Recommendations & Conclusions
46 items
1
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
The UK is experiencing its biggest energy crisis since the 1970s following major geopolitical instability during a year of worryingly extreme weather. Gas markets look likely to remain volatile for the foreseeable future and the UK remains exposed economically to oil and gas supply restrictions because of its continued dependence …
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The UK is experiencing its biggest energy crisis since the 1970s following major geopolitical instability during a year of worryingly extreme weather. Gas markets look likely to remain volatile for the foreseeable future and the UK remains exposed economically to oil and gas supply restrictions because of its continued dependence on fossil fuels.
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Government response AI summary
The government acknowledges the Environmental Audit Committee’s report and notes the machinery of government change and the contributions from various departments and the North Sea Transition Authority (NSTA).
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2
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
The UK has become used to reliable global energy markets providing a large proportion of its energy needs. Vladimir Putin’s apparent weaponisation of gas supplies has shown that the physical accessibility of energy supplies remains a crucial policy consideration, at least in the short to medium term. The UK Government …
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The UK has become used to reliable global energy markets providing a large proportion of its energy needs. Vladimir Putin’s apparent weaponisation of gas supplies has shown that the physical accessibility of energy supplies remains a crucial policy consideration, at least in the short to medium term. The UK Government needs to ensure that citizens and businesses have access to secure and affordable energy while at the same time doing its fair share towards limiting global temperature increase to 1.5°C, in line with its common, but differentiated responsibilities as a signatory to the Paris Agreement and the Glasgow Climate Pact.
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Government response AI summary
The government welcomes the Environmental Audit Committee’s report and provides context for the response, including mentioning the machinery of government change and contributions from other departments.
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3
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
Whilst the UK continues to be committed to phasing out the use of coal for electricity generation by 2024, the Government has recently announced its intention to allow the opening of a new coal mine at Whitehaven in Cumbria. The coking coal to be mined there has limited application in …
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Whilst the UK continues to be committed to phasing out the use of coal for electricity generation by 2024, the Government has recently announced its intention to allow the opening of a new coal mine at Whitehaven in Cumbria. The coking coal to be mined there has limited application in the UK steel industry, and 85% of the coal is planned for export to Europe. The UK Government needs to consider the impact of this decision on its ability to exert international influence with regard to the phasing out of unabated coal.
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Government response AI summary
The government acknowledges the committee's concern and reiterates its commitment to phasing out unabated coal for electricity generation by 2024, stating that any decision on a new coal mine is independent from this commitment and follows established planning policy.
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4
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
Climate breakdown threatens lives, livelihoods and infrastructure, and taking steps to ensure continued climate stability must be a national security priority for any government. The increasing frequency and ferocity of extreme weather events, floods, droughts and heatwaves which is manifest at the current 1.1°C average heating should serve as an …
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Climate breakdown threatens lives, livelihoods and infrastructure, and taking steps to ensure continued climate stability must be a national security priority for any government. The increasing frequency and ferocity of extreme weather events, floods, droughts and heatwaves which is manifest at the current 1.1°C average heating should serve as an alarm call. The impact that these weather extremes can have on national infrastructure has recently been all too apparent: there were striking examples of energy generating facilities across Europe being affected by the heatwave and drought in the summer of 2022. The world is currently on track to exceed the 1.5°C threshold that the Paris Agreement was intended to prevent.
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Government response AI summary
The Government recognizes that climate change and biodiversity loss pose risks to lives, livelihoods, national security, and infrastructure, and highlights its commitment to tackling these challenges through action and its net zero emissions target by 2050. It is also investing in climate adaptation measures.
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5
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
Tackling the immediate energy security and affordability issues caused by the war in Ukraine does not entail abandoning climate ambitions or putting them on pause. The energy trilemma can be solved by tackling all three issues together. There are many opportunities to achieve synergies between affordability, security and sustainability. Accelerating …
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Tackling the immediate energy security and affordability issues caused by the war in Ukraine does not entail abandoning climate ambitions or putting them on pause. The energy trilemma can be solved by tackling all three issues together. There are many opportunities to achieve synergies between affordability, security and sustainability. Accelerating the transition away from fossil fuels will enhance the UK’s energy security and reduce the ability of aggressive or repressive regimes to use oil and gas supplies as an economic weapon. It will also help to protect households from volatile fossil fuel prices permanently and will reduce the fiscal burden of financial support to households through this and any future energy crisis. (Paragraph 40) Accelerating the transition from fossil fuels and securing energy supplies 81 The British Energy Security Strategy
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Government response AI summary
The government agrees that energy security and climate ambitions are compatible and that transitioning away from fossil fuels is the best way to enhance energy security. They highlight existing progress in decarbonising the economy and improving energy efficiency.
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6
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
The Government acted swiftly to publish a British Energy Security Strategy following the invasion of Ukraine and the resulting gas supply crisis. We commend it on its rapid response. The Strategy has some merits. Its ambition on decarbonising the electricity system is welcome, and it sets strong and stretching targets …
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The Government acted swiftly to publish a British Energy Security Strategy following the invasion of Ukraine and the resulting gas supply crisis. We commend it on its rapid response. The Strategy has some merits. Its ambition on decarbonising the electricity system is welcome, and it sets strong and stretching targets for the roll- out of low-carbon electricity generation in the coming decade. (Paragraph 46
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Government response AI summary
The government welcomes the Committee’s recognition of the merits of the British Energy Security Strategy and states that it sets out a comprehensive plan to boost energy security, reduce reliance on fossil fuels, and accelerate the transition to a clean energy system.
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7
Conclusion
4th Report - Accelerating the transitio…
Accepted
There are, however, significant gaps in the Strategy. It is in essence an energy supply strategy, with much of its focus on electricity generation and oil and gas supply. To deliver genuine energy security, the strategy should have placed far greater emphasis on energy saving measures. Transport should also have …
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There are, however, significant gaps in the Strategy. It is in essence an energy supply strategy, with much of its focus on electricity generation and oil and gas supply. To deliver genuine energy security, the strategy should have placed far greater emphasis on energy saving measures. Transport should also have been included.
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Government response AI summary
The Government agrees energy efficiency is crucial and highlights measures in the British Energy Security Strategy to improve energy efficiency in homes, businesses, and transport, including a 15% reduction target by 2030 and investments in various efficiency measures.
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8
Recommendation
4th Report - Accelerating the transitio…
Not Addressed
The Government’s current fuel poverty target ‘to ensure that as many fuel-poor homes as is reasonably practicable achieve a minimum energy efficiency rating of band C, by 2030’ is vague and unspecific. Informed by the CCC’s Sixth Carbon Budget advice, we recommend that the new Energy Efficiency Taskforce is directed …
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The Government’s current fuel poverty target ‘to ensure that as many fuel-poor homes as is reasonably practicable achieve a minimum energy efficiency rating of band C, by 2030’ is vague and unspecific. Informed by the CCC’s Sixth Carbon Budget advice, we recommend that the new Energy Efficiency Taskforce is directed to advise the Government on appropriate interim targets to lift 100% of domestic properties to EPC C by 2035. Improving homes to EPC C or above will reduce the UK’s reliance on energy imports and cut carbon emissions while delivering a wealth of co-benefits, including warmer homes, improved health outcomes, and a job-creating boost to local tradespeople.
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Government response AI summary
The government response discusses NSTA emissions monitoring rather than the fuel poverty target and energy efficiency taskforce recommendations.
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9
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
Poor implementation has been a recurring issue for energy efficiency schemes for owner occupiers in England, which has undermined confidence among consumers and contractors. The Green Deal failed to offer sufficiently attractive loans to incentivise large scale take up. More recently, the Green Homes Grant was administered shambolically. The scale …
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Poor implementation has been a recurring issue for energy efficiency schemes for owner occupiers in England, which has undermined confidence among consumers and contractors. The Green Deal failed to offer sufficiently attractive loans to incentivise large scale take up. More recently, the Green Homes Grant was administered shambolically. The scale of the current fossil fuel price shock crisis requires a rapid acceleration of energy efficiency measures and a commitment to effective delivery.
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Government response AI summary
The government acknowledges the need for improving energy efficiency and states its commitment to achieving net zero carbon emissions by 2050 and reducing the UK’s final energy consumption from buildings and industry by 15% by 2030 against 2021 levels through the Energy Efficiency Taskforce (EETF).
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10
Recommendation
4th Report - Accelerating the transitio…
Accepted
The Government must first act to increase the funding of schemes that are already in place and have a proven track record of effective delivery. The £1 billion of further funding that the Government has provided to the Energy Company Obligation scheme over the next three years is welcome, but …
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The Government must first act to increase the funding of schemes that are already in place and have a proven track record of effective delivery. The £1 billion of further funding that the Government has provided to the Energy Company Obligation scheme over the next three years is welcome, but it is not commensurate with the scale or urgency of the energy security challenge. With over six million households now in fuel poverty, action on energy efficiency needs to be ramped up urgently.
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Government response AI summary
The Government states it is investing £6.6 billion this Parliament on clean heat and improving energy efficiency in buildings and highlights existing schemes like ECO, HUG, and LAD to support low-income households. They plan to launch the new ECO+ scheme in spring 2023 worth £1 …
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11
Recommendation
4th Report - Accelerating the transitio…
Accepted in Part
The current ECO scheme is not delivering anywhere near the numbers of energy efficiency improvements it did at its peak a decade ago. The Government needs to ensure that ECO+ is properly funded to deliver hundreds of thousands if not millions of improvements every year for the remainder of this …
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The current ECO scheme is not delivering anywhere near the numbers of energy efficiency improvements it did at its peak a decade ago. The Government needs to ensure that ECO+ is properly funded to deliver hundreds of thousands if not millions of improvements every year for the remainder of this decade. We recommend that the Government set a target to build capacity in the energy efficiency sector, with an objective to deliver at least 1 million installations a year by 2025 and 2.5 million a year by the end of the decade. The Government should direct the newly-announced Energy Efficiency Taskforce to estimate the extent of additional funding required to achieve such a timetable. (Paragraph 69) 82 Accelerating the transition from fossil fuels and securing energy supplies
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Government response AI summary
The government acknowledges the ECO scheme's importance and outlines the ECO4 and ECO+ schemes, with a combined budget of £2 billion from 2022-2026, aiming to upgrade homes and reduce energy bills. The Energy Efficiency Taskforce will focus on reducing energy demand by 15% by 2030.
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12
Recommendation
4th Report - Accelerating the transitio…
Deferred
The Government must also urgently bring forward measures to incentivise energy efficiency improvements via the mortgage market. The Department for Business, Energy and Industrial Strategy conducted a consultation on how an obligation on lenders could be introduced to improve the energy performance of domestic properties with mortgages. This consultation closed …
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The Government must also urgently bring forward measures to incentivise energy efficiency improvements via the mortgage market. The Department for Business, Energy and Industrial Strategy conducted a consultation on how an obligation on lenders could be introduced to improve the energy performance of domestic properties with mortgages. This consultation closed in February 2021: but more than 18 months afterwards the Government has yet to come forward with concrete proposals to kick-start a retrofit revolution in this part of the housing market. We are disappointed at this delay and recommend that the Department now fast track its response to that consultation and publish detailed policy proposals on green mortgages not later than the end of February 2023. If the Government has not published these proposals by the time the response to this report is due, we recommend that Ministers set out a timetable for doing so by the end of March 2023.
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Government response AI summary
The government acknowledges the role of mortgage lenders, but cites recent economic pressures as a reason to refine policy in this area based on consultation feedback before publishing a response. In the meantime, they are investing up to £20m through the Green Home Finance Accelerator …
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13
Recommendation
4th Report - Accelerating the transitio…
Acknowledged
In response to the Committee’s report on Energy Efficiency of Existing Homes, published in March 2021, the Government said that it was considering what further action might be required to catalyse the market for a wide range of attractive and low-cost green finance products. Yet it said that the variation …
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In response to the Committee’s report on Energy Efficiency of Existing Homes, published in March 2021, the Government said that it was considering what further action might be required to catalyse the market for a wide range of attractive and low-cost green finance products. Yet it said that the variation of stamp duty rates to incentivise green mortgages was not being considered, as to do so would risk the Exchequer’s revenue. We recommend that the Government direct the Energy Efficiency Taskforce to seek stakeholder views on how variations to the rate of stamp duty could be used to progressively incentivise energy efficiency improvements without jeopardising tax revenues.
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Government response AI summary
The government is prioritizing catalysing the market for Green Finance, citing the Green Home Finance Innovation Fund and the Green Home Finance Accelerator programme, and notes that the Energy Efficiency Taskforce will advise on stimulating investment.
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14
Conclusion
4th Report - Accelerating the transitio…
Accepted
We welcome the new interim target set by the Government in the Autumn Statement to reduce energy demand in this country by 15% by 2030. This goes some way to plugging the gap in the Energy Security Strategy which did not address reducing demand. We nevertheless regret that Ministers missed …
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We welcome the new interim target set by the Government in the Autumn Statement to reduce energy demand in this country by 15% by 2030. This goes some way to plugging the gap in the Energy Security Strategy which did not address reducing demand. We nevertheless regret that Ministers missed a crucial window of opportunity during the warmer months of 2022 to accelerate energy efficiency measures that could have helped to give permanent protection from the impact of volatile oil and gas prices to thousands more UK households.
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Government response AI summary
The government states that existing plans are expected to deliver around half of the new ambition to reduce the UK’s energy consumption by 15% by 2030 and highlights £6.6 billion already being spent this Parliament.
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15
Recommendation
4th Report - Accelerating the transitio…
Accepted in Part
The promise of £6bn further funding from the Chancellor is welcome, but those in fuel poverty cannot afford three winters of delay. We believe it is a false economy to hold this money back at a time when households are struggling, and the taxpayer is having to spend billions to …
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The promise of £6bn further funding from the Chancellor is welcome, but those in fuel poverty cannot afford three winters of delay. We believe it is a false economy to hold this money back at a time when households are struggling, and the taxpayer is having to spend billions to subsidise energy bills. The extra money promised on energy efficiency should be brought forward now to fulfil the Government’s manifesto commitment, not begin to be spent after a two year interval. We recommend that the Government launch a national ‘war effort’ push on energy saving and efficiency. The Government must treat the upgrading of all homes in England at band D or below to band C as a national priority to ensure affordability, enhance the UK’s energy security and reduce the high emissions from the country’s leaky and draughty building stock.
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Government response AI summary
The government recommitted to net zero targets through the Department for Energy Security and Net Zero and set an aspiration for as many homes as possible to reach EPC Band C by 2035 where cost-effective, affordable & practical. They cite current investments and planned ECO+ …
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16
Recommendation
4th Report - Accelerating the transitio…
Accepted
The Energy Efficiency Taskforce announced in November 2022, if appropriately resourced and commissioned, has the potential to make a significant practical contribution to policy implementation. In our view it would be well placed to advise Ministers in the Departments for Business, Energy and Industrial Strategy and Levelling Up Housing and …
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The Energy Efficiency Taskforce announced in November 2022, if appropriately resourced and commissioned, has the potential to make a significant practical contribution to policy implementation. In our view it would be well placed to advise Ministers in the Departments for Business, Energy and Industrial Strategy and Levelling Up Housing and Communities on the best means to achieve the step change in measures to decarbonise domestic and commercial property that the CCC has advocated. We recommend that the remit of the Energy Efficiency Taskforce Accelerating the transition from fossil fuels and securing energy supplies 83 expressly include the provision of advice to Ministers on any and all measures— including primary and secondary legislation, codes of practice and guidance—which in the Taskforce’s view will contribute to the swiftest possible implementation of energy efficiency measures at the scale the current situation demands.
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Government response AI summary
The Energy Efficiency Taskforce will advise ministers on delivering the government’s ambition to reduce total UK energy demand by 15% from 2021 levels by 2030, across domestic and commercial buildings and industrial processes, working within existing funding envelopes and policy parameters.
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17
Recommendation
4th Report - Accelerating the transitio…
Deferred
The Government can take further practical measures to make its policy on energy efficiency more effective. The current system of Energy Performance Certificates still requires a thorough overhaul to ensure that they represent an accurate assessment of the improved energy performance of buildings. We recommend that the Government bring forward …
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The Government can take further practical measures to make its policy on energy efficiency more effective. The current system of Energy Performance Certificates still requires a thorough overhaul to ensure that they represent an accurate assessment of the improved energy performance of buildings. We recommend that the Government bring forward amendments to the Energy Bill, currently in the House of Lords, to provide for a more effective rating system. The Government has also promised to publish a consultation on the Energy Performance of Buildings (England and Wales) Regulations before the end of 2022. If this has not been published by the time the Government responds to this report, we recommend that it sets out an explanation for the delay and sets a new urgent deadline for publication of the consultation, along with a timetable for the publication of its response and policy decisions, which should be issued no later than the end of 2023.
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Government response AI summary
The government acknowledges the role of Energy Performance Certificates and intends to consult on proposed reforms to the Energy Performance of Buildings framework in 2023, including options for an improved set of metrics.
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18
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
On the supply side, we welcome the clear and ambitious targets that the Government has set in the Energy Security Strategy for the roll out of low-carbon electricity generation. We are concerned that the Government is not doing enough to remove the barriers preventing the cheapest and quickest onshore low-carbon …
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On the supply side, we welcome the clear and ambitious targets that the Government has set in the Energy Security Strategy for the roll out of low-carbon electricity generation. We are concerned that the Government is not doing enough to remove the barriers preventing the cheapest and quickest onshore low-carbon technologies from being rapidly deployed. A number of witnesses have raised the challenges that low-carbon generators face in securing appropriate grid connections and how to manage latency in certain types of renewables. These are clearly significant issues, which the committee may wish to consider in the future.
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Government response AI summary
The government states that it will bring forward retail market reforms, that will deliver a market that works for consumers and supports system transformation. To achieve power decarbonisation by 2035 and support energy independence it will work across government.
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19
Recommendation
4th Report - Accelerating the transitio…
Accepted in Part
We are encouraged that the Government has now included one of the cheapest forms of renewable energy—onshore wind—in Contracts for Difference auctions and will consult on proposed changes to national planning policy to relax the de facto prohibition that has existed for the technology since 2015. We welcome these moves, …
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We are encouraged that the Government has now included one of the cheapest forms of renewable energy—onshore wind—in Contracts for Difference auctions and will consult on proposed changes to national planning policy to relax the de facto prohibition that has existed for the technology since 2015. We welcome these moves, while recognising that constraints remain. We recommend that the Government’s proposals establish clear guidelines to provide benefits for local communities in areas that accept onshore wind farms, including potentially reduced electricity bills. The Government should also set a clear ambition to expand its generating capacity from onshore wind by 2035 in line with the goals it has set for other technologies in the British Energy Security Strategy.
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Government response AI summary
The Government is committed to increasing onshore wind capacity and will consult on changes to national planning policy to relax the de facto prohibition, considering how to give local authorities demonstrating support for onshore wind a greater say and ensure that local communities benefit from …
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20
Recommendation
4th Report - Accelerating the transitio…
Not Addressed
It is unclear whether Ministers will maintain the current position whereby grade 3b agricultural land is available for ground-mounted solar installations. We recognise that the Government must balance the needs of energy security with biodiversity protection and food production. Nevertheless, moves to limit the land available for solar installations will …
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It is unclear whether Ministers will maintain the current position whereby grade 3b agricultural land is available for ground-mounted solar installations. We recognise that the Government must balance the needs of energy security with biodiversity protection and food production. Nevertheless, moves to limit the land available for solar installations will make it harder to achieve the Government’s stated ambition in the British Energy Security Strategy to increase solar capacity to 70GW by 2035. We recommend that the Government set out, in its response to this report, its assessment of the likely impact that reducing the classes of land available for ground mounted solar would have on its ability to achieve its own target of 70GW target by
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Government response AI summary
The government describes its technology-neutral approach, the importance of renewable energy such as solar panels, and the introduction of uplifted energy efficiency standards. They will explore how they can continue to drive onsite renewable electricity generation in new homes and buildings as part of the …
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21
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
As an island nation the UK has abundant tidal energy resources that could be tapped, yet tidal technologies received scant attention in the British Energy Security Strategy. We have been told that tidal range energy projects are now capable of being delivered at a similar overall cost to nuclear and …
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As an island nation the UK has abundant tidal energy resources that could be tapped, yet tidal technologies received scant attention in the British Energy Security Strategy. We have been told that tidal range energy projects are now capable of being delivered at a similar overall cost to nuclear and offshore wind. Tidal stream and tidal range technologies have the significant benefit that tidal flows are entirely predictable and can therefore deliver a consistently reliable year-round source of clean electricity.
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Government response AI summary
The government welcomes the inclusion of tidal power in Contracts for Difference auctions and recognizes the potential of tidal stream and tidal range technologies to deliver a reliable source of renewable energy.
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22
Recommendation
4th Report - Accelerating the transitio…
Acknowledged
We welcome the inclusion of tidal power in Contracts for Difference auctions which has resulted in 40MW of clean power from tides being awarded contracts. Tidal and other marine energy projects should be a vital component of the Government’s strategies for delivering both net zero and energy security. Tidal and …
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We welcome the inclusion of tidal power in Contracts for Difference auctions which has resulted in 40MW of clean power from tides being awarded contracts. Tidal and other marine energy projects should be a vital component of the Government’s strategies for delivering both net zero and energy security. Tidal and other marine energy projects should be a vital component of the Government’s strategies for delivering both net zero and energy security. We recommend that the Government incorporate, as part of the revised net zero strategy to be published by March 2023, an approach to developing tidal and marine energy that includes a stated ambition for the sector set out in gigawatts of generating capacity. The UK should be aiming to generate a significant proportion of its power from these sources by the middle of the 2030s. This approach must be extremely sensitive to biodiversity considerations given the obvious risks of disrupting important habitats, and the Government should make this clear in planning guidance.
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Government response AI summary
The government welcomes the inclusion of tidal power in Contracts for Difference auctions and recognizes the potential of tidal stream and tidal range technologies to deliver a reliable source of renewable energy.
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23
Recommendation
4th Report - Accelerating the transitio…
Acknowledged
The British Energy Security Strategy appears to reflect a 20th century approach to energy security, prioritising the construction of big, centralised power generation facilities to meet fixed demand. A move to a smarter, more flexible, digitally-enabled grid, which technological innovations now make possible, holds exciting potential to smooth demand peaks …
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The British Energy Security Strategy appears to reflect a 20th century approach to energy security, prioritising the construction of big, centralised power generation facilities to meet fixed demand. A move to a smarter, more flexible, digitally-enabled grid, which technological innovations now make possible, holds exciting potential to smooth demand peaks by flexing demand up and down in a way that was hitherto impossible. Developments in this area could have important implications for other elements of the Government’s energy strategy - for instance, how much baseload electricity is necessary and how much grid distribution capacity is needed to connect a more dispersed generation network. We recommend that the Government provides a progress report in 2023 on the joint Ofgem and BEIS Smart Systems and Flexibility Plan and incorporates any relevant actions from this report into its ongoing efforts to enhance energy security and decarbonise the electricity grid.
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Government response AI summary
The government recognizes the importance of a smart, flexible energy system, and that Ofgem has been working with industry to develop new grid codes and standards and it will bring forward retail market reforms to support system transformation to achieve power decarbonisation by 2035.
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24
Conclusion
4th Report - Accelerating the transitio…
The converted Drax power station provides 12% of the UK’s renewable power from the burning of wood pellets. This source of power is reliable and flexible and supports more intermittent renewables, such as wind and solar. However, we note that concerns have been raised about its sustainability and short-term climate …
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The converted Drax power station provides 12% of the UK’s renewable power from the burning of wood pellets. This source of power is reliable and flexible and supports more intermittent renewables, such as wind and solar. However, we note that concerns have been raised about its sustainability and short-term climate impact of burning wood pellets. We are currently examining these concerns as part of a separate inquiry.
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25
Recommendation
4th Report - Accelerating the transitio…
Accepted in Part
If the classes of land available for ground-mounted solar are further restricted, it will make it all the more imperative to mandate the widespread deployment of rooftop solar in new developments where there are appropriate south facing aspects. We recommend that the Future Homes Standard requires developers to fit solar …
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If the classes of land available for ground-mounted solar are further restricted, it will make it all the more imperative to mandate the widespread deployment of rooftop solar in new developments where there are appropriate south facing aspects. We recommend that the Future Homes Standard requires developers to fit solar PV as standard where it is possible.
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Government response AI summary
The government states that its approach remains technology-neutral but that renewable energy such as solar panels are a key part of getting to net zero. It expects most developers will install solar panels or heat pumps. It will explore how it can continue to drive …
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26
Conclusion
4th Report - Accelerating the transitio…
Accepted
Despite the UK’s heavy dependence on oil for transport, and transport’s status as the highest emitting sector, it is barely mentioned in the British Energy Security Accelerating the transition from fossil fuels and securing energy supplies 85 Strategy and was left out of the new national ambition to reduce energy …
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Despite the UK’s heavy dependence on oil for transport, and transport’s status as the highest emitting sector, it is barely mentioned in the British Energy Security Accelerating the transition from fossil fuels and securing energy supplies 85 Strategy and was left out of the new national ambition to reduce energy consumption by 15% by 2030. We acknowledge the Government’s leadership in setting a date to end the sale of petrol and diesel vehicles in 2030 and the encouraging rate of growth in the sale of electric vehicles. We note however that it may take many years for a full turnover of the vehicle fleet and that transport emissions have flatlined for the last decade. For the UK to meet its successive carbon budgets under the Climate Change Act 2008 and the Paris Agreement, transport emissions must start coming down more rapidly.
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Government response AI summary
The government states that decarbonising transport is a priority and references the Transport Decarbonisation Plan (TDP) published in 2021 that sets the sector on an ambitious path to net zero by 2050.
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27
Recommendation
4th Report - Accelerating the transitio…
Accepted
The best way to reduce the UK’s future exposure to volatility in the price of oil is to reduce oil consumption. The rapid growth in electric car sales is encouraging, but it will take many years to replace petrol and diesel vehicles. More must be done to improve the energy …
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The best way to reduce the UK’s future exposure to volatility in the price of oil is to reduce oil consumption. The rapid growth in electric car sales is encouraging, but it will take many years to replace petrol and diesel vehicles. More must be done to improve the energy efficiency of our transport system and reduce its contribution to climate change in the meantime. The International Energy Agency and other bodies have identified a range of demand side measures that the Government could use to cut oil use, make public transport more affordable and reduce transport emissions. We recommend that the Department for Transport consult on measures, such as those listed in the IEA’s ten-point plan, that it could introduce in the UK to improve energy security, reduce oil demand and cut climate-changing emissions from transport.
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Government response AI summary
The government states that decarbonising transport and reducing its contribution to climate change is a priority, referencing the Transport Decarbonisation Plan (TDP) published in 2021. They will continue to consider options, including those put forward by the IEA, and mention existing commitments and initiatives such …
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28
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
The Department for Business, Energy and Industrial Strategy has overall responsibility for net zero delivery, but the gaps in its British Energy Security Strategy suggest that it is failing to drive the departments responsible for other high emitting sectors, such as transport and buildings, to accelerate their own contribution to …
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The Department for Business, Energy and Industrial Strategy has overall responsibility for net zero delivery, but the gaps in its British Energy Security Strategy suggest that it is failing to drive the departments responsible for other high emitting sectors, such as transport and buildings, to accelerate their own contribution to energy security and the reduction of greenhouse gas emissions.
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Government response AI summary
The government says DESNZ and DLUHC work closely together, and they remain committed to meeting the net zero emissions target by 2050. They describe current building standards and the Future Homes Standard, and refer to the Transport Decarbonisation Plan.
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29
Recommendation
4th Report - Accelerating the transitio…
Acknowledged
In light of the Prime Minister’s confirmation at the Despatch Box to the Chair of this committee that he will personally drive cross-government action on climate change, we recommend that the Prime Minister directs the Secretary of State for Business, Energy and Industrial Strategy to work with his counterparts in …
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In light of the Prime Minister’s confirmation at the Despatch Box to the Chair of this committee that he will personally drive cross-government action on climate change, we recommend that the Prime Minister directs the Secretary of State for Business, Energy and Industrial Strategy to work with his counterparts in the Department for Levelling Up, Housing and Communities and the Department for Transport to seek further contributions from their departments to the national effort to enhance the UK’s energy security and reduce energy wastage. This cross-government work on energy security should inform the new and revised Net Zero Strategy that the Government is required to publish by March 2023. We further recommend that these Departments contribute to a comprehensive update to the British Energy Security Strategy in the spring of 2023. In that update the Government should indicate its progress in reducing direct and indirect reliance on Russian imports, securing energy supplies and improving energy efficiency. (Paragraph 140) North Sea oil and gas in transition
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Government response AI summary
The government says that DESNZ and DLUHC work closely together on climate change policy areas and highlights the Future Homes Standard and Building Regulations. A Transport Decarbonisation Plan exists and will be updated within 5 years.
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30
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
Vladimir Putin’s aggression in Europe, and the energy crisis that it has provoked, provides a new impetus to accelerate the transition away from polluting fossil fuels. Driving this transition through greater investment in energy efficiency and low- carbon technologies enhances energy security, protects households from fossil fuel price volatility permanently, …
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Vladimir Putin’s aggression in Europe, and the energy crisis that it has provoked, provides a new impetus to accelerate the transition away from polluting fossil fuels. Driving this transition through greater investment in energy efficiency and low- carbon technologies enhances energy security, protects households from fossil fuel price volatility permanently, saves public money and cuts climate-changing emissions. (Paragraph 175) 86 Accelerating the transition from fossil fuels and securing energy supplies
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Government response AI summary
The Government agrees that accelerating the transition from fossil fuels and securing energy supplies are vital for enhancing energy security, protecting households from fossil fuel price volatility, saving public money and cutting climate-changing emissions.
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Conclusion
4th Report - Accelerating the transitio…
Acknowledged
During this transition the UK must nevertheless continue to be able to access oil and gas to ensure that the country can continue to heat its homes, fuel its transport and generate a declining proportion of power. We have found consensus on the overarching need to accelerate the transition from …
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During this transition the UK must nevertheless continue to be able to access oil and gas to ensure that the country can continue to heat its homes, fuel its transport and generate a declining proportion of power. We have found consensus on the overarching need to accelerate the transition from fossil fuels, and the recommendations of this report reflect that. We have different views on the speed with which domestic oil and gas production may need to be phased out and on whether continued oil and gas licensing in the UK is necessary to ensure the country’s energy security, given the current geopolitical tensions. In theory, the UK’s domestic carbon budgets and its Nationally Determined Contribution targets could still be met if some new UK fields were licensed and developed. We also note that the IEA’s World Energy Outlook 2022 reiterates that new supplies create a ‘clear risk’ to the 1.5°C target.
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Government response AI summary
The Government agrees that during the transition the UK must nevertheless continue to be able to access oil and gas to ensure that the country can continue to heat its homes, fuel its transport and generate a declining proportion of power.
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32
Recommendation
4th Report - Accelerating the transitio…
Rejected
The UK Government showed admirable international climate leadership at COP26 in Glasgow, pushing for a renewed resolve to pursue efforts to limit the temperature increase to 1.5°C. When making decisions about future oil and gas licensing, the UK Government must also consider the international context. As the country which launched …
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The UK Government showed admirable international climate leadership at COP26 in Glasgow, pushing for a renewed resolve to pursue efforts to limit the temperature increase to 1.5°C. When making decisions about future oil and gas licensing, the UK Government must also consider the international context. As the country which launched the first Industrial Revolution, the UK has a historic responsibility to set a leadership example on climate change. The Paris Agreement enshrined an important principle of ‘equity and common but differentiated responsibilities’, which the UK must honour if it is to remain a credible climate leader. We therefore recommend that the UK set a clear date for ending new oil and gas licensing rounds in the North Sea: this date should fall well before 2050. We further recommend the Government should consult on what this date should be, based on the oil and gas production currently being planned by the UK and other producer states and on the remaining global carbon budget if temperatures are to be limited to 1.5°C..
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Government response AI summary
The government rejects the recommendation to set a clear date for ending new oil and gas licensing rounds in the North Sea, arguing that domestic production is already declining and that limiting UK production would not necessarily reduce global emissions.
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33
Recommendation
4th Report - Accelerating the transitio…
Rejected
The emissions targets currently set under the North Sea Transition Deal are not stretching enough. The Climate Change Committee suggests that it is feasible and necessary for oil and gas production emissions to be reduced by 68% by 2030. We agree. The oil and gas industry has been aware of …
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The emissions targets currently set under the North Sea Transition Deal are not stretching enough. The Climate Change Committee suggests that it is feasible and necessary for oil and gas production emissions to be reduced by 68% by 2030. We agree. The oil and gas industry has been aware of the contribution of its activities to man-made climate change since the 1990s, or earlier. A responsible industry should have been working to clean up its operations with far greater urgency than this timescale suggests. The Government needs to push the industry to go further and faster than its current approach. Challenging targets for the industry to undergo rapid decarbonisation must be introduced without delay. The fossil fuel industry should not be granted headroom in the UK’s carbon budgets that other hard to decarbonise sectors may need. We recommend that the North Sea Transition Deal be modified to include stronger targets and verification arrangements in line with the Government’s commitments under the Paris Agreement.
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Government response AI summary
The government rejects the recommendation to modify the North Sea Transition Deal, stating that the current decarbonisation targets are sufficiently ambitious and will help to reduce emissions, ensuring the UK Continental Shelf reaches net zero by 2050.
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Conclusion
4th Report - Accelerating the transitio…
Accepted
Sectoral involvement in drafting a deal of this nature is normal. It also makes sense for the industry to be involved in the monitoring and governance of a voluntary deal. However, we are concerned that the targets and accountability arrangements in the Deal are weak and lack the urgent and …
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Sectoral involvement in drafting a deal of this nature is normal. It also makes sense for the industry to be involved in the monitoring and governance of a voluntary deal. However, we are concerned that the targets and accountability arrangements in the Deal are weak and lack the urgent and transformative action which the CCC says is required. In particular, there appear to be few sanctions available to the North Sea Transition Authority in the event that companies do not achieve the production emissions targets they have agreed to meet. (Paragraph 200) Accelerating the transition from fossil fuels and securing energy supplies 87
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Government response AI summary
The government believes the current approach to targets and accountability arrangements in the North Sea Transition Deal is appropriate, citing a decline in upstream GHG emissions and actions taken by the NSTA to hold industry accountable.
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35
Recommendation
4th Report - Accelerating the transitio…
Accepted
To date the NSTA has not published the names of those operators lagging behind in reducing their production emissions. This prevents investors, shareholders and other interested parties from being able to appraise the performance of individual companies against their net zero pledges. The NSTA has indicated to us that it …
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To date the NSTA has not published the names of those operators lagging behind in reducing their production emissions. This prevents investors, shareholders and other interested parties from being able to appraise the performance of individual companies against their net zero pledges. The NSTA has indicated to us that it would potentially be prepared to use its ‘soft power’ to influence operators by publishing details of the performance of individual operators or companies. We recommend that the North Sea Transition Authority publish an annual league table in its Emissions Monitoring Report detailing the performance on emissions reduction of individual operators and companies. The Government should signal its support for such an approach, which would encourage action by operators to reduce their upstream emissions.
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Government response AI summary
The NSTA reports domestic production emission data at an aggregated level and has published asset level domestic production emission information in publicly available dashboards; the government supports this approach.
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36
Recommendation
4th Report - Accelerating the transitio…
Rejected
Given the urgency of the climate crisis and the need to deliver significant cuts in emissions by 2030 to meet the UK’s current Nationally Determined Contribution under the Paris Agreement, mandatory targets for the reduction of oil and gas operational emissions may well be more appropriate than voluntary targets. We …
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Given the urgency of the climate crisis and the need to deliver significant cuts in emissions by 2030 to meet the UK’s current Nationally Determined Contribution under the Paris Agreement, mandatory targets for the reduction of oil and gas operational emissions may well be more appropriate than voluntary targets. We therefore recommend that the Government, the regulator and the industry should review the provisions of the North Sea Transition Deal during the course of the fourth carbon budget (2023–2027), with a view to ensuring that they are still appropriate and sufficient to contribute to the UK’s obligations. If insufficient progress has been made on electrifying platforms and ending methane emissions during that budget period, we recommend that the Government should set mandatory upstream emissions reduction targets.
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Government response AI summary
The government will not reopen the North Sea Transition Deal for negotiation but will monitor progress closely to ensure the sector is on track to meet the 2030 target.
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37
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
Offshore oil and gas workers have many of the skills that will be needed elsewhere in the economy as the UK accelerates the energy transition. It is vital that Government works with training bodies, unions and the industry to offer adequate support in the transition to retrain and reskill for …
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Offshore oil and gas workers have many of the skills that will be needed elsewhere in the economy as the UK accelerates the energy transition. It is vital that Government works with training bodies, unions and the industry to offer adequate support in the transition to retrain and reskill for jobs in the net zero economy. The industry predicts that 45,000 jobs will be lost in oil and gas by 2030, but the North Sea Transition Deal has placed no commitments on companies to support workers in reskilling for new opportunities in the new offshore low-carbon economy. Stakeholders have also raised concerns that workers are currently having to fund their own retraining.
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Government response AI summary
The Government recognizes the importance of a skilled workforce and is working with industry, trade unions, training providers to support workers to reskill, citing the North Sea Transition Deal commitment to create a people and skills plan, investment in skills and training programmes, and a …
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38
Recommendation
4th Report - Accelerating the transitio…
Accepted
Oil and gas companies must accelerate their efforts to electrify offshore platforms, stop flaring and address methane leakage. We recommend that all oil and gas companies involved in extraction of fossil fuels from areas within the UK’s jurisdiction report annually on their progress in decarbonising their activities. We further recommend …
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Oil and gas companies must accelerate their efforts to electrify offshore platforms, stop flaring and address methane leakage. We recommend that all oil and gas companies involved in extraction of fossil fuels from areas within the UK’s jurisdiction report annually on their progress in decarbonising their activities. We further recommend that the North Sea Transition Authority identify and publish a league table of the best and worst performing companies, so that investors, non-governmental organisations and policymakers can monitor progress.
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Government response AI summary
The government responded that the NSTA already reports domestic production emission data via its annual Emissions Monitoring Report and has published asset level domestic production emission information in publicly available dashboards.
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39
Recommendation
4th Report - Accelerating the transitio…
Accepted
We are disappointed to observe that only two electrification projects are expected to be commissioned by 2027. During the development phase of a new project the NSTA approves Concept Select and Field Development Plans. We recommend that the regulator uses its powers at this stage of the project assessment to …
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We are disappointed to observe that only two electrification projects are expected to be commissioned by 2027. During the development phase of a new project the NSTA approves Concept Select and Field Development Plans. We recommend that the regulator uses its powers at this stage of the project assessment to insist on the electrification for all new projects due to be licenced in the 33rd licensing round. (Paragraph 217) 88 Accelerating the transition from fossil fuels and securing energy supplies
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Government response AI summary
The NSTA states it already has net zero considerations embedded throughout the project lifecycle and uses the FDP process to incentivise low carbon power solutions.
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40
Recommendation
4th Report - Accelerating the transitio…
Accepted
The routine flaring of unwanted fossil gas must be banned outright, as it has been by Norway since 1971. We recommend that the Government introduces an amendment to the Energy Bill to provide for a total prohibition on flaring from installations in the UK’s jurisdiction to be introduced not later …
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The routine flaring of unwanted fossil gas must be banned outright, as it has been by Norway since 1971. We recommend that the Government introduces an amendment to the Energy Bill to provide for a total prohibition on flaring from installations in the UK’s jurisdiction to be introduced not later than the end of 2025. This would help ensure the UK fulfils commitments it made at COP26 and COP27 under the Global Methane Pledge.
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Government response AI summary
The government stated it already has ambitious plans to end routine flaring and venting, has signed up to The World Bank Zero Routine Flaring initiative, and the NSTA expects flaring and venting emissions to be at the lowest possible levels.
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41
Recommendation
4th Report - Accelerating the transitio…
Accepted
It is encouraging that the North Sea Transition Authority is in the process of issuing licences to CCUS projects in the UK. We support the North Sea Transition Deal’s intention to drive forward the deployment of this technology which will be essential in decarbonising heavy industry. The Government must ensure …
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It is encouraging that the North Sea Transition Authority is in the process of issuing licences to CCUS projects in the UK. We support the North Sea Transition Deal’s intention to drive forward the deployment of this technology which will be essential in decarbonising heavy industry. The Government must ensure that there is certainty for the industry: there must be no repetition of the sudden withdrawal of Government support which previously disrupted the development of CCUS projects in the UK.
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Government response AI summary
The government stated that its £1 billion CCS Infrastructure Fund and the £240mn Net Zero Hydrogen Fund, along with work on enduring business models and revenue support, will provide industry with the certainty required to deploy CCUS at pace and at scale and that the …
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42
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
Oil and gas companies have understandably complained of the impact on the certainty of their revenue projections arising from sudden changes in the fiscal regime applying to their operations. But these are exceptional times. It would be politically and morally unacceptable for oil and gas companies to pocket record profits …
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Oil and gas companies have understandably complained of the impact on the certainty of their revenue projections arising from sudden changes in the fiscal regime applying to their operations. But these are exceptional times. It would be politically and morally unacceptable for oil and gas companies to pocket record profits because of a war at a time when an unprecedented number of households in the country have been plunged into fuel poverty. The Government was therefore right to introduce its Energy Profits Levy, which is contributing towards the support the Treasury is offering billpayers.
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Government response AI summary
The government introduced and increased the Energy Profits Levy (EPL) to address exceptional profits being made by oil and gas companies, and recognizes the impact on the oil and gas industry while believing it is necessary to ensure they pay their fair share of tax.
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43
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
The original 65% tax rate under the Energy Profits Levy was lower than the international average tax rate of oil and gas producers (of 71%), so we welcome the Chancellor of the Exchequer’s proposal to increase this rate to 75%, while noting that it remains below Norway’s tax rate of …
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The original 65% tax rate under the Energy Profits Levy was lower than the international average tax rate of oil and gas producers (of 71%), so we welcome the Chancellor of the Exchequer’s proposal to increase this rate to 75%, while noting that it remains below Norway’s tax rate of 78%.
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Government response AI summary
The government acknowledges the committee's welcome of the increase to the Energy Profits Levy and states the changes will bring the overall tax rate for oil and gas companies to 75%, in line with the international average.
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44
Recommendation
4th Report - Accelerating the transitio…
Rejected
The Energy Bills Support Scheme and the subsequent Energy Price Guarantee have provided badly-needed support for billpayers, saving four million households from fuel poverty. While we welcome the support the Government has provided, we note that currently it will only help eligible households through two winters. It will not deliver …
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The Energy Bills Support Scheme and the subsequent Energy Price Guarantee have provided badly-needed support for billpayers, saving four million households from fuel poverty. While we welcome the support the Government has provided, we note that currently it will only help eligible households through two winters. It will not deliver the energy efficiency measures which will lead to permanently lower energy bills. We call on the newly announced Energy Efficiency Taskforce to work with the Chancellor to allocate a proportion of the Energy Profits Levy revenue in the current Parliament to increasing energy efficiency investments, targeting these investments at the most vulnerable to lower permanently the costs of heating their homes. This additional investment should also fulfil the Government’s 2019 manifesto commitment to expenditure of £9 billion on energy efficiency in this Parliament.
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Government response AI summary
The government rejected the recommendation due to fiscal sustainability concerns regarding the use of EPL revenue for a hypothecated fund, citing the volatility of projections of EPL revenues and the constraining impact on the management of public finances.
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45
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
The tax system should help, not hinder, the transition to a low-carbon economy. The original way in which the Investment Allowance was structured provided a perverse incentive to accelerate investment in high-carbon oil and gas installations at a time when the public policy imperative was to accelerate the transition away …
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The tax system should help, not hinder, the transition to a low-carbon economy. The original way in which the Investment Allowance was structured provided a perverse incentive to accelerate investment in high-carbon oil and gas installations at a time when the public policy imperative was to accelerate the transition away from fossil fuels. We welcome the modest change introduced by the Chancellor to limit the 80% Investment Allowance to investment expenditure on upstream decarbonisation, while having significant reservations about the extent of the financial support the Treasury is providing via the Investment Allowance, which Accelerating the transition from fossil fuels and securing energy supplies 89 the Institute for Fiscal Studies has noted ‘means that North Sea investment will be massively subsidised’ and ‘could lead to loss-making investments being rendered commercial’.
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Government response AI summary
The government acknowledges that the tax system should support the transition to a low-carbon economy and highlights changes made to the Investment Allowance to target investments that reduce emissions from oil and gas production.
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46
Recommendation
4th Report - Accelerating the transitio…
Rejected
The Government is not providing renewable energy generators with the same level of generous tax reliefs for new investment to enhance the UK’s energy security. We recommend that the Treasury examine how a similar low-carbon Investment Allowance could be introduced for electricity producers paying the new temporary tax of 45%. …
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The Government is not providing renewable energy generators with the same level of generous tax reliefs for new investment to enhance the UK’s energy security. We recommend that the Treasury examine how a similar low-carbon Investment Allowance could be introduced for electricity producers paying the new temporary tax of 45%. (Paragraph 249) 90 Accelerating the transition from fossil fuels and securing energy supplies
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Government response AI summary
The government rejected the recommendation, stating that it supports renewables deployment through schemes like Contracts for Difference (CfD) and that the Electricity Generator Levy (EGL) is charged on a different base and at a lower combined rate than the Energy Profits Levy (EPL).
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