The net zero transition

Government strategies are often not particularly exciting, but when you couple one with a high-profile global conference on a subject that will affect every single person on the planet, then they become more interesting. The UK Government published Net Zero Strategy: Build Back Greener just before the UN Conference on Climate Change, otherwise known as COP26, in Glasgow in November.

The strategy sets out routes to reduce carbon emissions, policy proposals for key economic sectors, and cross-cutting action to support the transition to net zero by 2050. It covers many areas of interest for CLA members and is an important signal of policy direction, with associated opportunities and risk. The CLA supports many of the policies, some of which we have helped shape over the past few years. Some proposals, however, will need influencing through consultations and lobbying of government and MPs to ensure that those who live, work and run rural businesses are not disadvantaged.

The strategy is based on UK-wide targets for net zero by 2050, but for some sectors, implementing policies are devolved, and therefore will be different in each nation. Wales has its own net zero Wales target, and on 17 November, it published a Net Zero Wales plan that sets its long-term pathway.

The strategy builds on the UK Government’s 10-point plan for a green industrial revolution, which included £12bn funding to stimulate new industries, regulations to set future direction (such as for switching to electric cars), investment in skills development, and supporting green finance (for example loans for projects that help mitigate climate change).

The nine sector-based emission reduction plans show how all sectors are expected to play their part, with the largest changes expected from domestic transport, heat and buildings, international transport and power. Reductions will also be expected in agriculture and land use, and a new sector focusing on greenhouse gas removal is expected to drive negative emissions. All the sector plans have some relevance to CLA members, but the priority areas are power, heat and buildings, transport and natural resources.

Many commitments are not specifically related to rural areas. However, a few commitments will have a stronger impact on the countryside. This includes a requirement for all electricity to come from low carbon sources (including nuclear) by 2035, contracts to boost growth in wind and solar, and ensuring that the planning system can support low carbon energy infrastructure.

These changes should see UK power for renewable sources grow from the current 40%. Some of this will be offshore wind, but there will also be opportunities for rooftop and land-based solar. For this to work, though, the problems in grid connection availability and costs and planning objections will need to be addressed, which is something that the CLA is championing, alongside getting the right incentives and systems to unlock investment potential across all scales of power generation.

Most of the announcements and proposals on transport are not directly relevant to the rural economy. The two commitments that are relevant concern the delivery of electric vehicle (EV) charge-point infrastructure. The CLA will champion the needs of rural areas to ensure they get a fair share of the investment in EV charge-point infrastructure for domestic and business premises, and extension of EV grants to include electrical upgrades and connections.

The Net Zero Strategy was accompanied by a separate Heat and Buildings Strategy. This is primarily a roadmap for heat policy, focusing on how the UK can transition from fossil fuel heating towards low-carbon heating, but it also covers building efficiency, the potential future demand for cooling, and fuel poverty. Two consultations on proposed timescales for phasing out of oil and gas heating in homes and commercial buildings were also published. Th is is a priority area for the CLA, given rural properties’ reliance on fossil fuel-based heating and the limited and often costly decarbonisation options.

The net zero pathway indicates that emissions from agriculture, forestry and other land use will need to fall by 17-30% by 2030. Many of the commitments are already in progress, including trebling woodland creation rates by the end of this Parliament and a focus on peatland restoration. This is a devolved policy area. Commitments in England focus on changes through the new agricultural policy, alongside a review of the tax treatment of trees and woodland, and mobilisation of private sector investment. There is also a plan for a biomass strategy in 2022 to consider the role of bioenergy for carbon capture and storage.

The changes in agriculture policy with the removal of the Basic Payment Scheme over the next seven years in England, and from 2024 in Wales, will have a significant impact on most businesses. There will be opportunities through the new government schemes and private sector contracts for carbon, but there is still some work to do in their design. The CLA is working with the government to shape these new schemes.

Here we have outlined the key proposals that will be coming through in the next few years. However, it is important to note that given the wide range of net zero pathways and outcomes, these policies will evolve, and we should expect tightening of timescales and/or increasing ambition. This was demonstrated at the COP26 negotiations with a new UK commitment to a methane pledge, which will lead to new policies to meet the target of a 30% reduction in methane by 2030. The CLA is already working to ensure that farming has the investment in research and technological solutions needed to reduce methane emissions, and that other methane-producing sectors such as oil and gas also play their part.

The net zero transition is a long road affecting all parts of business and life, and it will be essential to ensure the rural economy is not left behind. The CLA is well-placed to continue to champion the needs of rural businesses and represent your interests with national and local government.