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Powering Up Britain – The Net Zero Growth Plan

Introduction 5

Capitalising on green growth 8

Reducing Emissions across the Economy 26

Power 26

Fuel Supply and Hydrogen 36

Industry 47

Heat and buildings 57

Transport 63

Natural Resources, Waste & F-Gases 71

Greenhouse Gas Removals 77

Supporting the Transition across the Economy 82

Innovation 82

Green Finance and Investment 88

Net Zero Workforce 92

Embedding Net Zero in Government 104

Local Net Zero 109

Empowering the Public and Business to

Make Green Choices 114

International Leadership 117

Endnotes 121

/126

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©Crowncopyright2023ThispublicationislicensedunderthetermsoftheOpenGovernmentLicencev3.0exceptwhereotherwisestated.Toviewthislicence,visitnationalarchives.gov.uk/doc/open-government-licence/version/3Wherewehaveidentifiedanythirdpartycopyrightinformationyouwillneedtoobtainpermissionfromthecopyrightholdersconcerned.Thispublicationisavailableatwww.gov.uk/official-documentsAnyenquiriesregardingthispublicationshouldbesenttousatNZhub@beis.gov.ukISBN978-1-5286-4019-0E0288804803/23Printedonpapercontaining40%recycledfibrecontentminimumPrintedintheUKbyHHGlobalonbehalfoftheControllerofHisMajesty’sStationeryOfficePoweringUpBritain–TheNetZeroGrowthPlan3Introduction5Capitalisingongreengrowth8ReducingEmissionsacrosstheEconomy26Power26FuelSupplyandHydrogen36Industry47Heatandbuildings57Transport63NaturalResources,Waste&F-Gases71GreenhouseGasRemovals77SupportingtheTransitionacrosstheEconomy82Innovation82GreenFinanceandInvestment88NetZeroWorkforce92EmbeddingNetZeroinGovernment104LocalNetZero109EmpoweringthePublicandBusinesstoMakeGreenChoices114InternationalLeadership117Endnotes121PoweringUpBritain–TheNetZeroGrowthPlan4IntroductionPoweringUpBritain–TheNetZeroGrowthPlan5IntroductionEnergysecurityandnetzeroaretwosidesofthesamecoin.TheenergytransitionandnetzeroareamongthegreatestopportunitiesfacingthiscountryandwearecommittedtoensuringthattheUKtakesadvantageofitsearlymoverstatus.Globalactiontomitigateclimatechangeisessentialtolongtermprosperity–theoverallcostsandrisksofglobalwarmingtobeequivalenttolosingbetween5%and20%ofglobalGDPeachyear.1Afterdecadesofrelianceonimportedfossilfuels,thenewDepartmentforEnergySecurityandNetZero’smissionistoreplacethemwithcheaper,cleaner,domesticsourcesofenergy.InresponsetohighhouseholdenergybillsresultingfromPutin’sinvasionofUkraine,thegovernmentsteppedin,payingaroundhalfoftheaveragehousehold’senergybillsoverwinterandaroundhalfofwholesaleenergycostsforsomebusinesses.Butthewaytomaintainlowercostenergyforeveryoneistomovetocleanerandcheaperenergytoprotectusfromvolatileinternationalenergymarkets,whileunderpinningourcleanenergytransition,sotheUKbecomesanetzeroeconomyby2050.ItwillalsohelpusmakesureBritainhasamongthecheapestwholesaleelectricitypricesinEuropeby2035.TheUKhasalreadymadehugeprogressindecarbonisingitseconomyanddecouplingemissionsfromeconomicgrowth.ThankstotheClimateChangeAct(2008)andEnvironmentAct(2021),wehaveastronglegalframeworkforreachingnetzeroemissionsby2050.Between1990and2021,wehavecutouremissionsby48%,decarbonisingfasterthananyotherG7country,whilstgrowingtheeconomyby65%.TheUKwasalsothefirstG7countrytosignnetzerogreenhousegasemissionsby2050intolaw.PoweringUpBritain–TheNetZeroGrowthPlan6Figure1:GreenhouseGasemissionsfortheUKandmajoreconomies,1990–2021OurtransitiontoagreenandsustainablefuturewillprovidenewopportunitiestogrowandleveluptheUKeconomyandsupporthundredsofthousandsofgreen,highskilledjobs,whilstensuringtheenvironmentisinabetterstateforthenextgeneration.Thepoliciesandambitionswehavecommittedtowillhelpleveragearound£100billionofprivateinvestmentaswedevelopnewindustriesandinnovativelowcarbontechnologies,andourambitionswillsupportupto480,000jobsin2030.TheNetZeroStrategy,publishedinOctober2021,wasthefirstdocumentofitskindforamajoreconomy.Itsetoutthegovernment’svisionforamarket-led,technology-driventransitiontodecarbonisetheUKeconomyandreachnetzeroby2050.Thepathtonetzerooutlinedinthestrategyisstilltherightone;developmentsinthelast18-monthshaveonlyreinforcedthatview.Putin’sillegalwarinUkraineandhighglobalenergypricesonlystrengthenourresolvetopropelourselvesawayfromexpensivefossilfuelstowardsacheaper,cleaner,greenereconomy.Therehasbeenfurtherevidence,athomeandabroad,ofthepotentialconsequencesofnotkeepingthe1.5°CParisAgreementgoalinreach,forexample,record-breakingtemperaturesacrosstheUKanddevastatingfloodsinPakistan.Whileweaccelerateoureffortstoreachnetzero,wearealsoensuringthatthecountryispreparedfortheeffectsofclimatechangethatwearealreadyexperiencing.TheThirdNationalAdaptationProgramme,whichwewillpublishin2023,willsetouttheactionswearetakingacrossgovernmenttoincreaseourresiliencetoclimatechange.PoweringUpBritain–TheNetZeroGrowthPlan7OurambitionistohitournetzerotargetswhiledeliveringamongthecheapestwholesaleelectricitypricesinEurope.ThisiswhythePrimeMinisterpledgedatCOP27toachieveourambitiousnetzerocommitmentandNationallyDeterminedContribution(NDC),createnewhigh-wagejobsandprotectUKenergysecurity.Further,asthePrimeMinistersetoutatCOP27,‘therecanbenosolutiontoclimatechangewithoutprotectingandrestoringnature’.InJanuarythisyear,wesetoutourvisionintheEnvironmentalImprovementPlan,providingablueprintnotjusttohaltthedeclineofnatureinourcountry,buttoreverseit.Asaprinciple,wewillpursueoptionsthatleavetheenvironmentinabetterstateforthenextgenerationandbenefitourhealthbyimprovingbiodiversity,airquality,waterquality,naturalcapital,andresiliencetoclimatechange.Tohelpachievetheseaims,wearepublishingourNatureMarketsFrameworkwhichsetsoutgovernment’sapproachtosupportingandacceleratinggrowthinnaturemarkets,akeymechanismtohelpdeliverourjointnatureandclimategoals.Protectingournaturalenvironmentandadaptingtoclimatechange,includingthroughinvestinginnature-basedsolutionssuchastreeplantingandpeatlandrestoration,goeshandinhandwithournetzerofutureandgovernmentwillcontinuetotakeanintegratedapproachtoensureco-benefitsaremaximised.WiththisNetZeroGrowthPlan,wearebolsteringourdelivery.Thisplan:•RespondstotheexpertrecommendationsmadeintheIndependentReviewofNetZeroreport,theoutcomeoftheindependentreviewintonetzero,chairedbytheRtHonChrisSkidmoreMP,whichexploreshowwecanachievenetzerointhemostpro-growth,pro-businessway;•DemonstratestheactionswewilltaketoensuretheUKremainsaleaderinthenetzerotransition,byensuringwedriveinvestmentintokeygreenindustrieslikeoffshorewind,carboncapture,usageandstorage(CCUS),andnuclear;•Strengthensdeliverywithafocusontheactionwecantaketodaytokeepusontracktomeetourcarbonbudgets,actingasourannualupdateagainsttheNetZeroStrategy,bothonanationalandlocallevel;•MeetsourstatutoryobligationsundertheClimateChangeAct(2008)to:•RespondtotheClimateChangeCommittee’s(CCC’s)2022ProgressReporttoParliament;and•ProvideaCarbonBudgetDeliveryUpdatethatsetsoutapackageofproposalsandpoliciesthatwillenableustomeetcarbonbudgets.PoweringUpBritain–TheNetZeroGrowthPlan8CapitalisingongreengrowthInautumn2022,thegovernmentcommissionedanIndependentReviewofNetZero.LedbyformerEnergyministertheRtHonChrisSkidmoreMP,theIndependentReviewofNetZerowastaskedwithassessingthegovernment’sapproachtonetzero,toensureitwaspursuingthemosteconomicallyefficientpathtomeetingitsclimatechangecommitments,giventhechangedeconomiccontext.TheIndependentReviewofNetZeroconcludedthatthetransitiontonetzerowillprovidetheeconomicopportunityofthe21stcentury,drivingeconomicgrowthandopportunityacrosstheUK.MissionZero:IndependentReviewofNetZero,publishedinJanuary2022,wasunequivocalinitsassessmentthattheplansetoutintheNetZeroStrategywastherightone,whilstprovidingrecommendationstostrengthenourdelivery.TheCCC’s2022ProgressReporttoParliamentfurtherconfirmsourapproach.Theglobaltransitiontonetzerowillseetrillionsofpoundsreallocatedtonewlowcarbonproductsandservices.McKinseyestimatesaglobalmarketopportunityof£1trillionforBritishbusinessesintheperiodto2030.2Wearenotaloneinrecognisingtheeconomicbenefitsthetransitionwillbring.ThroughourCOP26presidency,weencouragedanincreaseinnetzeropledgesfrom30%tomorethan90%ofglobalGDP.3SincethepublicationoftheBritishEnergySecurityStrategyandNetZeroStrategywehaveseentheUStakedecisiveactionthroughtheInflationReductionActandtheEUhassetoutitsambitiousplanstogrowgreenindustriesthroughtheGreenDealIndustrialPlan.TheUKwelcomesincreasedambitiononclimatechange.Alleconomieswillneedtotakedecisivestepstoreduceglobalemissions.Indeed,increasedinvestmentinnetzerotechnologiesgloballywillunlockinnovationanddrivecostsdown,aswellascreateopportunitiesforUKexports(e.g.,forCCUSandHydrogen).Alongsideourpartnersandallies,weremainconvincedthatamultilateralapproachisnecessarytotackleclimatechange.Wewillcontinuetoworkwithpartnerstoensurethatthecleantransitiondoesnotcomeattheexpenseofourtrustedglobalsupplychainsandtherules-basedinternationalsystem.Wedonotwishtoparticipateinadiscriminatorysubsidyrace,whichwillbeharmfultomanynations’intentionstotransition.Ourfocusisonrespondingtoinvestorandindustrycallstoprovidethelong-termcertainty,strategicde-risking,andconfidence,theyneedtoinvestinthetechnologiesandinfrastructurenecessarytodeliverourenergysecurityandnetzeroobjectives.Investmentisthekeytodeliveringourenergysecurity,carbontargetsandseizingtheeconomicbenefits–thejobs,exports,andproductivitygains–ofthetransition.WeneedinvestmentatscaleacrossarangeofsectorstorapidlyrolloutexistingPoweringUpBritain–TheNetZeroGrowthPlan9technologiesandbringthroughtransformativenewtechnologies.Establishedtechnologies,suchasoffshorewindturbines,needtobeconstructedatpacetomeetourambitionsfordecarbonisingpoweranddeliveringwholesaleUKelectricitypricesthatrankamongthecheapestinEuropeby2035.Meanwhile,asignificantproportionoftechnologieswewillneedfor2050arecurrentlyatthedemonstrationorprototypephase.4Innovationiscentraltoourapproachandcreatesopportunitiestodevelopnewtechnologies,businessmodelsandsystemstoreachnetzeroandfacilitateinvestmenttosupportfurtherdevelopment.Figure2:Lowcarbon-investmentas%ofGDPTheUKhasdemonstratedthatgreenandgrowthgohandinhandoverthelastdecadeandwearedeterminedtobuildonthis.BetweenthefirstContractsforDifference(CfD)renewableallocationroundin2015,andthefourthin2022,theperunit(MWh)priceofoffshorewindfellbyalmost70%.5Wehavedeliveredthesecondhighestamountofrecordedlow-carboninvestmentcumulativelyacrossEuropeoverthelast5yearsandestimatethatsince2010,theUKhasseen£198billionofinvestmentintolowcarbonenergy,throughamixtureofgovernmentfunding,privateinvestmentandleviesonconsumerbills.6Between2021and2022alone,itisestimatedthat£50billionofnewinvestmentshavebeenmadeinlow-carbonsectorsintheUK.Thisinvestmenthashadanimpactacrossrenewables,hydrogen,CCUS,nuclear,sustainablematerials,energystorage,electrifiedtransportandcleanheat.7PoweringUpBritain–TheNetZeroGrowthPlan10Governmentpolicyandfundingcommitmentsarealreadyleadingtorealoutcomes.Governmentcommitted£30billionofdomesticinvestmentforthegreenindustrialrevolutionatSpendingReview2021,£6billionforenergyefficiencyfor2025-28attheAutumnStatement2022,andupto£20billionforCCUSannouncedatSpringBudget2023.SinceNovember2020,over80,000greenjobsarecurrentlybeingsupportedorareinthepipelineacrosstheUKeconomyasaresultofnewgovernmentpoliciesandspending.Wearetargetingpublicfundingstrategically,asdifferentgreentechnologiesandinfrastructurerequiredifferentfinancialsupportdependingonitsmaturity.ThisissupportedbyinvestmentsfromacrosstheUK’spublicfinancinginstitutions.TherearerolesfortheUKInfrastructureBank(UKIB),BritishBusinessBank(BBB),andUKResearchandInnovation(UKRI)–asoutlinedinour2023GreenFinanceStrategy.TheUKIBalonehas£22billionoffinancialcapacityandacentralmissiontotackleclimatechangeandpromoteeconomicgrowthacrosstheUK.TheUKIBexpectscleanenergytobethelargestsectorinitsportfolioandisbuildingastrongpipelineofopportunitiesinareassuchashydrogen,CCUS,electricitystorageandcleantransport.TheBBB,thegovernment-ownedeconomicdevelopmentbank,supported£505millionofequityinvestmentincleantechnologycompaniesbetween2014andendofAugust2022.OurvisionforatransitiontoagreenandsustainablefuturewillprovidenewopportunitiestogrowandleveluptheUKeconomyandsupporthundredsofthousandsofgreenjobs.Thelowcarbontransitionshouldbefairandaffordableandnotnegativelyimpactbusinesses.Infact,worldleadinghydrogenhubsinplaceslikeTeesside,arebringingbackinvestmenttoareasthatexperiencedsignificantdeclineduringthe20thcentury.ThroughourNorthSeaTransitionDeal,we’rehelpingtodecarboniseoilandgasandprotectingthousandsofexistingjobs.Ifwedon’tsupporttheeconomywidenetzerotransition,notonlywillwemissourcarbontargets,butwewillmissoutontheopportunitiesgreengrowthpresentsbusinessandconsumers.InvestmentshavebeenmadeacrosstheUK,providingasubstantialboosttoregionalgrowth.PoweringUpBritain–TheNetZeroGrowthPlan11Figure3:InvestmentscontributingtonetzeroacrosstheUKsinceautumn2021WewillcontinuetostayattheforefrontoftheeconomictransformationtonetzeroandretainouredgetounlockfurtheropportunitiestoinvestandgrowgreenindustriesintheUK.TheUKisamongthemostexcitingcountriesintheworldforgreenindustrieswithone-in-sixofallForeignDirectInvestment(FDI)backedcleantechprojectsinEuropein2020.8Thisplanandtheaccompanyingplan,PoweringUpBritain–EnergySecurity,deliverspolicyandfundingmeasurestocementtheUKasaprimedestinationforlong-terminvestment,growingourgreenindustrialbaseandunlockingexportopportunitiesforBritishbusinesses.Theseplanswillseeusbuildonourstrengthsandourcomprehensivetrackrecordacrossarangeofsectors.•Offshorewind–Wecurrentlyhavetheworld’slargestoperationaloffshorewindfarmproject,Hornsea2,andthesecond,thirdandfourthlargestoperationaloffshorewindfarmprojectsintheworld.OurinnovativepolicyinstrumentsliketheCfDschememaketheUKaworldleaderinoffshorewind.•Nuclear–NuclearenergyhasbeenusedreliablyandsafelyintheUKforover60yearsandwehaveextensiveexperienceofthefullnuclearlifecycle,fromfront-enddesignthroughtodecommissioning.Oneoftheworld’smostadvancednucleartechnologiesisbeingdevelopedhereintheUK,withupto£210millionawardedtoRolls-RoyceSMRLtdinNovember2021todevelopfurthertheirdesignforoneoftheworld’sfirstSmallModularReactors(SMRs).Wearematchingtheglobalcompetitionandscaling-upournuclearprogrammebyhavinglaunchedGBN,responsiblefordrivingdeliveryofnewnuclearprojects,backedwiththefundingitneeds.PoweringUpBritain–TheNetZeroGrowthPlan12•CCUS–TheUKhasoneofthegreatestCO2storagepotentialsofanycountryintheworld,theUKContinentalShelf,withpotentialstoragecapacityestimatedat78billiontonnesprovidingsubstantialopportunitiesforgrowththroughinternationaltrade.9TheGovernmentwillprovideupto£20billionoffundingforearlydeploymentofCCUStounlockprivateinvestmentandjobs.GovernmentismakinganambitiousseriesofannouncementsonCCUS,followingthe£20billionfundingannouncedatSpringBudget2023,includingannouncingtheeightprojectstoprogresstonegotiationstoformthefirsttwoCCUSclusters,intheNorthEastandNorthWest.Theseprojectsarenottheextentofourambition.LaterthisyearwewillsetoutaprocesstolaunchthenextexpansionofTrack-1,andwehavenowlaunchedTrack-2.AmajorCO2storagelicensingroundwaslaunchedlastyear,andwearedevelopingalonger-termvisiontosetouthowCCUSwillsupportnetzero.•Hydrogen–TheUK’snaturalassetsandtechnicalexpertisemeanswecanbeanearlymoverinbothelectrolytic‘green’hydrogenandCCUS-enabled‘blue’hydrogenproduction.Thereareover200companiesworkingonhydrogenandfuelcelltechnologiesintheUK,andweconsistentlyfeatureinthetoptencountriesgloballyforhydrogentechnologypatentrates.Weareannouncingashortlistofprojectsforduediligenceandconfirmingfurtherdetailsonelectrolytichydrogenallocationrounds.•ElectricVehicleuptakeandinfrastructure–In2022,theUKhadthesecondhighestbatteryelectriccarsalesinEurope,bringingthetotalnumberofplug-invehiclesonUKroadstooveronemillionlicensed,ofwhicharound60%arebatteryelectric.10Charginginfrastructureisalsospeedingahead:publicchargingdeviceshavemorethantripledfrom10,300devicesinJanuary2019toover38,700inMarch2023.WearebuildingonthatbypublishingafinalconsultationonanambitiousZeroEmissionVehiclemandate,requiringanincreasingpercentageofnewcarandvansalestobezeroemission.•GreenFinance–Behindeverynewnetzeroinvestment,sitsateamoffinancial,legal,dataandaccountancyexperts,presentingahugeopportunityfortheUKfinancialsectorandprofessionalservices.TheUK’sfinancialsectorisalreadyleadsingreenprojectfinancingandinvestmentanalytics.Wesetouthowwewillcapturethisopportunityinthe2023GreenFinanceStrategy.•ResearchandTechsector–TheUKisaleadingsciencesuperpower.Wearewidelyrecognisedasgloballeadersincuttingedgeareaslikethemostpromisingfusionenergytechnologies,andboastaworld-classresearchbase,withthreeofthetop10universitiesglobally.11Thismeansweareoneofthebestplacestoconceive,developanddelivergreentechnologies,puttingusinastrongpositiontocapitaliseontheopportunitiesofanetzeroeconomy.TherearesignificantopportunitiesforUKindustrythewholewaythroughthesupplychain.WewantUKcompaniestocontinueplayingakeyroleingreensupplyPoweringUpBritain–TheNetZeroGrowthPlan13chains,fromnucleartoCCUSandelectricvehicles.Forexample,nuclearpowerplantHinkleyPointChasspentover£4.1billionwithsuppliersintheSouthwesttodateandEDFanticipatethat64%oftheconstructionvalueoftheprojectwillbespentwithUKfirms,withover22,000peoplenationwidecurrentlyworkingontheproject.12WearesupportingthedevelopmentandgrowthofresilientUKsupplychainsandtargetingpublicfundingstrategicallyforkeyindustries.OurFloatingOffshoreWindInvestmentSchemewillprovideupto£160milliontokickstartinvestmentinportinfrastructureprojects,supportingthegrowthofwindpowermanufacturingintheUK.Tosecuretheeconomicopportunitiesofthetransitiontocleanheat,£30millionwillbeprovidedthroughtheHeatPumpInvestmentAccelerator,leveragingupto£270millionofprivateinvestmentintomanufacturingandassociatedsupplychains.Wewillcontinuetoanchorandsupportthedevelopmentofthosesupplychainscriticaltodeliveringournetzeroandenergysecurityambitions,whilepromotingtherule-basedinternationalsystem.FollowingpublicationoftheCriticalMineralsStrategyinJuly2022andtheCriticalMineralsRefreshinMarch2023,wewillgofurtherwithasemiconductorstrategytobepublishedassoonaspossible.Fortheautomotivesector,governmenthasalreadycommittedtosupportingthetransitiontoelectricvehicleswithover£800millioncapitalfundingmadeavailableatthelastspendingreview.WewanttheUKtobeoneofthebestlocationsintheworldtomanufactureelectricvehicles,withanend-to-endzeroemissionvehiclesupplychain.OurambitiousZEVmandatewillputUKmanufacturersattheforefrontoftheelectricrevolution,supportedbydeliveryofcharginginfrastructurethatgovernmentisfundinginpartnershipwithindustrytoboostdemandandbyourcapitalallowancesreformstoboostinvestmentwiththeintroductionoffullexpensingfor3years.Inaddition,theAutomotiveTransformationFundandthelong-termAdvancedPropulsionCentreR&Dprogrammearesupportingthedevelopmentandcommercialisationofcutting-edgeautomotivetechnologies.Inthecomingmonths,afterengagementwithindustry,theGovernmentwillbuildontheseinterventionstotakedecisiveactiontoensurefutureinvestmentinzeroemissionvehiclemanufacturing.WearealsosupportingUKindustrytoincreasetheirexports.Theglobaltransitiontonetzerocreatesamajormarketopportunitywithexportswithinlowcarbonandrenewableenergyindustriesgrowingsignificantlyfasterthanexportsfromthebroadereconomy.In2021,itisestimatedexportsfromthesesectorsincreasedby67%from2020,comparedtototalexportswhichincreasedby6%.13WearesupportingUKfirmstoexportthroughUKExportFinance(UKEF).In2021-2022alone,theeconomicimpactofthenewloans,insuranceandguaranteesprovidedbyUKEFacrossthewholeeconomywasupto£4.3billionofUKGrossValueAdded(GVA)andanestimatedupto72,000UKjobs–40,000directlyemployedbyexportersandafurther32,000jobssupportedindirectlythroughtheUKsupplychain.WeareincreasingUKExportFinance’smaximumexposurelimitfromPoweringUpBritain–TheNetZeroGrowthPlan14£50billionto£60billion.ThisprovidesadditionalcapacityforUKEFtosupportexporters,includingingreenindustries,towincontracts,fulfilordersandgetpaid.Thetransitiontonetzeroalsoopensupopportunitiestocreatewell-paidandhigh-skilledjobs,supportlevellingupandreinvigorateourindustrialheartlands.ItisestimatedthatsinceNovember2020,over80,000greenjobsarecurrentlybeingsupportedorinthepipelineacrosstheUKeconomyasaresultofnewgovernmentpoliciesandspending.14NorthEastandNorthWestEngland,YorkshireandtheHumber,theMidlands,Scotland,WalesandNorthernIrelandwilleachhaveuniquebenefitsfromthetransition.TheONSestimatea16%increaseindirectemploymentinlowcarbonbusinessesacrosstheeconomyfrom2020to2021.Separately,newanalysisofgreenjobsadvertisementsbytheDepartmentforEnergySecurityandNetZerosuggeststhatwithinsomepartsofthegreeneconomy,jobsadvertisedofferhighersalariescomparedtotheUKaverage.Figure4:Advertisedsalaryindexbynetzerosectorusingonlinejobadvertdata,UK,2014to2022.Averagesalaryindexbysector(6-monthlyrollingaverage).PoweringUpBritain–TheNetZeroGrowthPlan15Thegovernmentisworkingcloselywithindustryandthefinancialsectortounderstandanybarrierstoinvestmenttheyarefacing,andcommunicatethesupport,incentivesandopportunitiesavailabletoinvestors.•Governmenthaspublishedthe2023GreenFinanceStrategy,settingouthowGovernmentwillutilisealltheleversavailabletomobilisetheprivateinvestmentneededtodelivernetzeroaswellashowtheUKwilldeliveronitsambitiontobecometheworld’sfirstNetZero-alignedFinanceCentre,andhowgovernmentwillhelpcementtheUK’sstatusasaworld-leadinggreenfinancecentre.•Themeasuresinthe2023GreenFinanceStrategysetoutapathwaytodeliveronthiscommitmentalongwithreformstotheUKpensionsandinsurancesectorthatwillleveragetheUK’sdeepcapitalmarketstoinvestinthenetzerotransitionandgreenindustriesintheUK.Forexample,throughSolvencyUK,wewillprovideincentivesforinsurerstoincreaseinvestmentinlong-termproductiveassets,includinginnovativegreenassetsandrenewableenergyinfrastructure.•Wearerespondingtofeedbackfrominvestorsontheneedforgovernmenttoprovideclarityonhowwearemakingnewnetzerotechnologiesandsectorsinvestable.Throughout2023,wewilldevelopandpublishaseriesofnetzeroinvestmentroadmaps.Thesewillarticulateinvestmentneedsbysectorandsummarisetherelevantgovernmentpolicyandopportunitiestosupportinvestmentdecisions.Wehavepublishedaroadmaponoffshorewind,andwillshortlypublisharoadmaponheatpumps,aswellasupdatedroadmapsonCCUS,andhydrogen.Wewillalsopublisharoadmaptoguidenaturepositiveinvestmentinkeysectorsby2024.•The2023GreenFinanceStrategysetsouthowpoliciesinthisplanwillworkalongsideinterventionsbytheUK’spublicfinanceinstitutions,includingUKIB,toaddressfinancingbarriersandacceleratethedeploymentofnetzerotechnologies.•Governmentisestablishinganewpartnershiptoworkwithkeyleadersacrossbusinessandfinancetosupportthedeliveryofournetzerotarget,formingasharedviewoftheactionsneededacrossgovernmentandindustrytosecurethesubstantialeconomicopportunitiesfortheUKfromnetzerothroughanewNetZeroBusiness&InvestmentGroup.Addressingsignificantappetitefromthebusinessandfinancecommunities,thegroupwillprovideastructuredcross-cuttingforumtohelpacceleratedecarbonisationinkeybusinesssectorsandstrategicallyaddressthebarriersbusinesssectorsfaceinreducingtheiremissions.Toachieveourambitions,wearesettingoutintheseplansarangeofdifferentleversatourdisposalwhichplaytotheuniquestrengthsoftheUK.Fromtaxtoregulationthroughplanningreform,targetedspendingandinternationalcollaboration,ourpolicyistailoredtosecureprivateinvestment.PoweringUpBritain–TheNetZeroGrowthPlan16•Astrongandsupportivebusinessenvironment:thegovernmentiscommittedtomakingtheUKthebestplaceintheworldtostartandgrowabusinessandweareensuringtheUK’staxsystemisoneofthemostcompetitiveoftheworld’smajoreconomies.AtSpringBudget2023,weannouncedreformstocapitalallowanceswhichgivetheUKthejointmostgenerouscapitalallowanceregimeintheOECD.Weintroducedfullexpensingforthreeyearstosupportbusinessinvestment,withacommitmenttomakethereformpermanentwhenthefiscalconditionsallow;andincreasedtaxreliefsforR&DintensiveSmallandMediumEnterprises(SMEs).Together,theseensuretheUKbusinesstaxsystemisoneofthemostcompetitiveoftheworld’smajoreconomies.•Long-termpolicycertaintyandagileandsmartregulationtodriveinvestment:wearesettingaclearpolicyframeworkonenergysecurityandnetzero,sobusinessescanplanandinvestwithconfidence.Smartandagileregulation,includingtheZeroEmissionVehiclesmandate,theconsultationontheSustainableAviationFuelsmandateaswellasinareassuchasbuildingefficiencyandheatpumps,willhelpdrivedemandfornewproductsandservicesandaccelerateinnovationandinvestment.SirPatrickVallance’sPro-InnovationRegulationofTechnologiesReviewongreenindustriesdemonstrateswecanmovequicklytoensureregulationsupportsinnovationandinvestment.Governmentwillbreakdownthebarrierstodeployment,toallowprojectsandinvestmenttohappenmorequickly.•Revenuemodels,financingmechanismsandmarketframeworks:inemergingsectorsweareestablishingclearmarketframeworks(includingthroughtheEnergyBill),sotheprivatesectorcaninvestwithconfidence.Thisincludesrevenuemodelsthatgiveinvestorsmorecertaintyaboutthereturnstheywillmake:fromCfDsandbusinessmodelsforhydrogen,throughtotheNuclearRegulatedAssetBase(RAB)modelandmodelsforCCUS.Tocomplementthis,ourgreenfinancepolicyframeworkseekstoensuresufficientprivatecapitalisavailabletofinanceournetzeroobjectives.•Targetedpublicinvestment:Publicspendinghasaroletoplaywhereindustryandhouseholdscannotinvest,forinstancemakingourschoolsandhospitalsgreenerthroughthePublicSectorDecarbonisationScheme(PSDS).Further,inareaswhereinvestorsfacegreaterriskduetothenoveltyorscaleofaproject,governmentcanco-investalongsidetheprivatesectortoensuregoodprojectshappen.Governmentdoesthisdirectly,forexamplethroughtheAdvancedFuelsFundforSustainableAviationFuels,orthroughourmajorpublicfinanceinstitutions,includingthe£22billionUKIB.Wehavesetouttheroleoftheseinstitutionsindetailinour2023GreenFinanceStrategy.Wealsocontinuetoprovidesignificantpublicinvestmentinresearchandinnovation,with£4.2billioninnetzeroresearchandinnovationovertheperiodfrom2022-25.PoweringUpBritain–TheNetZeroGrowthPlan17Figure5:TheUK’sattractivebusinessandinvestmentenvironment.Theroadtonetzero:deliveringlongtermcertaintythroughtheNetZeroStrategy‘deliverypathway’TheNetZeroStrategysetoutanindicative‘deliverypathway’ofemissionsreductionstomeetourclimatetargetsuptoCarbonBudget6(2033-37)andstayontrackfornetzeroby2050.Thisdrawsoninsightsfrommodelled2050netzeroscenarios,exploringtherangeofpotentialenergyandtechnologysolutions,andisdesignedtodriveprogresswhilepreservingoptionsandallowingroomforchange,recognisingthelevelofuncertaintyinlong-termplansofthiskind.Itisbasedonourunderstandingtodayofthepotentialforeachsectortodecarbonise,consideringthebalancebetweensectorsthatisoptimalfortheentireeconomyintermsofdeliveryandcost.Brokendownbysector,ourpathwayoutlinestheprogressweexpectacrosstheeconomy.Sectorshavethepotentialtomakeprogressatdifferentrates,dependingontheavailabilityanddeploymentoftechnologicalsolutions,developmentofsupplychains,financing,andinfrastructureandavarietyofupsideanddownsiderisks.Forexample,thecostsofsolar,offshore-windandbatterieshaveconsistentlyfallenfasterthanexpected.15Similarly,consumerbehaviourandtrendsareunpredictableandcancatalyserealisationofcarbonsavingssoonerthanexpected.Forinstance,recentsalesofbatteryelectricvehicleshavebeenexceedingexpectations.Theseindicativesectorpathways,presentedasrangesforresidualemissionstoreflecttheinherentuncertainty,helptodrivechangeandtoplanhowwecanremainontrackfortheuniqueeconomicandinstitutionalPoweringUpBritain–TheNetZeroGrowthPlan18environmentoftheUKtoprovidelong-termcertaintyanddirectionformobilisinginvestmenttomeetourtargets.WewelcometheCCC’sviewandnewevidencefromtheIndependentReviewofNetZerothatthispathwayrepresentsaclearandcrediblerangeforemissionsreductionineachsectoroftheeconomy.Thefigurebelowshowsemissionsreductionsbasedoncentralassumptions,buttheseshouldnotbeviewedaspredictionsortargets:thepreciseemissionssavingsultimatelycontributedbyeachsectorarelikelytochange.TheTechnicalAnnexprovidesfurtherdetailontheseuncertainties.Figure6:Indicativedeliverypathwayto2037bysector,fromtheNetZeroStrategy.DeliveringtheNetZeroStrategy:Highlightsfromthepast18monthsNearly18monthsonfromtheNetZeroStrategy,wehavemadestrongprogress.TheCCC’s2022ProgressReporttoParliamentandtheIndependentReviewofNetZerohavehighlightedareaswherewehavemadeparticularlystrongprogressoverthepastyear–andsubstantialachievementshavebeenmadeinanumberofareasacrossourdeliverypathway.Ourproposalsandpolicies,detailedinourCarbonBudgetDeliveryPlan,areadynamiclong-termplanforatransitionthatwilltakeplaceoverthenext15years,settingusoncoursetoreachnetzeroby2050.PoweringUpBritain–TheNetZeroGrowthPlan19Wecommittedto…Sincethen,wehave…Fullydecarbonisethepowersystemby2035,including:•Upto50GWofoffshorewindby2030,including5GWoffloatingoffshorewind.•Afinalinvestmentdecisiononalarge-scalenuclearplant.•In2021,theshareofgenerationfromrenewablesreached40%,includingfrombioenergy,windandsolar,and15%fromnuclear.•Reached14GWofoffshorewindinstalled.Round4willdeliver7GWofadditionaloffshorewindby2027withfutureAllocationRoundsexpectedtobringevengreatercapacity.•LaunchedGreatBritishNuclear.•Investedapproximately£700milliontotakea50%stakeinSizewellCinNovember2022.DrivethegrowthofLowCarbonHydrogenanddelivertheNorthSeaTransitionDeal(NSTD),including:•10GWofhydrogenproductioncapacityby2030•IndustrialDecarbonisationandHydrogenRevenueSupport(IDHRS)schemetofundnewhydrogenandindustrialcarboncapturebusinessmodels•TheNSTDwillachievea60MtreductioninUKgreenhousegasemissionswhichputsthesectoronapathtodeliveranetzerobasinby2050.•Launchedthe£240millionNetZeroHydrogenFundinApril2022andthefirstelectrolytichydrogenallocationroundinJuly2022,andpublishedtheHeadsofTermsfortheHydrogenProductionBusinessModelinDecember2022.•PublishedtheNorthSeaTransitionDealOneYearOnreport.Decarboniseindustryandtransformourindustrialheartlands,including:•Deliveringfourcarboncaptureusageandstorage(CCUS)clusters•£315millionIndustrialEnergyTransformationFund(IETF)tofuture-proofindustrialsectors.•ConsultingonanetzeroconsistentETScap.•PublishedapackageontheIndustrialCarbonCapture(ICC)businessmodelsinDecember2022.•Allocated£150millioninsupporttoindustrythroughtheIETFsincesummer2020.•ConsultedwithindustryontheETScaptoincentivisecosteffectiveabatement.PoweringUpBritain–TheNetZeroGrowthPlan20Wecommittedto…Sincethen,wehave…Setapathtoallnewheatingappliancesinhomesandworkplacesfrom2035beinglowcarbon,including:•£450millionBoilerUpgradeSchemetosupporthouseholdstoswitchtolow-carbonheating•£1.65billioninto‘helptoheat’schemes,includingtheSocialHousingDecarbonisationSchemeandHomeUpgradeGrants.•Launchedthe£450millionBoilerUpgradeScheme,receiving14,000voucherapplicationssinceitopenedon23May2022.•Funded‘HelptoHeat’schemestoreduceenergybillsandimproveenergyefficiency,including:−TheLocalAuthorityDeliveryScheme(LAD)Phase1and2allocated£500milliontodeliverupgradesworthupto£10,000perhousehold.Thesehavedeliveredimprovementstocirca36,000homes,withaverageannualenergybillsavingsofapproximately£250perhousehold.−SustainableWarmthis£502millionprogrammedeliveringLADPhase3andHomeUpgradeGrant(HUG)Phase1to30September2023,targetingdeliveryof20-22,000on-gasgridhomesunderLAD3and5-6,000off-gasgridhomesunderHUG1,withestimatedenergybillsavingsof£300perhousehold.−SocialHousingDecarbonisationFund(SHDF)haveallocated£179milliontoupgradeupto20,000socialhomes.SuccessfulbidsforSHDFWave2.1wereannouncedinMarch2023with£778millionofferedto107projects.MatchfundingfromWave2.1applicantsprovidesanadditional£1.1billion.16AcceleratetheshifttoZeroEmissionVehiclesandkickstartzeroemissionsinternationaltravelandshipping,including:•Endthesaleofnewpetrolanddieselcarsby2030•£620millionforzeroemissionvehiclegrantsandEVInfrastructure•Increasedthetotalnumberofplug-invehiclesonUKroadstooveronemillionlicensed,ofwhicharound60%arebatteryelectric.17•PublishedtheCyclingandWalkingInvestmentStrategy(CWIS2),includinganobjectivetodeliveraworld-classcyclingandwalkingnetworkinEnglandby2040.•LaunchedtheexecutiveagencyActiveTravelEnglandtosupportlocalauthoritiesandoverseeextensivefundingtodevelopandbuildnewwalking,wheelingandcyclingroutes.PoweringUpBritain–TheNetZeroGrowthPlan21Wecommittedto…Sincethen,wehave…Protectournaturalenvironmentandbuildourresiliencetoclimatechange,including:•Pilotourenvironmentallandmanagementschemesandrollthemoutfullybytheendofthisparliament.•Supportlow-carbonfarmingandagriculturalinnovationthroughtheFarmingInvestmentFund(FIF)andFarmingInnovationProgramme(FIP).•Setalegallybindingtargettoincreasetreecanopyandwoodlandcoverto16.5%oftotallandareainEnglandby2050.•Worktowardsrestoringapproximately280,000hectaresofpeatinEnglandby2050.•Publishedour‘EnvironmentalLandManagementupdate’inJanuary2023,whichsetsouthowwewillsupportfarmersandlandmanagerstosustainablyproducefood,whiledeliveringbenefitsforclimateandnature.−Thisincludedtheacceleratedroll-outoftheSustainableFarmingIncentive(SFI)andannouncedsixnewstandards,contributingtoourtargettodecarboniseagriculture.−WeannouncedtheopeningofroundtwooftheLandscapeRecovery(LR)schemewhichwillfocusonradical,large-scaleprojectsonnetzero,protectedsitesandhabitatcreation,includingtreesandpeatland.•Launchedthe£270millionFarmingInnovationProgramme(FIP).InpartnershipwithUKRI,thegovernmenthasalreadycommitted£68millionofFIPuptotheendof2022andisprovidingfurthergrantsof£51millionin2023.•Launchedthe£5.6millionPaludicultureExplorationFund(2022-2025)tosupporttheuptakeofpaludiculturewhichofferstheopportunitytocontinueprofitableagriculturewhilemanaginglandinawaythatsupportsnetzero.DevelopanddeployGreenhouseGasRemovaltechnologiesatscale,including:•DevelopmarketsandincentivesforinvestmentinGGRs•Deliverupto£100millioninnovationfunding•LaunchacallforevidenceexploringtheroleoftheUKETSasapotentiallong-termmarketforGGRs•Publishedconsultationsonbothatechnology-neutralbusinessmodelforGGRs,andapowerBECCSspecificbusinessmodel,withresponsesduethisyear.•Providedover£54millionofgovernmentfundingtothemostpromisingGGRdemonstrationprojectsinourinnovationprogramme.PoweringUpBritain–TheNetZeroGrowthPlan22Werecognisetheimportanceofthegovernment’sownset-upinensuringsuccessfuldeliveryofnetzero.Ensuringthatdepartmentsareworkingtogethertodelivercoordinatedactionconsistentwithourlong-termclimateaimshasbeenapriority.Recentprogressincludes:•Publishingthenetzeroandenergysecurityoutcomedeliveryplan(ODP)toprovideaclear,joined-upplanfordeliveryacrossourdomesticandinternationalclimateagenda.•EstablishingtheDomesticandEconomicAffairs(Energy,ClimateandNetZero)CabinetCommitteetodrivecoordinatedactionacrossdepartmentsandensurenetzeroisattheheartofgovernmentdecision-making.•Workingwithregulatorstostrengthentheirfunctionstosupportthenetzerotransition.Thismightbethroughregulationitself,usinglightertouchapproachessuchasStrategyandPolicyStatements,orembeddingnetzeroasaninternalbenchmarkingtool.•Embeddingasystems-drivenapproachtocomplexpolicyproblems,withadedicatednetzerosystemsteamengagingacrossgovernmenttoupskillcivilservantsinsystemsapproaches.•Managinginterdependenciesusingsystemstoolstoidentifyandtrackrisksacrossthenetzeroportfolioandunderstandtheirwidereffects.•NegotiatingseveraldevolutiondealssinceAugust2022whichcontainsharedagreementsinrelationtonetzero,climateadaptationorcleanenergy,includingthedeeperdevolutiondealswithGreaterManchesterandWestMidlandsCombinedAuthorities.•PartneringwithLocalGovernmentthroughourcross-departmentalLocalNetZeroForumtoaddresskeynetzeropolicyanddeliveryissuesfacinglocalgovernment.WhatcomesnextThisplanispublishedalongsidePoweringUpBritain–EnergySecurity.TheseplanssetoutourambitiouspolicieswhichwillensurewecandeliverenergysecurityandincreasetheUK’sinternationaleconomiccompetitiveness,whiledeliveringonnetzero.Therearetwosidesofthis:PoweringUpBritain–EnergySecurityisfocusedonchangingdecadesofrelianceonimportedfossilfuels,byreducingdemandandboostinghomegrownenergy,givingenergyresiliencethepriorityitdeserves.PoweringUpBritain–theNetZeroGrowthPlanfocusesonourlong-termdecarbonisationtrajectoryandhowitcanimprovetheUK’scompetitiveness,deliveranindustrialrenaissanceandlevelupthewholeoftheUnitedKingdom.Thesearecomplementaryandshouldbereadtogether.Whilecomprehensive,theywillcontinuetoevolveandbeflexibletoadapttochangingcircumstances.PoweringUpBritain–TheNetZeroGrowthPlan23Together,theseplansprovidethelong-termcertainty,revenuemodelsandframeworksandtargetedinvestmentthatwillacceleratedeliveryofourobjectives.Thesubsequentchaptersofthisplanoutlineourprogressoverthepastyearingreaterdetailandsummariseournextstepstodelivering.Thechaptersaregroupedintosectorsandenablers,bothreflectingthecategoriesidentifiedintheNetZeroStrategy:•Sectors:eachresponsibleforadefinedrangeofcarbonsavingsbetweennowand2050.SectorscoverPower;FuelSupply&Hydrogen;Industry;HeatandBuildings;Transport;NaturalResources,WasteandF-gases;andGreenhouseGasRemovals(GGRs).•Enablers:eachsupportthetransitionacrosstheeconomycovering:Innovation;GreenInvestment;NetZeroWorkforceandSkills;EmbeddingNetZeroinGovernment;LocalNetZero;EmpoweringthePublicandBusinesstoMakeGreenChoices;InternationalLeadershipandCollaboration.IncorporatingrecommendationsproposedbytheCCCandtheIndependentReviewofNetZerowillturbochargedelivery.ManyofthepolicyannouncementshavebeeninformedbytheCCCanalysisofgovernment’sprogress,containedintheir2022ProgressReporttoParliament.AfullresponsetotheCCCrecommendationsintheir2022ProgressReporttoParliamentiscoveredinaseparateannex.Moreover,wecanalsoconfirmthatwearepartlyorfullyactingupon23recommendationsfromtheIndependentReviewofNetZeroreport’s25recommendationsfor2025.ThisincludesexpeditingthesetupofGreatBritishNuclear,announcinganewtaskforcetodeliveronourambitionsforsolarpower,andsettingoutlong-termcommitmentstoCCUS.TheGovernmentthankstheRtHonChrisSkidmoreMPforhiscontributiontotheagendathroughhisreport.ThefullresponsetotherecommendationssetoutintheIndependentReviewofNetZeroiscoveredinaseparateannex.Withtheannouncements,proposalsandpoliciescontainedwithinthisplan,wewillenablecarbonbudgetstobemet.TheCarbonBudgetDeliveryPlansetsoutapackageofproposalsandpoliciesthatenableustomeetournextthreecarbonbudgets,uptoCarbonBudget6in2037,incompliancewithsection14oftheClimateChangeAct(2008).CarbonBudget5wassetonthe80%by2050trajectory,beforetheUKlegislatedfornetzeroby2050.CarbonBudget6onwardsissetonanetzeroby2050trajectory,asistheUK’sNDCannouncedinDecember2020.ThiscommitstheUKtoreduceallgreenhousegasemissionsbyatleast68%by2030on1990levels.Aswellasmeetingourcarbonbudgets,thepoliciessetoutherewillprogressustowardstheUKNDCtarget.TheUKremainsfullycommittedtoits2030NDCtarget,whichtheCCChasadvisedisconsistentwiththeParisAgreementtemperaturegoal.18TheUK’stargetisestimatedtorequirethefastestrateofreductioningreenhousegasesbetween1990and2030ofallmajorPoweringUpBritain–TheNetZeroGrowthPlan24economies.Wewillkeepourpolicypackageunderreviewanditerateitascircumstancesdevelop.Finally,updatedprojectionsandtechnicalupdatestothepathwayareincludedintheTechnicalAnnex.PoweringUpBritain–TheNetZeroGrowthPlan25ReducingEmissionsacrosstheEconomyPoweringUpBritain–TheNetZeroGrowthPlan26ReducingEmissionsacrosstheEconomyPowerSummaryAsecure,reliable,cost-effective,decarbonisedpowersectoriscriticalforamodernindustrialeconomy.IntheNetZeroStrategy,governmentcommittedtohaveafullylow-carbonpowersectorby2035,subjecttosecurityofsupply,tounderpinournetzeroambitions.19BoththeCCCandIndependentReviewofNetZerorecognisethekeyrolethatlowcarbonelectricityplaysindeliveringalowcarboneconomyconsistentwithnetzero.TheyalsonotedtheessentialrolearesilientandenergysecurepowersystemplaysinthegrowingandfunctioningoftheUK’seconomyandsociety.Todeliveronthesegoalsweneedtomobilisesignificantprivateinvestmentintolowcarbontechnologiesandtheirassociatedsupplychains,acrossgeneration,networks,storageandflexibility.WehavetakenmajorstepssincepublishingtheNetZeroStrategy.Ourpoliciesandincentivescreatemarketsforinvestmentandsectorgrowth,offertargetedfundingsupportPoweringUpBritain–TheNetZeroGrowthPlan27toreducetechnologyandinfrastructurecosts,andprovidelong-termclarityandcertaintyintermsoffuturerevenuestreams.WehavedeliveredthelargestContractsforDifference(CfD)auctionforrenewableelectricityyet.WemadeahistoricdecisionbyinvestinginSizewellC,andwearecommittedtodevelopingapipelineofnewnuclearprojectsbeyondthis.WehavetakenNetZeroTeessidePowerforwardtonegotiationwhichcouldbetheUK’sfirsteverpowerCCUSproject.WeannouncedacomprehensiveReviewofElectricityMarketArrangements(REMA)inGB;andwewillcontinuetotakeforwardthelandmarkEnergyBillwhichcontainsmeasurestodeliveramoresecure,cleaner,andcheaperenergysystemandwecontinuetodriveforwardonouraims.WehavepublishedPoweringUpBritain–EnergySecurity,whichsetsouttheGovernment’splanstoenhanceourcountry’senergysecurity,diversifyingthrougharangeofsources;includingwind,solar,nuclearandhydrogen.EnergysecuritynecessarilyentailsthesmoothtransitiontolowcarbonenergyinlinewithNetZero,evenasweacknowledgethevitalrolenaturalgaswillplayforyearstocome.Decarbonisingthepowersectorwhilstmeetingapotential60%increaseinelectricitydemand,bythemiddleofnextdecade,hasthepotentialtobringforward£275–£375billionofinvestmentfromboththeprivateandpublicsectors.20Investmentintheelectricitynetworkwillsupporttheexpectedincreaseinpeakdemand,bringingforward£50-£150billionofinvestmentby2037.21Reinforcingtheonshoreelectricitynetworkcouldsupport20,000-80,000jobsby2037,inadditiontoprovidingfurtheremploymentinthesupplychain.22Inaddition,measurestoincreasestorageanddemandsideflexibilitycouldsupportupto7,000jobsacrossthesupplychainby2030.23Ourproposalsandpoliciesforgrowingtheoffshorewindsectorinlinewithourambitionforupto50GWcouldsupportupto90,000directandindirectjobs.24Fornuclear,weaimtotakeonenuclearprojecttoFinalInvestmentDecisionthisparliamentandtwointhenextparliament,includingSmallModularReactors(SMRs).Eachlarge-scalenuclearpowerplantcouldsupportuptoaround10,000jobsatpeakconstruction,inadditiontoprovidingfurtheremploymentinthesupplychain.25TheCCCandIndependentReviewofNetZerosetoutaseriesofrecommendationsforthepowersectorsuchasenablingandacceleratingthedeploymentoflowcarbontechnologies,networks,planningandbuildingsupplychain,skills,andtraining.Insomecases,theserecommendationsarealreadyalignedtogovernment'sactions.Forinstance,wearetakingforwardmostoftherenewableelectricityrelatedrecommendationsfromboththeIndependentReviewofNetZeroandCCCAnnualProgressReport,tohelpacceleraterenewabledeployment.Onsolar,thisincludesestablishinganewgovernment/industrysolartaskforce,developingasolardeliveryroadmap,andassessinglow-costfinancefromretaillendersforhomesandsmallbusinesspremises.WearealsoworkingtobuildUKtrainingandcertificationcapabilityforonshorePoweringUpBritain–TheNetZeroGrowthPlan28windandsolar,exploringmeasurestoincentiviseon-sitegenerationatmanufacturingfacilitiesandworkingtopublishtheBiomassStrategyin2023.TheGovernmenthasacceptedthemainrecommendationoftheIndependentReviewofNetZero.WehaveestablishedGreatBritishNuclearandwillbeproducingaroadmaplaterin2023.FurtherdetailscanbefoundinPoweringUpBritain–EnergySecurity.WearealsoworkingwiththeOfficeforNuclearRegulation(ONR)andDepartmentforWorkandPensionstoevolvebusinessandfinancearrangementstobettersupportONRinvestmentinfuturecapabilityandresources.WeagreewiththeIndependentReviewofNetZero'srecommendationontheReviewoftheElectricityMarketArrangements(REMA)andhavesetoutourplansfortheprogrammeinPoweringUpBritain-EnergySecurity.WeranourfirstconsultationfromJulytoOctober2022andpublishedthesummaryofresponsesinMarch2023.WeaimtopublishasecondREMAconsultationinAutumn2023andwilltakedecisionsonshorter-termreformsmorequicklywhereitisviabletodosothroughouttheREMAprogramme.WeaccepttheIndependentReviewofNetZerorecommendation,thatGovernmentshouldcommittooutliningaclearapproachtogasvs.electricity‘rebalancing’bytheendof2023/4andshouldmakesignificantprogressaffectingrelativepricesbytheendof2024.Rebalancingwillgeneratetheclearshort-termpricesignalnecessarytoshiftbothhouseholdsandbusinessestolower-carbon,moreenergyefficienttechnologieslikeheatpumps.ThisisvitaltomeetGovernment’sexistingdecarbonisationcommitments,includingourgoalof600,000heatpumpsinstalledperyearby2028.Indicativeemissionspathwayto2037In2021,poweremissionswerearound54MtCO2emakinguparound12%oftotalUKnetGHGemissions(includinginternationalaviationandshipping).Naturalgascombustioncurrentlymakesupthelargestshareoftheseemissions.Poweremissionshavedecreasedby6%since2019and73%since1990.26Thisdecreasehasresultedmainlyfromchangesinthemixoffuelsbeingusedforelectricitygeneration,includingthedeclineofcoalandgrowthofrenewables;togetherwithgreaterefficiencyresultingfromimprovementsintechnology.InlinewiththesectoralbreakdownoftheindicativepathwaysetoutintheNetZeroStrategy,comparedto2021emissionslevels,GHGemissionscouldneedtofallby42%to48%onaverageover2023-27,by69%to74%by2030and79%to84%onaverageover2033-37.PleaseseetheCarbonBudgetDeliveryPlanfordetailsofourproposalsandpoliciesformeetingthecarbonbudgets.27PoweringUpBritain–TheNetZeroGrowthPlan29ProgressanddeliveryAreaProgressRaisedambitiononrenewablesandsecuredrecordcapacity•AcceleratedtheContractsforDifferenceschemetodriveincreaseddeploymentbymovingtoannualauctionsandsecured11GWofnewrenewablecapacitythroughAllocationRound4,whichwasthelargestauctiontodate.•WearelaunchingtheFloatingOffshoreWindManufacturingInvestmentScheme.Theschemewillprovideupto£160milliontokickstartinvestmentinportinfrastructureprojectsneededtodeliverourfloatingoffshorewindambitions.Thiswillgiveinvestorstheconfidencetobackthisemergingsector,whichwillmakeavitalcontributiontotheUK'senergysecurityandnetzero.•SupportedtherolloutofrooftopprojectsbyremovingValueAddedTax(VAT)onsolarpanelsinstalledonresidentialaccommodationsuntil2027.•WelaunchedtheContractsforDifference(CfD)AllocationRound5inMarch2023,whichisthefirstroundtorunonanannualbasis.Thisroundhasthepotentialtosupportarangeoftechnologies,includingoffshorewind,onshorewind,solar,tidal,geothermal,andfloatingoffshorewind.•TakenimportantstepstocutthetimetakentobuildrenewableelectricityplantsthroughprogressingtherangeofmeasuressetoutintheBritishEnergySecurityStrategy,includingplanningmeasuressuchasastrongneedstatementforoffshorewindandassociatedinfrastructureintheRenewableNationalPolicyStatementwhichwearepublishingforconsultation,afasttrackprocessundertheNationallySignificantInfrastructureProjectsActionPlan(NSIP),andcostrecoverypowerstoenablemorecapacityintokeybodiesinvolvedintheplanningprocess.•ImprovedtheresilienceofsupplychainsbymakingfundingavailabletosupportmajorportandmanufacturinginfrastructurethroughtheOffshoreWindManufacturingInvestmentSchemeandstrengtheningtheContractsforDifferenceSupplyChainPlanprocess.•BuiltontheUK'spositionasaworld-leaderinoffshorewindbyappointinganOffshoreWindIndustryChampion,TimPick,tospearheadaccelerationworkandjointlychairtheOffshoreWindAccelerationTaskforce(OWAT).PoweringUpBritain–TheNetZeroGrowthPlan30AreaProgress•Wehavepublishedaroadmaponoffshorewind,articulatingthesectoralinvestmentneed,andsummarisingthegovernmentpolicyandfunding,toprovideinvestorswiththeinformationtheyneedtosupportinvestmentdecisions.Setanewaimtodeliverupto24GWnuclearcapacityby2050•Committedtoprovideupto£1.7billionofdirectgovernmentfundingtoenableonenuclearprojecttoFinalInvestmentDecisionthisParliament,andaimfortwoprojectstoFinalInvestmentDecisioninthenext.28•Aspartofthis£1.7billionfunding,governmenthasinvestedapproximately£700milliontotakea50%stakeinSizewellCinNovember2022,29havingprovided£100milliontosupportprojectdevelopmentinJanuary2022.30•AnnouncedthelaunchofGreatBritishNuclear(GBN).•SupportedSMRsandAdvancedModularreactors(AMRs)byinvestingupto£210milliontodevelopSMRwithRollsRoyce,basedinDerby,31andprovideupto£55millionfundingtodeveloptwonewAdvancedModularReactor(AMR)Research,DevelopmentandDemonstrationProgrammereactordesignsandprovideregulatorysupport.ProgressedourcommitmenttodeliveratleastonepowerCCUSplantbythemid-2020s•WewillbeginnegotiationswithNetZeroTeessidePowerwhich,subjecttosuccessfulnegotiations,couldbetheUK'sfirsteverpowerCCUSproject.•PassedthelegislationfortheDispatchablePowerAgreement(DPA),whichwillprovidethebasisfornegotiationswithpowerCCUSprojects.•LaunchedacallforevidenceonhowourfuturepolicyframeworkcansupportthecontinueddeploymentofpowerCCUSprojectsbeyondTrack-1.•Publishedaconsultationonbusinessmodelsforpowerbioenergywithcarboncaptureandstorage(PowerBECCS)andconcludedthepowerBECCSprojectsubmissionassessmentprocess,wewillissuearesponsetotheconsultationimminently.Setanambitiontohalvethetimeittakestobuildnewtransmissionnetwork•AppointedNickWinserasNetworkscommissionertoadvisehowtofurtheracceleratetransmissionnetworkdeployment,ontopofongoingactionsincludingapackagetohalvedeliverytimes,basedonasignificantprogrammeofreform.PoweringUpBritain–TheNetZeroGrowthPlan31AreaProgressinfrastructureandbegunthetransitiontoastrategicallydesignednetwork•JointlywithOfgem,publishedtheElectricityNetworksStrategicFrameworkinAugust2022tosetoutasharedvisionforthetransformationoftheelectricitynetworkrequiredtomanagetheanticipatedincreaseinelectricitydemandaswedecarbonise.•WorkedcloselywithOfgem,networkcompaniesandconnectionstakeholderstospeedupconnectionsfornewgenerationanddemand,withanactionplantoaccelerateconnectionstobepublishedinthesummer.•HolisticNetworkDesignwaspublishedbyNationalGridElectricitySystemOperator(ESO),settingoutforthefirsttimeastrategic,coordinatedplanfortheelectricitynetworkneededtosupportupto50GWofoffshorewindby2030.32•WehavemadechangestoOfgemregulationtoallownetworkinfrastructuretobebuiltaheadofneed.Thisincludesanacceleratedregulatoryapprovalprocessforaround£20billionoftransmissionprojectsidentifiedintheHolisticNetworkDesign,whichsetsoutthenetworkinfrastructureneededtodelivertheGovernment'sambitionforupto50GWconnectedoffshorewindby2030.•JointlywithOfgem,publishedaconsultationresponseonourdecisiontoestablishtheFutureSystemOperator(FSO),whichwillundertakestrategicnetworkplanningfromawholesystemsperspective.•Launchedthe£100millionOffshoreCoordinationSupportSchemetosupportwell-advancedoffshorewindandinterconnectionprojectstocoordinatetheirtransmissioninfrastructure.33•WearelaunchingaconsultationonaStrategyandPolicyStatementforEnergyPolicy,andaconsultationoncommunitybenefitsfornetworkinfrastructure.•LaunchedaconsultationonchangestotheenergyNationalPolicyStatements,toreflectthestrategicimportanceofandneedfornetworkinfrastructureandastrategic,co-ordinatedapproach.PoweringUpBritain–TheNetZeroGrowthPlan32AreaProgressDeliveredontheSmartSystemsandFlexibilityPlanandEnergyDigitalisationStrategy•Respondedtoaconsultationconfirmingtheoutlineofanewpolicyframeworkforenergysmartappliancesanddemandsideresponseservicesthatwillenablethetransitiontoasmartandsecureelectricitysystem.•Drivenrolloutofover30millionsmartandadvancedmetersinhomesandbusinessesacrossGreatBritain,with55%ofallmetersnowsmartoradvanced.34•NationalGridESOlaunchedthenewDemandFlexibilityService,asanadditionaltoolforthemtomanageourelectricitysystemthiswinter.•Announcedupto£65millionthroughtheFlexibilityInnovationProgrammetosupportinnovativesolutionstoenablelarge-scalewidespreadelectricitysystemflexibility,alongsideupto£68millionthroughtheLongerDurationEnergyStorageprogrammetoacceleratetechnologycommercialisation.•PublishedtheElectricVehicle(EV)SmartChargingActionPlaninJanuary2023tomaximisethebenefitsofenergyflexibilityfromEVs,andtomakesurethesystemisreadytorespondintimefortheupturninenergydemand.•TogetherwithOfgemandInnovateUK,wehaverespondedtotherecommendationsoftheEnergyDigitalisationTaskforcesettingoutourprogressandnextstepsondeliveringdigitalisationwithintheenergysector.•WecontinuetoprogressworkwithOfgem,theESO,developersandourEuropeanpartnerstorealiseourambitionofatleast18GWofinterconnectorcapacityby2030andtobringforwardpilotMulti-PurposeInterconnectors(MPIs).•TheUKInfrastructureBank(UKIB)hasannouncedthat,followinganexpressionsofinterestprocess,itwillappointmanagersforequityfundscoveringbothshortandlongdurationelectricitystorage.UKIBwillinvestonamatchedbasis,crowding-inwidersourcesoffinance.Goingforward,UKIBexpecttomakedirectinvestmentsintheelectricitystoragesector,whichwasidentifiedasaninvestmentopportunityintheirStrategicPlan.PoweringUpBritain–TheNetZeroGrowthPlan33UpcomingdeliverymilestonesWecontinuetodriveforwardourvisiontopowertheUKthroughaffordable,home-grown,cleanenergy.Weareworkingtodeliverouraimtofullydecarbonisetheelectricitysystemby2035,subjecttosecurityofsupply.Detailsoftheactionsgovernmentistakingtoenhanceourcountry’senergysecurityanddeliverasmoothtransitiontoalowcarbonsysteminlinewithnetzeroaresetoutinPoweringUpBritain–EnergySecurity.Someofthekeyactionswearelistedbelow:•WewillsetupGreatBritishNuclear,withtheresponsibilitytoleaddeliveryofthenewnuclearprogramme,backedwiththefundingitneeds.•WewilllaunchacompetitiveprocesstoselectthebestSmallModularReactortechnologies,withfirstphasecommencinginApril2023.•Weintendtoconsultin2023ontheneedandpotentialdesignoptionsformarketinterventiontosupporthydrogentopower.•WewillpublishanactionplanthisyearinresponsetoElectricityNetworksCommissionerNickWinser'srecommendationsonhalvingthedevelopmenttimefortransmissionnetworkprojects.•Wewillestablishasolargovernment/industrytaskforceandwewillpublishasolarroadmapsettingoutaclearstepbystepdeploymenttrajectorytoachieve70GWofsolarby2035.PoweringUpBritain–TheNetZeroGrowthPlan34PlanningTheplanningsystemiscentraltodeliveringourambitiousprogrammeofnetzeroinfrastructuredevelopmentandbuildingoutthecleangenerationandgridcapacitythatwillpoweroureconomy.Aneffectiveplanningsystemisneededtosupportbothlargescalenationallysignificantinfrastructurelikeoffshorewind,nuclearpowerandcarboncapture,andsupportlocaldecisionsonrenewableandlowcarbonenergy.Thatiswhyinordertosupportournetzeroandenergysecuritygoals,thegovernmentiscommittedtoensuringfaster,fairer,andmoreeffectiveplanningregimes,includingthroughchangestotheNationalPlanningPolicyFramework-generallyforlocalplan-makinganddecisions-theenergyNationalPolicyStatements-fornationallysignificantdecisions-andElectricityActplanning.Thegovernmenthasalreadydemonstrateditscommitmenttoreform,bypublishinganactionplaninFebruary2023toimprovetheNationallySignificantInfrastructureProjectplanningprocess,includingregulatoryandguidancechangestostreamlinetheprocess,supportdigitaltransformationandaddresscapacityshortfallsthatcanslowtheprocessdown.Wearenow:•Implementingthesereformsasquicklyaspossible,withpowersinBillscurrentlybeforeParliamentwhichallowforfullcostrecoveryfromdevelopers,allowforshorterstatutorydeadlinestobesettointroduceafast-trackroute,andprovideforamorestrategicandoutcomes-basedapproachtoenvironmentalrequirements;•PublishingfiverevisedenergyNPScoveringrenewables,oilandgaspipelines,electricitynetworksandgasgeneration,andanoverarchingEnergyStatementforconsultation.Thisincludesanewrequirementforoffshorewindtobeconsideredas“criticalnationalinfrastructure”.•DeliveringanOffshoreWindEnvironmentalImprovementPackage.•Recognisingthatonshorewindisanefficient,cheapandwidelysupportedtechnology,governmenthasconsultedonchangestoplanningpolicyinEnglandforonshorewindtodeliveralocalistapproachthatprovideslocalauthoritiesmoreflexibilitytorespondtotheviewsoftheirlocalcommunities.WewillrespondtotheNPPFconsultationinduecourse.•Consultingoncommunitybenefitsfornetworkinfrastructure.•Examiningevidenceondistribution-levelconsentingtospeeduptheconnectionsprocessforthelow-voltagenetwork.•Developingupcomingproposalson:oAddressingpressinglocalplanningbottlenecksenergyefficiencyinhistoricbuildings.PoweringUpBritain–TheNetZeroGrowthPlan35oConsultingonchangestotheexistingpermitteddevelopmentrightswhichallowrooftopsolarandstand-alonegroundmountedsolarinthegroundsofdomesticandnon-domesticbuildings.oConsultingonanewpermitteddevelopmentrightforsolarcanopiesonnon-domesticcarparks,suchassupermarkets.oTheproposedapproachtositingnewnuclearprojects,anddevelopinganewnuclearNationalPolicyStatementfornuclearelectricitygeneratinginfrastructurebeyond2025.Thissignificantprogrammeofworkwillspeeduptheprocessingofnewenergyinfrastructureandsupportourcleangrowthambitions.However,giventhescaleandspeedoflowcarboninfrastructuredevelopmentneeded,weexpectthatmoreplanningreformwillberequired.Wearelookingcloselyatwhatothercountrieshavedonetospeedupinfrastructuredeployment,includingrecentdevelopmentsinEurope.Thisisaglobalchallenge,wheremanagingthebalancebetweenlocalandenvironmentalprotection,securingenergysuppliesinanunstableworld,andurgentlytacklingclimatechangeareanissueforgovernmentsacrosstheworld.PoweringUpBritain–TheNetZeroGrowthPlan36FuelSupplyandHydrogenSummaryHydrogenLowcarbonhydrogenisacriticalcomponentofourstrategytodeliverenergysecurity,driveeconomicgrowthandsupportnetzero.TheCCCandIndependentReviewofNetZeroemphasisethekeyrolethatlowcarbonhydrogencanplayindeliveringanetzeroeconomyasaversatilereplacementforhigh-carbonfuelsusedtoday.IthasthepotentialtohelptobringdownemissionsinvitalUKindustrialsectorsandprovideflexibleenergyforpower,heat,andtransport.Toreachthescaleandcostreductionsrequiredtohelpdelivernetzero,wearesupportingmultipleproductionroutes,includingCCUS-enabledandelectrolytichydrogen.AstheCCCnotes,naturalgaswillbeneededtosupporthydrogenproductionforthenetzerotransition.TheBritishEnergySecurityStrategy(BESS)doubledourambition:todeliverupto10GWoflowcarbonhydrogenproductioncapacityby2030,subjecttoaffordabilityandvalueformoney.WeanticipatethatelectrolyticproductionwilldeliveratleasthalfofthisambitiondrawingonthescaleupofUKoffshorewind,otherrenewablesandnewnuclear.Excessrenewableelectricitycanbeusedtoproducehydrogen,whichcanalsobestoredovertimeandusedtopowerthegridwhenneeded.Thisambitionplacesusinaleadinggroupofcountriesandwouldbringsignificanteconomicbenefits,withpotentialtounlockupto£11billionofprivateinvestmentacrossproduction,transport,andstorage,PoweringUpBritain–TheNetZeroGrowthPlan37supporting12,000jobsby2030.ThiswouldsupporteconomicgrowthandlevellingupacrossthecountryandenablecostsavingsacrosstheUKelectricitysystem.TheUKhasalreadybuiltworldleadingcapabilities-forexampleinelectrolyserandfuelcellmanufacture.ThecaseforinvestinginUKhydrogenisclear.Weareconsistentlyinthetoptencountriesgloballyforhydrogentechnologypatentrates,haveaglobalreputationforadvancedenergyinfrastructureandexpertise,andpossesshighlydevelopedgasinfrastructurethatcanberedeployed.Wearedeliveringpoliciestosupportdeploymentofnewlowcarbonhydrogenproduction,reduceupfrontinfrastructurecosts,andprovidegreaterclarityandcertaintyaroundfuturedemandandrevenuestreams,throughour£240millionNetZeroHydrogenFund(NZHF)andourHydrogenProductionandTransportandStorageBusinessModels.Buildingonthisprogress,wewilltakeforwardtheIndependentReviewofNetZerorecommendationtodevelopahydrogenproductiondeliveryroadmaptoshowhowhydrogenproductioncanbescaledupoverthecomingdecade.SincepublicationoftheUKHydrogenStrategy,wehavemadesubstantialpolicyandfundingprogress.35ThefirstcompetitionwindowforStrands1and2oftheNZHFranApriltoJulylastyear,aimedatprojectswhichrequiredevelopmentorcapitalcostswithoutrevenuesupport,andthesuccessfulapplicantshavebeenannounced.WeintendtolaunchasecondcompetitionwindowforStrands1&2oftheNZHFinthespring,toberunbyUKRIandprovidefurtherfundingroutesfordevelopmentandcapitalcostsofproductionprojectsthatdonotrequirerevenuesupport.TheCCCalsorecommendedthatgovernmentshouldestablishfundingmechanismstosupporttheupto10GWambitionandfinaliseproductionbusinessmodeldesigntodeliverfundingtothefirstproductionprojectsin2023.WehavesincelaunchedtheNZHFandthefirstelectrolytichydrogenallocationround(HAR1),whichisjointlyofferingNZHFcapexandHydrogenProductionBusinessModel(HPBM)revenuesupporttoelectrolytichydrogenprojects.WealsopublishedHPBMHeadsofTermswhichareintendedtoformthebasisoftheLowCarbonHydrogenAgreement(LCHA)signedwithhydrogenproducers.WeintendtopublishthefinalLCHAforinitialprojectsfromQ32023andtoawardcontractstotallingupto250MWofcapacityfromHAR1,subjecttoaffordabilityandvalueformoney.WeaimforcontractstobeawardedinQ42023,withfirstprojectsoperationalin2025.Wehavepublishedashortlistof20projectsweintendtoenterduediligencewithalongsidethisplan.Weintendtolaunchasecondelectrolytichydrogenallocationroundlaterthisyear,toawardupto750MWofcontracts.HPBMpaymentsforprojectsawardedcontractsthroughHAR1willbefundedbygovernmentuntilthehydrogenlevycomesintoeffect.WehavealsoprogressedthedevelopmentofCCUS-enabledhydrogen.Phase-1oftheCCUSClusterSequencingprocesshasnowconcludedandHyNetandtheEastCoastPoweringUpBritain–TheNetZeroGrowthPlan38ClusterwereannouncedasTrack-1clustersprioritisedfordeploymentinthemid-2020s.HyNetwillsupportdecarbonisationintheNorthWestandNorthWales,whiletheEastCoastClusterwilldeliverinfrastructuretodecarboniseindustryanddriveeconomicgrowthinHumberandTeesside.WithintheseTrack-1clusters,twohydrogenprojectshavebeenannouncedtotakeforwardtonegotiations.Hydrogentransportandstorage(T&S)infrastructurecouldbekeytofullyrealisefuturehydrogendemandalongsidegrowingproductioncapacityacrosstheUK.WecommittedintheBritishEnergySecurityStrategytodesignhydrogentransportandstoragebusinessmodelsby2025,andconsultedonthedesignofthesebusinessmodelsin2022.WithrespecttorecommendationsfromtheCCCandtheIndependentReviewofNetZerotodeliverhydrogenT&Sbusinessmodelsassoonaspossiblewhilesupporting'noregrets’projects,andplansfordistributionandstorageoutsideourindustrialclusters,weaimtorespondtoourconsultationonhydrogenT&SinfrastructureinQ22023,withanyfurtherdetailsonstrategicplanningtoalignwiththeproduction.TobringforwardhydrogenT&Sbusinessmodels,weareaimingtointroducelegislativemeasureswhenparliamentarytimeallows,whichwillbecrucialtodesigningthesenewbusinessmodelsby2025.Ourconsultationresponsewillprovidedetailoninstitutionalarrangementsforhydrogensystemplanning,notingtheIndependentReviewofNetZerorecommendationthattheFutureSystemOperatortakeahydrogensystemplanningrole.InJuly2022,ourHydrogenSectorDevelopmentActionPlansetoutgovernmentandindustryactionstomaximisethehydrogeneconomy’sbenefits,includingaskingindustrytoleadaprocesstovoluntarilysetUKsupplychainambition.Wewillworkwithindustryoverthecourseof2023todevelopsupplychainstrategiesforbothHydrogenandCCUS,andevaluatewhatadditionalintervention,ifany,mightberequired.OilandGasAswetransitiontonetzero,fossilfuelswillretainacrucialroleintheenergysystem,untiltherearecrediblecleanenergyalternativesthatcanreplicatetheirrole.AsrecognisedbytheCCC,naturalgaswillplayaroleforyearstocome,particularlyinthehardesttodecarbonisesectors.TheupstreamoilandgassectorcontinuestomakegoodprogressindecarbonisinginlinewithourNorthSeaTransitionDeal(NSTD)andmidstreamtargets.Electrificationistheprimarymeanstodecarbonisetheoilandgassectorbetween2027and2040.Thereareseveralelectrificationprojectsalreadyindevelopment,andweworkcloselywithregulatorsandindustrytosupportdelivery.WearecommittedtotheWorldBank’s‘ZeroRoutineFlaringby2030’initiative.In2021,totalgasflaredandventedgasreducedby20.1%and22.2%respectively,relativeto2020.36TheNorthSeaTransitionAuthority(NSTA)issuedupdatedguidanceforalloperators,wherebyallnewdevelopmentsshouldplanfornoroutineflaringandventingby2030.PoweringUpBritain–TheNetZeroGrowthPlan39LastyearwepublishedtheClimateCompatibilityCheckpoint,whichensuresthatthecompatibilityofnewlicensingwiththeUK’sclimateobjectiveshasbeenconsideredbeforeadecisiontoendorseanewlicensingroundismade.TheNSTAthenlaunchedtheUK’s33rdoilandgaslicensingroundinOctober2022.GovernmentandindustryremaincommittedtotheNSTDtargettoreduceGHGemissionsfromproductionby50%by2030.TheIndependentReviewofNetZeroandtheClimateChangeCommitteemadeseveralrecommendationsforoilandgasproduction.Withrespecttogreaterdataavailabilityandtransparency,theNSTArecentlypublishedassetleveldomesticproductionemissionsdashboardsandwillupdategasfootprintanalysiscomparingimportsanddomesticproductionthisyear.37WearecommittedtoensuringthattheClimateCompatibilityCheckpointcontinuestobeaneffectivetooltoshapefuturepolicyandwillconsiderfurthertheproposaltodevelopanoffshoreindustries’integratedstrategy.Governmentisprioritisingthedeliveryofambitioustargetsforoilandgassupplydecarbonisation,includingtheelectrificationofoilandgasfacilitiesandendingroutineflaringandventingby2030.TheNSTAalreadysupportsindustrytobuildabatementintotheirfacilitiesandisapplyingitsregulatorypowerstorequirenewplatformstoincludelowcarbonpower,prioritisingelectrificationwheretechnicallyfeasible.Wewillnotacceleratetheendtoroutineflaringfrom2030to2025asthe2030targetisalreadychallengingduetothebasin’smaturity,notingthatretrofittingfacilitiesisexpensiveandtechnicallychallenging.ThesectorcommittedtoacceleratecompliancewiththeWorldBank’s‘ZeroRoutineFlaringby2030’initiativeaheadof2030,anditsMethaneActionPlancommittedtoanambitious50%reductioninmethaneemissionsby2030.Thegovernmentisworkingwithregulatorsandindustrytocontinuetodrivedownflaringandventinggasaheadofthe2030target.Indicativeemissionspathwayto2037In2021,fuelsupplyemissionswerearound20MtCO2emakinguparound4%oftotalUKnetGHGemissions(includinginternationalaviationandshipping).Upstreamoilandgascurrentlymakeupthelargestshareoftheseemissions.Fuelsupplyemissionshavedecreasedby18%since2019and66%since1990.Since1990,thelargestreductionshavebeenfromcoalminingandgasleakage.InlinewiththesectoralbreakdownoftheindicativepathwaysetoutintheNZS,comparedto2021emissionslevels,GHGemissionscouldriseby8%orfallby2%onaverageover2023-27,fallby22%to33%by2030and43%to52%onaverageover2033-37.PleaseseetheCarbonBudgetDeliveryPlanfordetailsofourpoliciesandproposalsformeetingthecarbonbudgets.38PoweringUpBritain–TheNetZeroGrowthPlan40ProgressandDeliveryAreaProgressRaisingandbeginningtodeliveronourupto10GWhydrogenproductioncapacityambition•Doubledourambitionfrom5GWtoupto10GWlowcarbonhydrogenproductioncapacityby2030,subjecttoaffordabilityandvalueformoney,withatleasthalffromelectrolytichydrogen.•Launchedthe£240millionNZHFinApril2022andthefirstelectrolytichydrogenallocationroundinJuly2022,andpublishedHeadsofTermsfortheHydrogenProductionBusinessModelinDecember2022.•Publishedashortlistof20projectstoinvitetothenextstageofduediligenceforthefirstelectrolytichydrogenallocationroundalongsidethisdocument.WehavealsoannouncedthattwohydrogenprojectshavebeentakenforwardtonegotiationsunderTrack-1Phase-2oftheCCUSClusterSequencingProcess.•WehavenowannouncedthatHydrogenProductionBusinessModelpaymentsforthefirstelectrolytichydrogenallocationroundwillbefundedbygovernmentuntilthehydrogenlevycomesintoeffect,andannouncedafundingenvelopeforTrack-1oftheCCUSClusterSequencingProcess,inlinewiththeIndependentReviewofNetZero’srecommendationtoprovidelonger-termcertaintyatthenextSpendingReview.•Awardedcontractsfor23feasibilitystudiesandfivedemonstrationprojectsunderthe£60millionLowCarbonHydrogenSupply2competition.•PublishedaconsultationonaHydrogenCertificationScheme,aspartofourcommitmentfromtheBritishEnergySecurityStrategytosetupaschemeby2025,buildingontheLowCarbonHydrogenStandard,whichwaspublishedinApril2022andhelpsensuregovernmentsupportstrulylowcarbonprojectsonly.PoweringUpBritain–TheNetZeroGrowthPlan41AreaProgressDevelopinghydrogentransportandstorage,enduse,andinvestmentopportunities•WehavepublishedaconsultationonhighleveldesignoptionsforhydrogenT&Sbusinessmodels,alongwithanindependentconsultancystudyreviewinghydrogenT&Sinfrastructurerequirementsupto2035.•Wecontinuetosupportstrategicallyimportantinvestmentsbyearlymoversinindustry,includingthroughtheannouncementofanextensiontotheIndustrialEnergyTransformationFund.Subjecttobusinesscaseapproval,thegovernmentplanstoallocateafurther£185milliontohelpindustrialsitestoadoptdecarbonisationtechnologies.WeareencouragingotherearlyusecaseswhilstbringingforwardapplicationswiththegreateststrategicpotentialtosupportdeepdecarbonisationoftheUKeconomyaswellthroughfurthercompetitionroundsoftheNetZeroInnovationPortfolioandtransporttrials,consultingonDecarbonisationReadinessRequirementsfornewbuildandsubstantiallyrefurbishingcombustionpowerplants,trialsinhydrogenforheatingandconsultingonboilersbeinghydrogen-readyfrom2026(seeBuildingschapter).•InApril2022,wepublishedtheHydrogenInvestorRoadmap,articulatingthesectoralinvestmentneed,andsummarisingthegovernmentpolicyandfunding,toprovideinvestorswiththeinformationtheyneedtosupportinvestmentdecisions.ThiswasfollowedbytheHydrogenSectorDevelopmentActionPlaninJuly2022.Wewillshortlypublishanupdatedinvestmentroadmapforhydrogen.•WeappointedJaneToogoodasUKHydrogenChampiontohelpgalvaniseindustryandinvestorstoacceleratethedevelopmentoftheUKhydrogeneconomy.TheHydrogenChampionhasmetextensivelywithstakeholdersacrossindustrytoassessopportunitiesandidentifybarrierstoachievingthis,makingseveralrecommendationsinanindependentreportpublishedon22March2023.PoweringUpBritain–TheNetZeroGrowthPlan42AreaProgressContinuingtoprogressmeasurestoreduceGHGemissionsfromOilandGas•OurNorthSeaTransitionDealOneYearOnreportannouncedtheGovernmentandRegulatorsElectrificationGroup(GREG)toexplorebarrierstoelectrification,andanindustryTaskandFinishGroup.•InAutumn2022,theGREGmovedtoresolvespecificbarrierstoelectrification,engagingwidelytoprioritiseissues.Wecontinuetoworkcloselywithprojectsandregulators,includingNSTAandOfgem.•WefulfilledtheNetZeroStrategycommitmenttolaunchtheClimateCompatibilityCheckpoint.•Weintroducedan80%investmentallowanceundertheEnergyProfitsLevy,incentivisingindustrytoinvestinupstreamdecarbonisation.•CrownEstateScotlandandtheScottishGovernmentlaunchedtheInnovationandTargetedOilandGas(INTOG)sectoralmarineplanandseabedleasingroundforoffshorewind,aimingtopoweroilandgasassetsinScottishWaters.TheoutcomeoftheINTOGroundwasannouncedon24March,confirming13projects.•SeveralNorthSeaelectrificationprojectsareindevelopment,includinglarge‘hub’solutionswhichprovidepowerconnectionstoonshoreelectricitygridsandlinkuptonearbyoffshorewind-thesearecriticaltowiderelectrificationdeliveryandtheemergingfloatingoffshorewindsector.•TheHealthandSafetyExecutive(HSE)-ledIronMainsRiskReductionProgramme(IMRRP)addressesgasdistributionnetworkleaksbyreplacingironmainswithplasticpipeswithin30metresofbuildingsthroughto2032.By2032,thiswilldelivera66%reductioninCO2eGHGemissionssince2014,withc.5%ofironmainsremaining.PoweringUpBritain–TheNetZeroGrowthPlan43UpcomingDeliveryMilestonesForhydrogen,wewill:•Enterduediligencewith20projectsinthefirstelectrolytichydrogenallocationround(HAR1),throughwhichweintendtoawardcontractsinQ42023totallingupto250MWofcapacity,subjecttoaffordabilityandvalueformoney.•Aimtolaunchasecondelectrolytichydrogenallocationround(HAR2)inQ42023andaimtoawardcontractstoupto750MWofcapacityinearly2025,subjecttoaffordabilityandvalueformoney,todeliverupto1GWofelectrolyticlowcarbonhydrogenproductioncapacityinconstructionoroperationby2025.•AimtoengagewithindustryonthedraftfullformLowCarbonHydrogenAgreement(LCHA)inQ22023withtheintentionofpublishingthefinalLCHAforinitialprojectsfromQ32023.•Intendtolaunchasecondcompetitionwindowforstrands1&2oftheNZHFinspring2023,toberunbyUKRIandprovidefurtherfundingroutesfordevelopmentandcapitalcostsoflowcarbonhydrogenproductionprojectsthatdonotrequirerevenuesupport.•AimtopublisharesponsetoourconsultationonthedesignofbusinessmodelstosupporthydrogenT&SinfrastructurebytheendofQ22023,withanyfurtherdetailsonstrategicplanningtoalignwiththeproductionroadmap.TobringforwardhydrogenT&Sbusinessmodels,weareaimingtointroducelegislativemeasureswhenparliamentarytimeallows,whichwillbecrucialtodesigningthesenewbusinessmodelsby2025.•Aimtopublishadeliveryroadmapthisyeartoshowhowhydrogenproductioncanbescaledupoverthecomingdecade.•PublishthefirstrevisionsoftheUKLowCarbonHydrogenStandardthisyear.Foroilandgas,wewillsee:•ExclusivityArrangementsawardedbyCrownEstateScotlandtoINTOGprojects;•Thefirstlicensesfromthe33rdOffshoreOilandGasLicensingRoundinQ2of2023;•Furthermovesfromindustrytowardsourtargetofendingroutineflaring&ventingby2030;•Futureindustryinvestmentdecisionstodeliverthefirstelectrificationprojects.PoweringUpBritain–EnergySecurity,publishedalongsidethisplan,setsoutmoreinformationongovernment’sapproachtosecuringcleanerenergy.PoweringUpBritain–TheNetZeroGrowthPlan44Carboncapture,Usage,andStorageCarbonCapture,UsageandStorage(CCUS)isanemergingsectorthatisofcentralimportancetodecarbonisingtheUK’seconomy.Itwillenablethedecarbonisationofhardtoabateindustrialsectorsandenablelow-carbonhydrogenproductionandflexiblelow-carbonelectricitygenerationtocomplementotherformsoflowcarbonpower,alongwithengineeredgreenhousegasremovals.CCUSformspartofthemostcost-effectiveroutetonetzero,andrepresentsasignificanteconomicopportunity,withthepotentialtosupportupto50,000jobsby2030anddeliver£4.3billioninGVAby2050throughexports.TheUKistheplacetoinvestinCCUS–itisinthetopfivecountriesgloballyforCCUSreadinessandhasoneofthelargestpotentialCO2storagecapacitiesinEurope.WearecommittedtodeployingCCUSintwoindustrialclustersbythemid-2020sandfourclustersby2030,withtheaimofcapturingandstoring20-30MtCO2peryearby2030.By2030,theseclustersaimtoenableCCUSfor6MtpaofCO2fromindustrialsectors,atleast5MtpaofCO2fromengineeredgreenhousegasremovals,thegasCCUScapacityrequiredtokeepusonapathwaytowardsourpowersectordecarbonisationambitionsandCCUSsupportforthedeliveryofuptohalfofthe10GWambitionoflowcarbonhydrogenproduction.CCUSmayneedtoreachstoragecapacitytostoreatotalofatleast~50MtpaCO2bythemid-2030s.Significantprogresshasbeenmadeincreatingthisnewsector,andourpoliciesandincentivesaimtoreduceupfrontinfrastructurecostsandde-riskearlyinvestmentinacompetitiveandgrowingindustry.Wehave:•Developedbusinessmodelsacrossthevaluechainwhichprovidetheminimumrequiredinitialrevenuesupporttoattractprivateinvestment,ensuringanappropriatemethodtowinddowngovernmentsupportwhenindustrycanself-fundCCUSandhydrogenprojects.•SetoutmeasuresintheEnergyBill,thatwillestablishaneconomicregulatoryframeworkforCO2networks.•SelectedHyNet(NorthwestEnglandandNorthWales)andtheEastCoastCluster(TeessideandHumber)asthefirsttwoclusters.Alongsidethisdocument,weareannouncingtheTrack-1negotiationsprojectlistofeightcaptureprojectsfortheseclustersacrossthehydrogen,power,industry,andwastesectorsthathavebeensuccessfulinproceedingtonegotiationsinthenextstageoftheprogramme.Ofthese,therearethreeIndustrialCarbonCapture,twoEnergyfromWaste,onepower-CCUSandtwoHydrogenprojects.PoweringUpBritain–TheNetZeroGrowthPlan45•Thegovernmentwillprovideupto£20billionfundingforearlydeploymentofCCUS.ThisunprecedentedleveloffundingwillunlockprivateinvestmentandthecreationofjobsacrosstheUK,particularlyintheEastCoast,NorthWestofEngland,andNorthWales,andkick-startthedeliveryofsubsequentphasesofthisnewsustainableindustryintheUK.Thisincludesthepreviouslyannounced£1billionincapitalfundingthroughtheCCUSInfrastructureFund(CIF)tohelpreducethecapitalcostsbornebyprivateinvestorsinstrategicCCUSinfrastructure,transportandstoragenetworks,andindustrialcarboncapture(ICC)projects.•Announcedanintenttoincreasethesizeofthetwoinitialclustersbyexpandingtransportandstoragecapacityandadditionalcaptureprojects.•LaunchedTrack-2oftheCCUSclustersequencingprocesstoestablishtwofurtherCCUSclusters.•LaunchedtheUKenergysupplychaintaskforcetomaximiseopportunities,enhancedUKExportFinance’ssupportforattractinginvestmentinCCUSandidentifiedexistinginfrastructurethatcouldsupportCCUS;industryisworkingthroughtheCCUSCounciltopublishaSupplyChainStrategyinsummer2023.•TheNSTArantheUK’sfirstevercarbonstoragelicensingroundwith13potentialareasavailable:26bidsunderevaluationwithaviewtoawardinglicencesinApril2023.Wecouldneedasmanyas100storestomeetournetzerotargets.Theaboveactionsprovideaclearroadmaptomeetingour2030commitments.TomeetourCarbonBudget6commitments,takingintoaccountrecommendationsfromtheCCC’s2022ProgressReporttoParliamentandtheIndependentReviewofNetZero,wewillalso:•Workwithindustrytoprogressdevelopmentofnon-pipelinetransportinatimeframeconsistentwithourTrack-2objectives,supportingdecarbonisationofsitesawayfromCO2storesorindustrialclusterssuggestedintheIndependentReviewofNetZero.•Ensureadditionalclustersidentifiedfor2030orexpansionofthefirsttwoclusterscandemonstrateoptionsforthedeliveryofnon-pipelinetransportprojectsfrom2030.•SetoutavisionfortheUKCCUSsectortoraiseconfidenceandimprovevisibilityforinvestorsassuggestedintheIndependentReviewofNetZero.•ShortlypublishanupdatedinvestmentroadmaponCCUS,summarisinggovernmentpolicyandfunding,toprovideinvestorswiththeinformationtheyneedtosupportinvestmentdecisions.PoweringUpBritain–TheNetZeroGrowthPlan46On15March2023,theChancellorannouncedthattheGovernmentwillprovideupto£20billioninvestmentinCCUStohelpmeettheGovernment’sambitions.ThisunprecedentedleveloffundingforthesectorwillunlockprivateinvestmentandjobcreationacrosstheUK,particularlyontheEastCoastandintheNorthWestofEnglandandNorthWales.TheUKInfrastructureBank(UKIB)hasalsoidentifiedCCUSasaninvestmentopportunityinitsfirststrategicplan.TheBankisengagingthemarketandprojects,focusingonhowitcanacceleratedeliveryoftheUK’sfirstCCUSclusters.ProjectsareencouragedtospeaktoUKIBabouttheirfinancingneeds.Subjecttoproposalsmeetingitsinvestmentprinciples,thebankstandsreadytoinvest.ThebuildingblocksforthecreationofanewCCUSsectorsupportingournetzeroambitionareinplaceandthedeliveryofthefirstfourclustersisunderway.This,togetherwiththeadditionalareasoutlinedabove,willenableindustryandgovernmenttodeliveronournetzeroandCCUSobjectivesPoweringUpBritain–TheNetZeroGrowthPlan47IndustrySummaryUKindustriescombinehigh-endtechnologyandhighly-skilledworkerswiththeingenuitytomakeproductsthataretradedallovertheworld.ThroughtheIndustrialDecarbonisationStrategy,theUKwasthefirstmajoreconomytosetouthowwecanhaveathrivingindustrialsectoralignedtonetzero,whichalsosupportsjobs,growth,andinvestment.Thereisaroleforgovernmentinhelpingtoincreasetherateofadoptionoflowcarbontechnologies,particularlywhenthesetechnologiesarenotyetfullycost-competitiveorprice-competitivecomparedtoestablishedpractices.Progressinindustrialresourceefficiencyandenergyefficiency(REEE)iskeytoreachingnetzero.REEEmeasurescouldcontributeupto12MtCO2eofannualsavingsby2050(excludingpotentialadditionalsavingsfromtheIronandSteelsector).39TheEnergyEfficiencyTaskforcewillplayavitalroleinbringinggovernmentandbusinesstogethertodeliverambitiousREEEsavings.Itwilladviseandworkwithministersonthedeliveryofthegovernment’sambitiontoreduce,by15%,theUK’sfinalenergyconsumptionfrombuildingsandindustryby2030,comparedto2021levels.Thisappliestodomesticandcommercialbuildingsandindustrialprocesses,withaparticularfocusontheroleoftheprivatesectorandstimulatinginvestment.WearealsocontinuingtosupportEnergyEfficiencythroughtheIndustrialEnergyTransformationFund(IETF).WeareannouncinganextensiontotheIndustrialEnergyPoweringUpBritain–TheNetZeroGrowthPlan48TransformationFund(IETF),increasingtotalgrantfundingavailableto£500million.Subjecttobusinesscaseapproval,weintendtoopenPhase3oftheIETFfornewapplicationsinearly2024,supportingindustrytocuttheirenergybillsandcarbonemissionsthroughinvestinginenergyefficiencyandlowcarbontechnologies.Additionally,asannouncedattheBudget,weareextendingtheClimateChangeAgreementsSchemebytwoyears,whichprovidesreducedClimateChangeLevyratesforeligiblebusinessesinover50industrialsectorsworthanestimated£300millionayear.WearealsopublishingaconsultationonthedetailoftheextensionandviewsonanypotentialfutureClimateChangeAgreementsscheme.Wewillreplace50TWhoffossilfuelsperyearby2035tosupportindustrialfuelswitching.Electrificationhasthepotentialtoreduceannualindustrialgreenhousegasemissionsbybetween7and19MtCO2e,contributingbetween15%and40%ofthenecessarycarbonabatementinindustryby2050.40Thelevelofelectrificationuptakewilldependonasecuresupplyofelectricity,gridaccess,technologyinnovation,andtherelativecostofelectricitycomparedtootherfuels.Werecognisethattherearebarrierstofuelswitchingtoelectricity,includingtherelativecostofelectricitycomparedtogas,andweplantolaunchacallforevidencein2023toseekviewsonovercomingthesechallenges.Lowcarbonhydrogencouldplayaroleindecarbonisingindustrialmanufacturing.Hydrogencanbeusedbothforindirectheatingapplications,suchastofuelindustrialboilersorcombinedheatandpower(CHPs)plants,andfordirectheatingprocesses,suchasinafurnaceorkiln.Hydrogen,alongwithotheroptions,canalsohelpdecarbonisenon-roadmobilemachinery,anothersignificantsourceofGHGemissions.By2050industrycouldusebetween40-110TWhofhydrogenasafueleachyear,abatingbetween4–21MtCO2eperannum,dependingonhydrogenavailability.41OurUKLowCarbonHydrogenStandardandtheHydrogenProductionBusinessModelareintendedtoincentivisetheuptakeofhydrogenacrossUKindustry(seeFuelSupplyandHydrogenchapterformoreonourstrategy).CCUSwillplayavitalroleintransformingindustrialsectorssuchasrefining,cement,andchemicals.Itcanalsosupportthetransformationofourindustrialregionsintolowcarbonmanufacturingclusters,creatinghighvaluejobstohelpleveluptheeconomy.WehavecommittedtodeployCCUSinatleasttwoindustrialclustersinthemid-2020s,andinfourclustersby2030.ThiswillenableCCUSdeploymentandsupportourambitiontocaptureandstore6MtCO2perannumofindustrialemissionsby2030and9MtCO2perannumby2035.Weannounced£20billionofinvestmentintheearlydevelopmentofCCUSinMarch2023,andhavedevelopedbusinessmodelstode-riskandincentiviseprivateinvestment,andwehavenowannouncedtheTrack-1projectnegotiationlist,includingindustrialcaptureprojects.Wealsoanticipatedthatfurthersavingsof1MtCO2perannumafter2030couldbedelivered.ThebestmechanismforPoweringUpBritain–TheNetZeroGrowthPlan49deliveringtheseadditionalsavings,includingtheroleofindustrialcarboncapture,remainsunderreview.Wearedeterminedthatoureffortstodecarboniseindustryandreduceemissionsarenotunderminedbycarbonleakage.TheconsultationAddressingCarbonLeakageRisktoSupportDecarbonisation,publishedalongsidethisplan,isasignificantstepforwardinsettinganewframeworktomitigatethisriskandconsidersarangeofdomesticpolicyoptionstoprotectagainstcarbonleakage,includingbothacarbonborderadjustmentmechanism(CBAM)andmandatoryproductstandards.Decarbonisingourindustrialsectorhasthepotentialtounlock£19billioninpublicandprivateinvestmentacrosstheUKinlinewithour2037deliverypathway.Thiscouldsupportupto4000jobsdirectlyinindustryforthemanufactureandinstallationofon-siteenergyefficiencymeasuresandupto50,000jobsacrossindustry,powerandthetransportandstoragenetworkforthedeploymentofCCS.Indicativeemissionspathwayto2037In2021,industryemissionswerearound76MtCO2emakinguparound17%oftotalUKnetGHGemissions(includinginternationalaviationandshipping).Thelargestemissionssourcesincludemanufacturingandconstruction(e.g.ironandsteel,chemical,cement),oilrefineriesandindustrialnon-roadmobilemachinery.Industryemissionshavedecreasedby3%since2019and52%since1990.Since1990,thelargestreductionswerefrommanufacturingandconstruction(e.g.ironandsteel)andadipicacidproduction.InlinewiththesectoralbreakdownoftheindicativepathwaysetoutintheNZS,comparedto2021emissionslevels,GHGemissionscouldfallby15%to25%onaverageover2023-27,41%to52%by2030and62%to75%onaverageover2033-37.PleaseseetheCarbonBudgetDeliveryPlanfordetailsofourpoliciesandproposalsformeetingthecarbonbudgets.42ProgressanddeliveryMetricProgressAmbitiontodeliver6MtCO2peryearofindustrialCCUSby2030,and9MtCO2by2035•Phase2oftheClusterSequencingprocesslaunchedinNovember2021.ProjectstoproceedtotheduediligencestageofthePhase2processhavebeenannounced.•PublicationpackageonICCbusinessmodelswasreleasedinDecember2022.PoweringUpBritain–TheNetZeroGrowthPlan50MetricProgress•TheChancellorannounced£20billionofinvestmentintheearlydevelopmentofCCUSinMarch2023.•WehavenowannouncedtheTrack-1projectnegotiationlist,includingindustrialcaptureprojects.DevelopingourREEEmeasurestosupportourcommitmenttoreducetheUK’sfinalenergyconsumptionfrombuildingsandindustryby15%by2030against2021levels•Completedsixapplicationroundsofthe£289millionIndustrialEnergyTransformationFund(IETF).Successfulapplicationscanbefoundonlineandcamefromadiverserangeofsectors,locations,andcompanysizes.•PublishedtheGovernmentResponsetoourconsultationonstrengtheningtheEnergySavingOpportunityScheme(ESOS)andintroducedclausesintheEnergyBilltoprovideenablingpowerstostrengthenESOS.•RespondedtotheEnvironmentalAuditCommittee’sreportonBuildingtoNetZero,outliningourintentiontoconsultthisyearonourapproachtothemeasurementandreductionofembodiedcarboninnewbuildings.•CollaboratedwiththeUKRI-fundedNationalInterdisciplinaryCircularEconomyResearch(NICER)programmetostrengthenourevidencebaseonresourceefficiencyinitiatives.•Progressedworkonhowconsumerlabellingcaninformconsumersofdurability,repairabilityandrecyclability,andwillincorporatethesefindingsintofuturework.ProgressedfundingandfinancialincentivestodriveindustrialdecarbonisationwhilstmaintainingUKcompetitiveness•SupportingenergyandtradeintensiveindustriesthroughtheEnergyBillsDiscountScheme•Consultingonproposalsto‘rebalance’thecostsplacedonenergybillsawayfromelectricitytoincentiviseelectrificationacrosstheeconomy.•ExtendingtheEnergyIntensiveIndustries(EII)CompensationSchemeforafurther3yearsandsubsequentlyannouncedtheBritishIndustrySupercharger.•Continuedtosupporttheengineeringandtechnicaldesignelementsofdecarbonisationprojectsacrossindustrialclustersthroughthe£210millionIndustrialDecarbonisationPoweringUpBritain–TheNetZeroGrowthPlan51MetricProgressChallenge,deliveredthroughUKResearchandInnovation(UKRI).•ConsultedwithindustryonimplementinganetzeroconsistentcapfortheUKETS,reviewingFreeAllocationpolicyandexpandingtheuseofemissionstradingacrosstheeconomy.Governmenthaspublishedaninitialresponsecoveringproposalsimplementedby2023.•RespondedtoourIndustrialCarbonCapture(ICC)businessmodelconsultationandpublishedthelatestcontractualdraftingunderpinningtheICCandWasteICCbusinessmodels.•IntroducedaspendingpowerintheEnergyBilltoprovidefinancialassistanceforCCUS,lowcarbonhydrogenproductionandhydrogentransportationandstorage.ThisisintendedtofacilitatepaymentsundertheICCbusinessmodels,fundedthroughthe£1billionCCSInfrastructureFund(CIF)andIndustrialDecarbonisationandHydrogenRevenueSupport(IDHRS)scheme.WeareworkingwiththedevolvedadministrationsonthosepartsoftheBillthatarewithindevolvedcompetence.•Announced£5millionofgrantsthroughtheLocalIndustrialDecarbonisationPlanscompetition.Grantswillsupportindustryoutsidethemainindustrialclusters(in“localclusters”)todevelopstrategicdecarbonisationplansfocusedonsharedinfrastructureandintegratedsolutions.ThisUK-widecompetitionisintendedtolaunchinsummer2023.•Announced£24millionofUKRIfundingthroughtheTransformingFoundationIndustrieschallengeforeightinnovative,industriallyscaleddemonstratorprojectstotransformthesustainabilityoftheUK’sfoundationindustrycompaniesandsupplychains,demonstratingcapabilityoffuturetechnologiestoaddressresourceorenergyefficiencychallenges.•CommittedtoconsultonbolsteringenvironmentalregulationofindustrytoensureitintegratesregulationofGHGandotheremissions.PoweringUpBritain–TheNetZeroGrowthPlan52MetricProgress•PublishedaconsultationonAddressingcarbonleakagerisktosupportdecarbonisation.ExploresarangeofdomesticpolicyoptionstomitigatetheriskofcarbonleakageandensureUKindustryhastheoptimalpolicyenvironmenttodecarbonise.RespondingtotheCCCAnnualReportandIndependentReviewofNetZerorecommendationsforIndustry•Acceptedtherecommendationforacross-governmentstrategytodecarbonisenon-roadmobilemachinery(NRMM).WearerunningresearchprojectsandwilllaunchacallforevidencetodevelopourevidencebaseonoptionstodecarboniseNRMM.•Consultingonthepolicydesignofmeasurestodrivereductionsindemand,inlinewiththeCCC’srecommendation.Weareconsultingonpoliciestoaddresscarbonleakage,includingaUKCBAMand/ormandatorylow-carbonproductstandards,alongsideourreviewofpolicyonfreeallocationsundertheUKEmissionsTradingScheme.•Additionally,boththeCCCandtheIndependentReviewofNetZeromakerecommendationsconcerningpolicydevelopmentoftheUKEmissionsTradingScheme(ETS).Thesehave,inpart,beenaddressedinourrecentconsultationonDevelopingtheETS,onwhichtheETSAuthoritywillbepublishingaresponseinduecourse.•Setoutourambitionsforhydrogen(inthe‘FuelSupplyandHydrogen’chapterofthisreport).Ourupcomingcallforevidenceonindustrialelectrificationwilladdressrecommendationsregardingthebarrierstothisdecarbonisationtechnology.PoweringUpBritain–TheNetZeroGrowthPlan53UpcomingmilestonesTodriveourprogressindecarbonisingindustry,wewill:•PublishthefullgovernmentresponsetotheUKETSDevelopconsultation.Wealsoaccepttherecommendationthatwesetoutalong-termpathwayfortheUKETSandwillworkwithintheETSAuthoritytopublishonethisyear.•LaunchacallforevidenceonIndustrialElectrificationin2023.•WealsoaccepttherecommendationthatGovernmentshouldcommittooutliningaclearapproachtogasvs.electricity‘rebalancing’bytheendof2023/4andshouldmakesignificantprogressaffectingrelativepricesbytheendof2024.•Openthe£5millionLocalIndustrialDecarbonisationPlanscompetitionforbidsinSummer2023.•RespondtofeedbackreceivedthroughtheconsultationonAddressingcarbonleakagerisktosupportdecarbonisation.•ExtendtheIETF,increasingtotalgrantfundingavailableto£500m.Subjecttobusinesscaseapproval,weintendtoopenPhase3oftheIETFfornewapplicationsinearly2024,supportingindustrytocuttheirenergybillsandcarbonemissionsthroughinvestinginenergyefficiencyandlowcarbontechnologies.•ExtendthecurrentClimateChangeAgreementsSchemebytwoyears,providingClimateChangeLevydiscountsinreturnformeetingenergyefficiencyorcarbonreductionstargets.•PublishtheBiomassStrategyin2023.TheBiomassStrategywillreviewtheamountofsustainablebiomassavailabletotheUKandhowthisresourcecouldbebestutilisedacrosstheeconomytohelpachievethegovernment’snetzeroandwiderenvironmentalcommitmentswhilealsosupportingenergysecurity.•Launchadigitalenergyadviceserviceforsmallbusinessesthisyeartogiveimpartial,trustedadviceonimprovingnon-domesticenergyefficiency,reducingtheirenergyuseandbills.Wewillalsobepilotinganewauditandgrantschemethisyearenablingsmallbusinessestomovefrominsighttoimplementationofenergyefficiencymeasures.•TheGovernmenthasconsultedonproposalsfortheprivaterentedsectorandwillpublishtheGovernmentresponseinduecourse.Wewillalsoconsiderhowwecanfurthersupportgreaterenergyefficiencyinowner-occupiedcommercialbuildings.PoweringUpBritain–TheNetZeroGrowthPlan54•PublishaconsultationtoreviewthecurrentBatteriesRegulationsinthesecondhalfof2023.Thiswillconsidermeasurestopromotetherecovery,reuse,orrecyclingofallbatterychemistrytypes.•BeginworkonanNRMMstrategyin2023,asrecommendedbytheCCC.WeintendtolaunchaCallforEvidenceonNRMMdecarbonisationoptionsinAutumn2023.•Publisharoadmapforincreasingtheuseoftimberinconstructionbysummer2023.•Consideroptionstofurtherformaliseproductivecross-governmentpolicymakingandjoined-upstrategytosupportresource-efficientcirculareconomybusinessmodelsinindustry.Thisworkwillbuildonexistingindustrypartnerships,cross-governmentresearch,andtheworkofthenewlycreatedEnergyEfficiencyTaskforce.•BeginnegotiationswiththreeindustrialcarboncaptureprojectsaspartofPhase-2ofTrack-1oftheCCUSClusterSequencingProcess.PoweringUpBritain–TheNetZeroGrowthPlan55UKEmissionsTradingSchemeTheIndependentReviewofNetZerorecognisesthattheUKhasbeenagloballeaderinemissionstradingformorethantwentyyears.Since2021,theUKEmissionsTradingScheme(UKETS)hasplacedthepowerofthemarketattheheartoftheUK’snetzerostrategy.TheReviewsetsoutanenhancedrolefortheUKETSasafoundationforathriving,decarbonisedeconomythrough2050andbeyond.Itshowshow,withalong-termcommitmenttoanexpandedmarket,wecanunlockinvestmentinUKinfrastructure;catalyseinnovationintheUK’sworld-leadingscienceandtechnology;andsupportUKbusinesseswiththemostcost-effectiveandflexiblemeanstodelivernetzero.GovernmentwillmeetthisambitionwithavisionofaUKcarbonmarketthatcanmeettheopportunitiesandchallengesofthenetzerocentury.GovernmentacceptstheIndependentReviewofNetZero’srecommendationsthatwesetoutalong-termpathwayfortheUKETS;wewillworkwithintheUKETSAuthoritytodosothisyear.SubjecttoagreementwithintheAuthority,thispathwaywillconfirmthat:•Wewillexploreexpandingtheschemetomoresectorsoftheeconomy,includinghighemittingsectors.WewillshortlypublishaGovernmentResponsetoourconsultationoninitialexpansionoftheUKETS’sscopetocoverenergyfromwaste/wasteincinerationanddomesticmaritimeemissions.•WeintendtolegislatetocontinuetheUKETSbeyond2030untilatleast2050.Itwillremainalignedwithournetzerotarget,givingtheprivatesectorthecertaintytheyneedtoinvestindecarbonisation.•WerecognisetheintegrityofferedbytheUKETScouldunlockinvestmentatscaleintheUK'sgreenhousegasremoval(GGR)sectorbyprovidinganintegratedmarketwherebusinessescanmakeeconomicallyefficientchoicesonhowtodecarboniseorremovetheiremissions.WewillworkwithintheUKETSAuthoritytoconsideroptionsforintegratingGGRsintheUKETSsubjecttotheoutcomesoflastyear’sUKETSconsultation,arobustmonitoring,reportingandverification(MRV)regimebeinginplace,andthemanagementofwiderimpacts-includingmarketstabilityandthepermanenceoftheemissionsstoredbytheGGRs.FurtherdetailwillbeprovidedintheGovernmentResponsetotheUKETSconsultation.•Wewillexplorethepotentialroleofemissionstradingmarketsingas/electricitypricerebalancingasweconsideroptionsforrebalancingpolicycostsawayfromelectricityandontofossilenergyusewhenthecurrenthighgaspricesfall.•Usingfindingsfromthecallforevidenceontheroleofrobustmonitoring,reportingandverification(MRV)ofgreenhousegasemissionsonfarmsinlastyear’sUKETSconsultationandadditionalevidencefromongoingresearchprojects,wewilldevelopaharmonisedapproachformeasuringcarbonemissionsfromfarms,PoweringUpBritain–TheNetZeroGrowthPlan56whichcouldhelpunlocknewroutestodecarbonisationandfinancialopportunities.WedonotproposeexpandingtheUKETStoagricultureatthistime.ThroughoutthedevelopmentoftheUKETS,wewillundertakefullconsultationonourproposals.WearecommittedtoensuringthatcarbonleakagerisksaremitigatedatallstagesoftheUK’snetzerotransition.WearecurrentlyreviewingourapproachtofreeallocationofETSallowances,lookingatwaystobettertargetfreeallocationsforthosemostatriskofcarbonleakagetoensuretheyarefairlydistributed.Wearealsoconsideringotherpotentialmitigationapproaches–assetoutintoday’sconsultationAddressingcarbonleakagerisktosupportdecarbonisation.PoweringUpBritain–TheNetZeroGrowthPlan57HeatandbuildingsSummaryIthasneverbeenmorecriticaltoensuresecure,affordableheatingforhouseholds,andacceleratetheUK’stransitiontonetzero.DecarbonisingourbuildingstockwillbolsterUKenergysecuritybyminimisingourexposuretovolatilefossilfuelprices.Itwilldriveinvestmentintolow-carbontechnologiessuchasheatpumps,heatnetworks,andpotentiallyhydrogen,whilereducingbillsforhouseholdsandbusinesses.WehavemadesignificantprogresssincetheNetZeroStrategy.Weareinvestingover£6.6billionthisParliamenttowardsimprovingenergyefficiencyandlow-carbonheating,withtargetedregulationandnewmarket-basedmechanismshelpingtoreducecostsforconsumersandbusinesses,attractgreaterprivateinvestmentandstrengthensupplychainresilience.Wearedeliveringseveral‘HelptoHeat’schemes,suchastheSocialHousingDecarbonisationScheme,tosupporttheinstallationofinsulationandheatpumps,withtargetedsupportforlow-incomehouseholdsandtheleastenergyefficienthomes.Wearealsoincreasingpublicawarenessoflow-andno-costactionsthroughthe‘Italladdsup’campaign.Wehavepublished,followingconsultation,ourplansforanewEnergyCompanyObligationscheme–theGreatBritishInsulationScheme.Thislandmarkschemewillsupportover300,000householdstoimprovetheirenergyefficiencythroughmeasuresPoweringUpBritain–TheNetZeroGrowthPlan58suchasloftandcavitywallinsulation,keepinghomeswarmerandmorecomfortablewhilesavingpeoplemoneyontheirbills.However,wecanstillgofurther.Thatiswhywehavealreadycommittedanadditional£6billionbetween2025and2028,demonstratingourlong-termcommitmenttodrivingenergyefficiencyandcleanheatinourbuildingstock.WehavelaunchedtheEnergyEfficiencytaskforcetohelpdeliverourambitiontoreducetheUK’sfinalenergyconsumptionfrombuildingsandindustryby15%by2030,relativeto2021levels.Thetaskforcewillfocusonstimulatingprivateinvestmentandincreasinggreenfinanceoptions,galvanisingsupplychains,andincreasingpublicandbusinessengagementwithenergyefficiency.Thiswillincludebuildingpublicunderstanding,awarenessofsupport,anduptakeofcleanheattechnologiessuchasheatpumps.Theseactionswillalsounlockbillsavings,asatypicalhouseholdheatingtheirhometoacomfortabletemperaturecanbeexpectedtosaveover£1,000peryearbyimprovingtoEPCbandCfromtheworstenergyefficiencybands.43Aswellassupportinghouseholdsweareputtinginplacemeasurestoreducedemandfromlargebusinessesandimprovetheefficiencyofindustrialprocesses.Ourambitionfordrivingthenewgreenindustryoflow-carbonheatingsystemsandenergyefficiencymeasureshasthepotentialtoaddupto£10billioninGrossValueAdded(GVA)peryearintheUKandsupport~240,000jobsin2035.Forexample,researchshowsthatheatnetworkscouldprovideforc.20%oftotalUKheatdemandby2050,44upfromprovidingc.3%currently.45Thisrepresentsaninvestmentopportunityof£60–£80billion,46incentivisedthroughpoliciessuchasheatnetworkzoningandcapitalsupportschemes.Oursocialhousingprogrammealsoleveragesco-fundingfromlocalauthoritiesandhousingassociationstomaximiseinvestmentandbenefits.TheIndependentReviewofNetZerohighlightssubstantialprogresssofar,withrecommendationsfocusedonhowtoaccelerateprogresstomeetthescaleofthechallenge.TheReviewrecommendedthatweprovidegreatercertaintyonincreasingheatpumpinstallations.TheGovernmentisfirmlycommittedtomakingtheUKoneofthelargestmarketsintheworldforheatpumps,andwecanconfirmthat,asrecommendedbytheReview,theBoilerUpgradeSchemewillbeextendeduntil2028.Weareputtinginplaceacombinationofregulatoryandpublicspendingmeasurestomakeheatpumpsascheaptobuyandrunasfossilfuelboilers,toachieveatleast600,000heatpumpinstallationsayearby2028.Wehaveconsultedonphasingoutnewandreplacementfossilfuelheatingsystemsforoffgasgridproperties,andwillrespondtotheseconsultations.TheGovernmenthasanambitiontophaseoutallnewandreplacementnaturalgasboilersby2035atthelatest,andwillfurtherconsidertheIndependentReviewofNetZerorecommendationinrelationtothis.PoweringUpBritain–TheNetZeroGrowthPlan59WeaccepttheIndependentReviewofNetZerorecommendationthatGovernmentshouldcommittooutliningaclearapproachtogasvs.electricity‘rebalancing’bytheendof2023/4andshouldmakesignificantprogressaffectingrelativepricesbytheendof2024.Indicativeemissionspathwayto2037In2021,buildingsemissionswerearound88MtCO2emakinguparound20%oftotalUKnetGHGemissions(includinginternationalaviationandshipping).Residentialcombustioncurrentlymakesupthelargestshareoftheseemissions(78%),thevastmajorityofwhichisfromheating.47Buildingsemissionshaveincreasedby5%since2019anddecreasedby19%since1990.Annualbuildingsemissionsareparticularlyvolatileasimpactedbyexternaltemperatures.InlinewiththesectoralbreakdownoftheindicativepathwaysetoutintheNZS,comparedto2021emissionslevels,GHGemissionscouldfallby7%to17%onaverageover2023-27,25%to37%by2030and47%to61%onaverageover2033-37.PleaseseetheCarbonBudgetDeliveryPlanannexfordetailsofourproposalsandpoliciesformeetingthecarbonbudgets.48ProgressandDeliveryAreaProgressDelivereddomesticschemes,financeandadvicetoreduceenergybillsandincreaseenergyefficiency,particularlyoflow-incomehouseholds,strengthenedbyanewEnergyEfficiencyTaskforce•LaunchedanewEnergyEfficiencyTaskforce,toaccelerateenergydemandreductionanddriveenergyefficiencyimprovementstobringdownbillsforhouseholdsandbusinesses.•Investingapproximately£3billionthisParliamentindomesticenergyefficiencyupgradesthroughourdecarbonisationschemes,deliveringimprovementsto230,000–290,000homes,andsavingcustomersbetween£400-£700perannumontheirenergybills(basedon£2500pricecap).Wehavealsocommitted£1billionperannumuntil2026,supportinglow-incomehouseholdswithenergyefficiencymeasuresthroughtheEnergyCompanyObligation(ECO4).•IntegratedtheSimpleEnergyAdvicewebsiteintoanenhancedgovernmentwebsitewithtailoredadviceandconsumeroptionsforspend-to-saveimprovementsforpeople’shomes.•WehavelaunchedthelatestphaseoftheHomeDecarbonisationSkillsTrainingCompetition,with£9.2millionPoweringUpBritain–TheNetZeroGrowthPlan60AreaProgressfundingtoupskillpeopleworkingintheenergyefficiency,retrofitandlowcarbonheatingsectorsinEngland.Sethigherenergyefficiencystandardsfornewhomesandconsultedonamorerobustapproachtomonitorenergyperformanceofbuildings.•IntroducedanuplifttoenergyefficiencystandardsfornewhomesinJune2022,whichmustnowdeliveraround30%fewerGHGemissionscomparedtopreviousstandards.Theupliftisastepping-stonetotherevisedFutureHomesStandard,whichwewillconsultonin2023,aheadoflegislatingin2024andfullimplementationin2025.•PublishedaconsultationtoensureTheEnergyPerformanceofBuildings(EnglandandWales)Regulations2012arefitforpurposeandreflectournetzeroambitions.TheseincludechangestomakesureEnergyPerformanceCertifications(EPCs)arereliableandtrusted,suchasconsideringnewcivilpenaltieswhencertificatesarenotprovided.•Followingthe2020SocialHousingWhitePaper,the2021HeatandBuildingsStrategycommittedGovernmenttoconsidersettinganewregulatorystandardofEPCBandCforthesocialrentedsector.Wehavecommittedtobegintheconsultationprocessonaminimumenergyefficiencystandardforthesocialrentalsector,withinsixmonthsoftheSocialHousingRegulationBillreceivingRoyalAssent.Fundednon-domesticschemestoincreaseenergyefficiencyinbuildingsandincreaseskills•Madeover£1billionavailablethroughPublicSectorDecarbonisationSchemePhases1and2tosupportheatdecarbonisationandenergyefficiencyinthepublicsector.Phase3isdeliveringafurther£1.4billionbetween2022-2025tosupporta75%reductioninpublicsectorbuildingsGHGemissionsby2037.•Providedupto£61millionofdecarbonisationskillsfundingthroughthePublicSectorLowCarbonSkillsFund,supportingtheidentificationanddevelopmentofdecarbonisationprojectsinthepublicsector.LaunchedprogrammestorolloutCleanHeatTechnologies•Launcheda£450millionBoilerUpgradeScheme(BUS),withover15,000voucherapplicationssofar.BUShasenabledenergysuppliersandmortgagelenderstoofferlow-financeoptions,andinstallersintendtorampupdeployment.PoweringUpBritain–TheNetZeroGrowthPlan61AreaProgress•Launcheda£30millionHeatPumpInvestmentAcceleratorcompetitioninMarch2023,toexpandheatpumpmanufacturing.•Wehaveconsultedonphasingoutnewandreplacementfossilfuelheatingsystemsforoffgasgridproperties,andwillrespondtotheseconsultationsinduecourse.•ImplementingtheCleanHeatMarketMechanismin2024,amarket-basedincentiveformanufacturerstoincreaseinstallationoflow-carbonheatingsystemsrelativetothesaleoffossilfuelboilers.ThisisthroughtheEnergyBill.•CutrateofVATontheinstallationofheatpumpsandinsulationto0%for5yearsinMarch2022,tohelpboostcleanheatuptake.•ContinuedtogrowanddecarbonisetheUKheatnetworkmarketthroughtheGreenHeatNetworkFundandtheHeatNetworkEfficiencyScheme.Wecannowconfirmthatcapitalsupportwillbeextendedto2028tofacilitatethecontinuedgrowthoflowcarbonheatnetworks,including£220millionfortheHeatNetworkTransformationProgrammeover2025/6and2026/7.•Supportingindustrytodeliveraneighbourhoodhydrogenheatingtrialby2024andavillagescaletrialofhydrogenheatingby2025(locationtobeannouncedin2023)totakedecisionsin2026ontheroleofhydrogenindecarbonisingheating.Wearealsosupportingindustryinthedevelopmentofahydrogentownplan.Inaddition,wehaveconsultedonmandatinghydrogen-readyboilersandbroaderheatingsystemefficiencies.UpcomingDeliveryMilestones•LaunchtheGreatBritishInsulationScheme.BasedonproposalsannouncedlastyearasECO+,thiswilldeliver£1billionadditionalinvestmentbyMarch2026inenergyefficiencyupgrades,suchasloftandcavitywallinsulation.ItwillextendhelptoawidergroupofhouseholdsintheleastefficienthomesinthelowerCounciltaxbandsaswellasboostinghelpforthoseonthelowestincomes.Weplantolaylegislationbythesummertotakeitforward.PoweringUpBritain–TheNetZeroGrowthPlan62•WorkwiththeEnergyEfficiencyTaskForce,whichwillpublishitsactionplanlaterthisyear.•ExtendtheBoilerUpgradeSchemeto2028andenhanceitscurrentmarketingcampaign,toincreaseconsumerawarenessandfurtherencouragetake-up.•Enhanceourconsumerenergyadviceservicebylaunchingadigitaleligibilitycheckerforgovernmentfundingandaseriesofpilotsforin-personconsumeradviceacrossfiveregionalNetZerohubsinEngland.Weareexpandingtheservice,includinganationalphoneline,andaredevelopinganeligibilitycheckertodetermineifgovernmentfundingcansupportinstallingenergyefficiencymeasures.Followingthe2020SocialHousingWhitePaper,the2021HeatandBuildingsStrategycommittedGovernmenttoconsidersettinganewregulatorystandardofEPCBandCforthesocialrentedsector.Wehavecommittedtobegintheconsultationprocessonaminimumenergyefficiencystandardforthesocialrentalsector,withinsixmonthsoftheSocialHousingRegulationBillreceivingRoyalAssent.•Publishasummaryofresponsestotheconsultationonimprovingtheenergyperformanceofprivatelyrentedhomes,respondtotheconsultationonimprovinghomeenergyperformancethroughlenders.Weplantoconsultbytheendofthisyearonhowtoimprovetheenergyefficiencyofowner-occupiedhomes.•TheGovernmenthasconsultedonproposalsfortheprivaterentedsectorandwillpublishtheGovernmentresponseinduecourse.Wewillalsoconsiderhowwecanfurthersupportgreaterenergyefficiencyinowner-occupiedcommercialbuildings.•PublishafulltechnicalconsultationforFutureHomesStandardandFutureBuildingStandardin2023.•Introducearegulatoryframeworkforheatnetworksandbegintheimplementationofheatnetworkzoningby2025.•Confirmfundingof£15millionforthe2023/24HomeDecarbonisationSkillsCompetitionandhaverecentlyconfirmedanew£5millionHeatTrainingGrantforheatpumpandheatnetworkskills.PoweringUpBritain–TheNetZeroGrowthPlan63TransportSummaryTransportisthelargestemittingsectoranddecarbonisingitisakeypriority.The2021TransportDecarbonisationPlanandtheNetZeroStrategyputthesectoronanambitiouspathtonetzeroby2050,andwearemakinggoodprogressagainsttheCCCandIndependentReviewofNetZerorecommendations.OurplanswilldeliverwiderbenefitsacrosstheUK-bolsteringenergysecurity,unleashingeconomicgrowth,andsupportingahealthierpopulationandenvironment.Wehaveprovidedstrongmarketsignalsandincentivestodrivesupplychaindevelopment,andthisisalreadyunlockingsignificantprivateinvestment.Forexample,ourcommitmenttozeroemissionvehicleshasledtohundredsofmillionsofpoundsofprivateinvestmentincharginginfrastructure.Weareaworldleaderintheproductionanduseoflowcarbonfuels,withindependentanalysisconductedforSustainableAviationforecastingthepotentialfor65,000jobstobecreatedbyaUKsustainableaviationfuel(SAF)industryby2050,and£1.9billionofdirectGVAbenefitperannum.49Toacceleratesectorgrowth,wehaveanambitiousplantosupportinnovationanddeploymentoflowcarbontechnologies,reducingcoststohouseholdsandbusinesses.TherapidadoptionofbatteryelectriccarshasexceededtheCCC’strajectory,50withindustrystatisticsshowingthatnearly17%ofnewcarssoldin2022werebatteryelectric,upfrom12%in2021.51WeareleadingthewayinternationallywithourcommitmenttodelivertheZEVmandatefrom2024,makinggoodononeofthePoweringUpBritain–TheNetZeroGrowthPlan64IndependentReview’s25keyactionsfor2025.ThisissupportedbyourElectricVehicle(EV)InfrastructureStrategyactionplan,withmajorgovernmentinvestmentalongsidetheprivatesectorthroughourLocalEVInfrastructureandRapidChargingFunds.WewelcometheCCC’srecognitionofwiderprogressinreducingemissionsfromsurfacetransport.Thisincludesconsultingonendingthesaleofnewnon-zeroemissionL-categoryvehiclesandbuses,coaches,andminibuses,andannouncingphaseoutdatesforthesaleofnew,non-zeroemissionheavygoodsvehicles(HGVs).OurZeroEmissionRoadFreightDemonstratorprogrammewilldeployhundredsofzeroemissionHGVsinmultipletechnologiesonUKroads.Alongsideothermeasures,thiswillsupportdeliveryoftheIndependentReviewofNetZero’srecommendationtoacceleratedecarbonisationofthewiderfreightsector.Progressindecarbonisingaviationandmaritimecontinues.OurJetZeroStrategysetsoutourplanforachievingnetzeroaviationby2050,throughrapidtechnologydevelopment,withambitioustargetstoachievenetzeroindomesticflightsandairportsinEnglandby2040.WehavealsoplayedaleadingroleinsecuringagreementfortheInternationalCivilAviationOrganization(ICAO)toadoptnetzeroby2050.InMarch2022welaunchedtheUKShippingOfficeforReducingEmissions(UKSHORE)with£206millionoffundingtoacceleratedevelopmentofcleanmaritimetechnologies.TheCoursetoZeroconsultationwillinformdevelopmentoftargetsfordecarbonisingdomesticmaritime,andtherevisedCleanMaritimePlanin2023.WearealsodrivinginternationalprogressthroughtheInternationalMaritimeOrganization(IMO)negotiations.WewelcometheIndependentReviewofNetZero’srecognitionoftheimportantroleforlowcarbonfuels(LCFs)indecarbonisingsectorssuchasaviationandmaritime,andwilldeliveronitsrecommendationtopublishaLowCarbonFuelsStrategythisyeartoprovidecertaintyforindustryandinvestorsovertheroleLCFswillplayacrossmodesoutto2050.Wecontinuetomakeprogressdeliveringonourambitionsforathrivingdomesticsustainableaviationfuel(SAF)market,supportedbyacomprehensivepolicypackagethatincludesafurtherconsultationonourSAFmandate,respondingtotheGovernment-commissionedindependentevaluationofdevelopingasustainablelong-termUKSAFindustry,andlaunchingasecondapplicationwindowforthe£165millionAdvancedFuelsFund.Anacceleratedshifttopublictransportandactivetravelwillsupportdecarbonisation.OurCyclingandWalkingInvestmentStrategyaimstodeliveraworld-classcyclingandwalkingnetworkinEnglandby2040,inlinewiththeIndependentReviewofNetZero.ThenewlylaunchedActiveTravelEnglandwillprovideextensivefundingandsupportlocalauthoritiestodevelopandbuildnewwalking,wheeling,andcyclingroutesacrossEngland.Onrail,theGreatBritishRailwaysTeamwillbringforwardcostedoptionstodeliverourTransportDecarbonisationPlanambitions.TheGovernmentunderstandsPoweringUpBritain–TheNetZeroGrowthPlan65theneedsofcommunitiesinruralareasdifferfromthoseinurbanenvironments-thisiswhyEngland’slongtermNationalBusStrategyBusBackBetter,isexplicitaboutimprovingconnectivityandavailabilityofservicesinruralareas.Indicativeemissionspathwayto2037In2021,domestictransportemissionswerearound109MtCO2emakinguparound25%oftotalUKnetGHGemissions(includinginternationalaviationandshipping).Roadtransportconstitutesthemajorityoftheseemissions.Domestictransportemissionshavedecreasedby11%since2019and15%since1990,though2021emissionswereimpactedbyCOVID-19andresultantrestrictionsonmovement.InlinewiththesectoralbreakdownoftheindicativepathwaysetoutintheNZS,comparedto2021emissionslevels,GHGemissionscouldfallby2%to8%onaverageover2023-2727%to39%by2030and61%to73%onaverageover2033-37.PleaseseetheCarbonBudgetDeliveryPlanannexfordetailsofourproposalsandpoliciesformeetingthecarbonbudgets.52InternationalaviationandshippingweresignificantlyimpactedbyCOVID-19andresultantrestrictionsonmovement.In2021,internationalaviationandshippingemissionswerearound20MtCO2emakinguparound4%oftotalUKnetGHGemissions(includinginternationalaviationandshipping).In2019,internationalaviationandshippingemissionswerearound44MtCO2emakinguparound9%oftotalUKnetGHGemissions(includinginternationalaviationandshipping).InlinewiththesectoralbreakdownoftheindicativepathwaysetoutintheNZS,comparedto2019emissionslevelsduetoseverelydepresseddemandin2021,GHGemissionscouldfallby11%orriseby5%onaverageover2033-37.PleaseseetheCarbonBudgetDeliveryPlanfordetailsofourproposalsandpoliciesformeetingthecarbonbudgets.53PoweringUpBritain–TheNetZeroGrowthPlan66ProgressanddeliveryAreaProgressPhasingoutthesaleofalltypesofnewnon-zeroemissionroadvehicles.•WepublishedourresponsetotheGreenPaperonanewregulatoryframeworkforvehicleCO2emissions,andatechnicalconsultationonZEVmandatedesigninApril2022.WehavenowlaunchedourfinalconsultationontheZEVmandateregulations,toapplyfrom2024,ensuringdeliveryofourcommitmenttophaseoutthesaleofnewnon-zeroemissioncarsandvans.•Weconsultedondatestophaseoutnewnon-zeroemissionbusesandL-categoryvehicles.•AtCOP26weannouncedphaseoutdatesforthesaleofnewnon-zeroemissionHGVs:2035forHGVsof26tonnesandunderand2040forHGVsover26tonnes.•WecompletedthefirstyearoftheZeroEmissionRoadFreightTrialprogramme,includingfeasibilitystudiesanddeploymentoftwentybatteryelectricrigidtrucks.WeareexpandingthisaspartoftheZeroEmissionRoadFreightDemonstratorprogramme,todemonstrateHGVtechnologiesatscaleonUKroads.•Wefundedmorethan3,000newzeroemissionbuses.Tofurtherincentivisetheuptakeofzeroemissionbuses,weraisedtherelevantBusServiceOperatorsGrantrateto22p/kmfromApril2022.Wealsoannouncedindicativefundingfor31areastodeliverlocalbusserviceimprovements,toencouragebustravel.SupportingdevelopmentoftheUK’scharginginfrastructurenetwork•Wesupportedincreasedavailabilityofpublicchargingdevices,morethantriplinginfouryearsfrom10,300devicesinJanuary2019toover37,600,includingmorethan7,500rapiddevices,inFebruary2023.•WelaunchedtheLocalElectricVehicleInfrastructureFundPilot(LEVI)whichprovided£57millionofpublicandprivateinvestmentto25differentlocalauthoritiesacrossEngland.Thiswilldeliveralmost4,400chargepointsandgulliestoscaleupthedeliveryoflocalchargepointsandsupportdriverswithoutoff-streetparking.PoweringUpBritain–TheNetZeroGrowthPlan67AreaProgress•Followingapilotandinitialcapabilityfunding,afurther£343mcapitaland£37.8mresourcefundinghasbeenmadeavailableoverthenexttwofinancialyearstoscaleupthedeliveryoflocalchargepointsacrossEnglandthroughtheLocalEVInfrastructure(LEVI)Fund.•Inaddition,theOn-StreetResidentialChargepointScheme(ORCS),remainsavailabletoallUKlocalauthorities.Afurther£15misavailablein2023/24,followingatotalof£37min2022/23.•Together,ourLEVIandORCSfundingmeanswewillbeproviding£470mofpublicfundingforlocalelectricvehiclechargingoverthreefinancialyears,supportingtheinstallationoftensofthousandsofchargepointsinlocalareas.•Toimprovetheexperienceofconsumersaccessingpubliccharginginfrastructure,weareregulatingtointroducecontactlesspaymentatnewchargepoints8kWandaboveandexistingrapids50kWandabovewithinoneyear.Wearealsomandatingpaymentroamingtosupportfleetelectrification,pricingtransparencytoallowconsumerstocomparepricesimmediatelyandopenchargepointdatatosupportdriverstofindtherightchargepointfortheirneeds.Reliabilitywillalsobeimprovedasgovernmentwillmandate99%reliabilityforeachrapidnetworkanda24/7freehelplineacrossthepublicnetwork.•AlongsidedisabilitycharityMotability,co-sponsoringtheBritishStandardsInstitute(BSI)inprovidingworld-firstspecificationsondesigningandinstallingaccessiblepublicEVchargepoints.WearecontinuingtoincentivisethepurchaseofbatteryelectricvehiclecompanycarsbyconfirmingpreferentialbenefitinkindratesoutuntilApril2028.Increasinglevelsofcyclingandwalking•Lastyearwelaunchedanewexecutiveagency,ActiveTravelEngland,toensurelocalauthoritiesinvestineffective,high-qualityschemesthatsupportourambitionsforhalfofalljourneysintownsandcitiesinEnglandtobecycledorwalkedby2030.PoweringUpBritain–TheNetZeroGrowthPlan68AreaProgress•InFebruary2023weannounced£200millionfornewwalkingandcyclingschemesandprojectstoenablesaferandmoreinclusiveactivetravel.•InJuly2022wepublishedthesecondCyclingandWalkingInvestmentStrategy(CWIS2),whichincludedanobjectivetodeliveraworld-classcyclingandwalkingnetworkinEnglandby2040.Acceleratingaviationdecarbonisation•WepublishedtheJetZeroStrategyinJuly2022,whichintroducesaworldfirstin-sectoremissionsreductiontrajectorythatseesUKaviationemissionspeakin2019.•Wehaveseta2040netzerotargetfordomesticaviationandinFebruary2023publishedacallforevidencetoseekviewsonfurtheractionrequiredtoachieveourtargetforairportoperationsinEnglandtobezeroemissionby2040.•WehavecommittedtohavingatleastfiveUKSustainableAviationFuel(SAF)plantsunderconstructionby2025,supportedbythe£165millionAdvancedFuelsFund,andtointroduceaSAFmandatetargetingatleast10%SAFintheUKaviationfuelmixby2030.Wearelaunchingasecondconsultationonthemandate’sdesignaswellasasecondwindowoftheAdvancedFuelsFund.•Wecommissionedanindependentreviewtohelpunderstandtheconditionsneededtocreateasustainablelong-termUKSAFindustryinOctober2022,andwillimminentlyrespondtoitsfindings,andwillworkwithindustryonoptionstoincreaserevenuecertaintyforUKSAFplantsandoptionstostabilisetheUKmarketforfeedstocks.•Wehavecommitted£685milliontosupportdevelopmentofnewultra-efficientandzero-carbonaircraftthroughtheAerospaceTechnologyInstituteProgramme.AspartofthisProgramme,£113millionofgovernmentandindustryfundingwasannouncedinFebruarytoresearchzero-emissionliquidhydrogencombustingjetenginesandlightweightbatteriesforsmallaircraft.Inaddition,over£4.2millioniscommittedtoresearchairportpreparednessthroughtheZeroEmissionPoweringUpBritain–TheNetZeroGrowthPlan69AreaProgressFlightInfrastructureprojectwhichpublishednewresearchinMarch2023.•TheUKEmissionsTradingScheme(ETS)AuthorityhasconsultedonaligningtheUK'sETS(whichcoversdomesticflightsandthosetotheEUandGibraltar)withnetzero,whilereviewingthesector'sfreeallocationandexploringtreatmentofnon-CO2impacts.•WehaveledinICAOnegotiationsonadoptinga2050netzerotargetandmaintainingtheintegrityoftheCarbonOffsettingReductionSchemeforInternationalAviation.•Wehavecommittedtoworkingcloselywithacademiaandindustrytobetterunderstandthescienceandpotentialmitigationsnon-CO2impactsfromaviation.Acceleratingmaritimedecarbonisation•WepublishedtheCoursetoZeroconsultationinJuly2022,seekingviewsandevidenceontheoptimalpathwaytonetzeroGHGemissionsfordomesticmaritimeby2050.•WepublishedaconsultationwiththeUKETSAuthorityincludingproposalstoexpandtheschemetodomesticmaritime.•WelaunchedtheOperationZeroimplementationplan,todeliverzero-emissionoperationsandmaintenancevesselsintheNorthSeaoffshorewindsectorby2025andannouncedthe£206millionUKSHOREresearchanddevelopmentprogramme.•Wearechampioninga2050zeroemissionstargetforinternationalshippingthroughaleadingroleinIMOnegotiationsandlaunchedtheClydebankDeclarationatCOP26,nowwith24statesignatories,committingtosupportzeroemissionshippingcorridors.AspartoftheGreenShippingChallengewehaveannouncedagreementsondevelopinggreenshippingcorridorswiththeU.S.,NorwayandtheNetherlands.PoweringUpBritain–TheNetZeroGrowthPlan70UpcomingDeliveryMilestones•ImplementtheZEVmandatein2024andbolstercharginginfrastructureroll-outacrossthecountrytoaccelerateuptakeofzeroemissionvehicles.•Setanenddateforthesaleofnew,non-zeroemissionbusesandanexpectationforwhentheentirefleetshouldbezeroemission,whilstensuringbusservices,includingthoseservingruralareas,arenotadverselyaffected.•LaunchtheRapidChargingFundtosupporttheupgradeofelectricitycapacityonthestrategicroadnetwork,enablingtheroll-outofultra-rapidelectricvehiclechargepoints.•ProgressFutureofFreightplanactionstodecarbonisethewiderfreightsector,inlinewiththeIndependentReviewofNetZero'srecommendationanddeliverZeroEmissionRoadFreightDemonstrationsforhydrogenfuelcellandbatteryelectrictechnologies,withvehiclesandinfrastructurebeinginplacebyMarch2025.•Consultonthefutureregulatoryframeworktodeliverourcommitmentstophaseoutthesaleofnewnon-zeroemissionHGVsandsupportuptakeintheinterimperiod.•DeveloptheraildecarbonisationprogrammewiththeGreatBritishRailwaysTransitionTeam,aheadofGreatBritishRailwaysbecomingformallyestablished.•UpdatetheCleanMaritimePlan,withindicativedomesticdecarbonisationtargets,deliveringUKSHORER&Dinvestmentprogrammeinitiatives-includingtrialsofbatteryelectricandalternativefuelledvesselsandshoresideinfrastructurebyMarch2025-andconsideringapotentialphaseoutdateforthesaleofnewnon-zeroemissiondomesticvessels.•PlayaleadingroleondeliveringinternationalprogressondecarbonisingaviationandshippingthroughtheICAOandIMO.•Publishoursector-wideLowCarbonFuelsStrategyin2023,providingaclearvisionforinvestment,andlegislatingtoincluderecycledcarbonandnuclearderivedfuelsinrenewablestransportfuelschemes,enhancingfuelsecurityandenvironmentalbenefits.•Continueworkonpotentialmeasurestohelpaddressmarketbarrierstotheuseoffuelswithhigherbiocontentincompatibleheavy-dutyvehicles.•Developlongtermfundingplansforcyclingandwalkinginfrastructureandbehaviourchangeprogrammesupto2025.•AimtocompletethereviewoftheNationalNetworksNationalPolicyStatementduring2023,takingaccountoftheGovernment'slegalnetzerotarget.PoweringUpBritain–TheNetZeroGrowthPlan71NaturalResources,Waste&F-GasesSummaryMaximisingco-benefitsforclimateandnatureisvitaltosupportingnetzeroalongsideotherpriorityoutcomes,includingbiodiversity,waterquality,climateadaptationandeconomicgrowth.TheIndependentReviewofNetZerodemonstratedthatdecarbonisinglandusesectorsandsustainablymanagingnaturalresourcesandbroaderecosystemscancreatesizeableeconomicopportunities.Deliveringonthesehasthepotentialtoleveragegrowingdemandforinvestmentopportunitiesinnaturalcapital,supportingthemarketframeworksneededinthisemergingarea.WehavemadeprogressonkeyNetZeroStrategycommitments,publishingupdatesonhowenvironmentallandmanagement(ELM)schemeswillpayfarmerstoprovidearangeofpublicgoods,includingactionstoreduceGHGemissions.54WehavealsosetalegallybindingtargetfortreecoverageinEngland.Ourambitiousagriculturemeasuresbuildonhistoricalprogressinreducingemissions.Forexample,thedairysectorincreasedmilkproductionby11%between2000-2020,with21%fewercowsand12%lessGHGemissions.Wewillbuildonprogressinreducingemissionsfromagricultureandwillsetouthowfarmerswillbesupportedtounderstandtheiremissionsourcesthroughcarbonauditsby2024andtakefurtheractionstodecarbonisetheirbusinesses,includingthroughELMschemes.WewillshortlypublishaGovernmentResponsetoourPoweringUpBritain–TheNetZeroGrowthPlan72callforevidenceexploringtheroleofrobustmonitoring,reporting,andverificationofGHGemissionsonfarms.55Utilisingthesefindingsandadditionalevidencefromongoingresearchprojects,wewilldevelopaharmonisedapproachformeasuringcarbonemissionsfromfarms,helpingunlocknewfinancialopportunitiesthroughcarbonmarkets.WealsoanticipateentryofhighefficacymethanesuppressingproductstotheUKmarketfrom2025andwillexploretheroleofindustryandgovernmenttomaximiseuptakeofsuchproductsforsuitablecattlefarmsystemsatpace,throughaphasedapproach.ThiswillincludetheambitiontomandatetheintroductionofproductswithprovensafetyandefficacyincompoundfeedsforcattleassoonaspracticallypossibleinEngland.Wehavealsomadeconsiderableprogressreducingemissionsfromwaste,aswedriveforwardactiontodeliverthecollectionandpackagingreformsfromtheNetZeroStrategy.TheClimateChangeCommitteehasrecognisedtheeffectivenessoftheLandfillTaxindivertingwastefromlandfillandconsequentlyreducingemissions.Wewillshortlyissueacallforevidencetosupporttheneareliminationofbiodegradablewastebeingsenttolandfillby2028.WewillpublishanaddendumtotheResourcesandWasteStrategyinthesummer,whichwillfocusonnetzero.WewelcometherecommendationsmadebytheReviewandCCC’s2022ProgressReporttoParliament,includingaswepreparetopublishourLandUseFrameworkforEnglandlaterthisyear.Takingasystemsapproach,theLandUseFrameworkwillhelpsetouthowwecandelivermultifunctionallandscapesthatareresilienttoourchangingclimatewhilstmeetingourneedsfornetzero,foodproductionandenvironmentalrecovery.Forexample,theagriculturalsectorplaysanimportantroleinsupportingon-shorerenewableenergygeneration,aidingdeliveryoftheBritishEnergySecurityStrategy,whilstmaintainingdomesticfoodproductionsecurity.WeagreewiththeIndependentReviewofNetZero’srecommendationthatweensureapipelineoninvestablenature-basedsolutionsprojects.WehaveestablishedtheNaturalEnvironmentInvestmentReadinessFundwiththeEnvironmentAgencytodevelopapipelineof86projectsacrossEnglandtomonetisethebenefitsofnatureanddevelopenablingtoolsorstandards.Our2023GreenFinanceStrategysetsouthowwewillmeetHMG’sgoalofmobilisingatleast£500millionperyearofprivatefinanceintonature’srecoveryby2027,andmorethan£1billionperyearby2030.Indicativeemissionspathwayto2037In2021,agricultureandotherlanduseemissionswerearound49MtCO2emakinguparound11%oftotalUKnetGHGemissions(includinginternationalaviationandshipping).Livestock(particularlycattle)currentlymakeupthelargestshareoftheseemissions.Agricultureandotherlanduseemissionshavedecreasedby2%since2019and25%since1990.Thelargestfactorinthislong-termfallhasbeenanincreaseinthesinkprovidedbyforestland,withanincreasingCO2uptakebytreesastheyreachmaturity,inPoweringUpBritain–TheNetZeroGrowthPlan73linewiththehistoricalplantingpattern.InlinewiththesectoralbreakdownoftheindicativepathwaysetoutintheNZS,comparedto2021emissionslevels,GHGemissionscouldfallby1%to12%onaverageover2023-27,11%to24%by2030and19%to37%onaverageover2033-37.PleaseseetheCarbonBudgetDeliveryPlanfordetailsofourproposalsandpoliciesformeetingthecarbonbudgets.In2021,wasteandF-gasemissionswerearound30MtCO2emakinguparound7%oftotalUKnetGHGemissions(includinginternationalaviationandshipping).Thelargestemissionssourcesincludelandfillandairconditioningandrefrigeration.WasteandF-gasemissionshavedecreasedby11%since2019and66%since1990.Thereductionsince1990isprimarilyduetoreductionsinemissionsfromlandfillandhalocarbonproduction.InlinewiththesectoralbreakdownoftheindicativepathwaysetoutintheNZS,comparedto2021emissionslevels,GHGemissionscouldfallby23%to31%onaverageover2023-2743%to51%by2030and56%to65%onaverageover2033-37.PleaseseetheCarbonBudgetDeliveryPlanfordetailsofourproposalsandpoliciesformeetingthecarbonbudgets.56ProgressanddeliveryAreaProgressNaturalResources•WepublishedourEnvironmentalImprovementPlan(EIP),updatingonourprogressondeliveringthe25YearEnvironmentPlanandsettingoutourfutureambitionsforlandusetosupportnetzeroalongsidenature,biodiversityandclimateadaptationgoals.•PublishedourrecentEnvironmentalLandManagementUpdate,whichsetsouthowwewillsupportfarmersandlandmanagerstosustainablyproducefood,whiledeliveringbenefitsforclimateandnature.•Weareacceleratingtheroll-outoftheSustainableFarmingIncentive(SFI)schemein2023andconfirmedthefullrangeoffuturepayableactionsacrosstheSFIandtheCountrysideStewardshipscheme.•WealsoannouncedtheopeningofroundtwooftheLandscapeRecoveryschemewhichwillfocusonnetzero,protectedsitesandhabitatcreation.•WehavealsoestablishedacrossadministrationUKBlueCarbonEvidencePartnershiptoproducearoadmaptopotentialinclusionofcoastalwetlandsintheUKGHG.PoweringUpBritain–TheNetZeroGrowthPlan74AreaProgressAgriculture•AnnouncedsixnewSFIstandards.Actionsunderthesestandardswillhelptowardsdecarbonisingtheagriculturesector.•IntheEIP2023wecommittedtoconsultingthisyearonextendingenvironmentalpermittingtothebeefanddairysectors.•Openedthe£270millionFarmingInnovationProgramme(FIP).InpartnershipwithUKResearch&Innovation(UKRI),wehavealreadycommitted£68millionuptotheendof2022andwillprovidefurthergrantsof£51millionin2023tofacilitatethedevelopmentandadoptionofemergingfarmingtechnologiesthatwillhelpreduceGHGemissions.Peat•Launchedthe£5.6millionPaludicultureExplorationFund(2022-2025)tosupporttheuptakeofpaludiculture,whichoffersanopportunitytocontinueprofitableagriculturewhilemanaginglandinawaythatsupportsnetzero.•Announcedourintentiontobantheuseofpeatinhorticulture,withlimitedexemptions,in2024.•StarteddevelopmentoftheNaturalEnglandPeatlandRestorationPlanwhichwillprovideatrajectoryforpeatlandrestorationupto2050andwillbepublishedin2024.Forestry,agroforestryandhedgerows•Announceda£124millionboostfortheNatureforClimateFund(NCF),ensuringatotalspendofapproximately£678milliononwoodlandcreationandwoodlandmanagementby2025.•AnnouncedtheinclusionofahedgerowstandardintheSFI,duetoberolledoutlaterthisyear.•LaunchedtheForestryCommissionDevelopmentWoodlandOfficerapprenticeshipwiththeUniversityofCumbriaandtheInstituteofCharteredForesters.Wasteandwastewater•PublishedthegovernmentresponsetoconsultationsonlaunchingaDepositReturnSchemefordrinkscontainers.PoweringUpBritain–TheNetZeroGrowthPlan75AreaProgressinEngland,WalesandNorthernIrelandandExtendedProducerResponsibilityforpackaging.•Developedplanstoimproveresourceefficiency.SeeIndustrychapterformoredetail.•Consultedonimprovingfoodwastereportingforlargefoodbusinesses.•SetalegallybindingtargetthroughtheEnvironmentActtoreduceresidualwaste(excludingmajormineralwastes)kgpercapitaby50%by2042from2019levels.F–gases•PublishedourF-gasassessmentreportontheeffectivenessoftheF-gasregulationUpcomingDeliveryMilestonesNaturalResources:•ContinuetorolloutourELMschemes,withallthreeoperatinginfullby2024-5.•PublishaLandUseFrameworkforEnglandthisyear.•Publishasummaryofresponsestoourcallforevidenceonmethanesupressingfeedproducts.•Developamandatorymethodologyforvoluntaryfoodecolabelling,•PublishaBiomassStrategyin2023.TheBiomassStrategywillreviewtheamountofsustainablebiomassavailabletotheUKandhowthisresourcecouldbebestutilisedacrosstheeconomytohelpachievethegovernment’snetzeroandwiderenvironmentalcommitmentswhilealsosupportingenergysecurity.Thisincludesprovidingearlythinkingondomesticbiomassproduction,includingshortrotationforestryandperennialenergycrops.•Publisharoadmapforincreasingtheuseoftimberinconstructionbysummer2023.•PublishourresponsetotheLowlandAgriculturalPeatTaskForcereportandcontinuetoworkwithpartnerstodevelopthePeatlandRestorationPlanforpublicationin2024,aheadoftheNCFendingin2025andtransitioningtothefuturefarmschemesasthemainpeatdeliveryvehicle.•Launcha£6.6millionlowlandpeatresearchanddevelopmentprogrammeandexploreoptionstoincreaseambitioninlowlandpeatlands,developinginfrastructureandcollaborationprojectstotransformourlowlandpeatwaterlandscapes.PoweringUpBritain–TheNetZeroGrowthPlan76•RespondtothecallforevidenceontheUKEmissionsTradingScheme(ETS)potentialroleasalong-termmarketfornature-basedandengineeredgreenhousegasremovals.Waste,wastewaterandF-gases:•DeliverourcollectionandpackagingreformsfromtheResourcesandWasteStrategy.Thisincludes:publishingourresponsetoourconsultationonconsistencyinhouseholdandbusinessrecyclinginEngland,introducingaDepositReturnSchemefordrinkscontainersfromOctober2025,andimplementingpackagingExtendedProducerResponsibilityfrom2024.•Developaplantoachievetheneareliminationofbiodegradablemunicipalwastegoingtolandfillfrom2028followingacallforevidence.•RespondtoourcallforevidenceontheinitialexpansionoftheUKEmissionsTradingSchemetocoverwasteincinerationandenergyfromwaste.•PublishourresponsetotheconsultationonarevisedWastePreventionProgrammeforEnglandalongsidethenewprogramme'MaximisingResources,MinimisingWaste'.•Publishourresponsetotheconsultationonimprovingfoodwastereportingforlargefoodbusinesses.•SupportWaterUK'sNetZeroRouteMaptodeliveranetzerowatersupplyby2030.•PublishtworapidevidenceassessmentssettingoutoptionstoimproveourestimatesofGHGemissionsfromwastewatertreatment.•ConsultonproposalstoamendourexistingF-gaslegislation,withtheaimoffurtherreducingF-gasuseandemissions.PoweringUpBritain–TheNetZeroGrowthPlan77GreenhouseGasRemovalsSummaryRemovingcarbondioxidefromtheatmosphereisessentialtomeetnetzero.Weintendtocapitaliseontheeconomicbenefitsfromthisemergingsector,byscaling-upengineeredGreenhouseGasRemovals(GGRs)todelivernewexportopportunitiesandhigh-qualitygreenjobsacrosstheUK,supportingenergysecurityandlevelling-up.Todeliverthisweneedtomobilisesignificantprivateinvestment,supportinginnovationandprovidinginvestorswithlong-termclarityandcertaintyonfuturerevenuestreams.Ourpriorityistoreducegreenhousegas(GHG)emissionsfromhumanactivitiesandtoonlyuseGGRstomitigateremainingGHGemissionsthatareunavoidable.TheCCCagreesthatnature-basedandengineeredremovalswillbeneededtomitigatetheimpactofresidualGHGemissionsinhard-to-abatesectors,tomeetnetzero.57TheNetZeroStrategyestablishedourambitiontodevelopmarketsandincentivesforengineeredGGRtechnologiestoenabledeploymentofatleast5MtCO2epaofengineeredGGRremovalsby2030,potentiallyscalingto75-81MtCO2epaby2050.WewelcometherecommendationsfromtheCCCandIndependentReviewofNetZeroforGGRsectorpolicy.TheseincludedpublishingtimingsanddetailsoftheGGRsbusinessmodelproposal,detailingplansformonitoring,reportingandverification(MRV)andundertakinglegislativechangestoensureengineeredremovalscounttowardsourcarbonbudgets.WearealreadyactingontheseandthecommitmentsmadeintheNZStosupportthescale-upofengineeredGGRs.WerecognisethatthereisstillafinancialbarriertoscalingtheengineeredGGRsector.Wehavetakenstepstoaddressthis;forexample,in2022weconsultedonbothaGGRbusinessmodelandaspecificpowerbio-energycarboncaptureandstorage(powerBECCS)businessmodels,weintendtorespondtotheGGRconsultationlaterthisyear,thepowerBECCSresponsewillbepublishedimminently.Additionally,werecognisetheintegrityofferedbytheUKETScouldunlockinvestmentatscaleintheUK'sGGRsectorbyprovidinganintegratedmarketwherebusinessescanmakeeconomicallyefficientchoicesonhowtodecarboniseorremovetheiremissions.WewillworkwithintheUKETSAuthoritytoconsideroptionsforintegratingGGRsintheUKETS,subjecttotheoutcomesoflastyear’sUKETSconsultation.Arobustmonitoring,reportingandverification(MRV)frameworkwillbecrucialtopreservetheintegrityofanymarketfornegativeGHGemissionsandinstilpublicandinvestorconfidencethatremovalsaregenuineandverifiable.TheIndependentReviewofNetZeroemphasisedthatgovernmentmustclearlyoutlinethestandardsthebusinessmodelsrequire.WehaveconsultedontheimmediateprioritiesforMRV,includingareviewoftheexistinglandscapeofstandardsandinitiativesthatcouldunderpinPoweringUpBritain–TheNetZeroGrowthPlan78businessmodelsupportforinitialGGRprojectsandproposedprinciplesfordeterminingthelegitimacyofanegativeemission.WeagreewiththeCCCthataccesstoCO2transportandstorageinfrastructurewillbecriticalforengineeredGGRtechnologiesthatrelyonlong-termgeologicalstorage,suchasdirectaircarboncaptureandstorage(DACCS)andbio-energycarboncaptureandstorage(BECCS).OurworkonCCUSclustersissetoutintheCCUSsectionofthisdocument,andinPoweringUpBritain–EnergySecurity.Aspartofthis,weareexploringhowearlyGGRprojectscouldbeconnectedtothetransportandstoragenetwork.Subjecttocriteriaunderdevelopment,theGovernmentismindedtoenableengineeredgreenhousegasremovals(GGRs)toapplytoTrack-1expansionandTrack-2.WealsoagreewiththeCCCthatunderstandingandensuringthesustainabilityofGGRsiscrucialandwilldifferacrossthedifferenttypesofengineeredGGRmethods.Toaddressthis,wehavecommissionedresearchonresourceintensityforDACCS.RelevantforbiomassGGRs,wearecommittedtopublishingtheBiomassStrategyin2023.ThiswillreviewtheamountofsustainablebiomassavailabletotheUKandhowthisresourcecouldbebestutilisedacrosstheeconomytohelpachievethegovernment’snetzeroandwiderenvironmentalcommitmentswhilealsosupportingenergysecurity.ThiswilloutlinetherolethatBECCScanplayinreducingcarbonemissionsacrosstheeconomyandsetouthowthetechnologycouldbedeployed.DirectAirCapture(DAC)poweredbynuclearpowerplantTheUKGovernmentisfundingavarietyofinnovativeGGRtechnologies,includingseveralfirst-generationDirectAirCapture(DAC)technologiesthroughtheDACandGreenhouseGasRemovalsInnovationProgramme.Theobjectiveofthisprogrammeistoproduceseveraloperationalpilotplantsby2025,aswellasrealisinginvestment,jobs,skills,andtechnologyinthisnascentsector.OneexampleofaprojectbeingfundedisaconsortiumledbySizewellC,whoaredevelopinganinnovativeheat-poweredDACdemonstratorplantdesignedtocapturelowcarbonwasteheatfromanuclearpowerplant.Thistechnologycouldofferincreasedefficiencyandlessrelianceonelectricity,thereforereducingthecostofremovingcarbondioxidefromtheatmosphere.Ascaled-upDACplantlinkedtoSizewellCcouldutilisearound400MWofheatfromthenuclearpowerplanttocapture1.5milliontonnesofCO2peryear.PoweringUpBritain–TheNetZeroGrowthPlan79Indicativeemissionspathwayto2037AssetoutintheNetZeroStrategy,wesetanambitiontodeployatleast5MtCO2ep.a.ofengineeredremovalsby2030,potentiallyrisingto23MtCO2ep.a.by2035.HeadlineprogressanddeliveryMetricProgressTodeliveratleast5MtCO2epaofengineeredremovalsby2030.•InJuly2022wepublishedourconsultationonengineeredGGRbusinessmodelsthatcouldsupportonatechnology-neutralbasistechnologiessuchasDACCS,seawaterCO2removals,andcertainBECCSapplications.Thisincludedseekingviewsontheimmediateprioritiesformonitoringreportingandverification(MRV).•InAugust2022wepublishedourpowerBECCSconsultationandprojectsubmissionprocess,todaywehavepublishedtheprojectselectionoutcomeandwillpublishtheconsultationresponseimminently•InDecember2022,wepublishedapositiononGGRcreditsfortheIndustrialCarbonCapture(ICC)BusinessModelandWasteICCBusinessModel•WehavesetupaGGRBusinessModelExpertGrouptoenablegovernmenttocontinueengagementwithabroadrangeofstakeholdersacrosstheGGRlandscape,drawingonthisexpertisetoinformdevelopmentofthebusinessmodel.•InMarch2022,theUKETSAuthoritylaunchedacallforevidenceexploringtheroleoftheUKETSasapotentiallong-termmarketforGGRs.•WehaveactedonourcommitmenttoseekanamendmenttotheClimateChangeAct(CCA)toenableengineeredremovalstocontributetoUKcarbonbudgets,byincludingaclauseintheEnergyBillthatseekstobroadenthedefinitionof“removals”ofgreenhousegasesbeyondnature-basedGGRstoincludeengineeredGGRs.TheEnergyBilliscurrentlyprogressingthroughParliament.•Subjecttocriteriaunderdevelopment,theGovernmentismindedtoenableengineeredGGRstoapplytoTrack-1expansionandTrack-2PoweringUpBritain–TheNetZeroGrowthPlan80MetricProgress•ThepowerBECCSprojectselectionprocesssoughttoidentifyprojectswhichcoulddeploytoTrack-1timescales.TwoprojectspassedthedeliverabilityassessmentforthepowerBECCSprojectsubmissionprocess,DraxPowerLtdandLynemouthPowerLtd.TheyhavenotbeenselectedfordeploymentinTrack-1,buttheDepartmentforEnergySecurityandNetZerowillengagefurtherwiththeseprojectsfollowingtheassessmentoutcome.Track-1isnottheextentofourambition,andthedepartmentremainscommittedtoachieving5Mtpaofengineeredgreenhousegasremovalsby2030.Todeliververifiableremovalofupto1000tCO2epafrompilotprojects.•Phase1ofthe£6millionNetZeroInnovationPortfolioDACandotherGGRsProgrammedelivered22feasibilitystudiesacrossDAC,EnhancedWeathering,BiocharandBECCStechnologies.•Inphase2oftheDACandGGRinnovationcompetition,over£54millionofgovernmentfundingwasawardedto15ofthemostpromisingdemonstrationprojects.UpcomingdeliverymilestonesInthecomingyearwewill:•PublishgovernmentresponsesandnextstepsfollowingareviewoftheGGRbusinessmodelandpowerBECCSbusinessmodelconsultationresponses.FortheGGRconsultationresponse,thisincludeshavingreflectedoninputfromourGGRBusinessModelExpertGroupmeetings.•WorkwithintheUKETSAuthoritytoconsideroptionsforintegratingGGRsintheUKETSsubjecttotheoutcomesoflastyear'sUKETSconsultation,arobustmonitoring,reportingandverification(MRV)regimebeinginplace,andthemanagementofwiderimpacts-includingmarketstabilityandthepermanenceoftheemissionsstoredbytheGGRs.FurtherdetailwillbeprovidedintheGovernmentResponsetotheUKETSconsultationinduecourse.•MonitortheprogressoftheDACandGGRInnovationProgrammewhichwillbeintheprocessofbuildingpilot/demonstrationprojectstobefullyoperationalbyMarch2025.•PublishtheBiomassStrategyin2023,whichwilloutlinetherolethatBECCScanplayinreducingcarbonemissionsacrosstheeconomyandsetouthowthetechnologycouldbedeployed.PoweringUpBritain–TheNetZeroGrowthPlan81SupportingtheTransitionacrosstheEconomyPoweringUpBritain–TheNetZeroGrowthPlan82SupportingtheTransitionacrosstheEconomyInnovationSummaryDeliveringnetzerowillrequireastepchangeintherateofnewtechnologiesbeingdeveloped,deployedtomarketandadoptedbybusinessesandconsumers.TheglobalmarketopportunityforUKcompaniesfromnetzerocouldreachacumulative£1trillionto2030andsupportinginnovationcouldhelpunlockupto300,000jobsandnewcommercialopportunitiesinbothexportsanddomesticindustriesacrossallpartsoftheUK.58SincetheNetZeroStrategy,governmenthaveconfirmedaportfolioofnetzeroresearchandinnovation(R&I)investmentofapproximately£4.2billionovertheperiodfrom2022-25.Thisreflectsdeliveryofnetzeroresearchandinnovationprogrammesbeingatoppriority.TheNetZeroResearchandInnovationDeliveryPlan,publishedalongsidethisNetZeroGrowthPlan,outlinesthisgovernment’ssupportandalignswiththeprioritiessetoutintheNetZeroResearchandInnovationFramework.59WewelcometheCCCandIndependentReviewofNetZero’srecommendationsontheneedtodisseminateknowledgeandinsightfromR&Iprogrammesandacceleratetherapidandsafeintroductionofemergingnetzerotechnologies.ThegovernmentplanstoprioritiseseveralkeyrecommendationsfromtheCCCandIndependentReviewofNetZeroandwillcontinuetodeliveroursignificantresearchandinnovationportfolio.Wewill:•DevelopanetzerotechnologyroadmapandupdatetheEnergyInnovationNeedsAssessments;•DelivertherecommendationsaroundtheroleofregulatorsandregulationthroughthePatrickVallance-ledreviewofhowtheUKcanbetterregulateemergingtechnologiestoensuregrowth;PoweringUpBritain–TheNetZeroGrowthPlan83•DeliverrecommendationsondisseminatingknowledgeandreviewinggreaterR&Dfornetzerothroughexistingandplannedactivity,suchastherecentlylaunchedconsultationonR&Dtaxreliefreform.ProgressanddeliveryInthelast18months,wehavemadegoodprogressagainstthecommitmentssetoutintheinnovationchapteroftheNetZeroStrategy.Thisincludes:AreaProgressIncreasegovernmentinvestmentinR&D•Atthe2022AutumnStatement,theGovernmentrecommittedtoa£20billionperannumpublicR&Dbudgetby2024/2025.Thisincludedanadditional£1.6billionfortheUK’snineCatapultsfor2023-2028.ThiswillallowCatapultstocontinuesupportinginnovationandde-riskingthetransitionfromresearchtocommercialdelivery;acceleratinginnovationclusters;andstimulatingadditionalprivatesectorinvestmentinR&D.PublishtheUK’sfirstNetZeroResearch&InnovationFramework•TheNetZeroResearchandInnovationFramework,publishedalongsidetheNetZeroStrategyinOctober2021,setoutthekeyresearchandinnovationchallengesforthenext5-10yearsandaroadmapto2050.•We’vesincepublishedafollow-upNetZeroResearchandInnovationDeliveryPlanalongsidethisplantooutlinetheGovernment’snetzeroR&DprogrammesforthecurrentSpendingReviewperiod2022-25andhowthesearealignedtotheprioritiesintheFramework.Deliveragovernmentprogrammeofinnovationtoenabledecarbonisation•Governmentexpectstoinvestapproximately£4.2billioninnetzeroresearchandinnovationovertheperiodfrom2022-25.Thisincludes£1.5billionallocatedtonetzeroinnovationannouncedintheNetZeroStrategy,aswellasnetzeroresearchandinnovationdeliveredthroughotherdepartmentalprogrammesandthroughUKRI.FurtherfundingfromOfgem’s£450millionStrategicInnovationFund(£263millionduringthisspendingreviewperiod)isbeinginvestedininnovationrelatingtotheenergynetworks.•The£1billionNetZeroInnovationPortfolio(NZIP)and£385millionAdvancedNuclearFundcontinuestosupportpriorityareasinpower,buildings,industryanddisruptiveinnovationsover2021-2025.Todate,wehavealreadysupportedatleast863PoweringUpBritain–TheNetZeroGrowthPlan84AreaProgressorganisationswithNZIPfundingandatleast44programmeshavelaunchedsofar.•Intransport,governmentisinvestinginprogrammestodecarboniseland,seaandairtransportation.Thisincludes£20millioninZeroEmissionRoadFreightTrials(ZERFT),whichinvolvedsixfeasibilitystudiesandthedeploymentoftwentybatteryelectricrigidtrucksintoNHSandlocalauthorityfleets.WeareexpandinguponthisworkwiththeZeroEmissionRoadFreightDemonstrator(ZERFD)programmewhichwillseehundredsofZeroEmissionHGVsandtheirinfrastructuredemonstratedonUKroads.•TheNetZeroStrategycommittedatleast£75milliononresearchintonaturalresources,wasteandF-gases.TheDepartmentforEnvironment,FoodandRuralAffairscontinuetopushforwardkeyprogrammesinthesesectorsandareintheconcludingstagesoffinalisingapartnershipwithUKRIandtheDevolvedAdministrationscalledBuildingaGreatFuture–TransformingLandUseforNetZero,NatureandPeople.TakealeadershiproleinMissionInnovation2.0•AsaleadingmemberofMissionInnovation,wehavecementedMissionInnovationastheleadingforumforinternationalcleanenergyinnovationandglobalcollaboration.TheUKleadstheMissionInnovationSecretariatandhelpsshapetheoverallstrategyoftheinitiativethroughourroleontheSteeringCommittee.•TheUKnowco-leadstheGreenPoweredFutureMissionandtheCleanHydrogenMission,aswellastheHeatingandCoolingInnovationCommunity.TheUKalsoparticipatesinfourotherMissions.PoweringUpBritain–TheNetZeroGrowthPlan85Upcomingdeliverymilestones•Wewillcontinuetoawardfundinganddeliverprojectsacrossthe£4.2billionportfolioofnetzeroR&I.WeintendtopublishanupdateontheprogrammessetoutintheNetZeroResearch&InnovationDeliveryPlanbytheendoftheSpendingReviewin2025.•AddressingtheCCC'srecommendation,wewillcontinuetoencouragedisseminationoftheoutputsoffundedinnovationprogrammes.ThisincludesthroughpublishingprogrammeupdatessuchastheforthcomingNZIPProgressReportandsharingbestpracticethroughthecross-governmentNetZeroInnovationBoard.•AddressingtheIndependentReviewofNetZerorecommendations,wewilltakeforwardseveralnewcommitmentsincludingthedevelopmentofanetzerotechnologyroadmapandanupdateoftheEnergyInnovationNeedsAssessments.CaseStudy:LapwingReverseCoalProject:NovelengineeringofanaturalsolutionwillenabletheremovalofCO2fromtheatmospheretolockitbackintheground.TheLapwingEstatesitsonlowlandpeatwhichhasbeenhistoricallydrainedandfarmedforfoodproduction.ThishasdegradedthesoilandledtoGHGemissionsasthepeatoxidises(lowlandpeatisresponsiblefor3%ofUKGHGemissions).ReverseCoalwasawardednearly£3millionthroughtheNZIP.Tocapturecarbondioxideandabateexistingemissions,theywillrewetthepeatandestablishfastgrowingwillowcropswhichwillbechippedanddriedandthenfedintoahightemperaturepyrolysisplant.Thisplantconvertsthewillow(biomass)intoasolidformofcarbonakintocoal,called‘biochar'.Thebiocharisburiedundergroundforlongtermstablecarbonstoragewiththeheatandpowerdirectedintocontrolledenvironmentagricultureformoresustainableandsecurefoodproduction.Thisfirst-of-its-kindprojectisexploringaninnovativenewwaytosustainablyintensifyproductionofhighquality,healthyfood,whilstatthesametimesupportingthegovernment’stargetfornetzeroby2050.PoweringUpBritain–TheNetZeroGrowthPlan86FusionEnergyFusionhaspotentialtobetheultimatecleanpowersolution,deliveringlow-carbon,safe,continuousandsustainableenergywithouttheissueofverylong-lived,high-levelradioactivewaste.TheUKisarecognisedgloballeaderinthistechnology,withtheworldrecordforfusionenergyproductionbeingbrokenattheJointEuropeanTorusfacilityinOxfordshire,anduniquecapabilitiesinthetechnologieslikeroboticsandfuelhandlingneededtodevelopfusioncommercially.WehaveanopportunitytocapitaliseonourpositiontocreateanewfusionenergytechnologysectorintheUK,creatingjobs,economicgrowthandexportpotentialevenbeforefusionenergyisonthegrid.In2021,theUKFusionStrategysetoutambitiousobjectivestodemonstratethecommercialviabilityoffusionbybuildingaprototypefusionpowerplantcapableofprovidingenergytotheUKgridby2040,andtobuildaworld-leadingfusionindustrywithhigh-exportpotential.TheUKGovernmenthasalreadycommitted£222millionforthefirstfiveyearsofUKAEA’sSphericalTokamakforEnergyProduction(STEP)programme.STEPaimstodesign,develop,andbuildtheprototypefusionpowerplant.Thiswillnotonlydemonstrateapathtothecommercialviabilityoffusionenergy,butwillhelpcreateaskilledfusionsupplychainandprovidelearningandexperiencefortheUKfusionsectorasawhole.TheGovernmenthasalsoprovided£42millionfortheFusionIndustryProgramme.Thisinitiativewillgalvanisecommercialfusioninnovationthroughachallengefund,designedtosupportUKbusinessestosolvecommontechnicalissuesfacingfusion,aswellasencourageR&Dinvestmentintothisgrowingindustry.ThissupportstheFusionCluster,anewlycreatedcommunityofpublicorganisationsandbusinessesworkingtogetherattheCulhamCentreforFusionEnergytoshareknowledgeanddrivefusionenergyfromtheorytoreality.Membershaveaccesstocuttingedgetechnicalfacilities,start-upbusinesssupportandexperiencedpeers.ProgresssofarTheGovernmenthasalreadyidentifiedandannouncedasitefortheSTEPpowerplant,whichwillbebultinWestBurton,transformingthesiteofanexistingcoalpowerplantintoagreenenergycluster.Ithassetupthecompanythatwilldeliverthispowerstationandbegundevelopingthecommercialrelationshipsneedtobuildit.PoweringUpBritain–TheNetZeroGrowthPlan87TheUKistheonlycountryintheworldtodevelopandlegislateforaproportionateregulatoryregimeforfusionthatencouragesinnovationwhilstputtingsafetyattheheartofourfusionsector.Takentogether,theGovernment'sclearstrategyandinvestmentinfusionenergyR&D,regulationanddevelopmentofthesectorhasalreadymadetheUKthebestplaceintheworldtodofusioninnovation.FusioncompaniesfromaroundtheworldareinterestedincollaboratingwiththeUKandseveralcompanieshavemadeannouncementsaboutplanstobuildnewfacilitiesorexperimentsintheUKbecauseoftheuniqueprogrammestartedbytheUK.PoweringUpBritain–TheNetZeroGrowthPlan88GreenFinanceandInvestmentSummaryTheglobaltransitiontonetzerowillseetrillionsofpoundsreallocatedandinvestedinnewprojects,productsandservices.TheUK’sworld-renownedfinancesectorcanbeattheforefrontofthisglobalgreenfuture.UnlockingthepotentialofgreenfinanceisintegraltothedeliveryoftheNetZeroGrowthPlan.ItisalsovitaltodeliveringonthevisionsetoutintheChancellor’s2022AutumnStatement,and2023SpringBudget,forbothfinancialservicesandgreenindustriestobekeygrowthsectorsfortheUK.Alongsidethisplan,governmenthaspublishedthe2023GreenFinanceStrategy.Thissetsouthowwewilldeliveronourambitiontobecometheworld'sfirstnetzero-alignedfinancialcentre,howwewillutiliseallleversavailabletomobilisetheprivateinvestmentintoenergysecurityandnetzero,andhowwewillsupportindustrytocapturetheopportunityofbeingaworld-leadinggreenfinancecentre.Asweareclearthatthereisnopathwaytonetzerowithoutprotectingandrestoringnature,thestrategyexplicitlyincorporatesnatureandclimateadaptationintoourgreenfinancepolicyframework.TheUK’sCOP26Presidencyin2021generatedhistoricalmomentuminthenumbersofbusinesses,cities,regionsandinvestorsseekingtoalignwithclimateandenvironmentalgoals,withover90%ofglobalGDPnowcoveredbynationalnetzerotargets.InthefinancialservicessectorthiswasexemplifiedthroughthecommitmentoftheGlasgowFinancialAllianceforNetZero,whichunitesover550membersacrossthefinancialsectorcommittedtoalignwithanetzerofuture,spanning50countriesandrepresenting40%ofglobalprivatefinancialassets.Thisisalong-termopportunityforUKfinancialservices.Itisestimatedthatglobalsustainablefinancemarketsareexpectedtogrowto$34trillioninassetsundermanagementby2026,outpacinggrowthintheassetandwealthmanagementindustryasawhole.ManagingthiscapitalisasignificantopportunityforUKfinancialandprofessionalservices,butthesectormustbesupportedtosecuresignificantmarketshare.Frominnovativeclimatetechsolutionsseekingventurecapitaltogrowtowardstheirvision,tobankslendingtomajorrenewablesprojectsandassetmanagersallocatingcapitaltosupportthecompaniesofthefuture–behindeverystepofourtransitionwillbeourworld-leadingfinancialservicessector.The2023GreenFinanceStrategysetsouttheactionsgovernmentwilltakenexttodevelopourgreenfinancepolicyframeworkandrespondtorecommendationsmadebyboththeCCCandIndependentReviewofNetZero.Policyfocusesongreeningthefinancialsystem,throughtheprovisionoftherightinformation,dataandtoolsPoweringUpBritain–TheNetZeroGrowthPlan89forrealeconomyandfinancialservicescompaniestomanagerisksandseekopportunities;andonfinancingourgreenobjectivesthroughmoreefficientandeffectivemobilisationofprivatecapital.WeareprovidingfurtherdetailontheUK’scommitmentandframeworkforbecomingtheworld’sfirstnetzero-alignedfinancialcentre.Weareensuringmarketparticipantshavetheinformationanddatatheyneed,forinstanceby:committingtoconsultontheextensionoftransitionplanningdisclosurerequirementstothelargestprivatecompanies,complementingexistingrequirementsinplacebytheFCA,committingtoissueacallforevidenceonScope3emissionsreporting,andcontinuingtosupporttheworkoftheInternationalSustainabilityStandardsBoardandsettingupofaframeworktoaddresstheirsuitabilityforadoptionintheUKassoonasfinalstandardsarepublished.Wewillsupportindustryasitdevelopsthenewmarketframeworks,toolsandexpertiserequiredtoexpandgreenfinanceactivitywithanupdateonthedeliveryofaUKGreenTaxonomyandlaunchingaTransitionFinanceMarketReviewonhowtomaketheUKbecomethebestplaceintheworldforraisingtransitioncapital.Tosupportcompaniesandfinancialinstitutionstoinvestincriticalnetzerosectorsandtechnologies,wesetouthowtheUKInfrastructureBank,with£22billionincapitaltodeployfornetzeroandregionalandlocalobjectives,BritishBusinessBank,UKResearchandInnovation,andtheUK’sexportcreditagency,UKExportFinance,supportgreentechnologiesthroughtocommercialisation.Wealsocommittoconsultonthespecificstepsandinterventionsneededtosupportthegrowthofhighintegrityvoluntarycarbonmarketsandprotectagainstgreenwashing.WearepublishingaNatureMarketsFrameworksettingoutourapproachtoacceleratinghigh-integritymarketstoenablefarmersandlandmanagerstoattractinvestmentinnaturalcapital,aswellasourplanstodevelopacomprehensivesuiteofnatureinvestmentstandards.PoweringUpBritain–TheNetZeroGrowthPlan90ProgressanddeliveryAreaProgressFinancingGreen•TheUKInfrastructureBankisnowoperationaland,asof27thMarch2023,hasannounced12deals,investingapproximately£1.2billionandunlockingover£5billionofprivatecapital.Projectsthatcontributetowardsmeetingnetzeroinclude:−Committing£162.5millionasacornerstoneinvestorinNextPowerUKESGfund,theUK'slargestsubsidy-freesolarfund.−Investing£150million,alongside£1billionfromotherinvestors,intheUKportionoffinanceforthe1.4GWNeuConnectinterconnectorproject.−Providing£10milliontotheWestMidlandsCombinedAuthority,supportingtheintroductionofgreenbusesinBirmingham.•Sincetheirlaunchin2021,theUK'sgreengiltprogrammehasraisedmorethan£26billionfromgiltsissuedbytheUKDebtManagementOffice,andretailGreenSavingsBondssoldviaNS&I.•TohighlightandcommunicatemorewidelythenetzeroopportunitiesandincentivesforinvestmentintheUK,wepublishedfourinvestorroadmaps-coveringtheUK'sautomotive,hydrogen,CCUS,andoffshorewindsectors.•LastyearwehostedtheGreenTradeandInvestmentExpo.Thiseventbroughttogether200Britishbusinessleadersandglobalinvestors,showcasinginvestmentandexportopportunitiespresentedbytheUK'snetzerotransition.GreeningFinance•In2022theUKbecamethefirstG20countrytorequirethelargestbusinessesandfinancialinstitutionstodisclosetheirclimate-relatedrisksandopportunitiesundertheframeworksetbytheTaskforceonClimate-relatedFinancialDisclosure.ThroughourG7presidency,wefacilitatedotherjurisdictionstotakethesamesteps.Additionally,wehavecommittedtobuildingonthisthroughthedeliveryofSustainabilityDisclosureRequirements.PoweringUpBritain–TheNetZeroGrowthPlan91UpcomingdeliverymilestonesBytheendof2023,governmentwill:•ConsultontransitionplanningdisclosurerequirementsfortheUK'slargestcompanies;•ConsultontheUKGreenTaxonomy;•PrepareaframeworktoassesstheInternationalSustainabilityStandardsBoard(ISSB)disclosurestandards,subjecttotheirfinalisation;•Consultonspecificstepsandinterventionsneededtosupportthegrowthofhighintegrityvoluntarymarketsandprotectagainstgreenwashing;•ReceiverecommendationsfromtheTransitionFinanceMarketReview;AreaProgress•Furthermore,theUKlaunchedtheTransitionPlanTaskforce,agroupofindustryexpertstaskedwithdevelopingguidanceforgoldstandardtransitionplans.PoweringUpBritain–TheNetZeroGrowthPlan92NetZeroWorkforceSummaryTheGovernment’snetzeroandenvironmentalgoalsdependontheUKhavingtherightworkforcewiththerightskillsandcapacityintherightlocationsacrosstheUK.Inthenext30years,thenetzerotransitionwilldriveopportunitiesforjobcreation,withexistingoccupationssettoevolveastheUK’seconomydecarbonises.Itwillbeimportanttomanagethisshift,withpartsofthecountryrequiringthegreatesttransitionoftenamonglow-productivityareasoftheUK.WeagreewiththeCCCandtheIndependentReviewofNetZerothatgovernmentshouldtakeaproactiveapproachtoidentifyingandworkingwithindustrytotacklenetzerospecificworkforcechallengesandskillsgaps.AstheUKtransitionstonetzero,oneinfiveUKworkerswillexperienceshiftingdemandforskillsimplyingasubstantialneedtoupskillandreskillourcurrentworkforce.Alongsidethat,weneedtobringnewworkersandtalentalongwithusonthetransitiontonetzero.Deliveringanetzeroworkforceisajointgovernment,industryandeducationsectorendeavourwhichiswhytheGovernmentsetuptheGreenJobsDeliveryGroup.TheDeliveryGroupbuildsonexistingworkbytheGovernmenttopreparetheexistingworkforceforthegreeneconomyandboostthepipelineofskilledworkers.Governmentcontinuestoensuretheskillssystemisdeliveringfornetzero.ThisincludestheimplementationoftheDepartmentforEducation’sSustainabilityandClimateChangeStrategy,whichwillequipchildren,youngpeople,andadultlearnerswiththeknowledgeandskillstocontributetothegreeneconomy.AsjustoneexampleinMarch2023,theDepartmentforEnergySecurityandNetZeroannouncedanadditional£5milliontosupportlowcarbonheatingtraining,expectedtosupportaround10,000trainingopportunities,whichisstartinginApril2023andcontinuinguntilMarch2025.Thisisinadditiontothe£15millioncommittedtoskillsintheenergyefficiencyandlowcarbonheatingsectorssince2020throughtheHomeDecarbonisationSkillsTrainingFund,supportingover16,000trainingopportunitiesforpeopleworkingintheenergyefficiency,retrofitandlowcarbonheatingsectorsinEngland.Akeyroleforgovernmentistoprovideindustrywithcertaintyandclarity,sothattheprivatesectorisbetterabletoaddressskillschallengesthroughrecruitmentandtraining.TheGovernment'scommitmenttoitslegallybindingcarbonbudgetsandsectorspecificplanssendsanimportantsignaltobusinesses.Werecognisethatbusinessesrequiregreaterpolicycertaintytoinvestintheirworkforcesandtraining.PoweringUpBritain–TheNetZeroGrowthPlan93Whileacknowledgingtheworkdonesofar,theCCCandIndependentReviewofNetZeromaderecommendationsonpublishinganActionPlanorRoadmapforNetZeroSkills,drivingforwarddeliveryoftherecommendationsoftheGreenJobsDeliveryGroup.Weagreeontheneedtogofurtherandsoarecommittingtopublishingajointgovernment-industryNetZeroandNatureWorkforceActionPlaninthefirsthalfof2024,representingtheculminationofseveralsectoralassessmentsinthecoming12months.WearebeginningwithasetofheadstartactionsfromthepilotPowerandNetworksWorkingGroupnow,followedbyasuiteofcomprehensiveactionsforthissectorbySummer2023,whichcanbeusedasatemplatefortheothersectoralassessments(moredetailsetoutattheendofthischapter).Wewillpublishanupdatewiththissuiteofcomprehensiveactions,alongsidebiannualprogressupdatesfromtheDeliveryGroup’sco-Chairsonitswork,laterthisyear.WeagreewiththeIndependentReviewofNetZeroontheneedtodeveloprobustgreenjobsfigurestomonitorthetransition.WewillcontinuetoworkcloselywiththeDepartmentforLevellingUp,HousingandCommunitiesanditsSpatialDataUnittoensurethisworksupportseffortstoreducegeographicdisparitiesandleveluptheUK(seeboxbelowformoreinformation).Anotherkeymethodtodeliveronemployers’netzeroworkforceneedsareapprenticeships,whereGovernmenthasbeendrivingprogress.Over100standardsarecurrentlyapprovedfordeliveryinareasincludingsustainabilitybusinessspecialist,smartmeterinstaller,ecologist,metalrecyclingtechnicalmanager,andforestcraftsperson.Therearealsomoreindevelopmentincludinglowcarbonheatingtechnicianandbatterymanufacturingtechnician.ThesestandardshavebeendevelopedbyemployersandtheInstituteforApprenticeshipsandTechnicalEducation(IfATE),toensurethattheycontinuetomeettheneedsofemployerswithinthesector.Inaddition,IfATEasksalltrailblazergroupstoapplytheirSustainabilityFrameworkwhendevelopingorrevisingapprenticeshipssothatsustainabilityisconsideredinawaythatismeaningfultoeachoccupation.TheApprenticeshipLevyisakeypartoftheGovernment’sreformstotheapprenticeshipsystemandwearecommittedtomakingapprenticeshipsworkforbusinesses.Forexample,wearehelpingSMEstohireapprenticesandkeepingStandardsuptodatetosupportchangingworkforcedemands,likethedomesticelectricianapprenticeshipwhichwasrecentlyupdated.Thegovernmentiscommittedtoimprovingtheapprenticeshipsystemandcontinuestoengagewithstakeholdersontheirideas.Short,intensiveSkillsBootcampsalsoenablelearninginsectorsandjobsthatsupportthetransitiontonetzero.PoweringUpBritain–TheNetZeroGrowthPlan94ProgressanddeliveryAreaProgressTheGreenJobsDeliveryGroupGovernmentestablishedtheGreenJobsDeliveryGroupinMay2022,asthecentralgovernment-industryforumongreenjobsandskills,withministerialmembershipfromBEIS(nowtheDepartmentforEnergySecurityandNetZero),Defra,DfE,andDWP,aswellasmembershipfromindustryleaders,academia,theskillssector,unions,andlocalrepresentatives.Followinginitialinvestigationsintocurrentworkforcechallenges,fourtask&finishgroupshavebeenestablished:•ThePowerandNetworksGroupistacklingnear-termworkforcechallengesfacingthepowersector.Thepilotindustry-governmentworkinggrouphasalreadystartedtoconductaworkforceassessmentin2022whichwillfeedintotheoverarchingNetZeroandNatureWorkforceActionPlanin2024.EmergingactionsaresetoutintheinitialsstepsbelowandfurtherupdateswillbeprovidedbySummer2023.•TheNatureSkillsGroupisdevelopingasetofactionstocreateapipelineofrequirednature-basedjobsandskillsacrosstheeconomy.•TheLocalCapacityGroupbringstogetherplaceleaders,thebusinesscommunity,skillsprovidersandgovernmenttoexplorethekeylocalchallengesandopportunitiestodeliveringnetzerothoughalocallens.•TheResourcesandWasteGroupisgatheringinformationontheskillsneededtodelivertheResourcesandWasteStrategyandthemovetoamorecirculareconomy.Boostingtheskillspipelineforthegreeneconomy•InEngland,DfEisinvestinganadditional£3.8billioninskillsby2024-25.Thisincludesfundingforprogrammestosupportgreenskills,includingapprenticeships,TlevelsandSkillsBootcamps-programmesdesignedtorespondtowhatemployersneed.Wehaveseenemployerdemandforskillsincludingretrofitconstruction,electricvehiclemaintenance,windpower,arboriculture,heatpumpinstallationandgreenheatingtechnologies.PoweringUpBritain–TheNetZeroGrowthPlan95AreaProgress•TheInstituteforApprenticeshipsandTechnicalEducation(IfATE)isimprovingitsoccupationalmapsandwillbeaddinganew'greenoccupation'filtersothatemployersandlearnerscanseewhichapprenticeshipsandtechnicalqualificationssupportagreencareer.Forexample,aLowCarbonHeatingTechnicianapprenticeshipisindevelopment,offeringadirectrouteintothesmall-scalerenewablesindustry.•TheGreenApprenticeshipsandTechnicalEducationAdvisoryPanel(GATEAP)hasadvisedIfATEandtheemployersitworkswithonstrengtheninggreencontentwithinexistingstandardsandintroducingnewstandardswherenecessary.Therearealready100standardswhichsupportgreenskills.OccupationalstandardscontaininggreenskillsincludeMaintenanceandOperationsEngineeringTechnician,offeringaWindTurbineTechnicianoccupationalspecialism;andaPlumbingandDomesticHeatingTechnician,includinganEnvironmentalTechnologiesoption.•Newhighertechnicalqualifications(HTQs)willalignwiththetransitiontonetzero.ThisincludesHTQsinDigital,Construction,EngineeringandManufacturing,andAgriculture,EnvironmentalandAnimalCare.Theseareallsectorsthatwillrequirelevel4and5skillsforthegreentransition.•TheGovernmentisworkingwithindustrytoestablishsector-specificinitiatives.Forexample,anewForestryTrainingFundlaunchedinFebruary2023andaresearchprojectisbeingcommissionedonworkforcegrowthneededinthepeatrestorationsector.TheGovernmentisalsosupportingtheestablishmentofanewprofessionalbodyforthefarmingindustry,theInstituteforAgricultureandHorticulture(TIAH),tosupporttheagriculturaltransition.•TheGovernmentwillworkwithpartnerstoensurethatnetzeroandgreencareersareconsideredinallrelevantcurrentandproposedcareerscampaignsacrossgovernmentandindustry.ThisincludestheGreenCareersHubandNetZeroAmbassadors,aswellassupportingawarenessraisingofnetzeroandgreencareersbydisseminatinginformationtocareersleadersandcareersadvisersinschools,collegesandinthecommunity.PoweringUpBritain–TheNetZeroGrowthPlan96AreaProgressUpskillingtheworkforceforthegreeneconomy•InEngland,DfEandindustryareworkingtogethertotraintheexistingworkforceforthenetzerotransitionthroughprogrammesincludingSkillsBootcamps,FreeCoursesforJobs,HTQsandapprenticeships.Theseprogrammesarehelpingtoupskillmoreworkerssothattheycan,forexample,supportgreaterenergyefficiencyindomesticandcommercialbuildings,andworkwithgreentechnologiesthatcontributetotheloweringofcarbonemissions.•TheseSkillsBootcampstrainworkersinhighdemandskillssuchaselectricvehiclechargerinstallation,retrofit,andarboriculture.DfEiscontinuingtoexpandSkillsBootcamps,withupto£550millioninfundingallocatedforfinancialyears2022-25.•IndustryhavecommittedtoworkwithDfEtoproposenewSkillsBootcampsinFY2023-24aimedataddressingimmediateworkforceskillsneedsinkeylowcarbonsectors.TheywillworkatpacetoidentifycommonskillsdemandsthatcouldbeaddressedbySkillsBootcamps.Bytheendof2023,wewillhaveatleast35differentbootcampcoursesacrossEnglandsupportinggreenerconstruction,transport,andgreenenergyandindustrysectors.•Employers(includingthosewitharoletoplayindeliveringthenetzerotransition)areencouragedtousethe'findtrainingandemploymentschemesforyourbusiness'websiteformoreinformationonthefullrangeofgovernmentprogrammesavailabletohelpthemhireemployees,offerworkexperience,orupskillexistingstaff(includingthosewhichofferfinancialincentives).•FromApril2022,theGovernmentwidenedtheeligibilitycriteriaofFreeCoursesforJobs.AnyadultinEnglandwhoisearningundertheNationalLivingWageorisunemployedhasfreeaccesstothesequalifications.Optionsincludesgreenskillssuchasthebuiltenvironment,conservation,andforestry.Supportingindividualsintogreenjobs•DWPiscontinuingtosupportpeopleintogreenjobsthroughjobcentreinterventionsandarangeofdifferentprogrammes.ThisincludesSector-basedWorkAcademyProgrammesandtheRestartScheme,aswellasbyreferringpeopletowiderskillsprovision.DWPisincreasingknowledgeofgreenjobsacrossjobcentresandlaunchedanewgreenjobstoolkitinApril2022,PoweringUpBritain–TheNetZeroGrowthPlan97AreaProgresswithinformationonsectorsincludingforestry,wind,recyclingandwaste,waterandbuildingretrofit.•DWP'sNationalEmployerandPartnershipTeam(NEPT)establishedagreenjobsteaminDecember2021toensuregreenjobsopportunitiesareaccessibletojobseekers.•DWPlaunchedagreenjobssinglepointofcontact(SPOC)networkinMarch2022,withaSPOCineachofDWP's37districtshelpingtoimprovelocalfeedbackandsupport,promotenationalmessagingandensurecolleaguesareawareofgreenjobsandskillsopportunities.PoweringUpBritain–TheNetZeroGrowthPlan98GreenjobsandskillsdataItisestimatedthatsinceNovember2020,over80,000greenjobsarecurrentlysupported,orinthepipelineacrosstheUKeconomyasaresultofnewgovernmentpoliciesandspending.Ourambitionscouldsupportupto480,000jobsin2030.TheGovernmentisworkingwiththeOfficeforNationalStatistics(ONS)toimprovedataonthegreeneconomy.TheONSestimatea16%increaseindirectemploymentinlowcarbonbusinessesacrosstheeconomyfrom2020to2021-reachingnearly250,000.However,thisisonlypartofthepicture,andtheONShasundertakenworktodevelopabroaderdefinitionofgreenjobs:“Employmentinanactivitythatcontributestoprotectingorrestoringtheenvironment,includingthosethatmitigateoradapttoclimatechange”.Thisdefinitionhasbeendevelopedfollowingextensiveengagementwithstakeholders.ONSwilldevelopaframeworkunderneaththisdefinitionandpublishassociatedexperimentalstatisticsforgreenjobsthroughout2023.Itwillcontinuetoimproveitsexistingestimates,publishrelatedresearcharticles,andengagewithusers.Progressalsocontinueswithmonitoringjobsinthegreeneconomyusingexperimentalgovernmentanalysisofonlineadvertisements.Forfournetzerosectors-heatandbuildings,electricvehicles,wind,andnewandadvancednuclearpower-thekeytrendsidentifiedinonlinejobadvertisementswereexamined,showing:•TheirshareofUKonlinejobadvertisementshasincreasedinrecentyears(inTechnicalAnnex)•TheyarespreadthroughouttheUKwhileindividualsectorsappearmoreconcentratedinafew,varyinggeographicareas(Figurebelow)•TheyhavehigheradvertisedaveragesalariescomparedtotheUKaveragesalaryforonlinejobadvertisements(Figure4inintroduction)Thisanalysisprovidesinsightintopartofthedemandsideoftheonlinejobsmarket,producingoutputsatlocalauthoritylevel,andinformationaboutsalarylevels,tomonitortheimpactofthenetzerotransitiononthejobmarket.Theexperimentalnatureoftheanalysismeansitdoesnotcaptureallonlinejobadvertisementsinthesefoursectors.TheTechnicalAnnexprovidesmoredetailbehindthisanalysis.Additionally,theUnitforFutureSkills(UFS)isbuildingajobsandskillsdataecosystem,whichwillhelpidentifyskillsmismatchesatanindividual,sectoral,andeconomy-widelevel.PoweringUpBritain–TheNetZeroGrowthPlan99Figure7:Jobadvertdistributionbylocalauthorityforselectnetzerosectors,UK,2014to2022Source:DepartmentforEnergySecurityandNetZeroexperimentalanalysisofLightcastTMonlinejobadvertdata,2023.Note:ThepercentageshareisthenumberofonlineadvertisementsinthatlocalauthoritydividedbythetotalnumberofonlineadvertisementsforthatsectorPoweringUpBritain–TheNetZeroGrowthPlan100Upcomingdeliverymilestones•From2023theGovernmentwillimprovedatacollectedfromnetzeroandenvironmentalschemesonsupportinggreenjobsdata,includingbuildingagranularunderstandingofthegeographicdistributionofgreenjobsandtheireconomicimpactonplaces,andmakingasmuchofthisinformationaspossibleavailablepublicly.•FromSpringthisyear,theDepartmentforEnergySecurityandNetZerowillpublishtheDeliveryGroup’sbiannualupdatesfromtheco-chairs.•In2024,theDeliveryGroupwillpublishaNetZeroandNatureWorkforceActionPlan.•Wealsocontinuetojoinupacrossthedevolvedadministrations,whohavealreadymadeexcellentprogress,withtheWelshGovernmenthavinglaunchedtheirNetZeroSkillsPlaninMarch2023,andtheScottishGovernmentandSkillsDevelopmentScotlandhavinglaunchedtheirClimateEmergencySkillsActionPlan2020-2025in2020.PoweringUpBritain–TheNetZeroGrowthPlan101Pilotgovernment-industryactiononthepowerandnetworkssectorworkforceTheGreenJobsDeliveryGroupistakingactionand,aspriority,establishedapilotpowerandnetworkssectorsgovernment-industryworkinggroup,duetothesesectors’importancetodeliveringonnetzeroandenergysecurity.Challengesthesesectorsface,includeissueswiththeSTEMskillspipeline;competitionforskillswithothersectors;lackofdiversityandinclusioninthesector;andanagingworkforce.Inresponse,industryhasaskedformoreagileupskillingandreskillingtraining.Thisearlyworkofthepowerandnetworksworkinggrouphasbothhelpedtoestablishaprocess,thatwewillencourageothersectorgroupstofollow,andagreedheadstartactionswhichgovernmentandindustrywillmakeearlyprogresson.ThegroupwillpublishacomprehensivesuiteofactionswithintheGreenJob’sDeliveryGroupco-chair'supdatebySummer2023.Principlesofintent:Process(thatwewillencourageothersectorgroupstofollow)1.Bysummer2023,industry(ledbyEDF,withsupportfromEnergyandUtilitiesSkillspartnership(EUSP)andtheEngineeringConstructionIndustryTrainingBoard(ECITB))willconductandcollateresearchonworkforcedemandandskillsgapswithinthepowerandnetworkssectors,specificallyrelatedtonetzero.ThiswillcovertheskillsandworkforcepictureinEngland,aswellasthatofthedevolvedadministrationswhererelevant.2.Bysummer2023,industry(ledbyEUSP)willthenrefinethegroup’sinitialassessmentofworkforcebarriers.ThiswillcoverskillsandworkforceinEngland,andofthedevolvedadministrationswhererelevant.3.Bysummer2023,industry(ledbyECITB,withsupportfromEUSP)willnextmapandidentifygapsinroutestocompetence,includingthroughapprenticeships,qualifications,andindustryschemes.ThiswilldrawupontheworkoftheDfEandInstituteforApprenticeshipsandTechnicalEducation(IfATE).ThiswillcoverskillsandworkforceinEngland,andofthedevolvedadministrationswhererelevant.4.Inautumn2023,governmentandindustrywillworktogethertoidentifyhowbesttoovercomebarrierswhichthreatenthesectors'abilitytogetpeopleintokeyoccupationsinsufficientnumbers.Forexample,DfEwillidentifyopportunitiestoflexskillsprogrammesinlinewiththechallengesidentifiedvia1and2above.5.Theseactions,alongwithinformationonhowprogresstowardsthemwillbemonitored,willthenbeincludedaspartoftheNetZeroandNatureWorkforceActionPlanin2024.PoweringUpBritain–TheNetZeroGrowthPlan102‘Headstart’actionsonpowerandnetworks:1.Buildinguponthis,byautumn2023,industry(ledbyNationalGridandsupportedbyEUSP),andgovernmentwillworktogethertosupportmodularandagiletrainingroutesintokeyoccupationswithinthepowerandnetworkssectors.2.Industry,ledbyEUSP,willidentifywhereinvestmentinmodularorshortcoursescouldbeincreasedbydevelopingnewSkillsBootcamps.DfEwillrespondbysupportingtherolloutofnewBootcamps,throughtheDynamicPurchasingSystem(DPS)orbyrespondingtothelocalgrantholder.3.Byautumn2023,industry(throughEUSP)willworkwiththeIfATEviatheEnergyandUtilityEmployerAdvisoryPanel(EAP)toexplorehowapprenticeshipsandmodulartechnicalqualificationscanbestsupportskillsdevelopmentinsectors.4.Bywinter2023,Industry,ledbyEUSP,willpilotanapproachtomaximisingtheemployertrainingestate,deliveringtrainingtoanindustrystandard,aimedatmeetingindustryratherthanindividualemployerneeds.Thiswouldinvolve,forexample,industrycollaboratingonusingoneanother’strainingestatetomaximisethetalentpipeline,andprovidingtrainingonbehalfofotheremployerswherecapacityallows.Thisrequiresindustrytoexploreagreeingandsettingoutputstandards.5.Byspring2024,DfEwillprovidecommunicationstoindustry,tosupportemployersandtrainingproviderstoengagewithrecentlylaunchedflexi,portable,andacceleratedapprenticeships,toboostapprenticeshipnumbersbymaximisinguseofthevarietyofprogressionroutes.6.Industry,ledbyEUSP,willuseits‘workforceassessment’toinformregulatorsofprojectedworkforcedemandaspartofeffortstoensuresufficientprovisionforworkforceresilience.7.Industry,ledbyEUSP,willexplore(jointlyledwithECITB)potentialskillspassportingarrangementsforthepowerandnetworkssectors.8.Byautumn2023,industry,ledbyEUSP,willidentifyopportunitiesforgrowthandroutestocompetencepresentedbyapprenticeships.TherearenoplanstoreviewtheApprenticeshipLevyatpresent,butwewillcontinuetodevelopandsupportasuiteofimprovementstotheapprenticeshipssystemforemployers.9.In2023,industry(ledbyIEMA/CIEEM)andIfATEwillexplorehowapprenticeshipsandothernon-degreelevelroutestoenvironmentalmanagementandregulationcouldbeimprovedorcreated.10.Thegrouphasdiscussedwiderworkforceissues,includingattractingpeopleintonetzeroroles,andaddressingdiversityandinclusionissues.Asafirststep,thegroupiscollatingandanalysingarangeofdataandevidenceavailabletoidentifypotentialactions.11.Governmentwillworkwithpartnerstoensurethatnetzeroandgreencareersareconsideredinallrelevantcurrentandproposedcareerscampaignsacrossgovernmentandindustry.ThisincludestheGreenCareersHub,aswellassupportingPoweringUpBritain–TheNetZeroGrowthPlan103awarenessraisingofnetzeroandgreencareersbydisseminatinginformationtocareersleadersandcareersadvisersinschools,collegesandinthecommunity.Insummer2023,industryandgovernmentwilladdtothisinitiallist,formingamorecomprehensivesetofactionscoveringthestepsbeingtakentoaddressbothskillsandwiderworkforcechallenges.ThiswillthenbereflectedintheNetZeroandNatureWorkforceActionPlanin2024,alongsideactionsforotherkeysectorsandthedetailofhowprogresswillbemonitored.PoweringUpBritain–TheNetZeroGrowthPlan104EmbeddingNetZeroinGovernmentSummaryThegovernmenthasmadesignificantprogressinembeddingnetzeroinitsprocessesanddecisionmaking.InFebruary,thePrimeMinistercreatedtheDepartmentforEnergySecurityandNetZero,whosefocusalongsideenergysecurity,isdrivingoveralldeliveryofnetzeroandmaximisingtheeconomicopportunitythetransitionpresents.Additionally,thecreationoftheDomesticandEconomicAffairs(Energy,ClimateandNetZero)Cabinetcommittee,ensuresacoordinatedapproachtodeliveringnetzeroacrossgovernment.ThisCabinet-levelgovernanceissupportedbyDepartmentalgovernance,aswellasothergroupssuchastheNetZeroBusinessandInvestmentGroup,theGreenJobsDeliveryGroup,andtheJetZeroCouncilandtheLocalNetZeroForum.Wehaveembeddednetzeroconsiderationsintoourkeyfinancialdecision-makingframeworksincludingpublishingfurtherdetailontheenvironmentalimpactsofSpendingReview2021andthemethodologyforassessingthese.WehavealsolaidthefinalenvironmentalprinciplespolicystatementbeforeParliament.Thepolicystatementsetsouthowpolicymakersshouldinterpretandproportionatelyapplyfiveenvironmentalprinciplestosupportenvironmentalprotectionandsustainabledevelopment.MinistersoftheCrownwillberequiredtohavedueregardtothestatementwhenmakingpolicyfrom1November2023.ThesearetwokeymilestoneswecommittedtointheNetZeroStrategy.Allthewhilewehaveadoptedawholesystemsapproach,helpingustodealwiththeinherentcomplexityofthechallengesfaced.Wecontinuetoembedsystemstoolsandpracticestosupportcross-sectordecisionmaking,accountfordependencies,andmaximisethebenefitsofnetzero.Inthenext18monthswearecommittedtostrengtheninggovernanceevenfurther.Wewillcontinuetoembednetzerointodecision-makingframeworksandsharemoreinformationonhowweareset-uptodelivernetzerowithingovernment,directlyaddressingthethemesofenhancingcoordinationandtransparencyidentifiedthroughtheCCC’s2022ProgressReporttoParliamentprogressreportandIndependentReviewofNetZero.WenotetheCCC’sandIndependentReviewofNetZero’srecommendationsonincreasedfocusongovernmentcoordinationandconsistencyandexpandingoursuiteofpublicreporting.Wehavemadestrongprogressinthisareatodateand:PoweringUpBritain–TheNetZeroGrowthPlan105•Inresponsetorecommendationsonexpandingpublicreportingandimprovingtransparencyofinternalgovernmentprocesses,aspartofthegovernment’s2023responsetotheCCC’s2022ProgressReporttoParliamentwewill:−Sharefurtherdetailonthetoolsandprocessesusedtoinforminternaldecisionsandpolicy-making,includingpublishingamapofthegovernancelandscape.−PublishthefindingsofareviewthatassesseshowoftenwepublishdataonUKemissions.•WewillworkwiththeUKRegulatorsNetwork(UKRN)tobuildfromtheirexistingcross-regulatorClimateChangeNetworkandtestthebestwaytobring-inregulatorsfrombeyondtheUKRN’scoremembership.CommittingtoconfirmingproposalsfortheformandgovernanceofthisforumbySummer2023.•Wewillconsiderthecasefornewdeliveryagencieswheretheyaretherightmodel-usingGreatBritishNuclear,amongothers,ascasestudiesfortheefficacyofthesemodesofdelivery.•Improvingthequalityandcoverageofdataindecision-making,andensuringclimateandenvironmentalimpactsareconsideredinallfiscaldecisions,remainsapriority.HMTreasurywillcontinuetoworkwithdepartmentstobuildclimateimpactassessmentcapabilitytoensurethatspendingdecisionsandmeasuresatfuturefiscaleventscanbemadeusingimproveddata.HMTreasuryreceivedarecommendationtoworkwiththeOBRandCCCtosetoutaprocessforhowHMTreasuryconsiderstheclimateimpactsoffiscalevents,andwewillengagetheOBRandCCConthis.ProgressanddeliveryAreaProgressReporting•Wepromisedtoreportannuallyagainst24commitmentswemadeintheNetZeroStrategy.Anaccountofthesecommitmentsisprovidedby40quantitativemetrics,whicharesetoutintheTechnicalAnnex.Governanceandothergroups•EstablishedtheDomesticandEconomicAffairs(Energy,ClimateandNetZero)CabinetCommittee,pickinguponthesuccessesoftheClimateActionCommitteesandensuringnetzerocontinuestohaveaCabinet-levelforumdedicatedtoit.•Set-upaClimateNon-ExecutiveBoardMembersLiaisonForum,whichdrawsontheknowledgeandexpertiseofnon-executivePoweringUpBritain–TheNetZeroGrowthPlan106AreaProgressboardmembersfromacrossWhitehalltoprovidestrategicinsightandsupporttotheimplementationoftheNetZeroStrategyandBritishEnergySecurityStrategy.•IntroducedanewNetZeroBusinessandInvestmentGroup,whichconvenesbusinessandfinanceleaderstoaccelerateemissionsreductionacrosskeysectorsandmaximisetheeconomicopportunityofnetzero.•CreatedaLocalNetZeroForumwhichbringstogethernationalandlocalgovernmenttoprovideasingleandcoordinatedengagementrouteintoGovernmentonstrategiclocalnetzeropolicyanddeliveryissues.Procurement•RequiredsuppliersbiddingonqualifyingcentralgovernmentcontractstocommittoachievingnetzeroandtodetailtheiremissionsviaaCarbonReductionPlan.BetweenSeptember2021andthestartofFebruary2023,themeasurewasappliedto129procurements,whicharevaluedatc.£187.5billionovertheircontractualterm.•PublishedtheConstructionPlaybookandassociatedNetZeroCarbonandSustainabilityAnnex,whichincludestrongerguidanceandadditionalresourcesonhowgovernmentconstructionprojectsshouldundertakewholelifecarbonassessments,andseektoreducebothembodiedandoperationalcarbonemissions.CivilServicecapabilityandskills•Developedanewtrainingofferavailabletoallcivilservants,expandedtrainingforFastStreamers,andaredevelopingaclimateandenvironmentspecialismtobeembeddedintheCivilServicepolicyprofessionstandards.•FundedcarbonliteracycoursesforthepublicsectormorewidelywithcoursesnowavailablefororganisationssuchastheNHS,localgovernment,anduniversities.Fiscaldecisionmaking•AtSpendingReview2021(SR21)HMTreasuryrequireddepartmentstoassesstheclimateimpactsofmajorspendingbids.DecisionsmadeatSR21wereinformedbytheseassessmentsandproposalswereconsideredandassessedaccordingtotheseimpactassessmentsandwithinthecontextofthebroadersuiteofpoliciessetoutintheNetZeroStrategy.HMPoweringUpBritain–TheNetZeroGrowthPlan107AreaProgressTreasuryalsorequireddepartmentstoprovidequalitativecommentaryagainstthedeliveryofthe25YearEnvironmentPlan.•SinceSR21,HMTreasuryhascontinuedtoworkwithdepartmentstoimprovethequalityandcoverageoftheiremissionsimpactdata.InDecember2022,HMTreasurypublishedfurtherdetailonthemethodologyforassessingenvironmentalimpactsatSR21.•HMTreasuryandHMRCalsocarefullyconsideredtheclimatechangeandenvironmentalimplicationsofrelevanttaxmeasures.TheGovernmentincorporatedaclimateassessmentinallrelevantTaxInformationandImpactNotes(TIINs)formeasuresatBudget2021andhascontinuedtodoso.•InJanuary2023,thethenDepartmentforBusiness,EnergyandIndustrialStrategypublishedupdatedSupplementaryGuidancetotheGreenBooktoreflectthelatestevidenceandtheUK'snetzerotarget.Thisprovidespracticalinformationonembeddingcarbonmethodologiesandontheeffectivenessofclimatechangepolicy.Decarbonisingthepublicsection•Over£1billionoffundingwasmadeavailableover2020/21and2021/22throughthePublicSectorDecarbonisationScheme,whichprovidesgrantsforpublicsectorbodiestofundheatdecarbonisationandenergyefficiencymeasures.Afurther£1.425billioniscurrentlybeinginvestedthroughPhase3oftheschemeover2022/23to2024/25.•Weprovided£15millionin2021-22and£14millionin2022-23throughtheLowCarbonSkillsFundtoenablepublicsectororganisationstoacquireexpertskillsinordertounlockdecarbonisationprojects,bringingtotalfundingforthisworkto£61millionsince2020-21.•WepublishedtheGreeningGovernmentcommitmentsinOctober2021,settingouttheactionsdepartmentsandtheiragencieswilltaketoreducetheirimpactsontheenvironment.PoweringUpBritain–TheNetZeroGrowthPlan108Upcomingdeliverymilestones•SponsoredbytheDepartmentforEnergySecurityandNetZero,theModernEnergyPartnersprogrammewillpublishasuiteofpublicsectordecarbonisationguidanceontheESCwebsiteinspring2023.Thiswillhelptoaddressthecapacityandcapabilitybarriersthatpublicsectororganisationsfacewhentheyseektodecarbonisetheirbuiltestates.•ThenextapplicationwindowtothePublicSectorDecarbonisationScheme,Phase3c,isexpectedtoopentoapplicationsinAutumn2023.•WearedevelopingplansforfuturephasesoftheLowCarbonSkillsFundandwillmakefurtherannouncementsinduecourse.•Ministerswillberequiredtohavedueregardtotheenvironmentalprinciplespolicystatementwhenitlegallycomesintoforceon1November2023.•WeexpecttheProcurementBilltoreceiveRoyalAssent,whichwouldplacetheNationalProcurementPolicyStatement(NPPS)onastatutorybasis.TheNPPSsetsoutclearprinciplesthatcontractingauthoritiesshouldfollow-tacklingclimatechangeandachievingnetzeroisoneofthese.•HMRCwillexploreoptionstofurtherstrengthentheanalyticalapproachtomonitoring,evaluating,andquantifyingtheenvironmentalimpactsoftaxmeasures,includingtheirwiderimpacts.PoweringUpBritain–TheNetZeroGrowthPlan109LocalNetZeroSummaryLocalareasplayanintegralroleinsupportingthetransitiontonetzero.Localauthoritieshavestrongpowers,assets,andresponsibilitiesacrossmanyoftheareaswhereemissionsreductionsareneeded,andcivilsocietyorganisationscanenablecommunitiestotakecollectiveactiontoacceleratethenetzerotransitionintheirneighbourhoods.Localgovernmentisalsouniquelyplacedtoattractprivatesectornetzeroinvestmentthatwouldn’totherwisebeobtained;maximisingthelocalopportunitiesthetransitionwillbring,suchasthegrowthofgreenjobsandskills.Thegovernmenthasmadeexcellentprogressinsupportinglocalareastodelivernetzero.ThisincludesestablishingtheLocalNetZeroForum,continuingtheLocalNetZeroHubsProgramme,andestablishingNetZeroGo,theUK’sfree-to-usedigitalplatformprovidingadvicetohelplocalauthoritiesmakeprogressonnetzero.Wehavealsoagreeddevolutiondealswhichcontainsharedagreementsinrelationtonetzero/climateadaptationand/orcleanenergy.WewelcometherecognitionfromtheCCCandIndependentReviewofNetZeroofthepromisingstepscentralgovernmentaremakingtowardsharnessingtheambitionoflocalgovernment,includingtherecognitionofthesuccessoftheLocalNetZeroForumwhichhasbeenwidelywelcomedbylocalgovernment.TheIndependentReviewofNetZeroalsoaffirmedthatGovernmentshouldcontinuetosupporttheLocalNetZeroHubsProgramme,giventheirrolesupportinglocalauthoritiesoncapacityandcapabilitybuilding.Wehavemadeexcellentprogressinthisareatodateandwillcontinuetoworkcollaborativelywithlocalactorstoprogressstillfurther:•WewillstrengthenoursupporttolocalauthoritiesoncapacityandcapabilitybuildingandongoingknowledgesharingthroughourLocalNetZeroHubsProgramme,NetZeroGo,andtheannualnetzeroconferenceforlocalgovernmentthatwesponsorwithTheAssociationforPublicSectorExcellence(APSE).•Wewillpilotadevolvedapproachtobuildings'retrofitfrom2025inthedevolutiondealswithGreaterManchesterCombinedAuthorityandWestMidlandsCombinedAuthority.•WewillstrengthenthepartnershipwithlocalgovernmentthroughongoingengagementintheLocalNetZeroForum.PoweringUpBritain–TheNetZeroGrowthPlan110•Wewilllookattheopportunitiesofferedbyblendedfinancemodels,andexploresimplificationofthenetzerofundinglandscapeforlocalauthoritieswherethiswilldeliverbetteroutcomesfornetzero.•WewillcontinuetoworkwiththeCommunityEnergyContactGrouponsomeofthekeypolicyanddeliveryissueswhichimpactthesectorandsupportcommunityenergyprojectsthroughUK-widegrowthfundingschemesandOfgem'sIndustryVoluntaryRedressScheme.•AsannouncedintheBudget,allnewInvestmentZoneswillberequiredtodemonstratehowtheywillsupporttheUK'snetzerotarget.ProgressanddeliveryInthelast18thmonths,wehavedeliveredagainstthekeycommitmentswemadeintheLocalClimateActionchapteroftheNetZeroStrategy.AreaProgressInvestment•Wearetestingnewbusinessmodelsforinvestmentintonetzero,andtoexploresimplificationofdelivery.Oneapproachisusingdevolutiondealstopilotnewapproaches.Wehaverecentlyannouncedwide-rangingdevolutiondealswithGreaterManchesterCombinedAuthorityandWestMidlandsCombinedAuthoritywhichincludefirst-of-kindpilotsforretrofitfundingfrom2025(subjecttoconditionssuchasoutcomestobeachieved)andwhichprovidescopeforagreaterroletoplannewenergyinfrastructureinvestmentstrategically.Alongsidethis,wehavealsoagreed6otherdevolutiondealssinceAugust2022(inYork&NorthYorkshire,theNorthEast,Norfolk,Suffolk,EastMidlandsandCornwall),allofwhichcontainsharedagreementsinrelationtonetzero,climateadaptationand/orcleanenergy.Government'sexperiencewiththesedealswillinformfuturedevolutiondealnegotiations.•AsannouncedintheBudget,newInvestmentZoneswilldrivelocaleconomicgrowth.GreenbusinesssectorsareoneofthefiveprioritysectorsfortheInvestmentZones,andallInvestmentZonesarealsorequiredtodemonstratetheircontributiontonationalNetZeroandenvironmentaltargets.•Tosupportlocalauthorities'accesstofundingandincreaseinvestment,wehaveworkedacrossgovernmenttoensureeconomicgrowthfundingcontainsanetzeroprinciple;andthatPoweringUpBritain–TheNetZeroGrowthPlan111AreaProgresscleangrowthandgreenjobopportunitiesarehighlighted.Thisincludesforexample,the£2.6billionUKSharedProsperityFundwhichstatesthatinvestmentmadeunderthisFundshoulddemonstratetheextentofcontributiontonetzeroandnaturerecoveryobjectives.•Government-fundedresearchthrough3CiandInnovateUKishelpingtoidentifyopportunitiesforlocalareasandlocalgovernmenttoworkwiththeprivatesectortofinancethenetzerotransition.Proposalstodevelopworkonblendedfinancearesetoutintheaccompanyingpublication,the2023GreenFinanceStrategy.•WearesupportingFreeportsinEngland,WalesandScotlandtoproducenetzeroplans.Engagement•WehaveestablishedaLocalNetZeroForumtostrengthenourpartnershipwithlocalgovernment.AlongsidetheForum,wehavealsoestablishedtheNetZeroPlacesStakeholdergrouptoengagedirectlywithnon-governmentalorganisationswhoworkwithlocalauthorities.CapacityandCapacityBuilding•WecontinuetofundourfiveLocalNetZeroHubswhichbuildcapacityandcapabilityinlocalgovernment,TheHubssupportlocalauthoritiesacrossEnglandtodevelopnetzeroprojectsandattractcommercialinvestment.•TheUKInfrastructureBankisbuildingitslocaladvisoryfunctiontoasteadystatethrough2023,andwillalsolendupto£4billiontolocalauthoritiesatapreferentialrateforhighvalueandstrategicprojectsofatleast£5million.•WearefundingNetZeroGo,theUK'sfree-to-usenetzerodeliveryplatformforlocalauthorities.Itisaone-stopshopwhichbringstogetherthesupportandpracticaltoolslocalauthoritiesneedtodevelop,deliver,andevaluatelocallyfocusednetzeroprogrammesandprojects.SectoralSupport•WeareworkingcloselywithLocalAuthoritiestodeliverpracticalpolicymeasuresacrossarangeofdifferentsectors.Forexample:−AsoutlinedintheTransportDecarbonisationPlan,thenewLocalTransportPlan(LTP)guidancewillprovideupdatedPoweringUpBritain–TheNetZeroGrowthPlan112AreaProgressstrategicguidanceforthedevelopmentofLTPsandwillsupportplacestoquantifylocaltransportcarbonemissionsandassessthecarbonimpactofplannedinterventionsintheirLTP.−TheGovernment's'HelptoHeat'schemesensurehomeswillbewarmerandcheapertoheat.WorkingwithLocalAuthorities,theGovernmentwilldeliverupgradestooverhalfamillionhomesinthecomingyearsthroughourSocialHousingDecarbonisation,HomeUpgradeGrantSchemesandEnergyCompanyObligationScheme.Innovation•Wearesupportingplace-basedenergysysteminnovationthroughInnovateUK's£60millionNetZeroLivingProgramme.Therehavebeentworoundsoffundingannouncedtodate.Thisincludes:−NetZeroPathfindersforUKregisteredbusinessesandlocalauthoritiestoapplyforashareofupto£2milliontoplanforaplace-baseddemonstrationofwaystoaccelerateprogresstowardsnetzero.−FastFollowersforlocalauthoritiestoapplyforashareofupto£6milliontobuildskillsandcapabilitiestoacceleratelocalprogresstowardsnetzero.CommunityEnergy•ThroughourLocalNetZeroHubswearesupportinglocalauthoritiesandcommunityenergygroupstoworktogether,thisincludesfundingapilotprogrammewhichprovideslocalauthoritieswithdirectsupporttodevelopcommunity-ledenergygroupsandprojects.WehavealsoestablishedaCommunityEnergyContactGrouptoincreaseengagementwiththesector.Upcomingdeliverymilestones•Wewillcontinuetoinvest£5million/yearintheLocalNetZeroHubsProgrammeandprogressourongoingprojects,suchasNetZeroGo,tosupportdeliveryatthelocallevel.•WewillcontinuetosupporttheUKIBtobuilditslocaladvisoryfunctionandtoworkcloselywiththeLocalNetZeroHubs.•WewillsupportworktopromotenetzeroinvestmentinFreeports.PoweringUpBritain–TheNetZeroGrowthPlan113•Wewillpilotadevolvedapproachtobuildings'retrofitfrom2025inthedevolutiondealswithGreaterManchesterCombinedAuthorityandWestMidlandsCombinedAuthority.•GreenbusinesssectorsareoneofthefiveprioritysectorsfortheGovernment'sInvestmentZoneprogrammeannouncedintheBudgetandallInvestmentZoneswillberequiredtodemonstratehowtheysupporttheGovernment'snetzeroandenvironmentaltargets.PoweringUpBritain–TheNetZeroGrowthPlan114EmpoweringthePublicandBusinesstoMakeGreenChoicesSummaryBychoosinggreenproducts,servicesandgoods,thepubliccanhelpgrowthegreeneconomyandsupportprogresstowardsreachingnetzero.ManyofthecommitmentssetoutintheNetZeroStrategywillrequirethepublictomakegreenchoices,withtheinstallationofheatpumpsandpurchaseofelectricvehiclesplayingaparticularlyimportantrole.Asanexampleofhowwewillmakethesegreenchoiceseasier,wewillcontinuetodeliverenergyadvicetothepubliconhowtoreducetheirenergyuse,andindoingsotheirbills,andexplorethecasetoexpandthisfurther,includingourdigitaloffer.Werecognisethatsupportingthepublicandbusinesseswithgreenchoicesmustaddressmultiplebarriers,e.g.,cost,convenience,awareness,andthateveryone-government,industry,businesses,andcivilsociety-mustworktogethertoachievenetzerotogaintheeconomicbenefitsandensuretheenvironmentisinastateforfuturegenerations.AstheCCCacknowledgedintheirreport,wehavealreadyincludedintheNetZeroStrategyaclearsetofprinciplesforhowwewillengageandempowerthepublictomakegreenchoices.Acrossnetzerosectors,weareintroducingmeasureswhichsupportthesesixprinciples.•Principle1-Minimisethe‘ask’fromthepublicby‘sendingclearregulatorysignals.’•Principle2–Makethegreenchoicetheeasiest.•Principle3–Makethegreenchoiceaffordable.•Principle4–Empowerpeopleandbusinessestomaketheirownchoice.•Principle5–Motivate&buildpublicacceptabilityformajorchanges.•Principle6–Presentaclearvisionofhowwewillgettonetzeroandwhattheroleofpeopleandbusinesswillbe.ThepublicwillplayakeyroleinthetransitionandthereforewewillsetoutfurtherdetailonhowGovernmentwillincreasepublicengagementonnetzero.Thisincludesdetailinghowthegovernmentwill(i)supportpublicawarenessofouractionsthroughourdigitalplatforms,(ii)developaroadmapsettingoutplansandproposalsundernetzeroand(iii)constructaguidingframework,inconjunctionwithpartnersandtrustedmessengers,toamplifynetzeromessaging.PoweringUpBritain–TheNetZeroGrowthPlan115Governmentisestablishinganewpartnershiptoworkwithbusinessandfinanceleaderstosupportthedeliveryofournetzerotarget-anewNetZeroBusinessandInvestmentGroup.ThegroupwilllooktodevelopasharedviewofmarketbarriersacrossdifferentsectorstodelivernetzeroandtherespectiverolesacrossGovernment,industryandthefinancesectorinaddressingthese.ProgressanddeliveryAreaProgressAdviceonEnergySavingActions•InJuly2022,thegovernmentlaunchedanonlineadvicetoolthatprovideshigh-leveltrusted,impartialandtailoredadvicetoconsumersonhowtoimprovehomeenergyperformanceandinformationonretrofitrecommendations.InMarch2023,wealsolaunchedanaccompanyingphonelineservicethatprovidesadigitalassistserviceforthetool.•InDecember2022,theGovernmentalsolaunchedthe'ItAllAddsUp'campaignwith£18millionfunding.Thiscampaignprovidesadviceonsimple,low,orno-costactionsthathouseholdscantaketocutenergyuse.•Atargetedsistercampaigntotheconsumerenergycampaignhassupportedbusinessesthroughaperiodofrecordhighenergyprices.With£4.25millioninfunding,thecampaignisdesignedtohelpbusinesses,inparticularsmallbusinesses,manageenergybillsbyimprovingefficiencyandreducingoverallconsumption.•In2022,weranadigitaldiscoverytoexplorewhetherthereisauserneedfornewcontentonnetzeroonGOV.UKoranewresourcetolinktogetherdifferentsourcesofinformationandsupportonnetzeroinacomprehensiveplatform.Wewillrunanalphaphaselaterthisyear.SupportingUKbusinessestomeetnetzerocommitments•IntheyeartoCOP26,theformerNetZeroBusinessChampion,AndrewGriffithMP,engagedlargebusinessesandledTogetherforOurPlanet,acampaigntargetingsmallandmicrobusinessesacrosstheUK.TheUKremainsagloballeaderintheglobalRacetoZero,withalmost4,000smallandmedium-sizedenterprises(SMEs)andtwothirdsoftheFTSE100companiessigneduptodate.PoweringUpBritain–TheNetZeroGrowthPlan116Upcomingdeliverymilestones•WewillsetoutfurtherdetailonhowGovernmentwillincreasepublicengagementonnetzero.•Governmentwilllaunchaseriesoflocaldemonstratorprojects,whichwilltestvariousapproachestodeliveringin-personadvice,withaparticularfocusonharder-to-treatpropertiesanddigitallyexcludedconsumergroups.Wewillalsobereviewingfurtheradviceandmeasuresthatthe‘ItallAddsUp’campaigncaninclude.•Wewillcontinuetopursuetheroleofecolabellingacrosssectorstohelpconsumersmakemoreinformedpurchasingdecisions.Wewillcreateamandatorymethodologyforeco-labellingwhichthefoodanddrinkindustrymustfollowwhenprovidingvoluntaryinformationtoconsumersregardingtheirfood'semissionandsustainabilityclaims.AreaProgressEnvironmentimpactlabellingofproducts,goodsandservices•Whilelabelsalreadyexistforenergy-usingproductsandhomes(intheformofEnergyPerformanceCertificates),weareexploringtheuseofeco-labelsforawiderarangeofgoodsandservices.•Weareexploringtheuseofproductlabellingtoshowthedurability,repairabilityandrecyclabilityofproducts,aswellastheirenvironmentalfootprint.•Wehaveannouncedourintentiontorequirerecyclabilitylabellingonpackagingandwillintroducethisaspartofnewregulationsonpackagingandpackagingwaste.Behaviouralscienceandembeddingparticipatoryanddeliberativeprocesses•TheDepartmentforEnergySecurityandNetZeroandDefrahavebolstereditsbehaviouralresearchcapabilitiesbylaunchinganEnergy&ClimateBehaviouralScienceFramework,acall-offcontractthatallowsustorapidlyprocurebehaviouralresearch.DfThaslaunchedasimilarcontractfortransport.•Wehaveregularlyfundedpublicdialoguesonarangeofnetzeroissuesandwillcontinuetodoso,usingthefindingstoinformpolicydevelopment.Forexample,inthepastyear,theDepartmentforEnergySecurityandNetZerohascommissionedapublicdialogueonbiomassandbioenergywithcarboncaptureandstoragetofeedintothedeliveryoftheBiomassStrategyin2023.PoweringUpBritain–TheNetZeroGrowthPlan117InternationalLeadershipSummaryTheUKhasbeen–andwillremain-atthecentreofglobaleffortstotackleclimatechangeandtransitiontoaglobalnetzeroeconomy.Collectively,wemustreachourtargetinawaythatprotectsenergysecurity,supportsgreengrowthandinnovation,andmaximisesbenefitsforbusinessesandconsumers.Successfullyaddressingthechallengesofclimatechangerequiresanunprecedentedlevelofinternationalaction,collaboration,andcoordination.TheUKisdrivinginternationalcollaborationandfocusingouractionsonareasthatwillhavethebiggestimpact.Wearebuildingstrategicalliancestoacceleratetheglobalnetzerotransition,championingambitionanddrivingforwardreal-worldactiontokeep1.5alive,andmobilisingfinanceatscale–whilstmaximisingopportunitiesfortheUK.CurrentglobalchallengessuchasPutin’sinvasionofUkraine,foodandenergysecurity,therisingcostoflivingandtherecoveryfromtheCovidpandemicunderscoretheurgentneedtoaccelerateclimateaction.Furtheractiononclimatemitigation,adaptationandnaturecanbolsternationalandglobalresiliencetocurrentandfutureshocksandenhanceeconomicstability.TheUKwillcontinuetobeaworldleaderinthedrivetonetzero.Between1990and2021we’vecutemissionsby48%whilegrowingoureconomyby65%.In2020therewereover400,000greenjobsinlowcarbonbusinessesandtheirsupplychainsacrossthecountry.However,whilecountrieshaveincreasedtheiremissionreductiontargets,thescienceisclearthatemissionsneedtobehalvedby2030tokeep1.5Cwithinreachandreachnetzeroby2050.country-includingtheUK-willface,italsodrivesdownthecostoftransitionfasterbyincreasingdemandforlowcarbontechnologies.AstheIndependentReviewofNetZeromadeclear,theUKhascomparativeadvantageandstandstobenefitfromthehugeeconomicopportunitiesthisbrings.The2030StrategicFrameworkforInternationalClimateandNatureActionwilldefinetheUKGovernment’svisionandroleintacklingglobalclimatechangeandbiodiversitylossinthiscriticaldecade.Takinganintegratedapproachtoclimateandnature,theFrameworkwillbuildonourCOP26Presidency,theoutcomesofCOP27andtheConventiononBiologicalDiversity(CBD),COP15.TheUKInternationalClimateFinanceStrategyunderpinsthis,outlininghowtheUKisdeliveringonourcommitmenttoprovide£11.6billionofinternationalclimatefinancebetween2021/22and2025/26,supportingdevelopingcountriestotakeclimateaction,anddeliveringonourinternationalprioritiesandcommitments.PoweringUpBritain–TheNetZeroGrowthPlan118WewelcometherecommendationsofboththeClimateChangeCommittee(CCC)andtheIndependentReviewofNetZeroandfullresponsescanbefoundintheannexes.AsrecommendedbytheCCCandinresponsetotheGlasgowClimatePact,werevisitedour2030NationallyDeterminedContributionandstrengtheneditwithinformationondeliveryofourtargettoreduceallgreenhousegasemissionsbyatleast68%by2030on1990levels,includingplanstoexpandtheterritorialscopeoftheNDCtoincludetheUK’sCrownDependenciesandOverseasterritories.ProgressanddeliveryAreaProgressDuringtheUK’sUNFCCCPresidency–attheCOP26summitandbeyond•Keeping1.5degreesalive:Over90%oftheworld'sGDP,upfrom30%whentheUKtookontheCOPPresidency,isnowcoveredbynetzerocommitments.Morethan170countrieshavenowputforwardnew2030climateplans,knownasnationallydeterminedcontributions,amountingtoaround6Gtsinemissionsreductions.•IncreasingfundingandlaunchingUNworkfordealingwithclimateimpacts:Toaccelerateprogresstowardsachievingthe$100billiongoal,theUKsecuredenhancedpublicfinancecommitmentsfrom95%ofmajordonors,showcasedinthe'ClimateFinanceDeliveryPlan'launchedinGlasgow.InadditionatCOP26,countriesagreedtodouble2019levelsofadaptationfinanceby2025,thefirstquantifiedadaptationfinancetarget,withtheUKsubsequentlypledgingtotripleitsadaptationfinanceagainstthesametimeline.RecordlevelsoffinancetohelpcountriesadapttotheeffectsofclimatechangewerealsopledgedtotheAdaptationFundandtheLeastDevelopedCountryFundundertheUKPresidency.Anadhocworkprogrammetowardssettingthepost-2025newcollectivequantifiedgoalonfinancewaslaunched,andinvestorinitiativesworthtrillionswerelaunched,includingtheGlobalFinancialAllianceforNetZero(GFANZ).•Acceleratingunprecedentedlow-carbontransitionsofindustriessuchastransportandenergy,withcommitmentscoveringpower,coal,methane,fossilfuelfinancing,forestsandland,transportandsectors,includingthefirsteveragreementtocoalphasedowninaUNclimatedecision.PoweringUpBritain–TheNetZeroGrowthPlan119AreaProgress•EstablishinganewGlasgowDialogueonLossandDamagetodiscussthearrangementsforfundingactivitiestoavert,minimiseandaddresslossanddamage.•FinalisingtheParisRulebookafter6yearsofnegotiations,whichsetsouttheinstructionsandproductsneededtofullyimplementtheParisAgreementonclimatechange.TheseguidelinesbuildconfidenceandtransparencyascountriesdeliverontheircommitmentstomeetthegoalsoftheParisAgreement.DrivingprogressinCOP27•DuringCOP27ourfocuswasbuildingontheGlasgowClimatePact.Wewelcomethelandmarkprogressmadeonlossanddamageandtheagreementtoestablishafundtosupportthosemostvulnerabletotheeffectsofclimatechange.WealsosawprogressonkeyworkprogrammeslaunchedinGlasgow.Thisincludestheworkprogrammeforurgentlyscalingupmitigationambitionandimplementationinthiscriticaldecade(knownasthemitigationworkprogramme)andtheGlasgow-SharmEl-SheikhworkprogrammeontheGlobalGoalonAdaptation(GlaSS).DeliveringourcommitmentstodevelopingcountriesundertheParisAgreement,includingourcontributiontothe$100billionmobilisationtarget,throughUKInternationalClimateFinance(ICF).OurresultstodatedemonstratethetransformativeimpactthatUKICFcanhave.Between2011and2022,ourprogrammes:•Supported95millionpeopletobetteradapttotheeffectsofclimatechange•Improvedaccesstocleanenergyfor58millionpeople•Reducedoravoided68milliontonnesofgreenhousegases•Installed3.3gigawattsofcleanenergycapacity•Avoideddeforestationacross410thousandhectares•Mobilised£5.7billionofpublicand£5.2billionofprivatefinanceforclimatechangepurposes•Supportedthesustainablemanagementof910thousandhectaresofland.•WehavedoubledourInternationalClimateFinancecommitmentto£11.6billionbetween2021/22and2025/26.Thiswillenableastep-changeintheUK'simpactlong-termandsupportingdevelopingcountriesanddeliveringGlasgowClimatePactoutcomes.Thisfundingincreasewillbeusedto:unlockaffordablePoweringUpBritain–TheNetZeroGrowthPlan120UpcomingdeliverymilestonesContinuingtodriveglobalambitionandimplementationofnetzerocommitmentsisvitaltothefutureofourplanetandmoremustbedone.TheUKwillcontinuetochampioninternationalclimateaction,notingtheurgencyrequiredinthiscriticaldecadeto2030.AheadofCOP28wewillneedtorevitaliseeffortstokeep1.5°Cinreach,includinginpushingforemissionspeakingbefore2025,activefollow-uponthephasedownofcoal,andphaseoutofallfossilfuels.Wemustrapidlydecarbonisekeysectorsoftheeconomy,deliveringonsectorcommitmentsmadeatCOP26,includingthroughtheBreakthroughAgenda.Wewillsupportthemostvulnerabletoadaptandbuildresiliencetotheeffectsofclimatechange,deliveringontheGlasgowClimatePact,andhaltandreversebiodiversitylossasagreedthroughtheKunming-MontrealGlobalBiodiversityFramework.Wewillworkwithpartnersonthedesignofthefundingarrangementsandfundforlossanddamage,andtoshapetheframeworkfortheGlobalGoalonAdaptation.TheGlobalStocktakemustenableustogenuinelyshiftgearsondeliveringtheParisAgreementgoals.BeyondCOP28,theUKwillworkwithinternationalpartnerstorefinethepost-2025climatefinancegoal.TheUKwill:•Publishthe2030StrategicFrameworkforInternationalClimateandNatureActionwhichwillsetouttheprioritiesforUKactionthroughto2030.•PublishtheUK’sInternationalClimateFinanceStrategy.ItoutlineshowtheUK’shigh-profilecommitmenttospend£11.6billiononICFin2021/22-2025/26isbeingspentandisdeliveringresultsaspartofthepromisedcontributionstotheUNFCCCcommitmenttomobiliseUS$100billionclimatefinanceayearfordevelopingcountries.ThestrategyalsoshowshowwearedeliveringontheICFsub-targetswhichwehaveannouncedpublicly,onnature,adaptation,andinnovation.AreaProgressandcleanenergy;helpcountries,economiesandcommunitiesbecomemoreresilient;haltdeforestationandpreventirreversiblebiodiversityloss;supportthedevelopmentofsustainablecitiesandtransportsystems.PoweringUpBritain–TheNetZeroGrowthPlan121Endnotes1HMTreasury,(2006),‘SternReview:TheEconomicsofClimateChange’2McKinsey,https://www.mckinsey.com/capabilities/sustainability/our-insights/opportunities-for-uk-businesses-in-the-net-zero-transition3UniversityofOxfordnetzerotracker,https://www.bsg.ox.ac.uk/research/research-and-policy-updates/net-zero-tracker-report-finds-major-credibility-gaps-remain4InternationalEnergyAgency(IEA)(2021),‘NetZeroby2050:ARoadmapfortheGlobalEnergySector’,https://www.iea.org/reports/net-zero-by-20505DepartmentforEnergySecurityandNetZero(2015),ContractsforDifference(CFD)AllocationRoundOneOutcomehttps://www.gov.uk/government/publications/contracts-for-difference-cfd-allocation-round-one-outcomeDepartmentforEnergySecurityandNetZero(2022),‘ContractsforDifference(CfD)AllocationRound4:results’,https://www.gov.uk/government/publications/contracts-for-difference-cfd-allocation-round-4-results6Thisincludespublicandprivatesourcesoffunding.DESNZanalysisoftheBloombergNEF,Energytransitioninvestmentdatasetconvertingto2022prices,availableat:https://www.bnef.com/.TheBNEFseriescapturesinvestmentsmadeacrossdifferentlow-carbontechnologiesandsectors,includingpower,energystorage,transport,heating,hydrogen,andCCS.Figuresshouldnotbetakenasfullyrepresentativeofalllow-carboninvestmentsmadeacrosstheeconomyandarelikelytobeaconservativeestimate.7DESNZanalysisofBloombergNewEnergyFinancedataestimated£27billionwasinvestedin2021and£23billionin2022.BloombergNewEnergyFinance,EnergyTransitionInvestmentTrends20228EY(2021)WhycleantechinvestmentsintheUKareencouragingforfuturegrowth,https://www.ey.com/en_uk/attractiveness/21/why-cleantech-investments-in-the-uk-are-encouraging-for-future-growth#:~:text=The%20UK%20attracted%20one%2Din,spread%20of%20cleantech%20investments%20nationwide.9Bentham,M.,Mallows,T.,Lowndes,J.andGreen,A.(2014),‘CO2StorageEvaluationDatabase(CO2Stored).TheUK’sonlinestorageatlas’,https://nora.nerc.ac.uk/509387/1/1-s2.0-S1876610214023558-main.pdf10EuropeanAutomobileManufacturers’Association(acea),(2023),‘Fueltypesofnewcars:batteryelectric12.1%,hybrid22.6%andpetrol36.4%marketsharefull-year2022’,https://www.acea.auto/fuel-pc/fuel-types-of-new-cars-battery-electric-12-1-hybrid-22-6-and-petrol-36-4-market-share-full-year-2022/11TimesHigherEducation(2023),‘WorldUniversityRanking2023’,https://www.timeshighereducation.com/world-university-rankings/2023/world-ranking12EDF,(2022),Socio-economicImpactReport,https://www.edfenergy.com/energy/nuclear-new-build-projects/hinkley-point-c/about/realising-socio-economic-benefits13InternalDESNZresearch,Dataset:Lowcarbonandrenewableenergyeconomyestimates:https://www.ons.gov.uk/economy/environmentalaccounts/datasets/lowcarbonandrenewableenergyeconomyfirstestimatesdatasetandUKtrade:goodsandservicespublicationtables:https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/datasets/uktradegoodsandservicespublicationtables14DESNZanalysis(2023)15BEIS(2020),BEISelectricitygenerationcostreport,https://www.gov.uk/government/collections/energy-generation-cost-projections16DepartmentforEnergySecurityandNetZero(2023),‘SocialHousingDecarbonisationFundWave2.1:successfulbids’,https://www.gov.uk/government/publications/social-housing-decarbonisation-fund-wave-21-successful-bidsPoweringUpBritain–TheNetZeroGrowthPlan12217EuropeanAutomobileManufacturers’Association(acea),(2023),‘Fueltypesofnewcars:batteryelectric12.1%,hybrid22.6%andpetrol36.4%marketsharefull-year2022’,https://www.acea.auto/fuel-pc/fuel-types-of-new-cars-battery-electric-12-1-hybrid-22-6-and-petrol-36-4-market-share-full-year-2022/18CCC(2020),Letter:AdviceontheUK’s2030NationallyDeterminedContribution(NDC),https://www.theccc.org.uk/publication/letter-advice-on-the-uks-2030-nationally-determined-contribution-ndc/#:~:text=Key%20recommendations&text=We%20encourage%20the%20Prime%20Minister,international%20credits%20to%20do%20so.19BEIS(2021),‘NetZeroStrategy,p19’,https://www.gov.uk/government/publications/net-zero-strategy20InternalDESNZanalysisbasedonDDMReferenceCase2022-https://www.gov.uk/government/statistics/the-dynamic-dispatch-model-a-fully-integrated-power-market-model21BEIS(2022),Appendix1:Electricitynetworksmodelling,section3.2,Electricitynetworksstrategicframework,https://www.gov.uk/government/publications/electricity-networks-strategic-framework.22BEIS(2022),Appendix1:Electricitynetworksmodelling,section7,Electricitynetworksstrategicframework,https://www.gov.uk/government/publications/electricity-networks-strategic-framework.23BEIS(2021),p99,‘NetZeroStrategy’,https://www.gov.uk/government/publications/net-zero-strategy24BEIS(2022),‘Britishenergysecuritystrategy’,https://www.gov.uk/government/publications/british-energy-security-strategy/british-energy-security-strategy25BEIS(2022),‘UKgovernmenttakesmajorstepsforwardtosecureBritain'senergyindependence’,https://www.gov.uk/government/news/uk-government-takes-major-steps-forward-to-secure-britains-energy-independence26DESNZanalysisoftheFinalUKgreenhousegasemissionsnationalstatistics:1990to2021,https://www.gov.uk/government/statistics/final-uk-greenhouse-gas-emissions-national-statistics-1990-to-202127PleaseseetheCarbonBudgetDeliveryPlanfordetailsofourpoliciesandproposalsformeetingthecarbonbudgets.The'Meetingcarbonbudgets'sectionoftheCarbonBudgetDeliveryPlanmakesclearhowwehavereachedtheconclusionthatCarbonBudgetswillbemet.WhilsttheindicativepathwaysetoutintheNZSremainsourviewofthemosteconomicallyadvantageouswaytomeettheCarbonBudgets,andwethereforecontinuetouseitasameansofdevelopingandtestingpolicy,thepathwayplaysnoroleinourconclusionthatthatCarbonBudgetswillbemet.28HMT(2021),‘BudgetandSpendingReview–October2021:Whatyouneedtoknow’,https://www.gov.uk/government/news/budget-and-spending-review-october-2021-what-you-need-to-know29BEIS(2022),‘UKgovernmenttakesmajorstepsforwardtosecureBritain’senergyindependence’,https://www.gov.uk/government/news/government-readies-sizewell-c-nuclear-project-for-future-investment30BEIS(2023),PressRelease,https://www.gov.uk/government/news/government-readies-sizewell-c-nuclear-project-for-future-investment31BEIS(2021),‘UKbacksnewsmallnucleartechnologywith£210million’,https://www.gov.uk/government/news/uk-backs-new-small-nuclear-technology-with-210-million32NationalGridESO,‘ThePathwayto2030HolisticNetworkDesign,https://www.nationalgrideso.com/future-energy/the-pathway-2030-holistic-network-design#:~:text=The%20HND%20facilitates%20the%20connection,towards%20our%20net%20zero%20future.33BEIS(2022),‘OffshoreCoordinationSupportSchemeguidance’,https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1135467/Offshore_Coordination_Support_Scheme_guidance.pdf34BEIS(2023),SmartMeterStatisticsinGreatBritain:QuarterlyReporttoendDecember2022,https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1143890/Q4_2022_Smart_Meters_Statistics_Report.pdfPoweringUpBritain–TheNetZeroGrowthPlan12335JulyandDecember2022HydrogenStrategyupdatetothemarket36NorthSeaTransitionAuthority(2022)EmissionsMonitoringReport.https://www.nstauthority.co.uk/news-publications/publications/2022/emissions-monitoring-report-2022/37NSTA(2022)Dataset,https://www.nstauthority.co.uk/news-publications/publications/2022/38PleaseseetheCarbonBudgetDeliveryPlanfordetailsofourpoliciesandproposalsformeetingthecarbonbudgets.The'Meetingcarbonbudgets'sectionoftheCarbonBudgetDeliveryPlanmakesclearhowwehavereachedtheconclusionthatCarbonBudgetswillbemet.WhilsttheindicativepathwaysetoutintheNZSremainsourviewofthemosteconomicallyadvantageouswaytomeettheCarbonBudgets,andwethereforecontinuetouseitasameansofdevelopingandtestingpolicy,thepathwayplaysnoroleinourconclusionthatthatCarbonBudgetswillbemet.39ThisfigurehasbeenupdatedsincetheNZSpublication.DESNZanalysis(2023),‘NetZeroIndustryPathway(N-ZIP)model’,https://www.theccc.org.uk/wp-content/uploads/2020/12/N-ZIP-Model.xlsb.ForfurtherdetailsseeSectorModellinginTechnicalAnnex.40DESNZanalysis(2023),‘NetZeroIndustryPathway(N-ZIP)model’,https://www.theccc.org.uk/wp-content/uploads/2020/12/N-ZIP-Model.xlsb.41DESNZanalysis(2023),‘NetZeroIndustryPathway(N-ZIP)model’,https://www.theccc.org.uk/wp-content/uploads/2020/12/N-ZIP-Model.xlsb.ForfurtherdetailsseeSectorModellinginTechnicalAnnex.42PleaseseetheCarbonBudgetDeliveryPlanfordetailsofourpoliciesandproposalsformeetingthecarbonbudgets.The'Meetingcarbonbudgets'sectionoftheCarbonBudgetDeliveryPlanmakesclearhowwehavereachedtheconclusionthatCarbonBudgetswillbemet.WhilsttheindicativepathwaysetoutintheNZSremainsourviewofthemosteconomicallyadvantageouswaytomeettheCarbonBudgets,andwethereforecontinuetouseitasameansofdevelopingandtestingpolicy,thepathwayplaysnoroleinourconclusionthatthatCarbonBudgetswillbemet.43DLUCH(2022),'EnglishHousingSurvey2019-20Report’,https://www.gov.uk/government/collections/english-housing-survey#2019-to-202044BEIS(2021),‘OpportunityareasfordistrictheatingnetworksintheUK:secondNationalComprehensiveAssessment’,https://www.gov.uk/government/publications/opportunity-areas-for-district-heating-networks-in-the-uk-second-national-comprehensive-assessment45DESNZinternalanalysis46HeatNetworksIndustryCouncil47BEIS(2021),https://www.gov.uk/government/statistics/provisional-uk-greenhouse-gas-emissions-national-statistics-2021.IncludesIA&Sintotalemissions.ConsistentwithCB6/NZSanalysis.Source:BEIS,EnergyConsumptionintheUK2021,tableU248PleaseseetheCarbonBudgetDeliveryPlanfordetailsofourpoliciesandproposalsformeetingthecarbonbudgets.The'Meetingcarbonbudgets'sectionoftheCarbonBudgetDeliveryPlanmakesclearhowwehavereachedtheconclusionthatCarbonBudgetswillbemet.WhilsttheindicativepathwaysetoutintheNZSremainsourviewofthemosteconomicallyadvantageouswaytomeettheCarbonBudgets,andwethereforecontinuetouseitasameansofdevelopingandtestingpolicy,thepathwayplaysnoroleinourconclusionthatthatCarbonBudgetswillbemet.49SustainableAviationforecastsbasedonindependentanalysisconductedbyICFconsultingfirm.AnalysisassumesUKSAFproductioncostsmatchorarelowerthanwiderglobalSAFproductioncosts.50CCC(2022),Progress-in-reducing-emissions-2022-Report-to-Parliament.pdf(theccc.org.uk),pp.112-11351https://www.smmt.co.uk/2023/01/chip-crisis-subdues-new-car-market-but-evs-now-second-only-to-petrol/.Decembersawbatteryelectricvehicles(BEVs)claimtheirlargestevermonthlymarketshare,of32.9%,whilefor2022asawholetheycomprised16.6%ofregistrations,surpassingdieselforthefirsttimetobecomethesecondmostpopularpowertrainafterpetrol.52PleaseseetheCarbonBudgetDeliveryPlanfordetailsofourpoliciesandproposalsformeetingthecarbonbudgets.The'Meetingcarbonbudgets'sectionoftheCarbonBudgetDeliveryPlanmakesclearhowwehavereachedtheconclusionthatCarbonBudgetswillbemet.WhilsttheindicativepathwaysetoutintheNZSremainsourviewofthemosteconomicallyadvantageouswaytomeettheCarbonPoweringUpBritain–TheNetZeroGrowthPlan124Budgets,andwethereforecontinuetouseitasameansofdevelopingandtestingpolicy,thepathwayplaysnoroleinourconclusionthatthatCarbonBudgetswillbemet.53See44.54Defra(2023)EnvironmentalLandManagement(ELM)update:howgovernmentwillpayforland-basedenvironmentandclimategoodsandservices,https://www.gov.uk/government/publications/environmental-land-management-update-how-government-will-pay-for-land-based-environment-and-climate-goods-and-services/environmental-land-management-elm-update-how-government-will-pay-for-land-based-environment-and-climate-goods-and-services55PublishedwithintheUKETSAuthority’sconsultationon‘DevelopingtheUKEmissionTradingScheme’:DevelopingtheUKEmissionsTradingScheme(UKETS)-GOV.UK(www.gov.uk)56PleaseseetheCarbonBudgetDeliveryPlanfordetailsofourpoliciesandproposalsformeetingthecarbonbudgets.The'Meetingcarbonbudgets'sectionoftheCarbonBudgetDeliveryPlanmakesclearhowwehavereachedtheconclusionthatCarbonBudgetswillbemet.WhilsttheindicativepathwaysetoutintheNZSremainsourviewofthemosteconomicallyadvantageouswaytomeettheCarbonBudgets,andwethereforecontinuetouseitasameansofdevelopingandtestingpolicy,thepathwayplaysnoroleinourconclusionthatthatCarbonBudgetswillbemet.57Nature-basedsolutions,suchasafforestation,areincludedintheAgricultureandLULUCFsubsector.Forfurtherdetail,seetheNaturalResources,Waste&F-Gaseschapter.58InternalDESNZanalysisbasedonEnergyInnovationNeedsAssessmenttechnologydeploymentpaths(2019):https://www.gov.uk/government/publications/energy-innovation-needs-assessments.Notethisdataisbasedon80%emissionreductiontargetby2050,notthecurrentnetzero(100%reduction)target,hencelikelytobeanunderestimate.59BEIS(2021)NetZeroResearchandInnovationFramework,https://www.gov.uk/government/publications/uk-net-zero-research-and-innovation-framework-delivery-plan-2022-to-2025PoweringUpBritain–TheNetZeroGrowthPlan125PoweringUpBritain–TheNetZeroGrowthPlan126E02888048978-1-5286-4019-0

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