Weekly News Review - 22nd September 2023

Rishi Sunak criticised for U-turn on key green targets

Prime Minister Rishi Sunak has announced the loosening of some important net zero policies. The most significant of these changes is delaying the ban on the sale of petrol and diesel cars from 2030 to 2035 and a delay to the phase out of gas boilers in UK households. The announcement has been met with criticism from industry, climate experts and opposition MPs as well as a number of Conservative MPs.

Sunak said: “This country is proud to be a world leader in reaching net zero by 2050. But we simply won’t achieve it unless we change. We’ll now have a more pragmatic, proportionate, and realistic approach that eases the burdens on families.”

Car manufacturers have spent the last few years and hundreds of millions of pounds investing in the electric vehicle industry and many are disappointed with the change in policy. Lisa Brankin, the chair of Ford UK, said: “Our business needs three things from the UK government: ambition, commitment and consistency. A relaxation of 2030 would undermine all three.”

The announcement has cast doubt over whether the UK will still be able to meet its 2050 net zero target. The policy changes go against the advice of the Climate Change Committee (CCC). Piers Forster, CCC chair, said: “Today’s announcement is likely to take the UK further away from being able to meet its legal commitments. This, coupled with the recent unsuccessful offshore wind auction, gives us concern.”

Mark Maslin, a professor of climatology at University College London, said: “Sunak’s excuse again and again is not to put the cost burden on the public – as if it is individuals that have to pay for the net zero transition. He seems to forget government is there to enable major infrastructure changes and the switch to renewable energy, electric cars, and heat exchangers should be supported because all of them in the long run save people money and improve people’s health.”

Sunak has even faced criticism from members of his own party including former prime minister Boris Johnson and COP26 president Alok Sharma. Speaking to BBC Radio 4’s Today programme, Sharma said: “I think it’d be incredibly damaging for business confidence, for inward investment, if the political consensus that we have forged in our country on the environment and climate action is fractured.”

Hydrogen investment at risk due to policy delays and rising costs

A report from the International Energy Agency (IEA) has found that investment in hydrogen projects may stall if policy delays and rising costs are not addressed. The IEA’s Global Hydrogen Review 2023 highlighted that the number of low-emissions hydrogen projects being announced has increased rapidly. However, many businesses are waiting for more government support before investing.

National hydrogen strategies have been set out in more than 40 countries worldwide, however installed capacity and volumes remain low. As a result, low-emissions hydrogen still accounts for less than 1% of overall hydrogen production and use. A number of factors have influenced the slow uptake including the global energy crisis, rising inflation and more expensive borrowing costs.

In contrast, the deployment of electrolysers is forecast to triple this year from nearly 700MW in 2022 to 2GW by the end of 2023. Half of the growth this year has been in China as it seeks to become a market leader. If all announced projects are realised globally, a total of 420GW could be achieved by 2030, an increase of 75% compared to the IEA’s 2022 review.  However, this will require additional government support and investment and the removal of existing barriers.

IEA Executive Director Fatih Birol said: “We have seen incredible momentum behind low-emissions hydrogen projects in recent years, which could have an important role to play in energy-intensive sectors such as chemicals, refining and steel.”

“But a challenging economic environment will now test the resolve of hydrogen developers and policymakers to follow through on planned projects. Greater progress is needed on technology, regulation and demand creation to ensure low-emissions hydrogen can realise its full potential.”

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