This year’s Budget can help the UK to meet its net-zero goal and be good for business
This week’s Budget presents a great opportunity for the Government to turbo-charge the green economy and to turn great ideas into reality, says Cadent.
Cadent strongly welcomed the Government’s commitment to the UK being net-zero by 2050 – this was a brave and ambitious decision, but we are certain that it was the right one. And companies across the UK, like ours, are already doing some fantastic work to help the UK to meet this goal.
However, there is still a way to go, and industry and business needs certainty and support from Government to turbo-charge the green economy and to turn great ideas into reality. With the right support, we can decarbonise our economy and ensure that the UK is the world-leader in low-carbon solutions. With the right support and with the right policies in place, decarbonisation can be good for business. This week’s Budget presents a great opportunity for the Government to do just this.
In order to deliver on this though, business needs to see certainty and consistency from Government. Cadent are already working with the other gas distribution networks, the electricity networks, local authorities, academia and business to help deliver net-zero energy systems for the future. And, in the same way that decarbonising our energy systems requires joined-up thinking, decarbonising the whole economy will require collaboration and co-operation from different Government departments and regulators – a joined-up approach is needed.
HM Treasury, with its fiscal levers, has, potentially, the most critical role to play in supporting the ambitions and aims of BEIS or DfT in enabling the UK to reach net-zero by 2050. It is essential that those measures announced at this week’s Budget align with wider Government policy on net-zero. And consistency is key – with HMT supporting the net-zero goal, and ensuring that cross-Governmental policy works cohesively together, businesses will have the certainty they need in order to invest in green or future technologies. Only this week we launched the UK’s first ever Transition Bond, which is asking for investment to help us transform our network to help deliver net-zero – again, this requires certainty and stability from Government. This Budget needs to send clear signals to the market with regards to where there is a long-term future for potential investments.
Cadent are already working on some fantastic initiatives to help our networks to decarbonise - whether it be through trialling the transmission of hydrogen through our grid, which when burnt releases only water vapour, or in working with Combined Authorities to help decarbonise regional industrial clusters, such as through our HyNet project up in the North West. And, across the UK there is great innovation happening which could enable us to reach that net-zero goal. However, business alone will not be able to make this happen. Government needs to support the creation of these new business models and economies. Therefore, at this Budget, Cadent would like to see a greater commitment to greater funding for at-scale trials, clear signals to investors around the support for new markets, such as for Carbon Capture & Storage (CCS), and a commitment to examine how some of these markets, and the regulation they require, will work moving forwards, e.g. around hydrogen.
With COP26 being held in the UK later this year, there has never been a greater opportunity for the UK to highlight its leadership on climate change and to position its businesses as world-leaders in green solutions. If this Budget provides the right signals to markets and investors, it can help to unleash a wave of innovation across the UK and help UK business to thrive. This Budget can ensure we are net-zero by 2050 and be good for business.
Cadent submitted an official Budget representation, which called for the following:
- A commitment to maintaining the fuel duty differential for alternative fuels, including Compressed Natural Gas (CNG) and Hydrogen.
- An increase in funding available for at-scale trials, to demonstrate the viability of different routes to the decarbonisation of heat.
- An extension of, or replacement scheme for, the Renewable Heat Incentive (RHI), which will incentivise the production and feed-in of bio-gas and hydrogen to the gas grid.
- Innovation funding to support the development and marketisation of hydrogen/ methane blend appliances, such as boilers, to support the decarbonisation of heat at the lowest impact on consumers.
- A commitment to support for regional hydrogen clusters, such as in the Cheshire / Mersey Bay region and in the Tees Valley region.