UK Prime Minister announces a ten-point plan for a Green Industrial Revolution

UK Prime Minister announces a ten-point plan for a Green Industrial Revolution

Environment Analysis: Vanessa Jakovich, partner, and Abdullah Geelah, trainee solicitor, at Freshfields discuss the Prime Minister’s Green Industrial Revolution ten-point plan, setting out the key features and analysing whether there is anything missing from the plan.

Boris Johnson has outlined a ten-point plan (the Plan) for a ‘Green Industrial Revolution’, aimed at facilitating the UK’s 2050 net zero commitment through a combination of ambitious policies, £12bn of new public investment, and measures to mobilise private investment. The Plan also seeks to create and support up to 250,000 highly skilled green jobs.

What are the key features of the Plan? And how will this be rolled out?

The Prime Minister will establish a taskforce to roll out the Plan as a matter of ‘national priority’. Its key features are:

  • offshore wind: producing enough offshore wind to power every home, increasing production to 40GW by 2030 and supporting up to 60,000 jobs. The UK’s electricity demand will rise as homes switch from gas to electric heating and from hydrocarbon to electric-powered vehicles. Substantial additional generating capacity will have to increase accordingly in the years up to and beyond 2030
  • low carbon hydrogen: working alongside industry to generate 5GW of low carbon hydrogen production capacity by 2030 and develop the first town heated entirely by hydrogen by the end of the decade. The government has announced investment of up to £500m in hydrogen, including for trialling homes using hydrogen for heating and cooking. Of this funding, £240m will go into new hydrogen production facilities. The focus is currently on ‘blue’ rather than ‘green’ hydrogen
  • nuclear power: promoting nuclear power as a clean energy source. £525m has been allocated to help develop large and smaller-scale nuclear plants, advanced modular reactors and research which could support 10,000 jobs. The Energy White paper is expected to detail how this support will reduce the up-front finance costs of new nuclear, which is a key driver of relatively high levelised cost of traditional nuclear-generated electricity
  • shift to zero emission vehicles: phasing out sales of new petrol and diesel cars and vans by 2030 to accelerate the transition to electric vehicles. £1.3bn of funding has been flagged to fast-track the rollout of charge points for electric vehicles across England, £582m in grants for those buying zero or ultra-low emission vehicles and nearly £500m to be spent in the next four years for the development and mass-scale production of electric vehicle batteries. This will support car manufacturing bases in the Midlands, North East and north Wales. Significant private sector investment is needed to achieve the ambitious 2030 deadline
  • public transport, cycling and walking: encouraging cycling and walking as attractive ways to travel and investing in zero-emission public transport
  • jet zero and greener maritime: supporting difficult-to-decarbonise industries to become greener through research projects for zero-emission planes and ships
  • buildings: making homes, schools and hospitals warmer and more energy efficient, while creating 50,000 jobs by 2030, including a target to install 600,000 heat pumps every year by 2028. £1bn has been allocated for next year into making new and existing homes and public buildings more efficient
  • clean hydrogen, carbon capture and storage (CCS): making the UK a world leader in technology to capture and store harmful emissions, with a target to remove 10MT of carbon dioxide by 2030. The government will provide an extra £200m of new funding to create two carbon capture clusters by the mid-2020s, with another two set to be created by 2030
  • natural environment: protecting and restoring the natural environment, planting 30,000 hectares of trees every year and creating jobs in this area
  • finance and innovation: making the City of London the global centre of green finance and establishing a £1bn energy innovation fund to develop technologies needed to reach new energy targets

What is the context to this plan?

The Plan is designed to help the UK to eradicate its contribution to climate change by 2050. It builds on last year’s commitment to overhaul the Clean Growth Strategy to increase the 2050 decarbonisation target from 80% to 100%. In June 2020, the Prime Minister foreshadowed the Plan’s announcement in his ‘Build Back Better’ speech, where he announced the first steps in delivering the industrial aspects of the net zero emission target. The focus on the UK’s former industrial heartlands is salient as the Plan is aligned with the government’s wider aims to level-up investment and maintain a labour market in a post-industrial green economy.

The Plan sets out a roadmap of (some long-awaited) measures and new plans, including:

  • National Infrastructure Strategy (announced in the Chancellor’s Spending Review) which will provide £100bn of infrastructure investment tied into the UK’s net zero target, alongside the launch of a National Infrastructure Bank to channel billions of pounds into capital projects
  • Energy White Paper (due late 2020) which will set out the transformation of the energy system to drive economic growth
  • Transport Decarbonisation Strategy (due late 2020) which will look at moves to fully decarbonise the transport system
  • Hydrogen Strategy (due early 2021) which will outline the government’s targets for a UK hydrogen economy
  • Industry Decarbonisation Strategy (due early to mid-2021) which will set out the vision for a profitable low-carbon industrial economy

How does this fit in with existing policy, such as the Clean Growth Strategy and Industrial Strategy?

The Plan builds on the UK’s existing climate commitments and identifies areas of focus for upcoming policy and budgetary initiatives. The distinguishing factors of this Plan are the renewed investment, and notably, the ambitious timeframes. The government’s clear intention is to drive this domestic strategy forward ahead of the UK’s hosting of COP26 in November 2021, in order to strengthen the UK’s global role in leading the climate change agenda.

Is there anything missing from the Plan?

While the Plan supports R&D on zero-emission aircraft, it does not propose curbs on current aviation as it does for carbon-emitting ground transportation. This is perhaps understandable given the current challenges faced by the industry as a result of the coronavirus (COVID-19) pandemic.

There is a focus on wind, nuclear, CCS and hydrogen to the exclusion of other generation and storage plants, both established (eg solar) and innovative (eg space-based solar). It will be interesting to see how the Energy White Paper treats these other technologies.

The Plan does not provide detail as to the form of regulation that will be used to realise the ten upcoming policy initiatives, though it does flag upcoming proposals where we expect to see more detail. A clear programme of regulation for the Plan’s delivery will, in time, support and incentivise further private sector investment.

While the UK’s exit from the EU has led to some speculation around the treatment of environment and climate issues in the terms of international trade deals, the Plan does not directly address how the ten initiatives would interact with Brexit trade negotiations.

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