What is the UK’s Review of its Net Zero Strategy?

The UK’s Net Zero Strategy, sets out the UK Government’s plans to tackle emissions produced by the UK and to decarbonise all sectors of the UK economy. The 400 page strategy was published by the UK Government in 2021 and was recently the subject of an independent review commissioned by the government titled: Mission Zero An Independent Review of Net Zero. 

👉 What do we mean when we talk about the UK’s Net Zero Strategy? What is the Net Zero Review and what are its key takeaways?

Firstly, it’s important to understand what exactly a Procurement Policy Note (PPN) is.  

Net zero refers to achieving a balance between the amount of greenhouse gas emissions produced and the amount removed from the atmosphere. There are two ways to achieve net zero, and they work in tandem: reducing existing emissions, while at the same time removing greenhouse gases from our environment. When what we add is no more than what we take away, we reach net zero.

👍Is net zero achievable? Absolutely, it’s a realistic target because it recognises the fact that it’s impossible to eliminate all emissions, and instead it requires that what we do emit is cancelled out by the amount removed.

Before we get into the details, let's take a look at the timeline for the adoption of the net zero target in the UK:

2008

The UK adopted the Climate Change Act in 2008, which committed the UK to an 80% reduction in carbon emissions compared to levels in 1990, to be achieved by 2050.

2015

The Paris Agreement - a legally binding international treaty on climate change - adopted in 2015, set the goal of keeping global warming to below 2 degrees (and preferably below 1.5) above pre-industrial levels. The UK Government was one of the 194 states who signed the agreement and committed to reducing their greenhouse gas emissions to net zero by 2050.

2019

The 2008 Climate Change Act was reinforced in 2019 when secondary legislation was introduced by the UK Government which extended the target from 80% to 100%. This brings the UK in line with the Paris Agreement and means that the target of net zero greenhouse gas emissions by 2050 is legally binding.

2021

The UK Government published its Net Zero Strategy, setting out a pathway to reaching net zero greenhouse gas emissions by 2050. 

The UK’s Net Zero Strategy is a 400 page document that details how the UK plans to tackle climate change and carbon emissions, and ultimately to achieve its net zero target by 2050. It includes measures to increase the use of renewable energy sources, improve energy efficiency, and reduce emissions across all sectors of the UK economy. The strategy also includes measures to help the UK adapt to the effects of climate change as well as support the development of new climate friendly technologies. 

So what exactly are the key policies proposed by the strategy? 

• Ending the sale of new petrol and diesel cars and vans by 2030
• By 2035 the UK aims to be powered entirely by clean energy 
• Investment in hydrogen production
• 10% sustainable aviation fuel by 2030
• Cash incentives for the population to upgrade home heating systems from gas boilers to heat pumps
• Triple the rate of woodland creation in England 

To learn more about the UK’s Net Zero Strategy, take a look at our article on the topic.

The UK Government recognised that the economic landscape had fundamentally changed since its initial publication of the Net Zero Strategy in 2021. Households and businesses across the country now face high energy prices and inflationary pressures as a result of global events such as the war in Ukraine.

More specifically the review was designed to consider how the UK Government’s approach to net zero can: 

• Deliver maximum economic growth and investment, driving opportunities for private investment, jobs, innovation, exports, and growth across the UK
• Support UK energy security and affordability for consumers and businesses and the need to rapidly increase and strengthen UK energy production and supply
• Minimise costs incurred by businesses and consumers

The UK Government commissioned Chris Skidmore (Conservative MP) in 2020, to lead an independent review of net zero. Chris Skidmore is the former energy minister of the UK, and was responsible for signing the UK’s net zero target into law. 

The review, also known as Mission Zero, was conducted through a combination of analysis, research and consultation, including: 

• Analysis of the most up to date data on UK emissions 
• A cost and benefit analysis of the different methods available to reduce emissions
• Extensive consultations with stakeholders and experts, including businesses, NGOs, and even members of the public
• Examination of international best practices and the latest research on the most effective policies and technologies to help reach net zero 
• Expert-led workshops and roundtables with industry experts 
• Public calls for evidence 
• Independent studies and reports commissioned by the UK Government to support the review

The final report was released in January 2023.

The report outlined 7 conclusions. We’ll take a look at these in more detail below:

Net zero is creating a new era of change and opportunity

In fact, the review went on to state that “net zero is the growth opportunity of the 21st century,” and found that the supply of goods and services to enable net zero transition could be worth up to £1 trillion to UK businesses by 2030 - a huge opportunity. However, the UK is not the only country who has recognised the opportunity, there are of course, other global players who are investing in the development of new technology. The UK risks losing out on opportunities to other countries if it does not compete. The review determined that the UK must therefore position itself as a global partner for trade and collaboration. 

The review also found that despite the opportunities, real challenges remain in delivering on the UKs net zero ambition. Mostly due to a lack of consistent long-term policy or investment. It called on the UK government to renew its commitment in a more serious and effective way than ever before.

The UK must act decisively to seize the economic opportunities and smooth the transition

The review acknowledged that net zero will result in widespread changes to the global economy and that while it will create new economic activity, it will also lead to some sectors declining or stopping altogether.

The review identified that greater policy certainty and interventions on skills and the wider labour market are required to ensure that the UK Government is best supporting the transition of the economy to net zero. 

The benefits of investing in net zero outweigh the costs 📈

There’s no way around it - net zero requires significant investment. In fact, the Climate Change Committee estimates that an additional £13.5 billion of investment is needed, rising to between £50 to £60 billion by the early 2030’s in order to meet the UK’s net zero target. The majority of investment required to facilitate decarbonisation will need to come from the private sector, who of course expect high returns on this investment. The UK Government has an important part to play in this period of transition through its funding of research and development, major infrastructure, and incentivising investment in new technologies. 

But the benefits far outweigh any costs. Analysis shows that the direct cost of decarbonisation over the next thirty years will be less than 1% of UK GDP. And that the cost is potentially lower than maintaining status quo technologies. 

The indirect economic benefits are also not inconsequential. Transitioning to net zero will create new jobs, increase economic activity, and reduce the consumption of fossil fuels resulting in cost savings through cheaper energy bills. Not to mention the damage to the UK GDP that may result from climate change, for example the cost implication from weather related events (for example, drought, or flood damage) and deteriorating public health as a result of poor air quality etc. 

What’s made clear in the review is that investing now is cheaper than delaying. 

Unlocking the ambition communities will deliver the most successful version of net zero

The review found that the cheapest and most effective way to deliver net zero is to take a locally-led approach. Not only will this save on investment costs but it will also deliver financial and social benefits in return. 

Different parts of the UK have different needs and opportunities when it comes to transitioning to net zero and local leaders will be best placed to deliver this. 

Net zero can materially improve people’s lives – now and in 2050 – but work is needed to secure the benefits and minimise costs

Net zero can really, truly improve the lives of the UK population. For example, clean energy will result in cheaper bills for the UK consumer, which means people will be able to afford to keep their homes warmer. Not only this, but more energy efficient homes means less heating is needed in the first place. 

The transition to net zero will also create huge opportunities in terms of jobs - many of which will be skilled and high paying. These jobs are also not concentrated in one region but will bring employment opportunities to all corners of the UK. 

Cleaner air is another huge positive. The review identified that between 28,000 and 36,000 people die as a result of air pollution in the UK every year. Net zero will make a big difference to keeping the UK population healthier for longer. 

Despite these encouraging findings, the review also identified areas that require government action or support. Even though in the long run, net zero will result in savings, in the short term many people will face increased costs as a result. The cost of an eclectic vehicle for example is not cheap, nor is installing insulation into homes. The UK Government needs to support those who cannot afford these changes. They must also ensure continued public support for the changes, by providing the public with key information.

Net zero by 2050 remains the right target for the UK ‒ it is backed by the science, widely followed, and is creating real opportunity

The good news from the review is that net zero emissions by 2050 is not an unrealistic target. It also concluded that, despite the changed global situation, the UK’s Net Zero Strategy is still (broadly) the best cost-optimising pathway to net zero. The technologies required to reach the targets are largely unchanged compared to 2021 when the UK Government initially created its strategy.

Significant additional government action is required to ensure that the UK achieves net zero in the best way possible for the economy and the public

The review acknowledged that the UK’s target of net zero, adopted in 2019, was a moment of genuine global leadership. The Net Zero Strategy, while not perfect, was considered by many to be "an ambitious and comprehensive strategy that makes a significant step forward for UK climate policy”. 

However, the job is not done, and further action is needed. Taking into account the economic opportunity and the growing risks resulting from climate change, the review made 129 recommendations to the UK Government. Some of which are immediate and others considered more of a long term strategy. The recommendations fall into six pillars: 

• Securing net zero - a framework for a sustainable industrial strategy to deliver growth and jobs during the UK’s transition to net zero 
• Powering to net zero - recommendations under this pillar outline actions needed to deliver on targets, including a re-think of the UK’s energy infrastructure and increased investment in solar and onshore wind technology
• Net zero and the economy - action required to capture the economic opportunities presented by the net zero transition 
• Net zero and the community - recommendations aim to unlock local action through the reframing of the relationship between local and central government, and encouraging community action 
• Net zero and the individual  - how individuals can make green choices and support the transition, and how the government can ensure that net zero benefits everyone
• The future of net zero - recommendations to help the UK government seize opportunities from new technology and R&D innovation. It also looks at the UK’s carbon pricing regime and how the UK can keep its leadership position with regards to the global fight against climate change. 

So that you don’t have to read all 129 recommendations (unless you want to of course), we’ve picked out a few of the key ones below:

Infrastructure

• Accelerating the implementation of the British Energy Security Strategy, which focuses on expanding domestic UK energy supply and commits to removing Russian oil, coal and gas imports
• Accelerate the set-up of Great British Nuclear (a new body whose aim is to increase the UK’s nuclear capacity)
• Using infrastructure to support net zero by developing a cross-sectoral infrastructure strategy to support the building and adaptation for new green energy sources such as hydrogen etc. 
• Reforming the UK Government's approach to planning by allowing locally supported solar and offshore wind generation systems to be developed in communities more easily

Sustainable governance structures

• The creation of an ‘Office for Net Zero Delivery’ to ensure that best practices are followed and to drive forward net zero priorities
• Developing a UK Government financing strategy by the end of 2023 to give businesses and investors a long term view on the length of funding commitments

Supporting businesses

• Encouraging businesses to go green via incentives for investment in decarbonisation, including via the tax system and capital allowance. 
• The launch of a ‘help to grow green’ campaign, offering advice and information to businesses, particularly small businesses, so that they can plan ahead as the UK transitions to net zero

Engaging local action

• The backing of (at minimum) one Trailblazer Net Zero City, Local Authority and Community with the aim of achieving net zero emissions in the region by 2030 instead of 2050
• Catalysing local action by reforming the planning system at a local and national level to ensure that it supports net zero and associated economic activities
• Increased UK Government reporting on net zero commitments to increase transparency and ensure information is more readily available to the public

Greener homes

• Supporting energy efficient homes, including introducing legislation that ensures no new homes will be built with a gas boiler from 2025, and committing to the aim of making heat pumps a widespread technology within 10 years
• Create a gas-free energy grid by legislating for gas free homes and appliances by 2033

International leadership

• Establish a baseline for environmental and climate considerations to be used in future free trade agreements with the UK

Delivering on the recommendations outlined by the Net Zero Review will allow the UK to transition to net zero in the most effective and cost-efficient way. If you’d like to discover all 129 recommendations, you can find these in the report itself: Mission Zero, Independent Review of Net Zero

The Net Zero Strategy Review acknowledged that the UK Government has the right to be proud of the steps it has taken towards achieving net zero emissions, and concluded that achieving net zero by 2050 is technically feasible. However - and it’s a big however - the report also determined that in order to achieve net zero the UK Government will need to match its delivery to its ambition, because as it stands the UK is not on track to realise all of its commitments. 

Huge opportunities exist for businesses across the United Kingdom, not to mention the long term benefits that can be brought to the UK population through the delivery of net zero, but realising these opportunities and benefits is reliant on the UK Government and the actions it now takes to implement the recommendations of the Net Zero Strategy Review.

At Greenly we can help you to assess your company’s carbon footprint, and then give you the tools you need to cut down on emissions. Why not request a free demo with one of our experts - no obligation or commitment required. 

If reading this article has inspired you to consider your company’s own carbon footprint, Greenly can help. Learn more about Greenly’s carbon management platform here.