In a change of policy, UK Prime Minister Rishi Sunak held a press conference to announce what he described as a ‘new approach’ to climate change. The changes will effectively see a softening of UK policies geared towards reaching net zero, however the PM has stressed that the UK will maintain its legally binding commitment of reaching net zero by 2050.
Arguing the case for slowing the transition during the current cost of living crisis, the Prime Minister has said that it "cannot be right" to introduce such cost on the taxpayer, given the current economic climate:
"If we continue down this path, we risk losing the consent of the British people, we've had the fastest reduction in greenhouse gas emissions in the G7... how can it be right that British are now being told to sacrifice even more than others?"[i]
He used the argument that the UK was presently a world leader in cutting emissions. As the BBC reports, since 1990, emissions within the UK have fallen by 48.7% up to the end of 2022 - excluding international aviation and shipping – that is according to government data[ii].
The key policies which will see changes are:
1. Banning the sale of new petrol and diesel cars by 2030
The prime minister argued that by 2030 the majority of vehicles sold will be electric, yet he believes the current high up-front costs and lack of infrastructure remain a barrier to adoption. Instead, the transition will be eased with the ban on petrol and diesel sales moving to 2035, and after this deadline second-hand vehicles will remain on sale. Sunak stated that this will align with EU countries like Germany, France, Spain and Italy and some US states - such as California, New York and Massachusetts[iii]. We previously discussed the EU policy on phasing out CO2 emitting vehicles here:
2. Phasing out gas boiler installations by 2035
Sunak stated that heat pumps need to be made cheaper without imposing high costs on hard-pressed families, at a time when the technology is still expensive. The Prime Minister has said that people will have more time to make the transition to heat pumps, and households will only have to make the switch when they're changing their boiler. To help with this transition, the boiler upgrade scheme will be increased by 50%, from £5,000 to £7,500. The Prime Minister has also said that off-grid homes, such as those using heating oil, will no longer see a ban on new boilers which would have come into effect in 2026, but rather face this in 2035- in line with gas heating.
3. New energy efficiency rules for homes
The Prime Minister has removed plans which would have ensured all privately rented homes had an energy efficiency rating of C or better by 2028. The argument of the policy was that it would not only have lowered emissions but would also have reduced bills for renters. However, Sunak has argued that the cost of meeting this would have been expensive for landlords, and would have ultimately led to increased rents:
"Under current plans, some property owners would have been forced to make expensive upgrades in just two years’ time for a semi-detached house in Salisbury. You could be looking at a bill of £8,000, and even if you're only renting, you're more than likely see some of that passed on in higher rents. That's just wrong, so those plans will be scrapped.”[iv]
We discussed the UK governments previous energy efficiency policy in our insight “UK government in energy efficiency drive to help combat rising fuel costs and cut electricity usage”, as well as the economic impacts and barriers here: “Research finds that barriers preventing the implementation of energy efficiency measures are costing consumers and companies £3.1 billion per year”
4. New oil & gas licenses and the ban on on-shore wind
Whilst the UK government had already announced plans for new oil and gas licenses earlier this year, Sunak reiterated this policy and also announced that the present ban on new on-shore wind farms would be lifted.
Feedback ahead of the press conference had seen green groups and many business leaders voice concerns, amongst them Ford, where Lisa Brankin, Ford UK Chair said the UK's 2030 target on car and van sales was "a vital catalyst to accelerate Ford into a cleaner future. Our business needs three things from the UK government: ambition, commitment, and consistency. A relaxation of 2030 would undermine all three."[v]
Juergen Maier, former boss of Siemens UK and vice-chair of the Northern Powerhouse Partnership told Reuters that: "It's truly depressing I know from the many businesspeople I speak to every week that we are quietly getting on with our net zero plans. Sadly though, this government is no longer with us."[vi]
There are also concerns that the changes could hamper investment in clean energy, further extending the recent slump observed in the UK carbon price. Analysts at S&P Global have said: "The government has shown signs of wavering over the perceived short-term costs of the UK's net zero targets, and this has been a factor in the steep discount in UK carbon allowances, which has weighed on domestic power prices."[vii]
[ii] Could Sunak's green review threaten UK net zero? - BBC News
[iii] Net zero: Rishi Sunak pushes back ban on new petrol and diesel cars to 2035 - BBC News
[vi] Northern England leaders attack 'depressing' net zero climbdown | Reuters
Lauren has extensive experience as an analyst and market researcher in the digital technology and travel sectors. She has a background in researching and forecasting emerging technologies, with a particular passion for the Videogames and eSports industries. She joined the Critical Information Group as Head of Reports and Market Research at GRC World Forums, and leads the content and data research team at the Zero Carbon Academy. “What drew me to the academy is the opportunity to add content and commentary around sustainability across a wealth of industries and sectors.”
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