Aiming higher: UK Government sets its sights on net-zero emissions by 2050

As anticipated, on Wednesday, 12 June 2019, the UK Government introduced legislation committing the UK to reducing its net contribution to greenhouse gas emissions to zero by 2050. Once enacted, this law will translate the UK’s international treaty commitment to reducing its greenhouse gas emissions into national law. Although sectors such as international shipping and international aviation are still excluded (and the Government has stated that it will review the commitment if other countries do not follow suit), this represents a bold step in the Government’s policy ambitions.

The Climate Change Act 2008 (the “Act”), which introduced the legal obligations to reduce greenhouse gas emissions allows the Secretary of State, subject to considering the advice of the Committee on Climate Change, to amend the greenhouse gas emissions reduction percentage where there has been “significant developments in scientific knowledge about climate change, or European or international law or policy”. The new law takes the form of an amendment to the Act to the effect that the existing requirement to reduce greenhouse gas emissions by at least 80% against 1990 levels is increased to 100%. Achieving this would make the UK carbon account ‘net-zero’ with regards to its greenhouse gas emissions.

The UK carbon account is primarily a reflection of UK’s greenhouse gas emissions, reduced by UK removals of those emissions, and the account can also be credited or debited with international carbon credits.

As well as reflecting the growing public anxiety over the detrimental impacts of climate change, this latest amendment is consistent with recent Government announcements about its aims to decarbonise the UK economy. Namely, it follows the trajectory set by the 2017 Industrial Strategy, which names clean growth as a Grand Challenge, and the 2017 Clean Growth Strategy, which set out the Government’s ambition for decarbonising all sectors of the UK economy through the 2020s.

What does this change mean for ambitions to decarbonise heat, transport and electricity sectors?

Decarbonising Heat

With gas currently providing heating to 85% of residential buildings, the increased level of ambition will move decarbonising heat higher up the decarbonisation agenda. While the 80%-reduction commitment would have allowed some gas heating to have remained, the new threshold is expected to require a gas with CCUS, hydrogen or renewable electricity powered heating system. As well as opportunities, such a wholesale change is likely to present a number of challenges, such as:

1. Domestic consumer engagement: a move away from current gas boilers is expected to require either boiler changes or retrofitting of new heating systems onto existing premises. The level of consumer engagement and the associated cost of the change is likely to determine the speed at which this process can progress.

1. Distribution networks: whether to adapt existing gas networks to carry 100% hydrogen or the capacity of electricity distribution networks to enable electricity powered heating systems, both options would require careful, front-loaded planning and investment.

Decarbonising Transport

Under current policies such as Road to Zero and NO₂ plan, some emission-producing vehicles could have remained on UK roads in 2050. The new law would change that. To achieve ‘net-zero’, the UK may therefore need to accelerate existing aims such as ending the sale of new petrol and diesel vehicles sooner as well as looking to introduce hydrogen powered transport. This in turn would require the investment in technologies that make low carbon hydrogen, such as CCUS.

In addition, some of the challenges discussed in our Electric Vehicles and Charging Infrastructure guide will need to be overcome before zero-emissions vehicles are widely adopted and the policy targets can be met.

Moreover, thus far the focus has only been on road transport: little is said of decarbonising shipping and aviation. The Act does not legislate on emissions from international aviation or international shipping so the new law does not affect these sectors. Given that the Committee on Climate Change’s report in May 2019 specifically singled out these sectors, decarbonisation efforts in these areas remain to be seen.

Decarbonising Electricity

Although, the UK has made commendable progress towards decarbonising electricity generation, and recent policies such as the Offshore Wind Sector Deal continue to promote new low carbon electricity, the new target means that even these policies may need to be more ambitious. What’s more, the predicted increase in electricity demand means that current electricity sources need to be ‘cleaner’ and new sources of low carbon electricity generation that provide flexible and dispatchable power will be critical.

Comment

While the change represents a bold step by the Government, realising this aim depends on the steps that will need to follow. Namely, this is the time for the public and private sector to work together to create a regulatory and business landscape that would attract the investment needed to achieve the ‘net-zero’ goal. Already, the existing business models are being reviewed (such as in the context of the Infrastructure Finance Review) and regulatory models are being examined (such as in the case of hydrogen blending with natural gas in heating and for new CCUS projects). Much more will need to be done by Government and industry in the coming years.