In June 2019, the UK became the first major economy to set a new law requiring net zero emissions by 2050.
But what did the recent budget of March 2020 promise in terms of supporting Carbon Charter members to help meet this commitment, and where were the gaps?
Renewable Heat Incentive
The Government announced an extension to the Renewable Heat Incentive (RHI), until 31 March 2022. The RHI is a subsidy provided to producers of renewable heat, supporting biomass boilers, heat pumps and solar thermal by paying a tariff per unit of heat energy supplied. It was due to close in March 2021. In addition, the government said it will consult on a new “low-carbon heat support scheme” to replace the RHI from April 2022. It said this would give grants to “help households and small businesses invest in heat pumps and biomass boilers, backed by £100m of new exchequer funding”. See www.ofgem.gov.uk/environmental-programmes/non-domestic-rhi and also www.beeanglia.org for details of further funding opportunities for Charter Members.
Red Diesel
The removal of tax relief on red diesel will also be introduced from April 2020. While this won’t affect agriculture or domestic heating, this is likely to have an impact on the cost of commercial heating oil and have knock on price implications for services such as waste management and disposal (where red diesel is currently used to fuel heavy machinery).
Electric Vehicles and Transport
The Chancellor announced £1bn for green transport which includes £403m to extend grants for new electric vehicles until 2023, and extra funding for electric car charging points. See www.gov.uk/government/collections/government-grants-for-low-emission-vehicles for details of Workplace Charging Scheme.
However, fuel duty will remain frozen for a tenth year and a commitment to spending £27bn on road building between 2020 and 2025 was also announced in the budget. Research from the campaign group Greener Journeys suggests the fuel-duty freeze has “led to 5% more traffic, 250m fewer bus journeys and 75m fewer rail journeys”. While road-building programmes are often framed as being designed to ease congestion and cope with rising demand, there is evidence that providing additional capacity leads to a greater volume of traffic on the roads.
Tree planting
Tree-planting is viewed as another “essential” to achieve net-zero. The Budget revealed a Nature for Climate Fund, which will invest £640m in tree planting and peatland restoration in England. It is estimated that this will increase the rate of tree planting by more than 600%. Although details of the funding have not yet been published, other schemes such as the Woodland Creation Grant are already offering capital grants for farmers and landowners to create woodland, see www.gov.uk/guidance/woodland-creation-grant-countryside-stewardship
Plastics Tax
A tax on plastic packaging containing less than 30% recycled content will come into force in April 2022. This will be levied on plastics manufacturers and importers, with the aim of increasing the use of recycled plastic in packaging by 40% (estimated to be equal to carbon savings of nearly 200,000 tonnes).
The budget also reaffirmed plans for an Extended Producer Responsibility Scheme designed to encourage producers to make their packaging more recyclable and reduce the amount of unnecessary packaging in their products.
For more information about the key areas relating to the use of plastic packaging and how to use it effectively and/or replace with alternative packing materials see www.wrap.org.uk/category/materials-and-products/plastics.
For further information please speak to a Carbon Charter advisor.
