Kicking the net zero tyres

By Sara Price

Liz Truss, the Prime Minister, is taking a serious look at the cost of the net zero agenda following months of speculation and concern from some quarters around how green her government would be. Whether it’s been the appointment of a BEIS Secretary who has been critical of environmental activities or the re-emergence of old ideas – such as fracking – those in the energy / environmental sector have been waiting to see what happens next and if the UK rolls back on all things green.

Hot on the heels of the appointment of net zero champion Graham Stuart as Climate Minister, this week saw Chris Skidmore, a former Energy and Climate Change Minister and long-term collaborator of the new PM, launch a three-month independent review on behalf of the new PM into the delivery of net zero commitments, with a view to ensuing the agenda is achieved in a pro-growth, pro-business and pro-consumer way, minimising unnecessary cost and regulation.

Over the coming months, those operating in this space (consumers, investors, suppliers, generators, etc) will have the opportunity to provide insight into the delivery of net zero. It’s not a new line but the government is focusing on job creation, driving up private investment, and supporting innovation and growth. The overall ambition being that the UK is an energy exporter by 2040.

Those who initially cried foul over the Government’s plans to put all energy generations options back on the table (e.g. North Sea oil) and pause to reflect on how we get to net zero, should not view this review as bad news. Chris Stark, Chief Executive of the Climate Change Committee, has stated that the review is nothing to be afraid of, and it in actual fact is a chance to really raise the profile and case for strong commitments to net zero.

Speaking about the review, Skidmore signalled that he wants to know about the barriers that are holding businesses back and the restrictions preventing further domestic renewable generation. This sounds very much like time to get working on submissions to the review – the deadline of end October is deliberately tight.

Skidmore has the right credentials to deliver this review. As a former Energy and Climate Change Minister, he was the leading champion of a small cohort of MPs pressing candidates during the Conservative leadership contest to sign up to net zero pledges (which Truss did, while also committing to really look at how to put into practice net zero through a business lens). If the review was created by Truss as a means to water down the commitment of the government to net zero, Skidmore would not have been her choice to lead it.

The current energy crisis, sparked by an increase in demand following the Covid19 pandemic teamed with the war in Ukraine, and combined with the manoeuvres of the “anti-green” lobby amongst the Conservative Party and its media allies, has persuaded the new government that it needs to be seen to be kicking the net zero tyres. This is especially important in regard to the cost-effectiveness of the approach it inherited from the Boris Johnson premiership. The need for reliable domestic energy supply has never been greater. While the legally binding target for the UK to reach net zero by 2050 has been in place since 2019, we may just be seeing the start of a turbo-charged focus on decarbonisation and security of renewable supply.

For business, the net zero review provides a real opportunity to press government on the regulatory and legislative landscape needed in order to set the right path for a strong green economy. Going into 2023, we should all have a better costed direction of travel for meeting the net zero target.