Government to Set Fifth Carbon Budget in June

           Budgets and Statements

The Government is required to set the UK’s fifth carbon budget (2028 to 2032) into legislation by the end of June 2016 and intends to publish plans on how to meet its carbon reduction commitments by the end of the year. Under the UK’s Climate Change Act, the Government must set advance carbon budgets for five year periods, leading up to 2050. The first carbon budget ran to 2012 and achieved the required 23% reduction in greenhouse gases, against the base year of 1990. Indications are that the second and third budgets will also be achieved, reaching a 35% reduction by 2020.

In advance of setting each budget, advice is submitted to the government by the Climate Change Committee (CCC), an independent body with the purpose of advising the UK Government on setting emissions targets and reporting to Parliament on progress against existing targets. Their advice for the fifth budget was submitted at the end of 2015 which recommended a 57% reduction in greenhouse gases by 2030. The Energy and Climate Change Select Committee gathered views on the submission in the form of written and oral evidence. Evidence given by the Dr John McElroy, Director of Policy and Public Affairs at RWE and Dr David Clarke, Chief Executive of the Energy Technologies Institute was supportive of the target and they were of the opinion that, overall, the CCC’s approach to calculating the carbon budget was well considered. At the end of April, the Select Committee advised the Government to accept the CCC’s advice and in addition recommended that:

  • emissions from international shipping should be included
  • further to the Paris Climate Agreement, additional  analysis should be carried out in order to decide what level of emissions reductions would be required in order to meet a limit of a 1.5°C warming
  • a power sector carbon intensity target of 100 gCO2/kWh be set for 2030
  • it should be made clear how discrepancies will be dealt with once the EU ETS cap for the UK is known

The Energy and Climate Change Select Committee Chair Angus MacNeil MP said: “We can see no basis for downgrading the UK’s ambition to reduce emissions of climate-changing greenhouse gases. Indeed, to meet targets agreed at the Paris climate talks to keep temperature rises below 1.5 degrees, we may in the future need to cut emissions deeper and faster.”

While the first three carbon target have been met or are on track to being met, there are questions as to whether the UK will meet its fourth carbon budget which ends in 2027. Therefore, plans need to be put in place for both the fourth and fifth budgets. Speaking in January, Energy Secretary Amber Rudd said that new policies would be put in place by the end of 2016 in order to meet the UK’s targets but without piling pain onto consumers. The government has brought some green subsidies to an end early in order to limit the non-energy costs being passed through to consumers’ energy bills.

Although the government already has plans for decarbonising both heat and electricity generation, when assessing its path towards meeting the fourth and fifth carbon budgets, it may need to rethink its policy on Carbon Capture and Storage (CCS), which it has recently removed support for. The CCC’s recommendation includes CCS as an essential tool for meeting an emissions reduction target of 57% by 2030, in addition to other strategies.

While some media reports claim this new target will result in a competitive disadvantage for the UK, other reports suggest that well-designed climate policies will provide an opportunity for UK businesses. The focus of the fifth carbon budget is on transport and buildings and so is not seen as representing a particular risk to manufacturing. It has been proposed that the subject of carbon leakage be addressed as a separate issue to the carbon budget.

Full details of the CCC’s submission for the fifth carbon budget can be found here.

Nikki Wilson

Nikki joined Alfa Energy in September 2015 as a Carbon Management Consultant where she advises clients on legislation, compliance, and the implementation of carbon management schemes. She is a Practitioner member of IEMA, has a postgraduate diploma in Environmental Decision Making, and has over 15 years’ experience in energy consultancy.