Prime Minister announces key changes to the UK’s Net Zero Strategy.
Last Wednesday, Prime Minister Rishi Sunak announced key changes to the UK’s Net Zero Strategy. In a press conference held at 10 Downing Street, Sunak stated he wanted to deliver net zero in a “fairer” way, specifically citing the cost placed on families by the previous strategy.
The policy changes include:
- Delay the 2026 phase out of fossil fuel boilers in off-gas-grid homes until 2035.
- Increase the Boiler Upgrade Scheme (BUS) grant by 50% to £7,500.
- An exemption to the phase out of fossil fuel boilers in 2035 for households who will most struggle to switch to heat pumps or low-carbon alternatives.
- Scrap policies to force landlords to make energy efficiency upgrades to their properties.
- Delay the 2030 ban on diesel and petrol cars and vans until 2035.
Additionally, Sunak announced he would rule out a series of policy considerations targeting behavioural changes like requiring people to carpool, eat less meat and fly less.
He expressed that he is still committed to reaching net zero by 2050 and that the changes will undo targets which focussed on short-term political gain over long-term progress. Although, given the looming general election, the same claims are being made about the PM himself.
Political commentators suggest that Sunak is vying for a dividing line between the Conservatives and Labour, with the latter party expressing intentions to make Britain a clean energy ‘superpower’ in their election ramp-up.
How has the news been received by the housing sector?
As mentioned, the PM suggested that his U-turns on certain green targets were in order to reduce the financial burden on families. But, Kate Henderson, chief executive of the National Housing Federation, believes his actions will have the opposite effect, stating:
“England’s homes are among the oldest and draughtiest in Europe. Making homes more energy efficient is a win-win, not only helping to save our planet, but also boosting our economy by creating jobs and, crucially, saving money.
Our research found that retrofitting homes would save social housing residents on average 40% on heating bills. Scrapping targets on this could lead to people facing higher bills for years to come.”
A view shared by Dan Craw, deputy chief executive of Generation Rent, who summarised the potential detrimental effect:
“Leaving the impact on the climate to one side, it makes the cost-of-living crisis worse and damages renters’ health.”
Is there sense in delaying our targets?
Given the very unusual circumstances of the ongoing cost-of-living crisis, caused by high energy prices and inflation, have previous net zero targets actually become unrealistic?
No one would disagree that the UK is in a far different fiscal situation than pre-Covid, so does that mean we should take a different approach to net zero – and who will take the brunt of the cost of change?
What impact will the changes have?
Delaying targets for fossil fuel boiler replacements does not necessarily mean there will be a slowdown in the uptake of heat pumps. The increase to the BUS grant will bring heat pumps into price parity with fossil fuel boilers for most homes, thus removing a key barrier to the adoption of the technology.
Sunak also made no mention of delaying or reversing any of the proposals for the 2025 Future Homes Standard (although this could be just around the corner). The standard is currently set to change the Building Regulations to require newbuilds in England to be more efficient and likely to be off the gas grid, instead using a low-carbon alternative such as a heat pump.
The scrapping of the requirement for landlords in the private rental sector to make energy efficiency upgrades to homes, means a large amount of emissions won’t be reduced from the sector and many renters won’t benefit from a drop in energy bills.
Although, with rent prices rapidly rising in areas around the country, there is certainly a case for attempting to steady up the market by not burdening landlords with costly efficiency improvements.
After the minimum efficiency standards have been abandoned for the private rental sector, the suggestions of a similar policy for the owner-occupied sector seems highly unlikely for the near future.
The move seems to have had a mixed impact on the Electric Vehicle (EV) sector so far. Ford expressed their disappointment with Sunak’s decision, with their investment plans reliant on government targets and policy stability. Nissan then came forward to say that they are sticking to their plans to sell only EVs from 2030. So, we could see a scenario where carmakers continue with their already planned rollout of EVs.
It is difficult to judge the exact impact this policy upheaval will have. With a general election anticipated for next year, if the Labour Party were to get into power as some polls suggest, they could very well reverse these decisions.
That being said, the inaction and uncertainty that will come with these changes in the run up to that election should not be underestimated. Especially at a time when we should be ramping up climate efforts and not slowing them down.
Sava’s Consultancy Director, Dr Neil Cutland, commented on the announcements:
“We have to recognise that a lot of this is electioneering”, said Neil, “but there is also no doubt that the UK taxpayer is struggling more than ever to make ends meet. Bear in mind that I’m a scientist, with a firm belief that climate change is man-made and that it urgently needs halting. Bear in mind, too, that I’ve spent my entire career promoting the green agenda, and I genuinely support the net zero target. But I’ve always felt that it’s vital to make our implementation plans achievable.
“When I sat on various government-convened task groups between 2006 and 2013 that were thrashing out a definition of zero-carbon for newbuild homes, my strong opinion was that there was no point in working up a definition that the mainstream housing developers simply couldn’t achieve. I promoted the notion of technical compromises to make compliance easier for the industry, which definitely made me an outlier in the group (if not a heretic!). Nevertheless, and this applies now as much as then, I firmly believe that pragmatism should trump idealism.
“To bring this back to the Prime Minister’s announcements, some of them (such as delaying the ban on petrol and diesel vehicles) seem sensible to me, given the economic circumstances. And just maybe it’s OK to ‘give ourselves a bit of a break’ as a nation, and go for net zero a bit more slowly.
“The announcement that I think is bordering on disastrous, however, is the abolition of minimum energy efficiency standards for the private rental sector. Such improvements would have meant significantly lower fuel bills for households in rented accommodation, as well as reducing the UK’s carbon emissions. To abandon that one is a real missed opportunity.”
The official government press release containing all of the changes announced by Rishi Sunak can be found here.