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The dawn of a green industrial revolution?

Prime minister Boris Johnson unveiled his 10 Point Plan for a Green Industrial Revolution with £4bn of new government investment in a raft of technologies and projects, from carbon capture and storage and hydrogen production, to electric vehicles, offshore wind, and building energy efficiency.

The Treasury Spending Review, Energy White Paper and the long-awaited National Infrastructure Strategy, have all been promised before Christmas.  Critics have questioned whether the £4bn allocated (even if part of an already announced broader £12bn package of public investment) is enough to make this a really strategic package, pointing out that the projected spend on HS2 alone is £100bn.

Green Party MP Caroline Lucas welcomed some measures but said on the BBC Radio 4 Today programme that:

“The plan fails to rise to the gravity of this moment. When you put it in the context of the scale of the climate and nature emergencies (and indeed the scale of the job emergencies that we face) then it's nowhere near ambitious enough, it's not urgent enough, it's not bold enough.”

Most observers concede however that, whatever the resource allocation, the plan is at least a step in the right direction and  it’s clear that one effect of the unprecedented public spending in response to COVID may have been to re-set the Treasury’s mindset from “green means cost ” to “green means jobs”. For job creation is clearly a goal, with the Prime Minister suggesting the plan will create, support and protect hundreds of thousands of green jobs, whilst making strides towards Net Zero by 2050.

Unquestionably, the most high-impact, headline grabbing, part of the plan was confirmation that the UK will end the sale of new petrol and diesel cars and vans by 2030 - 10 years earlier than originally planned. Plug-in hybrid cars and vans will have a five year stay of execution but will have to be able to cover significant distances in zero emission mode and will still see sales of new models end in 2035.

£1.3bn to accelerate the rollout of electric vehicle charge points in homes, streets, and on motorways in England and a further £582m in extra grants to subsidise the cost of zero or ultra-low emission vehicles is welcome, as is the £500m earmarked to help ramp up production of electric vehicle batteries in the UK over the next four years.  The government expects the manufacturing drive will create "thousands of jobs" particularly in the West Midlands, North East, and North Wales – contributing to the stated “levelling up” aims – while also delivering the UK's first battery gigafactory.

Of the many ambitious targets set out in the plan, that of establishing London as a green finance hub is also interesting.  The Treasury's confirmation that all businesses will face mandatory climate risk reporting rules from 2025 and hints that further action on carbon pricing are in the pipeline could all support London in becoming the "global centre of green finance”.

There are however some gaps and interesting omissions in terms of policies, commitments, and investment pledges in the 10-point plan, some of which it is hoped may be addressed in the forthcoming Energy White Paper and National Infrastructure Strategy. Solar, storage and onshore wind were conspicuously absent from the plan. Unsurprisingly, Solar Trade Association chief executive Chris Hewett said it was “disappointing” that Number 10 hadn’t grasped the opportunity solar presents for the UK:

“Not only is solar set to be the cheapest power source for years to come, it also provides good jobs and business opportunities up and down the country. Residential solar installations have already bounced back to pre-pandemic levels, all major utilities are expanding their solar ambitions and costs continue to fall. Delivering net-zero is now as much about economics as it is policy.”

The remaining salient points of the plan are:

  • Offshore wind: the ambition is to aim for every home in Britain to be powered by offshore wind, with a target for 40GW of capacity by 2030, supporting up to 60,000 jobs. The industry maintains these aspirations can be met but investors will hope that the Energy White Paper accelerates the timetable for the clean power contract auctions that will drive the pace of new development.
  • Hydrogen: long seen as the “cinderella technology” with the promise of fuel cells rather than bulky batteries to power electric vehicles, up to £500m investment is earmarked for developing the UK's hydrogen economy. Hydrogen can be produced using a process called steam reforming involving high-temperature steam and a methane source, such as natural gas, which is costly and produces greenhouse gasses.  Hydrogen can also be manufactured by electrolysing water using wind energy, which is clean but even more expensive. Critics have noted however that the proposed £500m investment is insignificant compared to  the €7bn hydrogen strategy unveiled by the German government earlier this year.  Nevertheless, the ambition is to have five gigawatts of "low carbon" hydrogen production capacity by 2030 and develop the first town heated by the gas by the end of the decade.
  • Nuclear: The plan promises up to £525m of government investment towards developing both large and smaller scale nuclear plants, including research and development of small modular reactors (SMRs) which it estimates could support up to 10,000 jobs. It’s a vote of confidence in new nuclear in the UK and its integral role in net zero transition. However, many observe that the plan puts faith in technological “long shots” such as modular nuclear power and direct air capture which may not pay off.  Green lighting new ‘big nuclear’ projects beyond Hinkley Point C may also prove problematic.
  • Improving energy efficiency of homes and public buildings: The extension of the Green Homes Grant voucher scheme, helping householders to make their homes more energy efficient, will be welcomed by industry and certainly does have the potential to create many jobs. But the devil will be in the detail of the Energy White Paper as to how the government intends to mobilise the level of investment required to upgrade the UK's inefficient housing stock. Meanwhile, the plan sets a target of 60,000 heat pumps to be installed every year by 2028. The Public Sector Decarbonisation Scheme will continue to work to cut bills and emissions for hospitals and schools. Overall, it is hoped that energy efficiency savings policies will create 50,000 jobs by 2030.
  • Promoting green transport: The plan builds on the £5bn that was allocated earlier this year to support the acceleration of 'greener travel' such as cycling, walking and buses. However, the pace of change will depend on the enthusiasm of local authorities, many of which are facing objections over even modest measures to boost cycling in particular.
  • Zero emission ships and planes: The plan reiterates a commitment to developing new generation green aviation and shipping technologies. A further £20m has been earmarked for clean shipping technologies in addition to the work of the Jet Zero Council which launched earlier this year. However, airlines and shipping companies pushing for higher levels of R&D funding and many maintain that bolder action to accelerate decarbonisation efforts across these sectors will be required.
  • Carbon capture: The goal is to capture 10 million tonnes of carbon dioxide from the air using carbon capture technology by 2030. An extra £200m of funding has been assigned for the development of two carbon capture clusters by the mid-2020s, with another two planned for 2030.  The government expects these commitments to support up to 50,000 jobs.
  • Protecting nature:  The plan makes good on the manifesto pledge to plant 30,000 hectares of trees each year and to spend £5.2bn on flood and coastal defences in England by 2027. It follows the earlier announcement of the creation of more National Parks and a further £40m investment in green recovery nature restoration schemes. However, measures to restore and protect peat bogs – an effective and efficient natural carbon dioxide sink – were not mentioned at all.

Disclaimer

This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.

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