The Net Zero and Heat and Buildings Strategies

The UK Government published both its Net Zero Strategy and its Heat and Buildings Strategy on 19th October 2021.

The fact that these two Strategies have been released at the same time is no coincidence: a huge part of the predicted savings in emissions between now and 2035 is expected to come from reduced emissions due to heating homes and buildings, which will be an enormous challenge.

Key Message

The clear message from the Net Zero Strategy is that the Government intends to direct a considerable amount of effort and resource into reducing emissions and improving sustainability over the short to medium term. This represents an opportunity for all kinds of businesses to review their own position and consider their pathway to a more sustainable basis.

Funds will be available to support some of the changes that may be necessary – but this is clearly a transition phase and those funds will not necessarily be available in future. Now is the time to plan ahead.

Here we summarise what we think are the key points for rural landowners to consider from the two Strategies:

Agriculture, forestry and land use (England)

Agriculture

• 75% of farmers to be “engaged in low carbon practices” by 2030 – and 85% by 2035

• Government is to explore the monitoring, reporting and verification of emissions from agriculture and review potential carbon pricing strategies

• Farming Investment Fund will provide grants for equipment and infrastructure which helps reduce nitrate and ammonia emissions

• Consideration as to whether new statutory powers are needed to improve soil health and nutrient management, together with work to reduce the use of manufactured fertiliser

• Support for agroforestry

• A Biomass Strategy is to be published in 2022 to support sustainable biomass production and bioenergy with carbon capture and storage

• Land use trade-offs to be recognised and considered with the aid of a Net Zero Systems Tool for decision-makers

Peatlands

• 35,000ha peatlands to be restored by 2025 through the Nature for Climate Fund, with an aim to restore 280,000ha by 2050

• Lowland Agriculture Peat Taskforce to report in summer 2022 on actions for lowland peat – recognising their role in food production

Forestry

• Woodland creation rates to treble by the end of this Parliament

• £500 million of Nature for Climate Fund to be spent on woodland creation and management until 2025

• Guidance on the tax treatment of trees and woodland to be reviewed “to provide greater clarity” to landowners

• Promotion of the use of timber in construction

Renewable energy

• By 2035 the UK is to be powered entirely by clean electricity

• The main focus remains on offshore wind and solar (plus nuclear)

• There is recognition that “locally supported” onshore wind can be part of the solution

• Biomass power with associated carbon capture and storage is to be supported

Heat in buildings (England)

• It is necessary to decarbonise the heating of buildings if the country is to achieve a Net Zero target – which means shifting away from oil and gas to heat homes and non-domestic buildings.

• Government is proposing to ban the installation of new oil-fired boilers in off gas grid homes by 2026 and in off gas grid non-domestic buildings by 2024

• The ambition is for no new natural gas boilers to be installed from 2035

• Air and ground-source heat pumps, heat networks and biogas may all be part of the solution

• A decision will be taken on the future of hydrogen gas for heating by 2026, following further research and pilot schemes.

• A “whole building” approach is required so that improvements to the energy performance of the building (through better insulation etc) are undertaken as part of a coherent solution

• The Minimum Energy Efficiency Standards (MEES) which apply to private rented homes are already set to increase to Band C by 2030, without any additional funding support for landlords

• Government is considering how it can incentivise owner-occupiers to improve energy efficiency on sale, re-financing or during repairs and renovations. New requirements on mortgage lenders to disclose the energy performance of their lending portfolios are already being mooted.

Transport

• All cars to be “zero emissions capable” by 2035 (the sale of new petrol and diesel cars to end by 2030)

• Significant funding for electric vehicle charging points

• Further support for the development of hydrogen fuel solutions

Carbon capture and underground storage (CCUS)

• Two new hubs – one in north west England and the other on Teesside and Humber – will develop industrial CCUS technology to remove carbon dioxide from the air and store it underground, including in former North Sea oilfields.

20th October 2021