Rishi Sunak's Net Zero announcement - the industry responds

Prime Minister Rishi Sunak

On the 20th of September, 2023, Prime Minister Rishi Sunak announced a slowdown to the pace of Net Zero initiatives in hte UK.

He insisted that the UK remains committed to Net Zero by 2050 in a “more proportionate way”, and that “Realism doesn’t mean losing our ambition or abandoning our commitments”, but several key features of the UK’s Net Zero commitments will be delayed by several years.

This has provoked a lot of comment, much of it negative, from across the industry. MBS has rounded up the comments and here’s your brief on what people had to say.

The overwhelming theme was one of concern for business and investment uncertainty over policy which seemed to have been made on an ad-hoc basis. The Energy and Climate Intelligence Unit (ECIU) said “This looks chaotic and not the way long term policy should be made”, and the Sustainable Energy Association (SEA) added that changes will “only create further setbacks in delivering living and working spaces fit for future generations”. Meanwhile the Climate Change Committee warned the “announcement is likely to take the UK further away from being able to meet its legal commitments.”

More widely, over 400 NGOs and businesses (including Kensa, the Heat Pump Association and the Energy Saving Trust) jointly signed an open letter laying out “deep concerns at plans to water down the UK’s Net Zero policies”, saying thatSmart policies to boost clean technologies like electric vehicles and efficient, low carbon heating and more support for the most vulnerable will lower the cost of living.”

Former Siemens CEO Juergen Maier said the move would create business uncertainty and reduce trust in the UK from investors, commenting "It’s just chaos, isn’t it? It beggars belief... I'm honestly angry. Everybody [industry] is now sitting and wobbling and wondering. And I tell you what, they won't be investing in the UK."

His warning of the threat to confidence was echoed by Yselka Farmer, CEO of BEAMA,  the trade association for manufacturers and providers of energy infrastructure technologies and systems. She addedInvestors need certainty and commitment from Government… A move by Government to backtrack on these plans will stall investment, and worsen the growing distrust in policy that industry feels today.”

CIBSE also focused on the damage to confidence, saying that the announcementsgo against advice from the Government's own adviser, the CCC. They risk seriously undermining confidence from businesses and homeowners, who have started on the journey to invest in skills, supply chains, infrastructure, and decarbonising the building stock… As has repeatedly been recommended before: what is needed is a stable and consistent policy framework, alongside government support where required. “

Similarly, Chris Skidmore MP and Chair of the Net Zero Review, was also critical of the changes, warning that the UK would miss out on ”what can be the opportunity of the decade to deliver growth, jobs and future prosperity.

Back in March, Mr Skidmore told the CIBSE conference that the core message of the Mission Zero Review was “that net zero is not just a policy that is there to tackle climate change and the environment, vital though that is, net zero is now the principal economic opportunity for the 21st Century”, 

Actuate UK, the UK’s Engineering Services Alliance, is another organisation agreeing with warnings against creating uncertainty for business investment plans, saying Changes in the timescale and any dilution of the Government’s Net Zero policy risk damaging the strategic direction and investment already made by both large companies and by the hundreds of SMEs in our sector that have already created their business plans based on the 2030 target.”

Bekar Andrews, Interim Director of Wates, stated directly that businesses like theirs "need clarity and certainty of policy going forward to ensure we can make the required investment to help the UK deliver on our international commitments and achieve Net Zero by 2050”, adding that the Government should focus on the built environment to drive towards 2050 goals. "The UK’s buildings account for a third of our total emissions and so it makes sense to prioritise the decarbonisation of commercial and public owned buildings", he said. 

Gillian Charlesworth, CEO of the Building Research Establishment (BRE), commented that “Heat pumps are likely to be the technology that will dominate the transition to Net Zero, but this delay to the phase-out of gas boilers will discourage the public and industry.”, and added “The Government’s U-turn on introducing tighter energy efficiency targets for landlords is similarly concerning…excess cold caused by poor heating and low energy efficiency is the number one health and safety hazard in these properties. Failing to address this hazard head on will have an immediate impact on the health of householders and pressure on our public services”, with Mark McManus, UK MD of Steibel Eltron, adding that informed consumers still want to move away from gas boilers and know there are other options available, with heat pumps representing a reliable, fully-functioning, renewable heating system which people can be confident will perform just as well as a traditional boiler.“

Kelly Becker, Zone President, Schneider Electric UK and Ireland, also highlighted the risk of reduced investment, warning that nearly half of UK organisations are delaying investments (on Net Zero). But kicking the ‘climate can’ down the road is a mistake for businesses. The climate crisis is urgent, and reducing emissions must be top of the agenda – doing so can also result in many tangible operational and financial benefits.”   

Staying on the theme of concerns about investment and stability, Dr Matthew Trehalla, CEO of the Kensa Group said This is extremely concerning news… we should be scaling up to reach our Net Zero commitments by injecting investment and stability into green businesses and proven sustainable solutions, our planet's future is being cynically used as a political bargaining tool.”

Stuart Fairlie, MD of Elmhurst Energy described the move as a backwards step, adding that “the UK has the worst performing buildings in Europe”, and Group MD Martyn Reed added that if regulations are to be eased, “they should counterbalance that by providing compelling incentives to homeowners and landlords. A more proactive approach to incentivising can spur voluntary change even before regulations are inevitably mandated.”

Whilst Andrew Fletcher of Carbon Control described the announcement as “A cynical political stunt…nothing but self interest”, Carbonxgen gave a more measured response, acknowledging that it was not difficult to understand the reasons given and to agree with the underlying message that if we want to see changes in behaviours, choices rather than demands often see the biggest impacts” and added that “the financial impact of the change in direction will be well received by the electorate.”

On that more positive note, Actuate UK went on to sayWe wholeheartedly welcome the very specific increase in the Boiler Upgrade Scheme to £7500, which should help to drive the further introduction and development of heat pumps in the short term, and urge Government to concentrate its efforts, immediately and throughout the run up to 2035, to decarbonise and develop the grid and build a UK EV charging infrastructure that is fit for purpose.”

It is clear the Government have a lot of work to do to reassure the industry of their future plans, and to rebuild business and investment confidence.

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