12 October 2023

Net zero policy changes to cost drivers and renters more money, say advisers

12 October 2023

The Prime Minister’s recent delays to decarbonising buildings and transport will make net zero harder to achieve while adding more costs onto ordinary people, according to analysis from the Government’s climate advisers.

Rishi Sunak said in September that the sale of new petrol and diesel cars is to be put back from 2030 to 2035, and 20% of households will not have to replace their gas boilers with a low-carbon alternatives – while a plan to make landlords improve the energy efficiency of their properties was scrapped.

He said the Government remains committed to net zero, but has not provided any evidence to prove the new changes are compatible, the Climate Change Committee (CCC) said.

The CCC guides Government policy on how to reach net zero and it has warned that renters will have to pay more for energy in their less efficient houses while drivers who move to electric cars later rather than sooner will face higher costs through their vehicle’s lifetime.

UK emissions are supposed to fall by 68% compared with 1990 levels by the end of the decade, but the CCC said there remains a “substantial policy gap” in achieving this.

Around a fifth of the required emissions reductions to 2030 are covered by plans that we assess as insufficient

The 2030 target is seen as a critical step towards becoming net zero by 2050 and stopping the Earth’s climate heating more than 1.5C above pre-industrial levels – a limit seen by scientists as necessary for maintaining a safe planetary environment.

In its analysis, the CCC welcomed some of the Government’s changes, such as the deal to electrify the Tata Steel plant in Port Talbot and the Zero Emissions Vehicle (ZEV) mandate, which should see 80% of new cars sold with zero emissions by 2030.

It said the ZEV mandate will likely offset Mr Sunak’s delay to selling fossil fuel cars, though stressed the change could weaken confidence among businesses and consumers in the burgeoning industry.

It will also load more costs onto drivers in the long term as it is cheaper to run an electric vehicle over the car’s lifetime, the committee added.

Whereas the Government’s policy was to phase out all new gas boilers in buildings by 2035 and replace them with heat pumps or other low-carbon methods, the Prime Minister’s announcement that 20% of households will now be exempt means there will be “residual emissions” bleeding across the 2050 target, the CCC said.

It is also unclear which households will meet the exemption and while the grants to replace boilers rose from £5,000 to £7,500, the overall budget has not changed, meaning it will be available to fewer houses.

Mr Sunak also said he was scrapping plans to require landlords to make their properties more energy efficient, which under today’s energy prices mean a typical household could lose out on as much as £325 a year, according to the CCC’s analysis.

Professor Piers Forster, chair of the CCC, said: “We remain concerned about the likelihood of achieving the UK’s future targets, especially the substantial policy gap to the UK’s 2030 goal.

“Around a fifth of the required emissions reductions to 2030 are covered by plans that we assess as insufficient.

“Recent policy announcements were not accompanied by estimates of their effect on future emissions, nor evidence to back the Government’s assurance that the UK’s targets will still be met.

“We urge the Government to adopt greater transparency in updating its analysis at the time of major announcements.”

Our position as a global leader on climate has come under renewed scrutiny following the Prime Minister’s speech

The CCC said the Government also needs to adjust its policy to ensure that more offshore wind farms are built through the Contracts for Difference scheme.

This is supposed to offer developers support for high upfront costs and protection against volatile prices, but the most recent round saw no investment in offshore wind, with a lack of Government support in the face of sharp inflationary costs blamed.

Overall, the CCC is concerned that the UK is losing its reputation as a climate leader as other countries see ambivalence from the Government on its net zero policies.

Prof Forster said: “Our position as a global leader on climate has come under renewed scrutiny following the Prime Minister’s speech.

“We urge the Government to restate strong British leadership on climate change in the crucial period before the next climate summit, Cop28 in Dubai.”

A Government spokesperson said: “The UK remains a global leader on climate – cutting emissions faster than any other G7 country – so we are confident that we will meet our future carbon commitments, including net zero, just as we have over-delivered on every carbon target to date.

“We are taking a fairer and more pragmatic approach to meeting net zero that eases burdens on families – saving households up to £15,000 on upfront costs to upgrade their homes.

“We will continue to meet our international commitments under the Paris Agreement, while embracing the opportunities of clean industries – supporting thousands of British jobs, driving economic growth – while protecting national security and bringing down energy bills in the long term.”

The best videos delivered daily

Watch the stories that matter, right from your inbox