Budget 2021 – A summary of the energy sector
Unsurprisingly, Coronavirus and the UK’s economic recovery from the last twelve months dominated Rishi Sunak’s 2021 budget. Climate change and the UK’s 2050 Net Zero target understandably featured much less compared to the budget twelve months ago, however some energy policies did come to fruition from the budget.
Net zero remains part of the government’s overall economic policy objective with the chancellor committing to put green investment at the heart of the UK’s economic recovery from Covid-19. Below are some of the key points from Rishi Sunak’s Budget.
- The UK’s net-zero goal will be added to the remit of the Bank of England meaning the bank could be required to consider climate change risks as part of its emergency coronavirus response.
- £15bn to help finance the 2050 net zero transition in green bonds. NS&I will offer a green retail savings product by Autumn 2021.
- Leeds will host an Infrastructure Bank with an initial provision of £12bn. The aim of the new bank is to support local and regional growth as well as help meet the 2050 net zero emissions target.
- £57m to support jobs and green growth in Scotland including £27m for the Aberdeen energy transition zone.
- Teesside and Humberside will host the next generation port infrastructure to build future offshore wind projects.
- Announcement of a £20m competition to develop floating offshore windfarms to help the government fulfil its objective of powering every home by wind power by 2030. There are also two further competitions, £68m for green energy storage systems and £4m to boost clean energy crops and forestry.
- Fuel duty will be frozen, to remain at 58 pence per litre, plus VAT, as it has since 2011.
- Air passenger duty rates will increase from April 2022 with long-haul flights those most impacted.
There has been a mixed reaction of the budget from green economic leaders with the above policies being broadly welcomed but key groups also seeing the Budget as a missed opportunity. Questions remain how sectors such as housing and transport will be supported by the government to reduce their carbon footprint and help the government meet its net zero targets.
Whilst most businesses are still feeling the strain of the impact of Covid-19, net zero, sustainability and environmental policies are becoming the norm for businesses as they look towards a de-carbonised future.
For more information on the Budget and the potential future impact of energy policies on your business please feel free to contact hello@gleg.co.uk.