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£3.9bn for decarbonising heat and buildings set out in Net Zero Strategy

Words: Laura Edgar
Green energy / ESB Professional, Shutterstock_118528174

The UK Government has committed £3.9 billion of new funding for the decarbonisation of heat and buildings as part of its Net Zero Strategy.

Published yesterday (19 October), the strategy sets out how the government intends to secure 440,000 “well-paid jobs” and unlock £90 billion of private investment by 2030.

The strategy is the government’s plan to end its contribution to the climate crisis by 2050. Also, the government wants people’s energy bills to be lower.

Plans to decarbonise heat and buildings include a £450 million three-year boiler upgrade scheme. This will be implemented through the Heat and Buildings Strategy, also published yesterday. It involves new grants of £5,000, which will be available from April 2022, to encourage homeowners to install more efficient, low-carbon heating systems such as heat pumps.

The Net Zero Strategy also includes a £124 million boost to the government's Nature for Climate Fund. It goes towards restoring 280,000 hectares of England's peat by 2050 and treble woodland creation in England to meet the government's commitment to create at least 30,000 hectares a year across the UK by the end of this Parliament.

An extra £500 million will go towards “innovation projects” to develop green technologies for the future. This brings the total funding for net-zero research and innovation to at least £1.5 billion to support “the most pioneering” ideas and technologies to decarbonise homes, industries, land and power.

The Net Zero Strategy builds on Prime Minister Boris Johnson's 10 Point Plan, a £12 billion plan for a green recovery from Covid-19, published in November 2020.

It states that the government recognises the importance of the planning system to common challenges like combating climate change and supporting sustainable growth. To deliver a decarbonised system by 2035, the government has made a number of key commitments, including ensuring that the planning system can support the deployment of low-carbon energy infrastructure.

According to the strategy, the government will embed transport decarbonisation principles in spatial planning and across transport policymaking. It acknowledges that the UK has a limited amount of land and to deliver net zero, changes to the way land is used are required, such as afforestation, biomass production and peat restoration.

“In addition, through the environment bill, the government is introducing Local Nature Recovery Strategies (LNRS), a spatial planning tool for nature, allowing local government and communities to identify priorities and opportunities for nature recovery and nature-based solutions across England,” it states.

As part of its plans to reform the planning system, the government said it will review the National Planning Policy Framework (NPPF) to make sure it contributes to climate change mitigation and adaptation as fully as possible.

The Net Zero Strategy comes ahead of COP26, which the UK, alongside Italy, will host in Glasgow from 31 October to 12 November.

Johnson said: “The UK’s path to ending our contribution to climate change will be paved with well-paid jobs, billions in investment and thriving green industries – powering our green industrial revolution across the country.

“By moving first and taking bold action, we will build a defining competitive edge in electric vehicles, offshore wind, carbon-capture technology and more, whilst supporting people and businesses along the way.

“With the major climate summit COP26 just around the corner, our strategy sets the example for other countries to build back greener too as we lead the charge towards global net zero.”

Energy secretary Kwasi Kwarteng added: “There is a global race to develop new green technology, kick-start new industries and attract private investment. The countries that capture the benefits of this global green industrial revolution will enjoy unrivalled growth and prosperity for decades to come – and it’s our job to ensure the UK is fighting fit.

“The plan will not only unlock billions of pounds of investment to boost the UK’s competitive advantage in green technologies, but will create thousands of jobs in new, future-proof industries – clearly demonstrating that going green and economic growth go hand in hand."

Alongside the Net Zero and Heat and Buildings strategies, HM Treasury published its Net Zero Review, which explores the key issues as the UK decarbonises. It intends to help build a picture of where opportunities could arise and what should be taken into account when designing decarbonisation policy.


Richard Blyth, head of policy at the RTPI, said: “The government rightly acknowledges in its Net Zero Strategy the importance of the planning system in achieving climate targets.  

“However, there is still no clarity on when the government will review the National Planning Policy Framework (NPPF). It is essential that ministers urgently amend the NPPF to strengthen its commitment to climate action and align it with the Climate Change Act.

“Planning professionals are well placed to lead the efforts to reach net zero and the RTPI has this week published guidance to help local authorities in this area.

“We hope that the government will back up its support for the English planning system by providing £500 million over the next four years.”

Mark Bridgeman, president of the Country Land & Business Association (CLA), welcomed the additional funds to support tree planting and peatland restoration, but noted “with regret that government is already significantly behind in its existing targets”.

“To plant 30,000 hectares of new trees per year by 2024 across the UK means more than doubling current rates of planting. The ambition is good, but the delivery will be extremely challenging, particularly in England, where competition for land use is stronger than ever.

“Landowners across the country are willing and able to help government meet its tree planting targets, but they can only do so with the right support. While the grants scheme in England is now more attractive, farmers will need long0term certainty if they are to plant trees on land that could have another use.”

Sue Riddlestone OBE, chief executive at Bioregional, said: “While falling short of the urgent and ambitious action that we need, the government’s heat and buildings strategy is a welcome step towards reducing carbon emissions from our buildings – currently 21 per cent of the UK’s total emissions.

“Boosting the market for energy-efficient alternatives to gas boilers will achieve economies of scale for manufacturers, helping prices to fall, and will support training, skills, and our green economy. However, limiting boiler replacement grants to just 90,000 households assumes that prices of heat pumps and other technologies will fall quickly to allow the government's target of 600,000 new installations by 2028 to be met.

“More importantly, decarbonising the UK’s built environment is a significant challenge, and crucial elements remain unresolved in the announcement. The UK desperately needs a campaign to insulate our leaky homes, supported by clear regulatory and fiscal incentives and training for all the trades, if we are to reduce the demand for energy and reduce energy bills for consumers. Ideally, the heat pump grant would be accompanied by a requirement to have a whole home energy plan and ensure energy efficiency of at least EPC C.”

She also said urgent action is needed to ensure that all new homes are built to be zero-carbon in operation.

Association for Consultancy and Engineering (ACE) director of policy Matthew Farrow said the net-zero policy documents “contain a level of ambition that would have been unthinkable just three years ago”.

“It is fair to say that both government and business activity on net zero is picking up speed, and the government’s approach of backing a range of technologies while seeking to bring down technology costs is broadly sensible. Likewise, the attempt to balance maintaining public support while delivering regulatory clarity is clumsy but politically understandable.   

“The next few years really are make or break, however, and the hard work is only just beginning. The challenge is to convert the broad outlines we now have for technology choices and rollouts into actual physical deployment across millions of households and thousands of communities. Furthermore, this must be done in a joined-up way. The engineering and consultancy sector will be crucial in delivering this. Only we have the combination of engineering and design expertise, systems thinking, data insights and cross sectoral experience to make a net-zero society a reality."

Dave Sheridan, executive chairman at modular housebuilder ilke Homes, commented: “While welcome, the government’s new heating and building strategy must be more ambitious in its goal to decarbonise the UK’s housing stock.

“To avoid huge retrofitting costs, policymakers must prioritise the delivery of zero-carbon new homes now by bringing forward the requirement to reach the Future Homes Standard ahead of 2025. Homes England, the government’s forward-thinking housing agency, could also be reserving public land exclusively for housing that meets this standard to spur investment into the technologies that could create a green industrial revolution in housebuilding.

“The government’s target of installing 600,000 air source heat pumps in UK homes by 2028 is achievable as half of those should be in new homes. The sooner we move to these low-carbon technologies, the sooner we can bring down capital costs. It’s thanks to this scaling up that the cost of manufacturing wind turbines, solar panels and battery-powered cars have all drastically reduced. Policy should look to replicate for housebuilding the successes achieved in other sectors.”

Julie Hirigoyen, chief executive at UKGBC said: “UKGBC welcomes the recognition by government that we must move away from heating our buildings with fossil fuels – and that households must be helped to make the transition to clean electric heating.

“However, phasing out gas boilers from 2035 is not ambitious enough – there needs to be a clear cut-off date from 2030 to put us on track to meet net zero. And £5,000 grants will help just 30,000 households – a drop in the ocean in the context of the 900,000 annual installations we need to see by 2028. Worse still, there’s no targeted financial help at all for low-income households to embark on the journey to clean electric heating – meaning that the gap between rich and poor will widen, not close.

“Energy efficiency 101 tells us that retrofitting homes with insulation and efficiency measures has the multiple benefits of lowering fuel bills, enabling low-carbon heat solutions to work more effectively, and creating jobs. If we don’t urgently take that basic first step we run the risk of overloading the electricity grid and continuing to fail to meet the needs of society’s most vulnerable.

The Net Zero Strategy can be read here and the Heating and Buildings Strategy can be found here.

Image credit | ESB Professional, Shutterstock