Policies & action
We rate the UK’s current policies until 2030 as ”Almost sufficient”. The “Almost sufficient” rating indicates that the UK’s climate policies and action in 2030 are not yet consistent with the Paris Agreement’s 1.5°C temperature limit but could be, with moderate improvements. If all countries were to follow the UK’s approach, warming could be held below—but not well below—2°C. If, however, the UK remains on its currently projected emissions trajectory, by 2035, it would instead be in line with warming of 3°C.
A number of policy announcements have been made over the last 12 months, targeting the power, transport, and industry sectors, and are projected to result in significant emission reductions. However, these do not go far enough to achieve the UK’s 1.5°C compatible 2030 domestic target, and also means the UK is not currently on track to achieve its 2050 net zero target.
We assess the implemented and announced policies will lead to emissions reductions of between 54-56% below 1990 levels by 2030 excluding LULUCF and considering the impact of COVID-19. This is well below its 2030 NDC of at least a 68% reduction below 1990 levels.
Further information on how the CAT rates countries (against modelled domestic pathways and fair share) can be found here.
To coincide with the UK’s hosting of the UN Climate Ambition Summit in December 2020, the UK submitted its updated 2030 NDC target of at least a 68% reduction in GHG emissions below 1990 levels (which works out to be the same percentage reduction both including and excluding LULUCF emissions) to the UNFCCC.
This is a significant increase in mitigation ambition above its previous 57% target that was part of its fifth carbon budget. The CAT assesses the UK’s targeted 2030 domestic emissions reductions to be in line with a 1.5°C compatible trajectory. The at least 68% domestic target is in line with the recommendation of the Committee on Climate Change (CCC), but to ensure the UK is contributing its fair share, considerable support directed to developing countries is needed to help them transition to low carbon economies themselves (UK Committee on Climate Change, 2020).
In April 2021, the UK announced it would adopt the CCC’s recommendation for its sixth carbon budget, which amounts to a 78% reduction below 1990 levels by 2035 and, for the first time, is to include emissions from international aviation and shipping.
An impact assessment released by the UK government in conjunction with this decision outlines the net benefit to the UK economy of achieving this target to be GBP 266bn (Department for Business Energy and Industrial Strategy, 2021). The UK’s new 2030 and 2035 targets now position the country to achieve its 2050 net-zero target, provided the necessary suite of policies across every sector of the economy are put in place. Under current policies, however, the UK is projected to reach only 54-56% below 1990 levels (excl. LULUCF), far from on track to achieve its recently updated NDC, and underscoring the scale of new policies needed.
The release of the government’s Ten Point Plan for a Green Industrial Revolution in November 2020 set out a number of concrete policy goals aimed at putting the UK on track to achieve its 2050 net zero target (Department for Business Energy & Industrial Strategy, 2020c). However, the GBP 12bn in funding announced in conjunction with the plan, of which only GBP 4bn is new funding, falls short of achieving the government’s ambitious targets (Adam Vaughan, 2020; Hancock, 2020; Harvey & Ambrose, 2020; Raphael, 2020). Recent analysis by consultancy firm PwC and the thinktank IPPR outlines a need for GBP 40bn in infrastructure spending a year and GBP 33bn a year in additional investment respectively to meet government targets (Murphy et al., 2020; Smith & Freeman, 2020).
In the 12 years since the passage of the Climate Change Act in 2008, UK greenhouse gas (GHG) emissions have fallen by 37%, and the Act has provided the foundation for the coordination and advancement of climate action in the UK, including a projected phasing out of coal-fired power plants by 2023. The legislation was updated in 2019 to include a net-zero 2050 emissions target, with the UK becoming the first major economy in the world to legislate such a target(UK Government, 2019e).
The UK’s five-year carbon budgets, formulated under the original Climate Change Act legislation of 2008, were originally set in order to comply with the previous 2050 goal of an 80% reduction below 1990 levels. While the CCC recently stated that the fourth carbon budget remains “broadly appropriate” for achieving the updated 2050 net-zero target, achieving its recently updated, stronger 2030 target is crucial for maintaining a 2050 net zero trajectory(Committee on Climate Change, 2020b).
The UK’s long-awaited Energy White Paper was released late in 2020, following the release of the Ten Point Plan(UK Government, 2020f). The White Paper outlines an expected 230 MtCO2e in cumulative emissions reductions by 2032, which is 49 MtCO2e more than those outlined in the government’s Ten Point Plan. These further emissions reductions are claimed to come from ‘additional measures’ in the Energy White Paper, despite only limited additional measures being outlined. Nonetheless, averaging out these emissions reductions over the period of 2023-2032 gives an annual reduction of 23 MtCO2e below previously projected emissions. In 2030, this would still leave the UK far short of achieving its recently updated target of at least a 68% reduction below 1990 levels, implying significant additional measures will be required.
As part of the Energy White Paper, the UK committed to creating the UK Emissions Trading Scheme (UK ETS), which subsequently commenced on 1 January 2021. The design and coverage of the scheme is almost identical to the EU ETS that preceded it, but at the time of writing (June 2021), the two schemes had not been linked. The EU-UK Trade and Co-operation Agreement commits both parties to consider such a linkage.
An initial cap of 5% below the UK’s notional share in Phase IV of the EU ETS (2021-2030) will be established, and the government will consult with the CCC to determine an appropriate trajectory to align with the 2050 net-zero target. A floor price of GBP 22 per allowance has been set, higher than the initially planned GBP 15, to ensure a minimum level of ambition and price continuity within the scheme’s early years of operation. International credits will not be permitted initially in the UK ETS, but this may be subject to review in the future. A review of the initial performance of the scheme is set for 2023, with any changes to be implemented by 2026.
An announcement that the UK’s export credit agency, UK Export Finance, will be barred from offering financial support to foreign fossil fuel projects is a welcome development, as it decreases the chances of such projects occurring in rapidly developing countries (Ambrose, 2020a). This decision comes, however, after the agency continued to grant loan guarantees and direct funding for foreign fossil fuel projects to the value of GBP 3.5bn since signing up to the Paris Agreement in 2016. This includes GBP 2bn in 2018 alone, and a GBP 1bn financial package for a gas project in Mozambique agreed to just a month prior to announcing the ban on future financing.
Due to the ongoing COVID-19-related economic crisis, total UK GHG emissions (excluding LULUCF) declined 9% year-on-year to reach 48% below 1990 levels in 2020 (HM Treasury, 2020; OECD, 2020; UK Government, 2019f). This means the UK will substantially overachieve its 2020 target of a 37% emissions reduction below 1990 levels. It would also have done so in the absence of the COVID-19 crisis, albeit by a smaller margin.
The ongoing COVID-19 crisis has had a severe impact on the UK economy, and the government’s commitment to “build back greener” has so far seen only a relatively small fraction of its recovery funds allocated towards green efforts. As of June 2021, only 17% of the economic recovery funds have been allocated towards low-carbon green measures, compared to 30% of the EU’s latest 2021-2027 budget and associated recovery package, and behind the other large European economies such as Germany (47%) and France (36%) (Global Recovery Observatory, 2021). In absolute terms, however, the UK (USD 65bn) has spent more than either Germany (USD 47bn) or France (USD 57bn).
Significant expenditure towards expanding existing public transport networks, green energy and buildings upgrades have been announced; however, a large chunk of the funding for buildings has already been cut, with the GBP 1.5bn green homes grant being cancelled in early 2021 (Harvey, 2021).
The UK electricity sector has been rapidly decarbonising in recent years, with CO2 emissions from the supply of electricity falling by more than two thirds between 2012 and 2020 (Department for Business Energy & Industrial Strategy, 2021a). This is primarily due to a sharp drop in coal-based electricity production, which in 2020 amounted to just 1.7% of total generation, replaced by increasing production from renewables (Department for Business Energy & Industrial Strategy, 2021b; UK Government, 2021a). Generation from low carbon sources reached 59% in 2020 (up from 54.6% in 2019), despite a drop in nuclear generation, thanks to record output from renewables. With coal now close to being eliminated from the UK power sector, natural gas, which accounted for 36.5% of generation in 2020, will consequently need to be scaled down considerably over the next decade for the UK to meet its emission reduction targets.
In the first half of 2020, in part due to a steep reduction in overall electricity demand caused by the COVID-19-induced economic slowdown, the UK went for 67 consecutive days with zero coal-fired generation (Murray, 2020). This was the longest period the UK has operated without coal power since the Industrial Revolution in the late 1800s.
In mid-2021, the UK confirmed it will bring forward the date for the phase-out of coal-fired power by one year to 2024. However, this remains one year later than the government’s own projections of a phase-out by 2023 (UK Government, 2019h). In any case, a 2024 phase-out makes the UK a world leader in this regard, and is well ahead of the 2030 phase-out date for OECD countries required to limit global warming to below 1.5°C (Climate Action Tracker, 2016; UK Government, 2019f).
Despite the progress that has been made on phasing out coal, concerns remain that the UK’s energy planning policies are outdated and are being used to approve new fossil fuel projects, including a proposed gas plant in Yorkshire that was recently cancelled by energy company Drax (Ambrose, 2021a). Environmental campaigners launched a judicial review against the government in May 2020 after it refused to review the National Policy Statement for Energy (NPS), with the aim to force an overhaul of the policy to prevent such future approvals for fossil fuel projects (Ambrose, 2020c). A decision by the government to review the NPS followed in October 2020, which is ongoing.
In 2020, the share of renewable energy in total electricity generation rose steeply from 37% in 2019 to almost 43%, with renewables producing more electricity than coal and gas generation combined for the first time ever (Department for Business Energy & Industrial Strategy, 2021b). This is a stunning turnaround from just ten years prior, when total fossil fuel-based electricity generation was more than ten times that of renewables (Evans, 2019). Wind generation, fuelled by new offshore capacity, increased its share of total generation by 4.4 percentage points to 24.2%.
Share of renewable electricity generation
Despite this steep progress, the government has resisted calls to set a carbon-intensity target of below 100gCO2/kWh by 2030 as recommended by the CCC (Committee on Climate Change, 2018). This compares to a Paris Compatible benchmark of 75-80gCO2/kWh by 2030 derived for the EU in a recently-released analysis by the Climate Action Tracker (Climate Action Tracker, 2020). The government’s Energy White Paper released in 2020 fails to include such a target.
The UK government has reaffirmed its commitment to growing the offshore wind power industry, announcing a target of 40GW of offshore wind capacity by 2030, which includes 1GW of floating wind capacity (Department for Business Energy & Industrial Strategy, 2020c). This comes after the GBP 250m in funding for offshore wind projects announced by the government in 2019.
After being blocked from competing for subsidies in 2015, onshore wind registered a 94% decline in the number of new applications between 2015 and 2018 (Unwin, 2019). As a result, only 23 projects came online in 2019, roughly 5% of the peak of 405 in 2014 and a total of just 0.6MW of new capacity. All but one of these 23 projects had secured support from subsidy schemes before they were closed (Ambrose, 2020b). In 2020, new onshore wind capacity coming online equalled roughly half that of offshore wind at(Department for Business Energy & Industrial Strategy, 2021b). The onshore wind industry is hoping for a resurgence from 2021, however, as the government announced a reversal of its ban on this technology competing in future renewable energy auctions. In addition, total capacity to be awarded will double from 5.8GW in 2019 to 12 GW, with the next auction scheduled for 2021 (Lee, 2020; Parnell, 2020).
The UK solar PV industry has been facing difficulties of its own, with slow rates of growth in residential systems seen since incentives were slashed dramatically in early 2016 (Vaughan, 2018a). Upon subsidies being cut completely in April 2019, installations subsequently fell by 94% in May 2019 (Ambrose, 2019). The government announced a replacement policy called the Smart Export Guarantee which compels large energy suppliers to offer an export tariff to customers, however this did not come into effect until 1 January 2020 (UK Government, 2019d). This left a nine-month gap in customer incentives to install solar PV, creating hardship for solar installers. The large-scale solar PV sector has also faced difficult conditions since being banned in 2015, alongside onshore wind, from competing in renewable energy auctions. However, this ban, as with onshore wind, was reversed in March 2020, which should help the industry to recover from 2021 onwards.
The UK has a substantial bioenergy sector, which saw a significant drop in generation over 2020 after higher than average output in 2019 (Department for Business Energy & Industrial Strategy, 2020b, 2021b). However, burning biomass is an imperfect form of renewable energy for numerous reasons. For example, the use of biomass from sensitive forests can result in a loss of wildlife due to habitat destruction, while burning wood products sourced from high-value trees as opposed to low-value wood and forest residues is wasteful and results in higher emissions than if these trees were used for long lasting products like buildings or furniture (Simon, 2020). After ongoing public criticism of the sector, Drax, the UK’s largest biomass plant updated their sourcing policy in 2019 to ensure the biomass it uses meets Forestry Commission sustainability recommendations (Drax, 2020; Matthews et al., 2015). The UK provides an estimated GBP 1bn a year in subsidies to UK biomass energy producers financed through a fee on energy bills, and there is growing pressure to redirect this money to other forms of renewable energy (Power Technology, 2020).
The CCC in its 2020 Progress Report to Parliament stated that “low-carbon hydrogen is critical to achieving Net Zero and needs to be deployed at scale during the 2020s”. In response, the UK Government included ‘driving the growth of low carbon hydrogen’ as part of its Ten Point Plan, with an aim to achieve 5GW of installed low carbon hydrogen production capacity by 2030 and a commitment of GBP 240m in funding(Department for Business Energy & Industrial Strategy, 2020c) It includes an explicit intention to utilise carbon capture and storage, an as yet commercially unproven technology, to produce hydrogen from fossil fuels in addition to the use of renewable energy sources.
The UK nuclear industry has faced a number of setbacks in recent years, with the cancellation of three proposed nuclear plants since 2018 (Rojas, 2020; Vaughan, 2018b). The only nuclear plant under construction, and one of only three planned future plants, Hinkley Point C, has seen numerous cost increases, and is now expected to cost GBP 23bn (Ambrose, 2021b). These developments have not, however, deterred the UK Government from targeting a future expansion of nuclear power in its Energy White Paper, with a commitment to bring at least one large-scale nuclear plant to the point of a final investment decision by the end of the current parliament in 2024 (UK Government, 2020f).
The UK is also investing in the development of advanced nuclear technology, with a public investment of up to GBP 385m in an Advanced Nuclear Fund. This fund will go towards developing a Small Modular Reactor (SMR) design and to build a demonstration Advanced Modular Reactor (AMR) by the early 2030s. In January 2020 Rolls Royce announced it plans to build between 10 and 15 small modular reactors in the UK on former nuclear sites, with an intention to have plants operational by 2029 (Harrabin & Prescott, 2020).
A total commitment of over GBP 400m in funding has been put towards the design of a nuclear fusion power station underscoring the UK’s commitment to the long term development of nuclear fusion technology (UK Government, 2020b). However, the completion of a large-scale plant is not expected before 2040, and with this as-yet-unproven technology’s history of setbacks and delays, the relevance of this technology in contributing to the government’s 2050 net zero emissions target is questionable.
Oil and Gas
Government projections show that oil and natural gas will still constitute nearly three quarters of total UK primary energy demand in 2030 (UK Government, 2020l). The UK Government recently announced up to a GBP 16bn joint investment into the industry until 2030, and an agreement to allow oil drillers to continue exploration activities in the North Sea (Ambrose, 2021c). New projects would, however, need to meet the requirements of a yet to be designed “climate compatibility checkpoint” to determine whether each application is compatible with the UK’s climate objectives. The IEA, in its Net Zero 2050 report, outlined that to achieve net zero emissions by 2050, no new fossil fuel projects should be approved from now on (IEA, 2021).
The Oil and Gas Authority (OGA) launched a consultation in May 2020 with the intention of revising its strategy to be consistent with - and help to meet - the UK’s Net Zero Target (Beggs et al., 2020). It conceded that the oil and gas industry should “go considerably faster and further in reducing its own carbon footprint, or risk losing its social licence to operate”. The proposed new strategy promotes the use of carbon capture and storage (CCS), proposes an improvement in the governance of offshore licensees, and collaboration across the supply chain, as well as numerous other more minor proposals.
The only way electricity generated from natural gas could contribute to the 2050 net-zero emission target is with the extensive utilisation of CCS, which is a technology that is not yet commercially viable. The UK’s Committee on Climate Change has also explicitly outlined the need to move away from natural gas for residential heating, as the emissions resulting from this consumption cannot be sequestered (Committee on Climate Change, 2019c).
The residential sector constituted 61% of total UK final natural gas demand in 2019, which demonstrates the extent to which natural gas consumption in this sector must decrease over time (UK Government, 2020m). The government has indicated it plans to ban gas heating systems in new dwellings from 2025, which is a positive development, but is only partly in line with the CCC’s recommendation that also called for a ban on the use of gas for cooking in new homes from the same date onward (Taylor, 2019).
In a positive development, natural gas fracking was suspended across England from November 2019. However, the UK government admitted that this suspension was not permanent. Andrea Leadsom, the UK Secretary for Business, Energy and Industrial Strategy at the time, added that a permanent ban was not implemented because shale gas is something the UK “will need for the next several decades”, and that it is a “huge opportunity for the United Kingdom” (Cowburn, 2019). This is in contrast to findings that energy transformation without natural gas is possible and that continued investment in natural gas infrastructure risks these assets becoming stranded (Climate Action Tracker, 2017).
Since 2016, the transport sector in the UK has produced more GHG emissions each year than any other sector, and given the slow rate of projected emission reductions to 2030, this is projected to remain the case (UK Government, 2020b).
The government’s Ten Point Plan includes a heavy focus on transport related initiatives. However, the average projected emission reductions from the three targeted areas of zero emission vehicles, public transport, cycling, and walking infrastructure, and green aviation and shipping, are a meagre 1 MtCO2e per year between 2023 and 2030.
The recently announced sixth carbon budget (2033-2037) will for the first time include emissions from international aviation and shipping, a measure that has long been advocated for by the Committee on Climate Change (UK Government, 2021c). However, these emission sources currently remain excluded from the government’s 2050 net zero target.
The UK government’s 2020 budget included GBP 27.4bn for its Road Investment Strategy 2 (RIS2): 2020-2025, which includes GBP 14.1bn for new roads and expanding the capacity of existing roads (UK Department for Transport, 2020c). The Department for Transport has not published any assessment of RIS2’s cumulative impact on CO2 emissions, but one analysis has calculated it at an additional 20 MtCO2e between 2020 and 2032 (Sloman & Hopkinson, 2020). This is calculated as negating 80% of the potential emissions reductions resulting from the uptake of electric vehicles and their use on the UK’s 7,200 km strategic road network (SRN) that RIS2 covers. The RIS2 is facing a legal challenge that asserts its impact on the UK’s climate change commitments have not been properly considered, and in August 2020 the case was permitted to proceed to the High Court for judicial review, where a hearing is expected in summer 2021. Expert witnesses in the challenge have asserted that the true emissions resulting from the project will be about 100 times greater than government estimates (Topham, 2021a).
The government’s 2021 budget included a freeze on fuel duty rates for petrol and diesel, the 11th consecutive such freeze, and counter to a widely expected hike (Gerretsen, 2021). The freeze, in place since 2010, is estimated to have increased UK carbon emissions by as much as 5% over the past decade (Evans, 2020).
Work is currently underway by the Department of Transport to publish a Transport Decarbonisation Plan which was originally due at the end of 2020, with which it intends to outline what is needed to achieve net zero emissions across every mode of transport by 2050 (UK Department for Transport, 2020b).
As part of its Ten Point Plan, the UK government confirmed it will end the sale of fossil fuel cars and vans by 2030, five years earlier than its previous target that was already brought forward from 2040 (Department for Business Energy & Industrial Strategy, 2020c). A 2030 target makes the UK a global front-runner in this regard, and brings it into line with the CCC’s advice that petrol and diesel vehicle sales should end, at the latest, by 2032 (Committee on Climate Change, 2019c). Sales of hybrid vehicles will be banned from 2035.
The Transport Decarbonisation Strategy, released in 2021, outlines a target of 2040 to end the sale of fossil fuel heavy goods vehicles (HGVs), with sales of smaller trucks banned by 2035 (UK Government, 2021d). These dates are not finalised, however, and are subject to a consultation process being undertaken by the government from 2021.
In 2020, the registration of new electric passenger vehicles in the UK (excluding hybrids) reached 6.4%, a stunning increase on the total share of registrations for 2019 of 1.6%, and rising above the EU27 sales share (European Alternative Fuels Observatory, 2021).
EV market share
In 2018, the government cut subsidies for plug-in vehicles, with the subsidy for battery electric vehicles cut from GBP 4,500 to GBP 3,500, while grants for plug-in hybrids were cut completely despite an aspiration of to up to 70% of new car sales being ultra-low emission by 2030 (BBC News, 2018). The subsidy scheme was extended in the 2020 budget for three additional years, until 2022-23, however the amount of the subsidy was further cut to GBP 3,000, and was scrapped for cars costing more than GBP 50,000 (UK Government, 2020i). Vans, taxis, and motorbikes continue to be eligible for subsidies under the extension. Battery cars costing over GBP 40,000 will now also be exempt from the higher excise duty charges until 2025. This excise duty, called the “expensive car supplement” previously imposed an additional GBP 320 per year, on top of the GBP 145 base.
The 2018 Road to Zero Strategy that included GBP 106m to develop low and zero-emission vehicles in the UK, has been supplemented by additional funding under the Ten Point Plan with up to GBP 1bn in funding now committed, GBP 500m of which will be invested during the current Parliament (Department for Business Energy & Industrial Strategy, 2020c; UK Department of Transport, 2018). The Ten Point Plan also includes GBP 1.3bn in funding to accelerate the roll out of charging infrastructure, a significant increase on a previously announced GBP 400 million fund.
The UK’s Ten Point Plan outlines a number of new and existing funding announcements to boost public transport infrastructure across the country, including billions allocated towards improving and extending the bus network across the UK (Department for Business Energy & Industrial Strategy, 2020c). This includes a commitment to purchase 4,000 electric buses and further integrate bus and rail networks, with a National Bus Strategy forthcoming later in 2021.
The UK is currently investing heavily in expanding and upgrading its rail network. Under Control Period 6 (CP6, 2019-2024), the UK government allocated GBP 48 billion in funding for the rail network, GBP 10 billion more than the previous funding period (UK Government, 2017c).
There are currently a number of large railway enhancement projects under construction in the UK. These include: the Great North Rail project, scheduled for completion in 2022, which will provide 2,000 extra services each week, and enable 40,000 additional passengers to travel by rail each day across the north of England, and the Thameslink Programme that will upgrade infrastructure and upgrade the stock with 115 new trains (Network Rail, 2020).
The government granted approval in early 2020 to proceed with the High Speed 2 (HS2) project, after it went through a review process in 2019 (BBC News, 2020c). HS2 will be the UK’s second high speed rail project after the High Speed 1 project opened in 2003. The first phase of the project will result in 214km of dedicated track connecting London and Birmingham, while phase 2 will connect Birmingham to both Manchester and Leeds to the North. A leaked official review of the project showed the expected cost to now be GBP 106bn, after an initial price tag in 2015 of GBP 56bn. Phase one is expected to be completed between 2028 and 2031, with an expected phase 2 completion window of 2035-2040.
Cycling and Walking
The government announced in May 2020 that GBP 2bn of the GBP 5bn pledged towards improving bus and cycling services in the 2020 budget would be allocated specifically towards increasing the rates of cycling and walking (UK Government, 2020a). The first stage of this project will involve GBP 250m in immediate funding to construct pop-up bike lanes, wider pavements, safer junctions and cycle and bus-only corridors. This GBP 5bn in funding for cycling, walking and buses forms part of the government’s Ten Point Plan.
The Transport Decarbonisation Strategy released in July 2021 outlines targets to make domestic aviation net zero emissions by 2040, with total aviation emissions to reach net zero by 2050 (UK Government, 2021d). This makes the UK the first major economy to target net zero aviation emissions. The strategy does not, however, include measures to reduce demand for flying, implying that flying behaviour does not need to change to meet these challenging targets.
The UK government’s decision to allow the expansion of Heathrow Airport was ruled illegal in early 2020, with the future of the proposed third runway in doubt as a result (BBC News, 2020b). The Court of Appeal ruled that the decision to allow the expansion was unlawful because it did not consider the UK’s climate commitments and that the government had a duty to take the Paris Agreement into account. However, this decision was overturned by the High Court in December 2020, allowing the project to seek planning permission, which may be difficult to obtain, given that it will take into consideration stricter emission pledges by the UK government (Carrington, 2020).
Another controversial airport was approved in 2020, with the decision to convert a disused former military airport in Manston, Kent, into a dedicated cargo airport. This decision goes against the advice provided by the Examining Authority following a two year investigation into the proposal, which stated that not only was the airport not required to meet local or national needs, but that it would “have a material impact on the ability of the Government to meet its carbon reduction targets” (UK Department for Transport, 2020a).
In 2019, the UK government legislated vehicle emission standards that are in line with EU regulations stipulating a limit of 95g CO2/km for new passenger vehicles and 147g CO2/km for vans from 2020 (UK Government, 2020e). As per the 2019 legislation, these will change from 2025, also in alignment with EU regulations, to a 15% emissions reduction below a 2021 baseline for both cars and vans, and from 2030, this will increase to a 37.5% reduction below the 2021 baseline. Between 2013 and 2032, fuel efficiency standards for cars are projected to reduce cumulative emissions by 79 MtCO2e, however this also includes road transport electrification policies (UK Government, 2019g).
In 2020, buildings in the UK contributed 16% of total UK GHG emissions and according to the CCC, policy addressing this sector is lacking (Committee on Climate Change, 2020b). In the leadup to the 2019 election, the ruling conservative party announced a GBP 9.2bn investment over ten years to improve the energy efficiency of homes, schools and hospitals, but this has been described by the CCC as insufficient.
A total of GBP 3bn was announced as part of the government’s economic recovery package in response to the COVID-19 crisis, but in an abrupt turnaround, a key element of this funding was axed in 2021 (UK Government, 2020d). The Green Homes Grant scheme had GBP 1.5bn of its allocated GBP 2bn in funding revoked, with only 10% of the targeted 600,000 homes having been improved (Harrabin, 2021). An additional GBP 300m to be delivered through local governments was announced for upgrading the efficiency of private homes, but this brings the total of pledged funds to just GBP 1.6bn (Ralston, 2021).
A report by the UK Energy Research Centre (UKERC) warns that the current level of funding for decarbonising residential properties falls far short of what is needed if the sector is to align with the UK’s 2050 net zero target(Rosenow et al., 2020). It estimates that GBP 10bn per year will be required, compared to the current GBP 1.6bn in total, stating that roughly one million homes a year will need their heating systems replaced with low carbon alternatives compared to the projected 12,500 a year that is currently funded through the Clean Heat Grant.
The UK’s Clean Growth Strategy outlines a target of upgrading all fuel-poor homes to the energy efficiency standard EPC Band C by 2030, and as many homes as possible by 2035, which the government has calculated as requiring between GBP 35-65bn (BEIS, 2019; UK Government, 2017d).
The consultation for the Future Homes Standard, which is to be implemented in 2025, proposes that homes constructed from 2025 onward produce at least 75-80% less CO2 emissions than one built to requirements in 2019 (Ministry of Housing Communities and Local Government, 2019). This was rejected by the CCC as not ambitious enough, stating that homes constructed from 2025 should not only be ultra-energy efficient, but also zero-carbon (Committee on Climate Change, 2020a). Despite this, the 75-80% figure was included in the government’s Ten Point Plan in relation to green buildings. A ban on the installation of gas boilers in new homes constructed from 2025 was announced in 2019, but this would still allow gas cooking stoves, and therefore does not go far enough.
Reforms to the planning system announced in mid-2020 include a pledge to make new homes carbon neutral by 2050, a timeframe that is inadequate for achieving the steep reductions needed from the buildings sector across the next decade (BBC News, 2020a). A recently-released analysis by the Climate Action Tracker that derived Paris Agreement compatible sectoral benchmarks for key emitting countries asserts that for the EU (which also included the UK), all newly constructed buildings should already be zero emissions from 2020 onward (Climate Action Tracker, 2020). The previous government introduced the Code for Sustainable Housing in 2006 that aimed to achieve carbon neutrality of new homes by 2016, but this was scrapped in 2015 by the current government before it took effect.
The UK government is currently formulating the Buildings and Heat Strategy, which was due in late 2020 but has not yet been released. The CCC has recommended that it include a phasing out of the installation of all new gas boilers by 2035 at the latest (Committee on Climate Change, 2020b). The CCC also stated that the strategy should be supported by tax or levy changes that favour low-carbon heating over fossil fuels and funding for capital grants (including for hybrid heat pumps) at a much larger scale than existing plans.
Some details behind the UK’s pledge to reach net-zero emissions by 2050 came into sharper focus in early 2021 with the release of the Industrial Decarbonisation Strategy (UK Government, 2021b), which targets at least a two thirds reduction in total emissions below 2018 levels by 2035 and 90% by 2050. The strategy has a primarily three-pronged approach, relying on a switch to low carbon fuels, efficiency gains, and carbon capture and storage. By 2030, low carbon fuels, including hydrogen, are to make up around 20TWh of total demand, and 3MtCO2 are to be captured by Carbon Capture, Usage and Storage (CCUS).
Emissions from business and industry in the UK have fallen significantly since 1990, sitting roughly at 47% below 1990 levels in 2020 (Department for Business Energy & Industrial Strategy, 2021a). This has been driven, in particular, by plummeting industrial process emissions (-81% since 1990), while total industrial CO2 emissions fell by 8.7% between 2019 and 2020 due primarily to the COVID-19 crisis. A tonne of steel requires 40% less energy to produce in the UK in 2017 than it did 40 years prior (UK Government, 2017a), demonstrating that emission reductions have been realised through both efficiency gains and decreased output.
As part of the government’s economic recovery package in response to the COVID-19 induced slowdown, a GBP 350m investment was announced to reduce emissions from heavy industry (UK Government, 2020h). This includes GBP 139m towards scaling up CCS and to support the transition from natural gas to hydrogen, and GBP 149m to drive the use of innovative materials in heavy industry including recyclable steel.
The UK’s Industrial Strategy, which outlines four ‘grand challenges’, one of which is to “maximise the advantages for UK industry from the global shift to clean growth” was also released in 2017 (UK Government, 2017b). Specifically outlined in the strategy are commitments to develop smart energy systems to remodel the electricity grid, transform construction techniques to improve efficiency, invest GBP 162m in innovation for a low-carbon industry, and build on the sector specific action plans to further cut energy use and improve productivity.
The main policies in place that target industry emissions are the Industrial Energy Transformation Fund, the Renewable Heat Incentive, the F-gas regulation, the Climate Change Levy and Climate Change Agreements, the Energy Savings Opportunity Scheme, and the Industrial Heat Recovery Support initiative.
The Industrial Energy Transformation Fund is a GBP 315m fund announced in 2018 that aims to assist businesses with high energy demand cut their energy bills and carbon emissions through investing in energy efficiency and low-carbon technologies (BEIS, 2020). Funding is available through 2024 both for feasibility and engineering studies, as well as industrial energy efficiency projects. Currently there is no government estimation as to the total emission reductions expected to result from this fund.
The Renewable Heat Incentive provides financial incentives to increase the uptake of renewable heating technologies. Eligible installations receive quarterly payments for 20 years based on the amount of heat generated. Total cumulative emissions savings from this policy between 2018-2032 are projected to equal 61MtCO2e (UK Government, 2020k).
The F-gas Regulation is an EU-wide regulation in place since 2015 that will cut total EU F-gas emissions by two thirds below 2014 levels by 2030. This is slightly below the reduction required under the Kigali Amendment to the Montreal Protocol which requires a 70% reduction below the average consumption between 2011-2013 by 2029 (UNEP, 2019). For the UK, it is projected that cumulative emissions will be reduced by 110MtCO2e over the period 2018-2032 as a result of this policy. A UK specific legislation covering F-gas emissions was passed in 2019, ensuring the continuation of emission reductions beyond the UK’s exit from the EU (The Ozone-Depleting Substances and Fluorinated Greenhouse Gases (Amendment Etc.) (EU Exit) Regulations 2019, 2019).
The UK’s Climate Change Levy (CCL), introduced in 2001, is a tax on the supply of energy in the industry, commerce and public sectors which has facilitated an increase in energy efficiency since its inception (UK Government, 2017a). CCL rates have increased over time, last being ratcheted up in April 2021, while the government has announced it plans to continue increasing rates in the future to drive further efficiency gains (UK Government, 2019g). Under the Climate Change Agreements (CCA) scheme, in place since 2013, businesses voluntarily agree to reduce energy use and CO2 emissions, in return, receiving a discount on the CCL (Department for Business Energy & Industrial Strategy, 2020a). The total value of these discounts to participants since its inception has averaged nearly GBP 300 per year. The UK government confirmed in 2020 that the CCA scheme would be extended for two years to March 2025.
To comply with the EU’s Energy Implemented Efficiency Directive, in 2017 the UK established the Energy Savings Opportunity Scheme (ESOS), a mandatory energy assessment scheme for large businesses. It requires companies to measure their total energy consumption and carry out audits to identify cost-effective energy savings measures (UK Government, 2017a). With an announcement by the government that they intend to simplify energy reporting into a single scheme, ESOS may change from its current form now that the UK has left the EU. This policy is expected to reduce UK emissions by 6MtCO2e cumulatively between 2018 and 2032.
The Industrial Heat Recovery Support initiative was launched in 2018 to encourage the reuse of waste heat from industrial processes. This initiative includes GBP 18m in funding towards feasibility studies and to subsidise the deployment of heat recovery technologies and is expected to reduce emissions by 1.5 MtCO2e cumulatively between 2018 and 2032 (UK Government, 2019g).
In 2030, GHG emissions from agriculture are projected to be just 3%, or 1.4MtCO2e, lower compared to 2019 levels under current policies (UK Government, 2020b). However, emissions reductions from measures included in the recently-passed Agriculture Bill to redirect subsidies currently paid for simply owning land, towards environmental improvements such as peatland and saltmarsh restoration have yet to be (Damian Carrington, 2020). Measures in the Agriculture Bill’s Environmental Land Management (ELM) scheme are claimed by the UK government to be the most fundamental shift in farming policy for 50 years, with GBP 1.8bn in subsidies being redirected to environmental restoration in England alone.
The UK’s Greenhouse Gas Action Plan for Agriculture (GHGAP), implemented in 2011, is an industry-led initiative and the principal mechanism for delivering reductions in emissions from agriculture across England (Department for Environment Food & Rural Affairs (DEFRA), 2017). In a review completed in 2016, it was found that the initiative had achieved a total reduction of 1 MtCO2e as of that year. Emission reductions are expected to pick up pace during the period of the third carbon budget (2018-2022), with an expected 3 MtCO2e per year expected by the end of 2022. In order to achieve this level of mitigation, however, it was conceded that further uptake of proven methods is necessary. The next review of the GHGAP was originally scheduled for 2020, but has not yet been completed at the time of writing (June 2021).
There is also considerable action being undertaken by the devolved parliaments within the UK. The Scottish Government in 2018 released its Climate Change Plan, which details sectoral emission reductions to 2032. Under this plan, the agriculture sector is targeting a 9% reduction below 2018 levels by 2032, amounting to a 0.8 MtCO2e fall in emissions (Scottish Government, 2018). The recently released Welsh Agriculture White Paper proposes increased levels of carbon sequestration and decarbonisation of the Wales agriculture sector to ensure the Welsh Government’s 2050 net zero emissions target is met (Welsh Government, 2020).
The UK has updated the methodology it uses for calculating emissions from peatlands, resulting in a 409 MtCO2e cumulative increase in historical emissions from the land use, land use change, and forestry (LULUCF) sector between 1990 and 2018 (UK Government, 2020g, 2021a). This has turned the LULUCF sector from an emissions sink over this period into a significant source of emissions, making up 1.3% of total emissions in 2019. This is also likely to result in emissions projections from this sector in 2030 switching from a net sink to a net emissions source.
Scotland has been doing much of the heavy lifting recently when it comes to tree planting, having planted roughly eight times more trees than were planted in England in 2018/19 (BBC News, 2019). Overall, however, the UK reached less than 50% of the 30,000 ha/yr rate of tree planting recommended by the Committee on Climate Change (CCC) to help meet the UK’s climate targets. The CCC has stipulated this rate would need to be raised to 50,000 ha/yr if emission reduction targets are not met. In the 2020 budget statement, the government announced a goal of planting 30,000 ha of trees over the next five years, corresponding to one fifth of what would be needed to achieve the level recommended by the CCC (UK Government, 2020c).
In 2018, the UK government released its “25 Year Environment Plan” to improve the natural environment (UK Government, 2018a). This report outlines a target of increasing the area of woodland in England to 12% by 2060 by planting 180,000 ha by 2042. The total area of Woodland in the UK stood at 3.19 million ha in 2019 (Forest Research, 2019). It also committed the government to designing a new “woodland creation grant scheme”, which aims to incentivise large scale afforestation to meet the UK’s carbon goals. These grants are now available under the Country Stewardship program with agreements starting at the beginning of 2021.
As part of this plan, the government has committed to plant 11 million trees in England between 2017 and 2022 (Forestry Commission, 2018). Across the 2017/18 and 2018/19 financial years, a reported 3.64 million trees were planted in total in England, equating to approximately 2,318 ha, meaning the government is not currently on track to meet its target (Forestry Commission, 2019). A GBP 50 million scheme intended to increase the rate of tree planting was unveiled in late 2019, giving landowners the opportunity to sell carbon credits generated from woodlands on the open market or to the government until 2055/56 (UK Government, 2020n). In August 2020, the UK government announced a consultation on a new law to prohibit larger companies from importing certain commodities if they were produced on illegally deforested land (UK Government, 2020o).