Powering up Britain and what it means for business
The UK’s updated net zero strategy, “Powering Up Britain”, brings together the Energy Security Plan and Net Zero Growth Plan, outlining how the UK could “diversify, decarbonise and domesticate energy production” but what does it mean for business? (1)
The government’s full strategic intent was embedded in documents forming the key parts of a wide-ranging strategy published in March 2023, which include:
support for carbon capture projects
nuclear energy
offshore windfarms
electric vehicles
home heat pumps
hydrogen power
(2) (© Crown copyright. OGL)
The aim is to deliver long-term benefits in four broad areas: energy, consumers, the climate and the economy. The UK Government has committed £30 billion of domestic investment for the sustainable industrial revolution in the Spending Review 2021, £6 billion for energy efficiency for 2025-8 in the Autumn Statement 2022, and up to £20 billion for CCUS in the 2023 Spring Budget.(3) (© Crown copyright. OGL)
Carbon border tax
In December 2023, the government announced a new import carbon pricing mechanism by 2027 that addresses many business concerns prompted by the EU Carbon Border Adjustment Mechanism (CBAM) introduced last year (4), as well as challenges presented by the US Inflation Reduction Act and the EU Net-Zero Industry Act. (© European Union. CC)
The government advises that the new UK Carbon Border Adjustment Mechanism (UK CBAM) could “ensure highly traded, carbon intensive products from overseas in the iron, steel, aluminium, fertiliser, hydrogen, ceramics, glass and cement sectors face a comparable carbon price to those produced here.”(5) (© Crown copyright. OGL)
The government’s focus is firmly on attempts to create optimal conditions for investment, outlined in the updated Green Finance Strategy (6) that was published at the same time as the revised Net Zero Growth Plan. This includes maximising the impact of the UK’s public financing institutions, for example through the UK Infrastructure Bank with its £22 billion of financial capital (7), as well as the Infrastructure Bank, British Business Bank and UK Research and Innovation. (© Crown copyright. OGL)
Sustainable finance
The strategy also sets out the route map for the UK to become the world’s first Net Zero Aligned Financial Centre (8), aiming to embed the country at the forefront of the evolving global sustainable finance market.
And in December 2023, the government fleshed out details of its £6 billion energy-savings strategy for homes and businesses from 2025. It will particularly provide extra help for up to 200,000 families who need it most, such as those in poorly-insulated, low income or social homes.(7) (© Crown copyright. OGL)
Sources:
1 https://www.gov.uk/government/publications/powering-up-britain
4 https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en
5 https://www.gov.uk/government/news/new-uk-levy-to-level-carbon-pricing
6 https://www.gov.uk/government/publications/green-finance-strategy
8 https://www.gov.uk/government/news/chancellor-uk-will-be-the-worlds-first-net-zero-financial-centre
9 https://www.gov.uk/government/news/families-business-and-industry-to-get-energy-efficiency-support