What is Net Zero?

What is Net Zero?

In October 2021, the UK Government released its Net Zero Strategy to “Build Back Greener” which was presented to Parliament, pursuant to Section 14 of the Climate Change Act 2008. This strategy highlights the Government’s long-term plan to end the UK’s contribution to man-made climate change by 2050.

What is Net Zero?

The phrase ‘net zero’ simply means that carbon emissions must be reduced to as close to zero as possible by 2050, with the remaining emissions being absorbed through the use of greenhouse gas removals such as natural carbon sinks (e.g. trees) or new technologies, such as carbon capture. If this goal is achieved, global greenhouse gas emissions will be at ‘net zero’.

In order to achieve this target, the UK are focusing on various steps moving forward including:

  • ending coal fired power generation;
  • retiring petrol and diesel engines from all cars; and
  • halting deforestation.

How are the UK ‘Building Back Greener’?

The Government wishes to utilise the unprecedented economic opportunity that climate change presents and ‘build back better’ from the pandemic through its levelling up agenda, providing the country with new high skilled, high wage and sustainable jobs more evenly spread across the UK.

The aim is to produce new clean machinery, leading the way with incentives such as wind farms in the North Sea and the creation of state-of-the-art nuclear reactors, whilst also driving down costs as much as possible. This in turn should allow more and more end-users to enjoy more efficient cars and heating systems on an expedited timeline.

UK Strategy for Net Zero

The following strategy is the Government’s long-term plan to end the UK’s contribution to man-made climate change by 2050:

  • Working with the grain of consumer choice: consumers will not be expected to dispose of their current boilers and cars. The strategy will work with what is already in use;
  • The biggest polluters will pay the most for the transition, via fair carbon pricing;
  • The most vulnerable consumers will be protected through Government support, via mechanisms such as energy bill discounts and energy efficiency upgrades; and
  • Working with businesses to deliver deep cost reductions in low carbon technology, through support for the latest technology to bring down costs for consumers and deliver benefits for businesses.

The strategy is for a long-term transition which will take place over the next 25+ years into 2050. But many of the policies within this strategy will be rolled out over the course of the next 10 years.

Sector Focused Approach

The strategy outlines proposals to keep the UK on track to meet its upcoming carbon budgets (budgets to be met over five-year long periods imposed by the Climate Change Act). The strategy involves a delivery pathway showing indicative emissions reductions for each sector of the economy in order to meet targets leading up to the sixth carbon budget (between 2033 and 2037). The sectors targeted are:

  • Power
  • Fuel Supply & Hydrogen
  • Industry
  • Heat and Buildings
  • Transport
  • Natural Resources, Waste and Fluorinated Gases and
  • Greenhouse Gas Removals.

A summary of the key policies and proposals to be introduced in each sector are highlighted below:

Power

  • the UK will be powered entirely by clean electricity by 2035;
  • secure investment on a large-scale nuclear plant by the end of the current Parliament whilst launching a new £120 million Future Nuclear Enabling Fund with a focus on future nuclear technologies;
  • a production goal of 40GW of offshore wind by 2030, incorporating new low carbon generation; and
  • a production goal of 1GW of floating offshore wind by 2030, utilising the North and Celtic Seas.

Fuel Supply & Hydrogen

  • the Government have set up the Industrial Decarbonization and Hydrogen Revenue Support Scheme (IDHRS) to fund new hydrogen and industrial carbon capture business models; and
  • a new climate compatibility checkpoint for future licensing on the UK Continental Shelf to regulate the oil and gas sector.

Industry

  • aim to deliver four carbon capture usage and storage (CCUS) clusters, capturing 20-30 MtCO2 across the economy by 2030. Teeside, the Humber, Merseyside and North Wales are among the potential ‘SuperPlaces’ which will be transformed into these clusters over the next 10 years; and
  • £315 million investment into the Industrial Energy Transformation Fund (IETF) to future proof the industrial sector and its Employees.

Heat and Buildings

  • a focused target that no new gas boilers will be sold by 2035;
  • a £450 million three-year Boiler Upgrade Scheme offering households grants of up to £5,000 for low carbon heating systems so that they cost the same price that a gas boiler currently does;
  • a £60 million Heat Pump Ready programme will provide funding for pioneering heat pump technologies and will support the government’s target of 600,000 installations a year by 2028;
  • additional funding of £1.4 billion for Public Sector Decarbonation with the aim of reducing emissions from public sector buildings by 75% by 2037; and
  • launch of a Hydrogen Village trial to inform a decision on the role of hydrogen in the heating system by 2026.

Transport

  • a zero-emission vehicle mandate to improve consumer choice and deliver on the 2030 commitment to end the sale of petrol and diesel cars;
  • allocation of £350 million to the Automotive Transformation Fund to boost the electrification of UK vehicles;
  • £3 billion directed to build integrated bus networks with more frequent services; and
  • significant investment in rail electrification and rapid transit systems.

Natural Resources, Waste and Fluorinated Gases

  • supporting low carbon farming and innovation through the Farming Investment Fund;
  • restoring 280,000 hectares of peat in England by 2050; and
  • free separate food waste collections for all households from 2025.

Greenhouse Gas Removals

  • delivering £100 million investment into GGR innovation; and
  • exploring options for robust monitoring and reporting of GGRs.

Summary

The Government has stated that this strategy does not intend to predict the exact shape of the British economy in 2050, and neither should it. Ultimately, only the future will tell whether we will in fact ‘build back better’. However this strategy marks the beginning of the end of the UK’s domestic contribution to climate change.

The hope is that the birthplace of the industrial revolution will soon become the home of the new Green Industrial Revolution.

For information or advice on any of the topics raised, please contact our Energy Team.

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