Prime Minister Rishi Sunak has announced significant changes to the UK Government’s strategy towards its net zero goal.
The UK Government has been legally committed to achieving net zero by 2050 since June 2019, with Theresa May supporting the legislation as one of her last acts as Prime Minister of the UK. That commitment was further emboldened under her successor, Boris Johnson, who promised that the UK would undergo a ‘green revolution’, which would see the economy prosper from the transition to net zero carbon emissions.
Sunak is now rolling back some of those commitments. While he maintains that he still believes in the UK’s commitment to net zero by 2050, he is staking his premiership on delaying some of the previously announced measures, noting that ‘realism doesn’t mean losing our ambition or abandoning our commitments’.
In a press conference on Wednesday, Sunak said that his Government would ‘adopt a more pragmatic, proportionate and realistic approach to meeting net zero’, despite receiving criticism from many in both his own party and in the industries that were impacted by the announcement.
Critics of Sunak have noted that the Prime Minister’s decision to kick the can down the road is an attempt to shore up support for the Conservative Party, which has been behind in recent polling, before the next election. Sunak is hoping to replicate the party’s recent success in the Uxbridge by-election, where it retained a seat many believed it would lose, thanks to widespread opposition to Transport for London’s planned expansion of the Ultra Low Emissions Zone, also known as ULEZ.
The announcements made by Sunak include:
Petrol and diesel ‘ban’ moved to 2035
The change that has echoed most throughout the electrical industry is the postponent of the upcoming ‘ban’ on the sale of new petrol and diesel cars, which was expected to come into force in 2030.
Of course, those within the industry will know that this was never a straight ban on cars that were powered by fossil fuels. Instead, it would have prevented car manufacturers from selling cars that were wholly powered by petrol and diesel, while still allowing hybrids, plug-in hybrids and, of course, full electric vehicles.
As of August 2023, vehicles that are wholly powered by either petrol and diesel made up less than 50% of all new cars sold, with more and more manufacturers moving away from pure fossil fuels. That means the market is already naturally moving towards the Government’s initial 2030 goal. However, the Government has argued that delaying the ban would give the industry more time, and put the UK in lock step with the European Union.
There has been a mixed reaction amongst the car industry regarding this delay, with Toyota and Jaguar Land Rover supporting the move, while Ford launched a scathing attack on the Government’s decision. Meanwhile, Stellantis, which owns brands such as Vauxhall, Peugeot, Citroen and Fiat, noted that it will continue on its current trajectory of achieving ‘100% zero emission new car and van sales in the UK and Europe by 2030’, regardless of the UK Government’s moves.
Of course, it’s important to note that different car manufacturers are at different stages in their transition. For example, Volvo has already planned to go fully electric by 2030, while Stellantis, the group which contains the Jeep, Chrysler, Fiat, Peugeot, Citroen and Opel brands, has said it will no longer invest in the development of new internal combustion engines. Meanwhile, Toyota has been slow to react to the EV transition. It currently sells just one electric car, which hasn’t exactly been selling like hotcakes in the UK market.
Additionally, while the ‘ban’ has been delayed, many have criticised the Government’s messaging. After all, as the Conservative Party gear up for a general election campaign, it has staked its chances on creating a dividing line between Labour and itself when it comes to green issues. However, it has misleadingly portrayed the ban as impacting all diesel and petrol vehicles, which would naturally impact the poorest in society. That would be disingenuous as this ban would only impact those purchasing new cars, while not exactly limiting their options drastically.
It’s also worth noting that there have been no changes to the ZEV Mandate, which was said to be on the chopping block last month. This could have a bigger impact than the outright ban, as it forces car manufacturers to hit certain sales targets when it comes to zero-emission vehicles. In fact, under the current plans, car makers would still be expected to have 80% of their sales in 2030 be vehicles that emit no carbon whatsoever. That means hybrids and pure fossil fuel cars will have to make up no more than 20% of sales.
The ZEV Mandate is also expected to come into force as soon as next year, with a target of 22% of all new cars sold by each manufacturer being zero emission. That means while the can has been kicked down the road for a full ban, car makers will still likely be making the transition as quickly as possible.
New grant for boiler upgrades
It was widely expected that Sunak would weaken the Government’s plans to phase-out gas boilers in new build homes, but that hasn’t happened. In fact, there was no reason why it should have happened, as it’s the easiest win for both the Government and housebuilders. For example, all new Redrow developments across the UK have already been transitioning away from gas central heating in favour of air source heat pumps – while other developers are also following suit.
However, there have been changes announced for homeowners who were concerned they would be forced to change their boilers sooner rather than later.
Firstly, the upcoming ban on oil and LPG boilers for off-gas-grid homes will be delayed until 2035. This would allow existing fossil fuel heating systems to be used in certain homes for nine years longer than previously planned, but these homes will represent a minority of UK homes. After all, these are homes that are not connected to the nationwide gas grid.
Additionally, Sunak has said that those who face significant challenges to upgrade their boilers after that date could be offered an exemption. Although that would naturally depend on which party is in power, as that could easily be scrapped between now and then. So, if that’s you, I wouldn’t bank on it.
To make the transition to more eco-friendly ways of generating heat, Sunak is hoping that the carrot will work better than the stick. While he says that households will not be forced to rip out their current boilers if they’re in perfect working order, he says that those looking to upgrade will get the opportunity to have part of the cost funded by the Government.
The Boiler Upgrade Grant has been around for a while, but the amount offered by the Government will be raised by 50% to £7,500. That should go someway towards the cost of installing a new heat pump, especially as the market begins to mature in the UK, with ever-cheaper options entering the market at regular intervals.
Landlords no longer need to worry about energy efficiency upgrades
One of the most shocking changes set to be announced by Sunak is the Government’s plan to drop new energy-efficiency targets for private rented homes. This would have ensured that renters would benefit from lower energy bills and less draughty homes – although Sunak has sided with landlords.
Under previous plans, the Government would have imposed fines on landlords who failed to upgrade their properties to meet minimum energy efficiency standards.
Of all the announcements this is arguably going to be the one that has the biggest impact. The previous target would have seen landlords forced to upgrade their properties to meet an EPC minimum of C by 2028, but instead the Government is hoping to ‘encourage’ landlords to do so, but without any legal requirement.
According to the latest Government data, 2.52 million renters (56%) are currently living in homes with an EPC rating below C. Of those, 1.9 million renters are living in a property with an EPC D rating. Since April 1, 2020, landlords can no longer let or continue to let properties covered by the MEES Regulations if they have an EPC rating below E, unless they have a valid exemption in place. Now, many of those landlords will have no incentive to improve upon that minimum rating.
What’s next?
It’s unknown as to what other plans are set to be announced by Sunak as part of his Government’s watering down of the country’s net zero commitments in the future. However, there was one bright spot of the announcements on Wednesday, with the Government confirming that it will soon announce big reforms to the grid connection process, as well as expedite upgrades to the nation’s energy grid.