Source · Select Committees · Environmental Audit Committee
Recommendation 28
28
Accepted
Paragraph: 150
Maintain UK leadership in green finance and ensure global net zero policy alignment
Recommendation
The UK Government should be proud of its world-leading track record in supporting green finance initiatives. At the same time, it must neither be complacent nor lose momentum. The UK must continue to use its leadership position to bring other countries on board and create policy alignment across jurisdictions. For its influence to continue, the UK cannot be perceived to be watering down its own net zero policies.
Government Response Summary
The government reiterates its commitment to net zero, highlighting its strong track record with significant investment in low-carbon energy sectors and a halving of emissions. They detail current actions like the Green Finance Strategy, £960m Green Industries Growth Accelerator, a £300m HALEU nuclear fuel program, and Transmission and Connections Action Plans to demonstrate continued momentum and leadership.
Paragraph Reference:
150
Government Response
Accepted
HM Government
Accepted
Our mission is to achieve energy security for this country, powering Britain from Britain, by replacing imported fossil fuels with green renewables and nuclear energy. This will not only help us reach net zero by 2050; it will also underpin our resilience and prosperity as a nation. The Prime Minister has reiterated in his speech on 20 September 2023 that net zero is a priority for this Government. We will transition to net zero in the most efficient, low cost, business friendly and least disruptive manner possible. The UK has a strong track record in attracting the investment we need for the clean energy transition - since 2010, the UK has secured close to £200bn of public and private investment in low carbon energy sectors - over 40% of UK electricity is now coming from renewables (48% in Q1 2023), higher than the US (21% in 2022). The UK has done this through a range of financing mechanisms, policy and market frameworks, and targeted public investment. The UK has halved its emissions, ahead of every other major economy and we have one of the most ambitious decarbonisation targets in the world. We have grown our economy by over 70% since 1990. The UK’s approach demonstrates that ‘green’ and ‘growth’ go hand in hand, and that the UK net zero transition provides many exciting investment opportunities for the private sector. The UK’s 2023 Green Finance Strategy – Mobilising Green Investment – set out how Government will utilise all the levers available to mobilise the private investment needed to deliver net zero, and with that our energy security, net zero and environmental targets, whilst strengthening the UK’s leading position at the forefront of the global green finance market. The Government continues to listen to business and react to changing markets, for example: • In January 2024, we published a civil nuclear roadmap, which sets out the Government’s vision for a dynamic civil nuclear sector, supporting the ambition to achieve net zero by 2050. • In December 2023, we published a suite of documents on delivering hydrogen, including the latest Hydrogen Strategy Delivery update and a new ‘Production Roadmap’ presenting the Government’s hydrogen policy and funding progress since the publication of the Hydrogen Strategy as well as our future priorities and delivery timelines. We also made some important announcements including a list of the 11 successful electrolytic ‘green’ hydrogen production projects from the 1st electrolytic allocation round (HAR1), the launch of the second electrolytic round (HAR2) and a decision on blending. • In March 2023, we published the Track-1 Project Negotiation List which includes 8 capture projects which we have selected through the Cluster Sequencing Process to progress to negotiations to form the first two CCUS clusters, based in HyNet and the East Coast Cluster. In December 2023 we launched the Track-1 expansion process for new CCUS projects wishing to connect to the HyNet cluster by 2030. The CCUS Track-2 December 2023 Market Update set out the Government’s proposed Track-2 approach of an ‘anchor’ and ‘buildout’ phase and high-level timelines, with the anchor project submission window opening early 2024, along with the request for a provisional cluster expansion plan. In December 2023, our CCUS business models update set out the Government’s updated proposals for the business model for transport and storage. • In November 2023, we published key details about the upcoming sixth Contracts for Difference Allocation Round (CfD AR6) with increased maximum strike prices available to new renewable projects. • At the 2023 Autumn Statement, we announced a £960m Green Industries Growth Accelerator to support manufacturing capacity in the clean energy sectors where the UK has the strongest current or potential advantage, such as Carbon Capture Usage and Storage (CCUS), hydrogen, offshore wind, networks, and nuclear. In January 2024 we announced we will become the first country in Europe to launch a high-assay low enriched uranium (HALEU) nuclear fuel programme, strengthening domestic supply for new nuclear projects with a landmark £300 million investment. • We published the Transmission Acceleration Action Plan alongside the 2023 Autumn Statement. By reducing delays in network build, this programme of work is expected to increase investment by up to £15bn over the next 10 years, support thousands of jobs and reduce energy bills for households across Great Britain. • We published the Connections Action Plan alongside the 2023 Autumn Statement jointly with Ofgem, which builds on work to go further and faster to reduce connection timescales.