Autumn statement 2016: Chancellor delays decisions on post-2020 energy policy

24th November 2016


Related Topics

Related tags

  • Adaptation ,
  • Mitigation ,
  • Fossil fuels

Author

IEMA

Industry and campaign groups have slammed the autumn statement for lacking detail on energy policy after 2020.

In the March budget, former chancellor George Osborne had pledged to set out the long-term direction for rates of the carbon price support (CPS) and the carbon price floor (CPF), both of which are designed to boost investment in renewable energy.

His replacement, Philip Hammond, yesterday said he would freeze the CPS at £18 tonne/CO2, adding only that the Treasury would continue to consider the appropriate mechanism for setting the carbon price in the 2020s. He also delayed a decision until the March Budget on the fate of the levy control framework, which caps future spending on low-carbon energy.

Dustin Benton, acting deputy director of the Green Alliance, said the postponement was disappointing given that renewable energy infrastructure could deliver an additional £22bn in private sector investment before 2020.

Dr Jonathan Marshall, energy analyst at the Energy and Climate Intelligence Unit (ECIU), said Hammond had failed to offer clarity for the energy industry beyond the short term. ‘Considering the long-term nature of energy investments, clarity more than three years into the future is vital for the industry.

‘Vast swathes of the UK’s generating capacity are reaching retirement age, and long-term clarity on carbon pricing would provide investors with the platform to back much needed new low-carbon equipment. This statement is likely to see investment in new capacity continue at glacial pace,’ he said.

Friends of the Earth senior campaigner Liz Hutchins said the CPS needed to be extended till at least 2025 to support the phase out of coal-fired power.

Hammond announced £390m to support renewable fuels, ultra-low emission vehicles and driverless cars. But the Renewable Energy Association pointed out that more clarity on future power system decarbonisation was essential since electric vehicles would only reduce emissions if they were powered by low-carbon sources.

IEMA chief policy advisor Martin Baxter said that the statement had done little to demonstrate the government’s commitment to the environment and sustainability.

Baxter welcomed the chancellor’s announcement of investment in infrastructure, industry and skills, a programme he said that should have environment and sustainability skills at its core. But he added: ‘We are disappointed that this hasn’t thus far appeared to be prominent. We look forward to seeing this come through in the imminent industrial strategy, the emissions reduction plan and the 25-year environment plan.’

The solar industry was disappointed that Hammond did not act to prevent business rate rises for organisations supplying themselves with solar power. Rates are due to increase six to eight-fold from April, which would see return on investment fall by around 2.5%, according to the Solar Trade Association (STA).

Leonie Greene, STA head of external affairs, said: ‘Only the week after the UK ratified the Paris Agreement, the chancellor made no mention of climate change. It is deeply frustrating at this point in time that we have to battle against a tax regime that is rewarding investors in fossil fuels over solar energy. Very modest intervention is needed to unlock a billion of investment in solar over this parliament.

Other measures announced in the autumn statement include:

  • a freeze in fuel duty, the seventh year running that the tax has not risen. The move equates to an estimated drop of £850m in revenue for the Treasury;
  • tax breaks for employees buying bikes or electric cars will be exempt from changes to salary sacrifice schemes, which allow employees to buy benefits before tax;
  • £1.1bn for local road upgrades and £220m for strategic roads;
  • £170m in flood defence and resilience measures, £20m of which will be for new flood defence schemes, £50m for rail resilience projects, and £100m to improve the resilience of roads.

Subscribe

Subscribe to IEMA's newsletters to receive timely articles, expert opinions, event announcements, and much more, directly in your inbox.


Transform articles

Facing the climate emergency challenge in local government

It’s well recognised that the public sector has the opportunity to work towards a national net-zero landscape that goes well beyond improving on its own performance; it can also influence through procurement and can direct through policy.

19th March 2024

Read more

The UK government’s carbon capture, usage and storage (CCUS) strategy is based on optimistic techno-economic assumptions that are now outdated, Carbon Tracker has warned.

13th March 2024

Read more

The UK’s new biodiversity net gain (BNG) requirements could create 15,000 hectares of woodlands, heath, grasslands, and wetlands and absorb 650,000 tonnes of carbon each year.

13th March 2024

Read more

The UK government’s latest Public Attitudes Tracker has found broad support for efforts to tackle climate change, although there are significant concerns that bills will rise.

13th March 2024

Read more

Multinational corporations are undermining their net-zero commitments with excessive air travel and no plans to reduce ‘the low hanging fruit’ of carbon footprints, a study by Transport & Environment has found.

13th March 2024

Read more

The UK government’s climate adaptation plans are ‘inadequate’ and falling ‘far short’ of what is required, the Climate Change Committee (CCC) has warned today.

13th March 2024

Read more

Large businesses across the world are avoiding climate action due to fear they will be called out for getting their work wrong, according to a new Carbon Trust report.

29th February 2024

Read more

A thought-provoking discussion on how storytelling can change the world took place in Central London last night, alongside an exclusive sneak preview of an upcoming IEMA film series.

29th February 2024

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert

IEMA Cookie Notice

Clicking the ‘Accept all’ button means you are accepting analytics and third-party cookies. Our website uses necessary cookies which are required in order to make our website work. In addition to these, we use analytics and third-party cookies to optimise site functionality and give you the best possible experience. To control which cookies are set, click ‘Settings’. To learn more about cookies, how we use them on our website and how to change your cookie settings please view our cookie policy.

Manage cookie settings

Our use of cookies

You can learn more detailed information in our cookie policy.

Some cookies are essential, but non-essential cookies help us to improve the experience on our site by providing insights into how the site is being used. To maintain privacy management, this relies on cookie identifiers. Resetting or deleting your browser cookies will reset these preferences.

Essential cookies

These are cookies that are required for the operation of our website. They include, for example, cookies that enable you to log into secure areas of our website.

Analytics cookies

These cookies allow us to recognise and count the number of visitors to our website and to see how visitors move around our website when they are using it. This helps us to improve the way our website works.

Advertising cookies

These cookies allow us to tailor advertising to you based on your interests. If you do not accept these cookies, you will still see adverts, but these will be more generic.

Save and close