The government's strategy sets out how low carbon economic opportunities, through the creation of new technologies and new businesses, will also help deliver national targets to tackle climate change.
Over £2.5 billion will be invested to support low carbon innovation from 2015 to 2021, with the Government claiming it is part of the largest increase in public spending on science, research and innovation in over three decades. This funding covers programmes delivering low carbon energy, transport, agriculture and waste.
The £2.5 billion of existing government spending includes up to £505 million from the Department for Business, Energy and Industrial Strategy's Energy Innovation Programme, which aims to accelerate the commercialisation of innovative clean energy technologies and processes.
There are already more than 430,000 jobs in low carbon businesses and their supply chains. The low carbon economy could grow 11% per year between 2015 and 2030 – faster than the rest of the economy.
The government recently announced the establishment of a taskforce of senior financial experts to accelerate growth of green finance in the UK's low carbon economy. It has been given 6 months to deliver ambitious proposals to accelerate investment in the transition to a low carbon economy, creating high-value jobs and opportunities for UK businesses. It will examine a range of interventions, from making infrastructure investment more sustainable to scaling-up green mortgages.
The government is focused on hitting the fifth carbon budget (2028 to 2032) with the package of measures outlined today.
Measures set out in the Strategy include funding through the BEIS Energy Innovation Programme of:
• up to £10 million for innovations that provide low carbon heat in domestic and commercial buildings
• up to £10 million for innovations that improve the energy efficiency of existing buildings
• an extra £14 million for the Energy Entrepreneurs Fund, including a new sixth fund
• up to £20 million in a Carbon Capture and Utilisation demonstration programme
• up to £20 million to demonstrate the viability of switching to low carbon fuels for industry
• up to £20 million to support clean technology early stage funding
Further measures include commitments to:
Business and industry efficiency
• develop a package of measures to support businesses to improve their energy productivity, by at least 20% by 2030
• establish an Industrial Energy Efficiency scheme to help large companies install measures to cut their energy use and their bills
• demonstrate international leadership in carbon capture usage and storage (CCUS), by collaborating with our global partners and investing up to £100 million in leading edge CCUS and industrial innovation to drive down costs
• support around £3.6 billion of investment to upgrade around a million homes through the Energy Company Obligation (ECO), and extend support for home energy efficiency improvements from 2022 to 2028 at least at the current level of ECO funding
• all fuel poor homes to be upgraded to Energy Performance Certificate Band C by 2030 and our aspiration is for as many homes as possible to be Energy Performance Certificate Band C by 2035 where practical, cost effective and affordable
• develop a long term trajectory to improve the energy performance standards of privately-rented homes, with the aim of upgrading as many private rented homes as possible to Energy Performance Certificate Band C by 2030 where practical, cost effective and affordable
Low carbon transport
• the government has announced an end to the sale of all new conventional petrol and diesel cars and vans by 2040
• spend £1 billion supporting the take-up of ultra low emission vehicles, including helping consumers to overcome the upfront cost of an electric car
• develop one of the best electric vehicle charging networks in the world
• work with industry as they develop an Automotive Sector Deal to accelerate the transition to zero emission vehicles
• invest around £841 million of public funds in innovation in low carbon transport technology and fuels
Clean, affordable energy
• phase out the use of unabated coal to produce electricity by 2025
• provide up to half a billion pounds for further Contract for Difference auctions for less established technologies, such as offshore wind, with the next one planned for spring 2019
• work with industry as they develop an ambitious Sector Deal for offshore wind, which could result in 10 gigawatts of new capacity, with the opportunity for additional deployment if this is cost effective, built in the 2020s
• deliver new nuclear power through Hinkley Point C and progress discussions with developers to secure a competitive price for future projects in the pipeline
Agriculture and natural resources
• as the UK leaves the EU, design a new system of future agricultural support to focus on delivering better environmental outcomes, including addressing climate change more directly
• establish a new network of forests in England including new woodland on farmland, and fund larger-scale woodland and forest creation, in support of our commitment to plant 11 million trees, and increase the amount of UK timber used in construction
• work towards our ambition for zero avoidable waste by 2050, maximising the value we extract from our resources, and minimising the negative environmental and carbon impacts associated with their extraction, use and disposal
publish a new Resources and Waste Strategy to make the UK a world leader in terms of competitiveness, resource productivity and resource efficiency
• government will work with businesses and civil society to introduce a 'Green Great Britain' week to promote clean growth.
The Clean Growth Strategy - Leading the way to a low carbon future
REACTIONS TO THE CLEAN GROWTH STRATEGY
Shaun Spiers, Executive director of Green Alliance said: "It is great to see this long awaited strategy setting out the government’s ambitions for clean growth. It is certainly a welcome move in the right direction. The test now will be to embed the strategy across government and encourage investment in clean growth by giving businesses the certainty they need.
"Going green is not only good for the environment: it is crucial for the future of the UK economy. By taking decisive action to reduce carbon emissions at home we can take advantage of the growing global market for low carbon technology and expertise. This strategy is the opportunity to reboot the agenda on energy efficiency, clean vehicles and the efficient use of resources in the UK."
John Sauven, Executive Director of Greenpeace UK, said: "The strategy is on the right track but we need a more ambitious destination. Our small country could be a big power on low carbon solutions if we keep up the momentum, especially on energy efficiency and electric vehicles.
"The government's punt on offshore wind has already paid off in spectacular style, and proves that clean technology, ambitious developers and government support are a winning combination.
"A smart, efficient and renewable-powered electricity system is possible. And the offshore wind industry is proof you can provide jobs and regional development at low cost without leaving a legacy of nuclear waste and exorbitant decommissioning costs.
"The transport sector is now the greatest emitter of CO2 emissions. We need stronger ambition on phasing-out diesel and petrol cars before the 2040 ban, and no new runway at Heathrow.
"If Claire Perry and her team now puts real flesh on the bones in their strategy, we could clean up our transport, heat and power sectors."
Professor Sam Fankhauser, Director of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science said: "The Clean Growth Strategy recognises that the transition to low-carbon growth should be at the heart of the UK's industrial policy over the next few decades, bringing greater prosperity, higher living standards and enhanced wellbeing.
"Explicitly the true test of this Strategy is whether it will deliver the emissions reductions required by 2030 according to the fifth carbon budget. There is much to praise in the Clean Growth Strategy but there are also many aspirations rather than tangible policy commitments. For instance the Strategy is notably vague on industrial energy efficiency. The Strategy is also missing some key elements, such as how the government proposes to establish a sufficiently strong carbon price before and after Brexit."
Friends of the Earth senior climate campaigner Simon Bullock said: "This strategy is a welcome change in the politics of climate change in the Conservative Party. While the plan has some huge gaps the government is rightly presenting tackling climate change as a massive opportunity for economic rebirth, and for Britain to lead the world.
"But clearly there is far more actual policy needed – the plan does not deliver on UK targets for cutting emissions, let alone the more ambitious Paris climate agreement, and some parts of government are still firmly stuck in a rut of more fossil fuels, roads and runways."
Energy Institute CEO Louise Kingham said: "This breathes new life into decarbonising the UK and the skills that will make it happen. Taking energy efficiency seriously in homes, businesses and industry will cut emissions, bring down bills and increase productivity more effectively than anything else. Putting CCS back at the table and action to tackle emissions from heat, alongside renewables, nuclear and electric vehicles make this a credible plan.
"The strategy is really important for the UK's standing on the global climate change stage, as we look to the next round of UN talks hosted by Fiji in Bonn next month.
"But meeting the UK's carbon targets is ultimately a numbers game and the real proof will be in the delivery. Hitting 57% emission reduction by 2030 in a cost-effective way, and realising the big industrial wins that come with that, calls for a no-surprises investment climate. This includes policies aimed at getting the best deal for billpayers, which must take a balanced, long-term view of consumer interest.
"Energy professionals are primed and ready to bring their skills to bear and be at the heart of this transition."
Jonathan Grant, PwC sustainability director and Low Carbon Economy Index author, said: "Analysis by PwC shows that the UK leads the G20 on clean growth and is decoupling emissions from economic growth significantly faster than its peers. The UK's success comes down to policies that create a positive investment climate for low carbon technology, the drive to tackle emissions from coal and the strength of our services sectors.
"The Clean Growth Strategy should continue the UK's transition to a low carbon economy."
CEO of the Energy Technologies Institute, Jonathan Wills, said: "The Clean Growth Strategy sets out an economic opportunity and challenge; one which drives a clean, green economy for the future. But we are running out of time to make this happen. This strategy signals the needed investment in infrastructure which will take a generation to implement, so we must make decisions fast and commit to making it happen. Certainty of direction and constancy of market signal is important. To realise the opportunities will need sustained commitment over multiple political cycles and a consistency of purpose that stimulates investment.
"There are no silver bullets to decarbonisation. If we are to achieve an affordable transition to a low carbon energy system and meet the legally binding climate targets, we believe the answer is a blended mix of renewables, including nuclear, bioenergy, carbon capture and storage (CCS), gaseous fuels as well as a greater efficiency in buildings, industry and transport. We're pleased that this approach is reflected in the strategy announced today. We now need to combine these in a flexible and adaptable way – technically and commercially.
"The Clean Growth challenge is a whole system question. It is not simply which technologies and which business models, it is primarily how best to put them together in an optimal system that works economically. We need a system which is able to adapt to a changing societal need. Only by testing technologies and new commercial approaches at scale - learning by doing – underpinned by long term policy signals, will we provide the necessary confidence for investors.
"Today's announcement might not provide all the answers but it sets out the strategy, indicating a direction of travel that should give industry and investors more confidence and gives the country a real opportunity to be a world leader in low carbon energy."
Frazer Mackay, WSP MD of energy and industry, said: "The new Clean Growth Strategy was worth the wait. Meeting our carbon targets is a public and private commitment and the Strategy provides a broad, over-arching plan of how it is going to meet them and the role the private sector has to play. There's nothing to stop business working towards carbon neutrality, and we have set 2025 as our own deadline.
"It is reassuring to see Government confirm that innovation, sustainability and prosperity go hand in hand but it remains unclear exactly how it intends to get us to an all-electric future. With Brexit just around the corner, greater stability and clarity over clean energy auctions after 2020 is an essential first step for investors and developers. However, we welcome today's recognition of the potential of technology, from battery storage to hydrogen and electric vehicles, and look forward to continue helping drive this agenda forward.
"In certain areas, particularly energy efficiency and heating, Government's ambition still lags behind. Recent announcements on banning petrol and diesel vehicles have provided momentum, but decarbonisation efforts still disproportionately focus on generation and transport over buildings, even though in places like London buildings contribute nearly 40% of NOx emissions. Our recent research showed replacing gas boilers with heat pumps in buildings can cut business costs, so this was a missed opportunity for a quick win on air quality and clean growth."
Head of Energy and Climate, Gareth Redmond-King at WWF said: "The strategy's ambition is to be welcomed, however the details fall short of what we need to lead the UK to a green and prosperous future. The news on improving homes is a victory for owners, renters and landlords; and more money for off-shore wind - the cheapest form of generation - is great news. But overall the UK Government admits that it will miss most of its targets.
"They are not delivering the emissions reductions needed in the next decade, relying instead on past success to offset missed targets with the rapid power decarbonisation that we've seen to date. This risks passing on a worse situation to the next generation. The UK Government has much more work to do in putting forward credible policies to close a carbon gap of nearly 10% by 2032. We have been a global climate leader, but if we set out plans that don't meet our own targets to meet the global threat of climate change, then we will have so much further to go to meet the more ambitious international ones agreed in Paris."
Jill Duggan, Director of the Prince of Wales's Corporate Leaders Group said: "The government's publication of a Clean Growth Strategy is helpful for businesses who need to know the direction and speed of travel in order to invest and grow. However, if it wants to regain its leadership position, the UK needs to lift its aim and set out a realistic pathway for achieving net zero emissions by mid century, in line with its international obligations."
Juergen Maier, CEO Siemens plc, said: "Clean growth is good growth and the UK has a great opportunity to lead. Siemens welcomes the launch of the government's Clean Growth Strategy which sets a clear direction for business and puts decarbonisation at the heart of the industrial strategy."
STA Policy Manager Chris Hewett said; "It does seem extraordinary that when a technology as vital to the world's future as solar is asking, not for any new public support, but for simply a level playing field with other technologies that the Government is not moving to respond. This technology will dominate global power supply in years to come so in the interests of UK plc, the Government needs to stop putting the UK solar industry at a competitive disadvantage.
"Whether it is tax breaks for fossil fuels, a continued emphasis on big centralised power over local power, or access to auctions - solar is not being treated fairly. Solar empowers local people and communities, and it stimulates smart innovation more than any other energy technology. That's why communities and City leaders all over the UK want to see the Government support solar power. The British solar industry is being artificially held back by the Government and that doesn't help consumers, innovation or local leadership.
"We will be looking to the Autumn Statement for the measures we need urgently to level the playing field for solar power."
Philip Sellwood, Chief Executive, Energy Saving Trust, said: "We welcome the Clean Growth Strategy and the firm commitment by Government to make domestic energy efficiency a priority. Aspirations for all homes to reach an EPC 'C' standard by 2035 are very welcome but details on how this will be realised now have to be made an urgent priority. We now need a detailed plan setting out how we will make our homes low energy, affordable to run and healthy to live in. This means incentives for all of us to invest in home energy upgrades, a doubling of funding to help people out of fuel poverty and a commitment that all new homes are built to a zero carbon standard."
Mike Cherry, Federation of Small Businesses National Chairman, said: "After nearly two years of waiting, the Government has finally come to the table with a carbon plan that has the potential to be a blueprint for achieving our long term carbon targets.
"FSB research highlights that 60% of small businesses say security of supply is their top energy priority. For many, this even outweighs concerns about costs and carbon emissions. It is hoped that the direction laid out by the Government's strategy will instil some confidence for smaller firms choosing to invest in new energy technologies.
"The elephant in the room, however, remains and that is the extensive, and expensive, overhaul of the UK's energy infrastructure and who will bear the costs. This investment will come at a heavy price for bill and tax payers. Government must guarantee that these costs are shared out equitably through a fair and transparent market.
"And while we welcome the commitment to supporting energy efficiency, we note that much of the focus of this appears to be on helping larger industry. Government must be transparent about where the cost of this support will fall, particularly ensuring that small businesses are not unfairly picking up the tab.
"The Clean Growth Strategy provides some much needed clarity for investors, indicating which technologies Government wants to promote in the long term. This now needs to be followed by a review of the current incentives and subsidies system to understand if it is still fit for purpose. Many small businesses are already playing a critical role in helping the UK become more energy efficient and reducing our reliance on imported energy. With the right support, even more can take up the challenge."
Energy Networks Association CEO David Smith said: "We welcome many of the proposals and acknowledgement of the important role of network innovation in meeting our climate change targets. But there needs to be far greater recognition that the strategic use of our energy networks in a joined-up way is the quickest and cheapest way to utilise new technologies.
"The energy efficiency call for evidence is welcome. Customer engagement is key to delivering domestic measures and Network Operators lead the energy sector in terms of customer satisfaction levels. They have proven their potential to deliver through existing fuel poverty schemes.
"Government policy needs to set out the strategic role for the gas network, alongside the electricity grid, in meeting our climate change targets. Decarbonising gas is the cheapest way to meet our carbon commitments and gas network companies have already begun the process of deploying new sources of green gas, such as bio-methane and hydrogen, at more than 80 sites across the UK. The strategy recognises their potential as part of the 2050 pathways but more needs to be done to give it a far greater role in policy than is currently the case."
Roz Bulleid, Head of Climate & Environment Policy at EEF, the manufacturers' organisation, said: "Manufacturers have been waiting some time to discover how the government intends to meet the UK's challenging 2030 decarbonisation target and will be pleased to see a broad-ranging and well-structured report, that ties into the wider Industrial Strategy. It balances the need to offset the costs manufacturers face from decarbonisation with greater realisation of the potential opportunities across a range of product areas.
"There is also much appreciated recognition of the need for more government support for industry in key areas, including energy efficiency, heat reuse and carbon capture and storage. Industry stands ready to now work with Government to ensure we move from strategy to delivery at the earliest opportunity."
"The focus on energy efficiency is very much appreciated, particularly the continued commitment to development of an industrial energy efficiency fund, as promised in the Conservative manifesto. The power sector has received vastly more public support for decarbonisation than industrial firms, even though energy efficiency can cut greenhouse gas emissions more cheaply.
"Sixty percent of our members see the time it takes to recover costs from energy efficiency projects as a barrier and 10% cite access to funds; these can be overcome with more government support."
Carbon Capture and Storage
"We are pleased to see the revived interest in this area. Carbon capture and storage (CCS) is seen as vital to meeting the UK's carbon targets at least cost, with the Committee on Climate Change suggesting meeting the UK's 2050 climate target without it would be twice as expensive. Strong government support mechanisms are needed to deliver on this cost-saving while also allowing UK firms can continue to compete internationally"
"It is disappointing to see no development of the government's position on the future of the EU Emissions Trading System and regulation of the sectors it affects. Companies in the scheme urgently need more clarity on the approach the government will be taking.
"However, the commitment to continue matching EU product standards in this area will be welcomed by many manufacturers. Companies do not want to make multiple products for multiple markets."
"It is disappointing to see limited mention of the impact climate policy has had on electricity prices in the strategy, specifically the Roadmap to lowering business energy costs promised in the Industrial Strategy green paper. We hope this will follow after the results of the Helm review are published."
Ken Cronin, Chief Executive of UK Onshore Oil and Gas, said: "We welcome today's Clean Growth Strategy, which re-affirms the importance of natural gas for heating and makes clear the international consensus on the need for carbon capture, usage and storage, a point which has also been made many times by the Committee on Climate Change. By replacing high lifecycle emission LNG imports with natural gas produced onshore, we can help to reduce the UK's carbon footprint and provide a cost-effective source of energy and feedstock for our homes, businesses and industry.
"The transition from coal to natural gas and renewables has been the key driver of decarbonisation to date. Natural gas will continue to be a critical fuel for the UK in the transition to a low carbon economy. As the report makes clear, the reforming of methane with Carbon Capture and Storage is likely to be the primary means of producing low carbon hydrogen, which has great potential to decarbonise heating, transport and industry and improve air quality."
Nina Skorupska, Chief Executive of the Renewable Energy Association said: "The language, ambition and recommitment from Government to lower emissions are welcome, as is the recognition that decarbonisation and economic growth are not mutually exclusive, but are in fact linked in the coming decades.
"The plan focuses on areas that have not been given a huge amount of time or thought to previously in government, such as industrial efficiency or the built environment, both of which are crucial and can be a win-win.
"However, for many of our members they will see very little substance in this plan and we will have to ensure we are pushing government for how they intend to address the big issues of adding low-carbon generation, greening our heat system, cleaning our transport and leading the decentralisation revolution that will lead to a cheaper and low-carbon future."
Commenting on the specifics sectors of the plan, James Court, Head of Policy and External Affairs at the Renewable Energy Association said: "Heat remains one of the biggest problems, and this plan still leaves us short of meeting the Fifth Carbon Budget. It is clear that there is not one silver bullet for heat, and this plan recognises that insulation and planning regulations need serious attention, but doesn't set out long-term market framework for the heat sector beyond 2020. We hope this will lead to a revisiting of the Zero Carbon Homes debate and a genuine commitment to build future proofed homes that have efficiency and domestic renewable generation at its heart.
"Transport has more answers emerging, but the Electric Vehicle hopes need more actions than words if the UK is to become a world leader. We need a bold strategy on the smart charging infrastructure that can be a pillar of new low carbon communities. There also needs to be recognition of the significant role that biofuels play currently, and the much larger role they can play in the future.
"In power we need to see much more technology neutral approach, with the cheapest generation onshore wind and solar remaining blocked to market, and the backbone of the low-carbon revolution, bioenergy, forgotten. We cannot have a low cost, low carbon and secure energy transformation without these technologies."
Nick Blyth, Policy Lead at IEMA, said: "We welcome today's publication of the long-awaited plan. For many, there has been a real recent frustration with 'stop-start' policy approaches; the uncertainty regarding future company reporting, withdrawal of support from zero carbon homes and the loss of Carbon Capture support in 2015 spring to mind. It is encouraging that some commitments are returning through this new plan, and we are also hopeful to see signs of a more joined-up approach. IEMA members would also welcome and support further development for a much more lasting policy landscape. This is essential in providing confidence for business and investors, and in continuing the UK's journey to a pioneering, prosperous zero carbon economy."
Lib Dem leader Vince Cable said: "This strategy is a year late and is a damp squib. It is an inadequate response to tackling climate change, one of the greatest threats to our economy and our planet. We need a far more radical plan. Britain is on course to miss our climate change targets in the Paris Agreement and this does not change that.
"While additional funding for renewables is welcome, we need to see far more investment in cutting-edge technologies such as tidal power and a wide-scale plan for insulating people's leaky homes.
"One of the most important aspects of this strategy is investment in carbon capture and storage. This is vital for our low carbon future. Yet the Government has replaced the £1 billion programme they scrapped two years ago with a much smaller and inadequate £100 million programme.
"If the Government was serious about tackling climate change they would be creating a far more radical plan, such as introducing a diesel scrappage scheme, allowing new onshore wind farms and giving the immediate go-ahead to Britain's first ever tidal lagoon in Swansea Bay.
"Brexit will make the achievement of this strategy far more difficult, by closing off markets to potential UK exports and reducing the availability of government revenue to support all these plans."
Mr. Jacob Hayler, Executive Director of The Environmental Services Association (ESA), said: "The Government's Clean Growth Strategy rightly recognises the impressive work of the waste and resource industry in helping the UK transition to a low carbon circular economy.
"Emissions from the sector have reduced by 73% since 1990, recycling rates have quadrupled over 15 years, and the equivalent of 2.3 million homes are powered by renewable electricity generated from waste.
"We welcome the Government's plans to go even further in reducing carbon emissions, and look forward to an ambitious Resources and Waste Strategy with real, tangible measures that will help our members invest in greater resource efficiency and deliver clean economic growth for the UK plc."
Anaerobic Digestion & Bioresources Association (ADBA) Chief Executive Charlotte Morton said: "The multi-faceted nature of AD means that, with the right support, it can play a central role in decarbonising heat, electricity, transport, and farming, as well as recycling organic wastes, increasing energy and food security, and restoring the UK's degraded soils. No other technology can make such a key contribution to so many different areas of the Clean Growth Strategy.
"We welcome the government's ambition to divert all food waste from landfill by 2030 and to support local authorities in rolling out separate food waste collections. We look forward to BEIS's new Resources & Waste Strategy, which will need to be supported by meaningful funding and legislation to effect the scale of change needed for an urgent transition to a more circular economy.
"We also welcome the strategy's highlighting of the importance of best practice in AD. ADBA's pioneering, industry-led Best Practice Scheme, which will be launched in full later this year, will help support AD operators in meeting the highest environmental, health and safety, and operational standards.
"The publication of the Clean Growth Strategy today is a welcome sign that the government is starting to think about how we can make the deep emissions cuts that will be necessary to meet the Fourth and Fifth Carbon Budgets over the next 15 years.
"What is needed now is tangible support for AD in the form of the following:
• Urgent tabling of legislation on the Renewable Heat Incentive to renew support for biomethane-to-grid;
• A long-term replacement for the Feed-In Tariff to support small-scale renewable electricity generation;
• Mandatory separate food waste collections in England to allow AD to recycle this vital and underused resource; and
• A new support system for farmers that rewards carbon abatement and incentivises the use of biofertiliser to restore soils."