Unpacking the details of any Budget takes time. While some have suggested this wasn’t a 'green' Budget, it certainly reaffirmed the Government's commitment to Net Zero - including a focus on decarbonising the industrial and built-environment sectors. That includes more widespread funding across the UK, supporting Carbon Capture, Usage and Storage (CCUS) cluster projects and establishing GB Energy.
Our Energy and Sustainability team have prepared this initial summary:
Renewables
- £125m allocated to establish 'Great British Energy' (building on the previous commitment for an initial capitalisation of £8.3bn over the parliamentary term).
- Establishment of the 'National Wealth Fund' to catalyse over £70bn of private investment in the UK’s growth industries for the future (including clean energy).
- Support for electrolytic 'green' hydrogen production, with £2bn to support 11 hydrogen projects across the UK.
- £134m will be provided to support the delivery of port infrastructure to facilitate floating offshore wind.
Transport
- Accelerating the transition to Electric Vehicles (EV):
- Ending the sale of cars that rely solely on internal combustion engines by 2030;
- All new cars and vans sold by 2035 will be zero emission (ie no hybrids);
- £200m to increase the deployment of EV chargepoints, including funding for local authorities to install on-street charging;
- £120m to support electric vans through the plug-in vehicle grant scheme;
- Changes to first year VED rates for new cars to widen the gap between zero emissions, hybrid and ICE cars; and
- 'Benefit in Kind' tax rates for company cars to continue to favour electric cars (maintained at 2% increase per year to 2030).
Retrofit and low carbon transition
- £1bn of funding provided through the Public Sector Decarbonisation Scheme over the next three years.
- A further £163m over the next three years to support the development and deployment of new technologies so that businesses can transition to low carbon alternatives.
- £3.4bn committed to the Warm Homes Plan over the next three years. This includes £1.8bn to support over 225,000 homes in fuel poverty to reduce their energy bills and will include funding schemes such as the Warm Homes: Social Housing Fund and Warm Homes: Local Grant which will work towards funding low carbon heat sources and improving energy efficiency across social and local government housing stock, with further funding to be considered at future spending reviews. Learn more about the Warm Homes: Social Housing Fund Wave 3 grants for social housing landlords.
Other power generation and policy
- CCUS: £3.9bn allocated for Track-1 projects in 2025-2026, to "decarbonise industry, support flexible power generation and capitalise on the UK's geographical and technical strengths".
- New Nuclear: £2.7bn committed to continue the development at Sizewell C through to 2025/26.
- Continued commitment to work with Ofgem and the National Energy System Operator (NESO) to develop a robust grid connection process to remove the barriers faced by new infrastructure projects and unlock private investment.
- Clean Power 2030 Action Plan to be published.
- Government to respond to the Climate Change Committee's Progress Report.
If you want to find out more about the Budget announcements or wider policy developments in the energy space, then speak to our team.
