UK Government Releases Clean Growth Strategy

UK Government

At over 160 pages, the government has released one of its most comprehensive energy and environmental publications to date. The full publication can be found at the end of this article.

Strategy Overview

The Government is determined to leave our natural environment in better condition than before. Clean growth is not an option, but a duty we all owe to the next generation, and economic growth has to go hand-in-hand with greater protection for our forests and beaches, clean air and places of outstanding natural beauty.

Their approach to clean growth is an important element of the modern Industrial Strategy: building on the UK’s strengths; improving productivity across the country, and ensuring they are the best place for innovators and new businesses to start up and grow.

Clean growth means growing our national income while cutting greenhouse gas emissions. Achieving clean growth, while ensuring an affordable energy supply for businesses and consumers, is at the heart of the UK’s Industrial Strategy. It will increase productivity, create good jobs, boost earning power for people right across the country, and help protect the climate and environment upon which we and future generations depend on.

European Union Emissions Trading Scheme (EU ETS)

The Government is considering the UK’s future participation in the EU ETS after our exit from the EU and they remain firmly committed to carbon pricing as an emissions reduction tool whilst ensuring energy and trade intensive businesses are appropriately protected from any detrimental impacts on competitiveness.

Carbon Price Support (CPS)

Specifically in relation to the power sector and CPS, starting in 2021/2022, the Government will target a total carbon price which will give businesses greater clarity on the total price they will pay for each tonne of emissions, and will set out more detail on carbon prices for the 2020s in the 2017 Autumn Budget.

Carbon Reduction Commitment (CRC)

They will continue with plans to close the CRC Energy Efficiency Scheme following the 2018-19 compliance year. They will drive energy efficiency by implementing the previously announced increase to the main rates of the Climate Change Levy from 2019.

Climate Change Agreements (CCAs)

They will undertake an evaluation of the Climate Change Agreements to inform any successor scheme from 2023.

Energy Savings Opportunity Scheme (ESOS)

The Government will build on existing schemes such as the Energy Savings Opportunity Scheme (ESOS), undertaking a comprehensive assessment of its effectiveness and consider any future reforms. Alongside this Strategy, they are consulting on a new and streamlined energy and carbon reporting framework to replace some existing schemes, such as the reporting element of the CRC Energy Efficiency Scheme, and align with mandatory annual greenhouse gas reporting by UK quoted companies. This will improve the way in which businesses report their energy use, and provide businesses with the information needed to identify how they can reduce energy bills.

Climate Change Levy (CCL)

CCL rebalancing between autumn 2019 to summer 2024; expect a narrowing between the CCL rates for gas and electricity.

Taxable Commodity  Rate from 01/04/2017 Rate from 01/04/2018 Rate from 01/04/2019
Electricity (£ per kWh) 0.00568 0.00583 0.00847
Natural Gas (£ per kWh) 0.00198 0.00203 0.00339
LPG (£ per kWh) 0.01272 0.01304 0.02175
Other taxable commodity (£ per kWh) 0.01551 0.01591 0.02653

Renewable Obligation Certificates (ROCs)

ROC’s scheme closes to all grace period applicants in spring 2019.

Feed-in Tariff (FiT)

Small-scale Feed-in Tariff government wants to see more people investing without government support with an update on future policy approach and the end of 2017.

Carbon Reporting Framework

Consult on new and streamlined energy and carbon reporting framework. This will replace some existing schemes, such as the reporting element of the CRC Energy Efficiency Scheme, and align with mandatory annual greenhouse gas reporting by UK quoted companies. 

Other parts of the strategy include:

  • Provide £255 million of funding for energy efficiency improvements in England and help public bodies access sources of funding.
  • Work with British Standards Institute (BSI) to develop voluntary green sustainable finance management standards.
  • Establish an industrial energy efficiency scheme.
  • Support the recycling of heat produced in industrial process.
  • Consult on raising minimum standards of energy efficiency for rented commercial.
  • Explore how voluntary building standards improve energy efficiency programs.
  • Simplify requirements for business to measure and report energy use.
  • Invest £265 million in smart systems.
  • Invest £460 million in nuclear.
  • Invest £177 million to further reduce the cost of renewables.
  • Invest £1.2 billion to make cycling and walking the natural choice.
  • Invest around £841 million of public funds in innovation, in low carbon transport, technology and fuels.
  • Provide up to £557 million for further Pot 2 Contract for Difference auctions.
  • Invest £99 million in innovative technology and research for agri-tech.
  • Provide £50 million for the Plug-in Taxi programme.
  • Invest £14 million into the Energy Entrepreneurs Fund.
  • Invest £1 billion on ultra-low emissions vehicles.
  • Provide £20 million to support new clean early-stage investment fund.
  • Invest an additional £80 million, alongside £15 million from Highways England, to support charging infrastructure deployment.
  • Publish joint industrial decarbonisation and energy efficiency action plans.
  • Demonstrate international leadership in carbon capture usage & storage (CCUS).
  • Work with industry to deploy CCUS.
  • Work with industry as they develop an Automotive Sector Deal.
  • Publish an Automated and Electric Vehicles Bill, allowing the Government to set requirements for the provision of charging points.
  • Publish a new Resources and Waste Strategy.
  • Reinstate a regular Clean Growth Inter-Ministerial Group.
  • Work with mortgage lenders to develop green mortgage products.
  • Phase out high carbon forms of fossil fuels within business.

Read the full publication here

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