The government will finally respond to the vast package of green energy subsidies and tax cuts unveiled across the pond with a raft of new environmental policies to attract investment in the UK’s push for net zero and supply security.
Downing Street’s plan has internally been titled ‘Green Day’ and will include measures to protect jobs in British industries such as electric vehicle production, according to Bloomberg.
This reflects growing fears the country’s renewables sector will come under threat from the US Inflation Reduction Act – which commits $368bn to the green energy sector, the biggest environmental package in history.
The EU is already organising its own response, the ‘Green Industrial Plan’ which will include loosening state subsidies for member states.
Earlier this year, City A.M. revealed nascent energy companies were considering opportunities Stateside following the new subsidy regime.
James Basden, founder and director of clean energy storage specialist, Zenobe Energy (Zenobe), told City A.M. that his company was going to “accelerate what we’re doing in America because of the tax credits.”
He said: “We’re not alone. The UK and the EU are going to have to change, I’m afraid, because markets move very fast.”
There has also been pressure from MPs, including BEIS Select Committee member Alexander Stafford, who told City A.M. the UK could not become complacent about its leading role in renewable projects.
He said: “The UK, which is unquestionably a world leader in green energy projects, must work hard to ensure we stay the torchbearers of global green projects.
“There are elements of these funding regimes that the UK should also look to emulate.”
Bloomberg expects the program isn’t likely to rival the US or EU packages in terms of funding, but will include measures to address risks to British jobs and implement a plan for green growth,.
Officials at the Treasury and the new Department for Energy and Net Zero, led by Grant Shapps, are working on the policy.
Earlier today Chancellor Jeremy Hunt unveiled a £20bn spending commitment for carbon capture and also announced plans to include nuclear in the same favourable investment environment as green energy.
He also described the country as a world leader in offshore wind and solar – a position that is under increasing threat.
When approached for comment, the government referred to Hunt’s statement during the Budget.
He said: “The transition to net zero is essential to long-term prosperity. The UK welcomes decisive international action to tackle climate change and has a world-leading track record in reducing emissions, innovating in green technologies, and mobilising finance for the transition.
“In addition to the measures in the Spring Budget, the government will set out further action later this month to ensure energy security in the UK and meet our net zero commitments.’