2020 renewable heat and transport targets Contents


A whole-systems approach?

76.The genesis of this inquiry was the fear that the UK was at risk of failing to meet its crucial renewables objectives not because they are impossible, but because Government departments have not cooperated effectively. DECC told us “the Government is committed to a whole systems approach to decarbonisation” and it is “working with colleagues across Government to identify action that will cost-effectively deliver the emission reductions required”.196

77.However, the Campaign to Protect Rural England criticises “the Government’s silo approach taken to the different targets”.197 The UK Hydrogen Fuel Cell Association claims “at present, the Government’s heat, power and transport teams appear to be working entirely independently”.198 Giving specific examples, the REA criticises the UK’s high imports of Used Cooking Oil for waste fuels “while millions of tonnes of food waste is sent to landfill”.199 ADBA (the Anaerobic Digestion and Bioresources Association) noted “at present, heat and renewable transport incentives are administered through completely separate incentives”.200 Gasrec criticised inefficiency in the Government’s allocation of biomethane support between the heat and transport sectors (see paragraph 72). In chapter 3, we suggest that heat pump deployment is proceeding without prerequisite energy-efficiency improvements. Transport and heat electrification are competing for the same, limited, electricity generation and network capacity (see chapter 4). These examples demonstrate how Government could develop renewable energy more quickly and with fewer unintended consequences by adopting a whole-systems approach. It could do this by formally assessing whether the scarce resources employed by a proposed policy—for example biofuels or the electricity networks—could be used more effectively for decarbonisation in another area.

78.Opportunities for more coherent Government policy on low-carbon and renewable energy have arisen through recent Machinery of Government changes. A new Department for Business, Energy and Industrial Strategy (BEIS) has brought together the former DECC with elements of the former Department for Business, Industry and Skills (BIS): at best, this will enable more joined-up thinking on a low-carbon economy and place clean growth at the heart of a more influential Department; at worst, energy and climate-change issues will be buried by conflicting concerns. We note the new Economy and Industrial Strategy Cabinet Committee, a potentially positive move which brings together the Prime Minister, Chancellor of the Exchequer, and Secretaries of State for Business, Energy and Industrial Strategy, Communities and Local Government, the Environment, and Transport (among others).201 Their leadership will be central to developing renewable and low-carbon energy, which in turn is vital to the UK’s economy and industrial strategy.

79.Decarbonisation is of critical importance, and the resources to achieve it—primarily bioenergy and the electricity networks—are limited: efficient resource allocation is therefore key. There is evidence that Government’s overall renewables strategy has been hampered by inconsistent approaches. The creation of a new Department for Business, Energy and Industrial Strategy is an opportunity for greater cooperation and consistency. The new Economy and Industrial Strategy Cabinet Committee should place meeting the UK’s renewables and decarbonisation targets at the heart of its terms of reference. We moreover recommend that, for any policy that deploys scarce resources to achieve decarbonisation and renewables objectives, the Government compares its costs and benefits against other potential uses of those resources—this process could be included in Impact Assessments.

Leaving the EU

80.The 2020 renewable targets have many merits, even as the UK prepares to leave the EU. Greenpeace stated “the EU renewable energy targets are an essential platform for reducing costs and delivering at scale” in the context of the UK’s renewable needs for long-term decarbonisation.202 E3G, an environmentalist group, argued that “increased investment in renewable energy sources to 2020 is a ‘low-regret’ pathway”, as the UK needs renewable energy to meet its own long-term decarbonisation objective. Moreover, “if the UK were to disregard [the targets] then it would lead to ‘moral hazard’ whereby other EU countries would be more likely to disregard other obligations in the UK’s national interest”.203 Global warming cannot be solved by the UK alone: but the UK’s reputation as a climate leader matters. Moreover, Dr Skorupska of the REA identified that “across electricity, heat and transport there are over 117,000 jobs working in renewable energy”.204 David Manning of SGN stated shortly after the EU referendum “what we do today lays the foundation for us to be able to achieve 2050 [emissions targets], so I don’t think we can afford to take our foot off the gas based on what might or might not have happened [with regard to the EU referendum]”.205

81.The UK has not yet left the EU: the exit process could take two or more years. The Treaty on the Functioning of the European Union will cease to be binding on the UK only when withdrawal is agreed, or two years (without agreement) after the UK triggers Article 50: at this point, the Renewable Energy Directive will no longer bind the UK. The 2020 targets have been transposed into UK law through the Promotion of the Use of Energy from Renewable Sources Regulations 2011 and the Renewable Transport Fuel Obligations (Amendment) Order 2011. Both are statutory instruments made under the powers of the European Communities Act 1972 (ECA). To retain the 2020 targets in part or in whole despite repealing the ECA, new legislation would be required. Lord Bourne clarified “as a Department and as a Government, we are still working to the 2020 targets as something that we are seeking to honour”.206

82.If the UK misses, or reneges on its commitment to, the 2020 renewables targets, this will undermine confidence in its commitment to future targets, including the 2050 decarbonisation objectives of the Climate Change Act 2008—both rely on the Government driving policy to change patterns of electricity, heat, and transport consumption and supply; both are Government promises in which stakeholders must be able to trust. Leaving the EU renders the status of the 2020 targets uncertain. The Government must reassess its capacity to meet them and, if able, recommit to them notwithstanding its exit from the EU. If it is not, it must set and commit to replacement targets and explain how these will support the longer-term decarbonisation objectives of the 2008 Act as effectively as the 2020 targets.

196 DECC (HAT0063)

197 Campaign to Protect Rural England (HAT0058)

198 UK Hydrogen Fuel Cell Association (HAT0030), para 20

199 REA (HAT0053), para 21.1

200 ADBA (HAT0044)

202 Greenpeace UK (HAT0066)

203 E3G (HAT0070)

204 Q81

205 Q123

206 Q162

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7 September 2016