What the Net Zero Strategy means for UK construction

By Leila Steed20 October 2021

earth from space

The UK Government has published its Net Zero Strategy, outlining the country’s plan for lowering carbon emissions and meeting the climate targets set out in the Paris Agreement.

Said to build on the Prime Minister’s Ten Point Plan for a Green Industrial Revolution - which was published in November of 2020 - the Net Zero Strategy sets out “how the UK will secure 440,000 well-paid jobs and unlock £90 billion in investment by 2030” on its path to meeting the 2050 emission targets.

The plan aims to ensure the country’s “biggest polluters pay the most for the transition” and deliver “deep cost reductions in low carbon tech” for businesses.

Prime Minister Boris Johnson said, “The UK’s path to ending our contribution to climate change will be paved with well-paid jobs, billions in investment and thriving green industries – powering our green industrial revolution across the country.

“By moving first and taking bold action, we will build a defining competitive edge in electric vehicles, offshore wind, carbon capture technology and more, whilst supporting people and businesses along the way.”

While Business and Energy Secretary Kwasi Kwarteng said that the plan would “future-proof industries”, its full impact on the construction industry is still unclear.

What does the Net Zero Strategy mean for construction sector companies?

Suneeta Johal, CEO of The Construction Equipment Association said, “With COP26 fast approaching we are anticipating the Chancellor to make some announcements about the government’s promise of achieving net-zero emissions by 2050.

“As it currently stands, construction equipment doesn’t feature in the government’s carbon budget until around 2035, so we are hoping there will be changes in that respect once the detail is published.”

“For businesses, any financial assistance or tax incentives that could attract owners and contractors in the update of battery or hydrogen-powered machinery could help increase its uptake.

What does the Net Zero Strategy include?

• An extra £350 million of the Governments maximum £1 billion commitment to support the electrification of UK vehicles and their supply chains.

• £620 million for electric vehicle grants and infrastructure, particularly local on-street residential charge points. It includes a plan to put more zero emission cars and vans onto UK roads through a zero emission vehicle mandate.

• A £140 million Industrial and Hydrogen Revenue Support scheme to accelerate industrial carbon capture and hydrogen projects, and bridge the gap between industrial energy costs from gas and hydrogen.

• An extra £500 million towards developing the green technologies of the future. This aims to support the development of technologies for decarbonising homes, industries, land and power.

• £3.9 billion of new funding for decarbonising heat and buildings. This includes the recently announced £450 million 3-year Boiler Upgrade Scheme.

• £124 million for the Nature for Climate Fund, to help the UK restore 280,000 hectares of peat in England by 2050 and create 30,000 hectares of woodland per year across the UK.

• £120 million towards the development of nuclear projects through the Future Nuclear Enabling Fund.

“This could provide a welcome boost for those supplying, or thinking of supplying, machinery of this type. The electrification of the car fleet is a great start, but we would like to see an accelerated plan for our sector too.”

Johal, who recently issued an open letter to CEA members calling on them to speak out about the challenges they face in meeting emissions targets, said, “The government’s recent commitment to investing in infrastructure to the sum of £650 billion of public and private investment over the next 10-years is encouraging and a step in the right direction.

“We will be very interested in the government’s plans to develop and deliver the nation’s infrastructure and our sector’s involvement.

“Our industry is fully on board with the new approach to environmental accountability and to sustainable infrastructure, and we are looking forward to the anticipated opportunities the forthcoming autumn statement should bring for environmental accountability.”

Publication of the Net Zero Strategy: Build Back Greener whitepaper, which will be submitted to the United Nations Framework Convention on Climate Change (UNFCCC), comes as the UK Government also introduces its new Boiler Upgrade Scheme as part of its heat and buildings strategy to decarbonise homes and announces the securing of billions of pounds in foreign investment.

Yesterday, a total of 18 new “green growth” trade and investment deals were announced at the Global Investment Summit in London, with major international companies contributing around £9.7 billion to the British economy and creating 30,000 new jobs.

Alok Sharma, COP President-Designate, Alok Sharma said, “The UK continues to show climate leadership as we publish our roadmap to net zero by 2050. It shows the wealth of opportunities, including thousands of new skilled jobs, that a transition to a green economy can herald.

“With COP26 opening in less than 2 weeks, leaders stepping up with more commitments has never been more urgent.

“I’m calling on countries across the world, particularly the G20, to commit to net zero by mid-century, ambitious 2030 emissions reduction targets and to set out credible implementation plans so we can limit global warming to well below 2C and keep the goal of 1.5 degrees within reach.”

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