millions of households use less energy and cut their bills. Alongside recent developments, such as the Great British Insulation Scheme, the new standards were set to create