COP26: Primer on the UK’s Net Zero Strategy

The net zero narrative has gained great momentum over the past four years. This momentum has been characterised by the release of numerous targets for achieving net zero before 2050, including those of the UK Government. Now, in the run up to COP26 the government has set out its plans for achieving net zero by 2050 in the long awaited Net Zero Strategy. The strategy, required under the Paris Agreement, sets out the government’s plan for delivering on its nationally determined contribution (NDC) up to 2037. NDCs are the commitments made by the nations signed up for the Paris Agreement to reduce their emissions. The NDCs agreed under the 2016 Paris Agreement were not ambitious enough to limit global warming to 2 degrees Celsius.  Under the existing NDCs, emissions were in fact set to rise by 16% from 2010 levels by 2030.[1] However, the Paris Agreement includes a ‘ratchet mechanism’ which commits the nations to review and improve their NDCs every five years.  The UK’s new strategy now seeks a 68% reduction in GHG emissions across the economy by 2030 and 78% by 2050 compared to 1990 levels.[2] It is these new improved NDCs that are currently being addressed at COP26 as the UK Government seeks to build on the ambition of the original Paris Agreement and ‘keep 1.5 degrees alive’.

Key sectors

The strategy stretches across seven key sectors and provides a decarbonisation pathway for each to support the UK’s 2050 net zero target.  The sectors and their individual policies and targets are as follows:

Power

The UK aims to have an 100% ‘clean energy’ grid by 2035. An offshore wind target of 40 GW has been set, along with a budget of £120 million for new nuclear technology and the promise to secure a final investment decision on a new large-scale nuclear plant.

Fuel supply and hydrogen

The strategy promises to deliver 5 GW of hydrogen production capacity by 2030, supported through a £140 million fund to establish the Industrial Hydrogen Revenue Support scheme.  A revision of the Oil and Gas Authority strategy will give new powers to assess the emission reduction targets of operators and establish a carbon compatibility check for future licensing on the UK continental shelf.[3]

Industry

‘New low carbon industrial ‘clusters’ that use hydrogen energy and carbon capture and storage will be created. The government will support businesses to switch to low carbon fuels or alternatives using ‘fair’ carbon pricing and the £315 million Industrial Energy Transformation Fund (IETF).  Additionally, a new ‘net zero consistent’ cap will be consulted on for the UK Emissions Trading Scheme (ETS). 

Heat and buildings

The policies seek to decarbonise heat and buildings through £3.9 billion of new funding, including a £450 million boiler update scheme.  All new heating appliances must aim to use ‘low carbon technologies’ by 2035.3

Natural resources, waste and fluorinated gases

An additional £124 million will be provided to the Nature for Climate fund to restore peatland and to triple woodland creation, contributing to the UK’s commitment to create at least 30,000 hectares of woodland each year by 2024[4].  There are also commitments to explore options for the near-elimination of biodegradable municipal waste to landfill from 2028.  Furthermore, £295 million of capital funding will be allocated to help Local Authorities prepare to provide free food-waste collections in England from 2025.

Transport

The government plans to end the sale of petrol and diesel vehicles by 2030 and to require by 2035 that all new cars and vans sold are zero emission at tailpipe. £3 billion will be invested in new bus services, £2 billion in cycling infrastructure and £620 million in new vehicle grants and infrastructure (e.g. EV charging points).  They are aiming to kick-start the commercialisation of sustainable aviation fuel (SAF), with the ambition to achieve 10% SAF use by 2030.

Greenhouse gas removal (GGR)

The UK Government will support the early deployment of GGR technologies using a previously announced £100 million in investment for GGR research and innovation.  It will also seek to explore options to provide oversight with ‘robust monitoring, reporting and verification’ of GGR.

Response to the Strategy

Considering the importance of the strategy to global climate politics, it is perhaps not surprising that it has had mixed reviews.  In their review, the Climate Change Committee stated that “our overall assessment is that it is an ambitious and comprehensive strategy that marks a significant step forward for UK climate policy.”[5]

Similarly, the Financial Times concluded that “the strategy is bold in places while lacking in others but overall represents among the most detailed and impressive blueprints unveiled by any government to reduce its emissions.” [6]

However, not all the reviews have been so positive.  In its official position the Guardian concluded that “in a number of ways, the net zero strategy published by the UK government on Tuesday falls short of what was hoped for, and perhaps even expected by more optimistic observers.  The public investment that ministers have committed to is insufficient, their faith in private-sector solutions overblown.”[7]

Despite the mixed opinions on the Net Zero Strategy, there appear to be shared themes of praise and criticism across many commentators.  Most notably, the commitment to create a clean energy grid by 2035 is almost universally praised.  The bold ambition for expanding carbon capture has received comparable levels of praise.  This has reaffirmed commitments to end the sale of petrol and diesel vehicles by 2030 and all non-zero emission from tailpipe cars and vans by 2035.

On the other side of the coin, the key criticisms that have emerged largely relate to the details of the heating and buildings strategy along with the lack of detail provided on how the Government intends to finance the strategy or shift consumer behaviour to enable emission reductions.

The heating and building strategy has received particular attention, with detractors pointing out the poor funding for home insulation and the lack of ambition to tackle the impact of heating, which accounts for nearly a third of the UKs total emissions.6  The lack of policies to influence consumer behaviour has also been commonly raised as a concern, with the strategy giving little indication that it will seek to influence consumers to reduce high impact behaviour such as meat consumption or air travel.  This is despite the fact that consumer behaviour change is thought to be necessary to meet up to two thirds of the measures required for net zero.[8] 

Finally, commentators have also raised the apparent incompatibility  between the strategy’s goals and a number of the Government’s other policies; examples which include the continued licensing of oil and gas extraction and the £billions currently allocated for road building and enhancement.  The Government’s mixed messaging on climate matters is further compounded by the ambiguity surrounding how the Treasury intends to finance the transition to net zero. Commentators are expressing dismay over the Treasury’s position that they are unwilling to finance the strategy using borrowing as it would be “unfair to pass on costs to future taxpayers”.[9]  The recent announcement in the Autumn budget that the treasury intends to reduce taxes on domestic air travel and commit £21 billion of spending for roads would have done nothing to allay these criticisms.[10]  With regard to the Net Zero Strategy, it is clear that these fears could have been addressed through the inclusion of a ‘net zero test’ as was recommended by the Climate Change Committee in the Summer.  However, as pointed out by the Climate Change Committee: the absence of a ‘net zero test’, which is designed to ensure that all policy and planning decisions are aligned with the Net Zero Strategy, leaves the UK’s transition at constant risk of being undermined by short-sighted political decisions.

Overall, in places the Net Zero Strategy is admirably ambitious, setting a clear direction for major sectors such as energy and carbon capture.  But as the UK holds such a key position as the host of COP26, the lack of detail and funding of crucial sectors and policies speaks much louder than it otherwise would.  As the race to avert the worst consequences of climate change at this point is very much a sprint not a marathon, it is frustrating that the Net Zero Strategy is not as bold and comprehensive as it could or should have been.  The government must listen and incorporate feedback from industry and the public to address the outlined weaknesses, and position the UK where it can truly lead the pack on the way to a net zero world. 

[1] Paris Agreement: What does it mean and what is going wrong? (yahoo.com)

[2] What is COP26 and why is it important? | Chatham House – International Affairs Think Tank

[3] UK Net Zero Strategy: Understanding the Impact on Key Sectors | Latham.London | Latham & Watkins

[4] Farming News - Net Zero Strategy: Industry response

[5] Government’s Net Zero Strategy is a major step forward, CCC says - Climate Change Committee (theccc.org.uk)

[6] Charting the UK’s path to net zero | Financial Times (ft.com)

[7] The Guardian view on the net zero strategy: not tough enough | Editorial | The Guardian

[8] Four key measures to implement Britain's Net Zero Strategy | British Politics and Policy at LSE

[9] In-depth Q&A: The UK’s net-zero strategy - Carbon Brief

[10] ‘Cop26 own goal’: despair over budget backing for flights and roads | Autumn budget 2021 | The Guardian