UK Government releases long-awaited net zero strategy

THE UK Government has outlined how it plans to reach net zero by 2050 in its Net Zero Strategy. The plans include the approval of two carbon capture usage and storage (CCUS) industrial clusters, however there is criticism that the strategy still falls short in many areas.

The long-awaited Net Zero Strategy was published just 12 days before the start of COP26. It was released alongside the Heat and Buildings Strategy and the Net Zero Research and Innovation Framework, which sets out key net zero research and innovation priority areas for the UK over the next 5-10 years. Also published on the same day were the Government’s response to the Climate Change Committee’s (CCC) highly critical Progress Report and Independent Assessment of UK Climate Risk published in June, and the Treasury’s Net Zero Review. The Net Zero Review notes that there can be net economic benefits with a well-managed transition to net zero and that there are costs for inaction.

The strategy builds on the Ten Point Plan to set out an economy-wide plan for how businesses and consumers will be supported in the transition. It claims that since the Ten Point Plan was released in November 2020, £26bn (US$35.9bn) of Government capital investment has been mobilised.

The strategy covers policies for a wide range of sectors across the economy. The four principles of the strategy are to continue to enable consumer choice, ensure the biggest polluters pay the most, protect the most vulnerable, and work with businesses to reduce costs.

Prime Minister Boris Johnson said: “The UK’s path to ending our contribution to climate change will be paved with well-paid jobs, billions in investment and thriving green industries – powering our green industrial revolution across the country. By moving first and taking bold action, we will build a defining competitive edge in electric vehicles, offshore wind, carbon capture technology and more, whilst supporting people and businesses along the way.”

“With the major climate summit COP26 just around the corner, our strategy sets the example for other countries to build back greener too as we lead the charge towards global net zero.”

The strategy aims to unlock £90bn in private sector investment to 2030 and secure up to 400,000 jobs. However, according to The Guardian, sources at the Department for Business, Energy and Industrial Strategy (BEIS) said that this was not meant to mean all newly created jobs, but to also include those where jobs were transitioned to a greener sector.

Some new funding for decarbonisation

Many of the policies and ambitions announced in the strategy – such as the aim for a zero emissions power grid by 2035 – have previously been announced. This repetition has led to some criticism. Tim Lord, Senior Fellow, Net Zero at Tony Blair Institute for Global Change, said on Twitter that in terms of policy, the strategy is “not so much a new album, as a Greatest Hits with some bonus tracks.”

Ministers can’t just keep re-announcing the same promises and listing them all out with a repackaged name – they need an actual strategy that sets out the important role the state must play in our net zero transition.

Darren Jones MP

Darren Jones MP, Chair of the Business, Energy and Industrial Strategy (BEIS) Committee, said: “The Government is failing to recognise the scale and pace of change required to meet our climate change targets. Ministers can’t just keep re-announcing the same promises and listing them all out with a repackaged name – they need an actual strategy that sets out the important role the state must play in our net zero transition.”

However, there is some new funding as part of the strategy. While reiterating plans to secure a final investment decision on a large-scale nuclear facility by the end of Parliament, the Government announced a new £120m Future Nuclear Enabling Fund, which will look at options for future technologies such as small modular reactors. It said a number of potential sites are being considered including Wylfa in North Wales.

The Government aims to initiate the commercialisation of sustainable aviation fuel (SAF) and it confirmed an ambition to have 10% SAF by 2030. It includes new funding of £180m to support the development of the SAF industry.

Adam Morton, Chair of Sustainable Aviation, welcomed the ambition and the funding. “SAF is ready now and has an essential role to play towards achieving UK aviation’s net zero target, particularly for long-haul routes. The UK has the right skills, infrastructure and feedstocks to lead the world in SAF commercialisation, drive down aviation emissions and create thousands of new green jobs this decade.”

“A UK SAF mandate can also work but only if the supply exists and if fuels are affordable, which is why in addition to today’s positive announcement we need the right policies, such as a price mechanism, to bridge the price gap between SAFs and fossil jet fuel, and for these to be announced as early as possible.” 

There will be £500m in new funding for net zero research and innovation to support the development of new green technologies.

A new £140m fund for the Industrial Decarbonisation and Hydrogen Revenue Support (IDHRS) scheme will be available to fund new hydrogen and industrial carbon capture business models. This aims to accelerate industrial CCUS and hydrogen and bridge the gap between industrial energy costs from gas and hydrogen.

The strategy repeated a previous announcement that there would be a “climate compatibility checkpoint” for future oil and gas licensing, which it claims will ensure that any future fossil fuel extraction is compliant with the UK’s net zero target  However this still goes against the International Energy Agency’s warning that there can be no new oil and gas development if net zero is to be reached.

Two CCUS clusters selected

The Government announced that two out of five CCUS clusters had been selected for £1bn of Government support in order to be operational by the mid-2020s. HyNet and the East Coast Cluster (a collaboration between Zero Carbon Humber, Net Zero Teesside, and the Northern Endurance Partnership) were selected as part of the first phase of the clusters programme, with the Scottish Cluster selected as a “reserve”.

Greg Hands, Energy and Climate Change Minister, said: “If the [selected] clusters represent value for money for the consumer and the taxpayer then subject to final decisions of Ministers, they will receive support under the Government’s CCUS Programme. We are also announcing the Scottish Cluster as a reserve cluster if a back-up is needed. We will continue to engage with the Scottish Cluster throughout Phase-2 of the sequencing process, to ensure it can continue its development and planning.”

While the selection of HyNet and the East Coast Cluster have been welcomed by industry, there has been disappointment that the Scottish Cluster was not selected as a phase 1 cluster.

Of all the carbon capture clusters in development, every single one of them involves an oil and gas company. With 50 years of expertise producing energy, the UK’s changing oil and gas industry is using its skills to help the country hit net zero.

Mike Tholen

Nick Cooper, CEO of Storegga, speaking on behalf of the Scottish Cluster said: “Whilst we are disappointed of the outcome of the sequencing bid, we remain convinced of the potential and significant advantages of the Scottish Cluster and are committed to the development of CCS to support decarbonisation of UK industry and power. We have been very clear that all of the current clusters need to be operating to meet UK net zero targets and will be seeking support to progress as soon as possible.”

A BEIS Committee report from 2019 recommended that at least three clusters should be established by 2025 to ensure that there would be no delay if one project runs into difficulties. Oil and Gas UK also emphasised that the UK would need all five clusters to reach net zero. Mike Tholen, OGUK Sustainability Director, said: “Of all the carbon capture clusters in development, every single one of them involves an oil and gas company. With 50 years of expertise producing energy, the UK’s changing oil and gas industry is using its skills to help the country hit net zero.”

Deidre Brock MP also queried in Parliament how the Government can claim they are delivering a just transition when pulling the plug on the Scottish Cluster when many industrial jobs are centred around the north-east of Scotland.

Is it enough?

The strategy was broadly welcomed, particularly as it brings together net zero ambitions across the economy. However, there were also comments that the strategy isn’t sufficient to get to net zero.

Chris Stark, Chief Executive of the CCC, issued an initial response to the strategy. “We didn’t have a plan before, now we do. This is a substantial step forward that lays out clearly the government’s ambitions to cut emissions across the economy over the coming 15 years and beyond. It provides much more clarity about what lies ahead for businesses and individuals and the key actions required in the coming decades to deliver a net zero nation. It also gives the UK a strong basis to be president of the forthcoming COP26 summit. The critical next step is turning words into deeds. We have begun to assess the strategy in more detail and the extent to which the policies proposed in this strategy deliver their ambition.”

Philip Dunne MP, Environmental Audit Committee Chairman, said: “There is every indication that this strategy, with its policies on electric vehicle manufacturing and charging, along with emphasis on carbon capture and storage, will indicate to the market that net zero Britain is an investible proposition.”

Malcolm Wilkinson FIChemE, Chair of IChemE’s Sustainability Special Interest Group said: “The strategy is a positive start outlining as it does a broad approach to UK zero carbon. The UK government has in the past talked a good game but has fallen down on implementation with CCUS being one case in point and failure to meet the carbon budgets set by the CCC another. It remains to be seen therefore whether this time the targets will be achieved. The devil too is in the detail and whilst we have plenty of broad financing promises and job growth estimates, the detail of generating capacities from each of the wish list technologies is lacking and there is a lot of arm waving on such things as hydrogen with clear confusion as to what will be green (requiring excess renewable electricity), or blue (dependant on natural gas). The bottom line of course is that from the global perspective we all are reliant on what happens at COP26.”

There is nothing for steel in this document, and a £250 million clean steel fund some way down the road will not cut it.

Ed Miliband MP

There have also been concerns over a potential lack of transparency. While the strategy says that it will put the UK on the path to meeting the sixth carbon budget in 2035, it doesn’t detail how this will happen. According to New Scientist, the Government has a document breaking down the emissions savings of individual actions, but declined to publish it.

Kevin Anderson, Professor of Energy and Climate Change, University of Manchester, said: “The UK’s Net Zero strategy falls far short of both its Paris and G7 temperature and equity commitments. Scour the associated spreadsheets and the numbers reveal a story of subterfuge, delusion, offsetting and piecemeal policies – all dressed up as a shiny new strategy for COP26.”

Ed Miliband MP said in Parliament that while it was good that tackling the climate crisis is a shared national objective, the strategy falls short on delivery, particularly on long-term investment. He said that a source at BEIS told him that the Treasury was focusing on short-term risks rather than long-term needs. He also highlighted the failure to significantly invest in the hydrogen and steel sectors. “It will cost £6bn for the steel industry to get to net zero over the next 15 years. If we want a steel industry we will need to share the costs with the private sector. However, there is nothing for steel in this document, and a £250 million clean steel fund some way down the road will not cut it.”

Nilay Shah FIChemE, Vice-Chair of the National Engineering Policy Centre’s net zero project highlighted that the decarbonisation plans will provide opportunities for chemical engineers. “Industrial decarbonisation is an important part of energy and industrial strategy and the plan for investment in the key clusters is welcome. However, the needs of a range of industries in for example the East and West Midlands and Staffordshire will need to be met in creative ways too. The topics of industrial decarbonisation and greenhouse gas removal provide many interesting opportunities for chemical engineers. Overall, the report should be seen as the strategic, and the next challenge will be the development of more granular implementation plans which will need to engage a wide range of stakeholders and take account of regional variations. However, it is timely and hopefully will give confidence globally that the UK has credible plans to meet its NDCs [Paris Agreement pledges] and will encourage other countries to declare ambitious NDCs of their own at COP26 and beyond.”

Mark Apsey FIChemE, Chair of IChemE’s Energy Community of Practice, said: “The long-awaited publication of the UK Government’s Net Zero Strategy is a welcome step forward on the UK’s journey to decarbonise in line with our legally binding targets ahead of COP26 in Glasgow next month. Many of the policy measures announced will directly support growth in green jobs in the short term and attract investment into the clean technologies required to transform our society. Time will tell if these policy announcements are sufficient to keep the UK on track to deliver on our commitments to try and limit global temperature rise to 1.5^oC. As chemical engineers it is our duty to work urgently within our respective fields across industry to help realise the greenhouse gas emission reductions that society, backed up by science, is so clearly demanding.”

Another concern raised on the strategy was that not all of the recommendations made by the Green Jobs Taskforce – which outlined what will be necessary to transition the work force to a net zero economy – have been acted upon. The strategy says that the ideas in the taskforce’s recommendations informed the development of the strategy, and that the policies in the strategy are a first step to addressing the challenges.

However, Frances O’Grady, General Secretary of Trades Union Congress said: “The UK can be a world leader in creating good, green jobs. But this strategy is a huge let down. The Government has failed to implement many of the main recommendations of its own green jobs taskforce - just two weeks before it hosts the UN climate change conference. That’s not the way to show global leadership - it’s self-sabotage. Today’s spending commitments will do little to address the yawning investment gap needed to get British industry ready for net-zero. Unless ministers do more to future-proof and decarbonise energy-intensive industries, hundreds of thousands of jobs in UK manufacturing and supply chains will be in jeopardy.”