UK Priorities for COP28
Graham Stuart Excerpts(5 months, 3 weeks ago)
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The Minister for Energy Security and Net Zero (Graham Stuart)
The UK is committed to tackling climate change and restoring nature. We have reduced our emissions by more than any other major economy since 1990 and, going forward, have one of the most ambitious targets for 2030. Our emissions are down 48% compared to 1990 and we have grown the economy by 70% over the same period.
We brought the world together at the COP26 Glasgow summit to speed up the global net zero transition, as well as brokering a historic deal to end deforestation and kickstart new green finance markets. However, limiting global temperature increases to 1.5° will only be possible if countries around the world commit to join the UK on a net zero pathway. The science is clear that global emissions need to peak by 2025 and must be reduced by 43% in 2030 compared to 2019 in order to achieve this.
The upcoming 28th conference of the parties under the UNFCCC (COP28), to be hosted by the UAE in Dubai from 30 November to 12 December, will mark an important moment to get to net zero. Amid record global temperatures, the first global stocktake of progress against the Paris agreement will show that the world is currently off track and urgent action is needed to keep the 1.5° goal within reach. The world needs to take a hard look at what is working and where we are failing to deliver, focusing our resources on practical, deliverable solutions. This COP must deliver the framework and targets already agreed, including in Glasgow, and set out the long-term decisions that are needed to bring everyone with us, from rural communities to the countries most impacted by climate change.
The context is challenging, given the current geopolitical tension, conflict and macroeconomic environment where countries are battling inflation and debt. At the same time, the widespread impacts from increasing global temperatures have never been felt more, underscoring the need to deliver on our climate commitments and reduce emissions.
His Majesty the King will attend the opening ceremony of the world climate action summit at COP28 at the invitation of the UAE and at the request of HMG, and will deliver an opening address. The Prime Minister, Foreign Secretary, Secretary of State for Energy Security and Net Zero, Environment Secretary and other Ministers will attend the summit. I will lead the negotiations for the UK.
The Prime Minister’s focus will be on forests, finance and net zero transitions. These are areas where the UK can lead global progress, building on our track record, and working with the UAE presidency, other countries, business and civil society.
Overall at COP28 the UK wants to see progress in five priority areas:
New commitments and action to keep 1.5 alive. Coming out of the global stocktake, we need renewed leader-level political consensus and increased ambition to keep 1.5 in reach. We need commitment to peak global emissions by 2025 and clear guidance for the next round of NDCs. And we need a clear, forward-looking road map with global targets in key sectors and commitment to action including through the breakthrough agenda, on forests, and through the phasing out of hydrofluorocarbons. Since 2010 the UK has seen nearly £200 billion of public and private finance investment in low carbon energy sectors. We will use this domestic experience to spearhead efforts to accelerate decarbonisation of key sectors of the global economy.
A clean energy package with clear commitments to transition away from fossil fuels. This includes commitments to triple global renewables and double energy efficiency by 2030, to phase out unabated fossil fuels—in line with the G7 commitment the UK helped to deliver earlier this year—and to end new unabated coal power and phase out coal power globally.
An outcome on finance that helps deliver the trillions needed to accelerate the transition. This includes reform of international financial institutions, delivery this year of the collective goal of $100 billion climate finance per year for developing economies, and progress on the post-2025 climate finance goal with contributions from a broader range of donors. Based on preliminary data, the OECD has stated that it is likely that the $100 billion goal was met in 2022. The UK will play its part. We are fully committed to delivering on our £11.6 billion of international climate finance and we are a world leader in green finance. We will work with partners to realign financial flows with the Paris agreement and global biodiversity framework.
Progress on building resilience to climate impacts—demonstrating progress on the Glasgow commitment to double adaptation finance by 2025 and establishing an effective loss and damage fund to support countries that are particularly vulnerable. We are pleased that the loss and damage transitional committee, mandated by COP27, has put forward a recommendation on the fund. The UK was instrumental in securing that recommendation and we hope it will be agreed at COP28. We will continue to advocate for the priorities of the most vulnerable. I co-chaired a third climate and development ministerial alongside the UAE, Malawi and Vanuatu at pre-COP last month. This focused on enhancing access and delivery of adaptation finance, the equitable delivery of high-quality grant-based finance and concessional finance.
Real progress towards protecting, restoring and sustainably managing nature, on land and in the ocean, which is crucial to delivering on net zero and building resilience. We need COP28 to maintain momentum on the implementation of the global biodiversity framework agreed at CBD COP15 last year, to make concrete progress on the historic agreement to halt and reverse biodiversity loss by 2030. We want to see forests prioritised in the global stocktake and to use the Forest and Climate Leaders’ Partnership as the vehicle to drive accelerated delivery of the Glasgow leaders declaration on forests and land use. To date UK International Climate Finance has avoided over 410,000 hectares of ecosystem loss.
We will continue to deliver ambitious reductions, embracing innovation and green finance opportunities. The UK will go into COP28 with a strong record at home and internationally. We recently committed $2 billion to the green climate fund second replenishment, the biggest single international funding commitment the UK has made to help tackle climate change, making us the top contributor cumulatively to the world’s most prominent international climate fund.
In his recent net zero speech, the Prime Minister set out the long-term decisions to enable a just transition to net zero while maintaining public support. We are absolutely clear that net zero is the right thing to do for our long- term national security, economic prosperity and the future of our children.
All countries around the world need to do more to keep 1.5 alive. The UK is delivering significant progress, and following the clear framework and targets agreed at Glasgow COP, we saw 90% of global GDP committed to net zero. We must now drive progress and support other nations constituting 99% of emissions to grasp the benefits of green growth.
We will update the House in the usual way once negotiations have concluded.
[HCWS80]
Oral Answers to Questions
Graham Stuart Excerpts(5 months, 3 weeks ago)
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Andrew Gwynne
As a fellow Lancastrian, I hope you had a good Lancashire Day yesterday, Mr Speaker.
The Minister for Energy Security and Net Zero (Graham Stuart)
As a Yorkshire MP, I resent that remark. [Laughter.]
I meet regularly with business leaders and organisations. I chair or co-chair, among others: the Offshore Wind Industry Council, which I will be going straight to after questions; the solar taskforce; the green jobs delivery group, which met yesterday; the North sea transition forum, which I will attend tomorrow; and, from a strategic cross-cutting point of view, the Net Zero Council. Of course, the Secretary of State and I met global leaders yesterday.
Andrew Gwynne
Well, as the Minister seems to meet so many business leaders, he must have heard their shock and horror about the Government’s roll-backs on net zero. Earlier this month, the Aviva chief executive officer Amanda Blanc said that the Government were putting our climate goals as a country “under threat”, putting at risk
“jobs, growth and the additional investment the UK requires”.
She is not wrong, is she?
Graham Stuart
The hon. Gentleman has a well-founded and highly esteemed reputation for anger. Under this Government, this country has cut its emissions more than any other major economy on the planet, and we have the most ambitious plans for 2030. When I attend COP28 next week, we will be inviting and supporting others to join the UK, which under this Conservative Government has led the way on a pathway to net zero.
Joanna Cherry
The Industrial Decarbonisation Research and Innovation Centre based at Heriot-Watt University in my constituency is doing incredible work on the green transformation across the UK’s industrial heartlands. It is working with all the biggest industrial clusters and is supporting more than 30 universities and research initiatives, looking at all aspects of the Government’s decarbonisation challenge. As such, it is well placed to assist business to meet our net zero targets. The problem is that its funding is coming to an end next March, and at present there is nothing to replace it. The science Minister promised me a meeting about this urgent issue several months ago, but it has been cancelled a number of times. Will the Minister advocate with his colleague so that I can get this meeting arranged and get funding in place for IDRIC to continue its fantastic work?
Graham Stuart
I thank the hon. Lady for her question and for championing vital research, not least in Scotland. I am looking forward to meeting scientists when I am in Scotland over the next couple of days. We have all heard her request, and it will be noted.
Philip Dunne (Ludlow) (Con)
My right hon. Friend mentioned that he will go to COP28 next week. Could he remind Members of the House, particularly those on the Opposition Benches, of the measures taken in last week’s autumn statement to help to promote the green energy agenda in this country?
Graham Stuart
My hon. Friend is quite right. We must never forget the parlous state of this country in 2010. Less than 7% of our electricity came from renewables—that was the legacy of the right hon. Member for Doncaster North (Edward Miliband). In the first quarter of this year, that was nearly 48%. Opposition Members raised the issue of people being cold and unable to pay their bills, but just 14% of homes were insulated properly; now, it is 50%. In last week’s autumn statement we heard announcements about the grid and—
Mr Speaker
Order. The Minister talks about emissions, and we are getting a lot of them from him today.
David Morris (Morecambe and Lunesdale) (Con)
My constituents put in 10% of the energy into the national grid from two nuclear power stations. We are No. 7 on the template for new builds, so I would like to invite the Under-Secretary of State for Energy Security and Net Zero, my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie) to come to Heysham to see for himself the good work of EDF and the new nuclear power programme that is coming to my constituency.
Graham Stuart
My hon. Friend is a stout champion not only of the pathway to net zero but of the jobs and prosperity that come with it. It is with great alacrity that I accept on behalf of my hon. Friend the Minister.
Anne McLaughlin (Glasgow North East) (SNP)
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The Minister for Energy Security and Net Zero (Graham Stuart)
This has been a record year for onshore wind, which is already the largest renewables technology. The latest contract for difference added an unprecedented 1.7 GW.
Dame Meg Hillier
The Minister seems to be comparing figures I have not seen. If it is a record year, why have we seen such a dramatic drop in planning applications for onshore wind farms and in the number of onshore wind farms delivered? From a peak of 64 applications in 2011, it went right down to zero in 2019 and now to 10 in 2022, the latest figures the House of Commons Library could provide. That does not seem like a record year to me. Is it not time the Government stopped shilly-shallying on onshore wind and backed the builders, not the blockers?
Graham Stuart
The hon. Lady is renowned in the House for her arithmetic skills, but in this case they seem to have failed her. The 1.7 GW is a tremendous success. I share her enthusiasm for onshore wind where communities support it. In September, the Government announced changes to planning policy for onshore wind in England to help make it easier and quicker for local planning authorities to consider and, where appropriate, approve onshore wind projects where there is local support.
Mr Philip Hollobone (Kettering) (Con)
In the Kettering constituency there are 30 large wind turbines. Together with solar panels, they generate enough renewable electricity to power all 45,000 homes in the constituency. Is this not yet another case of where Kettering leads, others follow?
Graham Stuart
My hon. Friend has championed, does champion and, I am sure, will continue for many years to champion the good people of Kettering, and the fact that they are providing such leadership on net zero and the delivery of renewables after our parlous inheritance from the Labour party. Let us make sure that we never go back to a system in which renewables are not brought on to our grid in the way they are today.
Dr Alan Whitehead (Southampton, Test) (Lab)
The Minister is being a little shameless with his figures. We really ought to look at what is continuing to happen in England. In England, industry and other bodies warned that the supposed changes to onshore planning restrictions that were announced in September were far too timid to make any real difference to the dearth of new onshore wind.
I recently visited the site in Leighton Buzzard of the only turbine that has been put in place onshore in England since those supposed restrictions were lifted. It turns out that it has been in the planning process since 2014, and is not on a new site anyway. The Department’s renewable energy planning database shows that there are precisely zero new schemes in the pipeline in England. Should the Minister not go away and reconsider the remaining planning and funding restrictions on onshore wind so that it really can get going again?
Graham Stuart
As I have said, I share the enthusiasm on both sides of the House for onshore wind. The Government have set regulations that require onshore wind developers to consult communities in advance of submitting a planning application, as well as having it consulted on post-submission. We make no apology for rolling out this transformation in renewable technologies in concert with communities, rather than seeking to ride roughshod over them.
Stephen Morgan (Portsmouth South) (Lab)
Kenny MacAskill (East Lothian) (Alba)
The Minister for Energy Security and Net Zero (Graham Stuart)
This Government are proud to have made the UK a global leader in offshore wind, and the industry believes that UK jobs in the sector will rise from the current 30,000-plus to 100,000-plus by 2030—if, of course, Conservative stewardship continues.
Kenny MacAskill
Jobs for whom? That is the question. We have already seen the shameful situation of UK seafarers who work in the offshore wind sector being laid off, to be replaced by low-wage, exploited migrant labour. As the sector develops, as we see people go out to work on the turbines for longer and as we see the building of floating accommodation for them to stay on, there is a huge risk that those workers—not just those on the supply ships—will also face exploitation. Will the Minister work with Cabinet colleagues to ensure that the national minimum wage applies in the offshore sector beyond the 12-mile territorial limit? That is the solution to protect our workers, and those from abroad, from being exploited.
Graham Stuart
I thank the hon. Gentleman for his question, and I share his enthusiasm for making sure that we continue the development of good, well-paid jobs, and the development of the skills required to help people access those jobs, and that we do not have exploitation onshore or offshore during that development. It is a huge opportunity for the United Kingdom and for Scotland. Working together, I am sure we can develop it.
Tim Loughton (East Worthing and Shoreham) (Con)
As we know from the excellent Rampion wind farm in Sussex bay—hopefully it will soon be expanded—offshore wind farms support workers not just in energy production but in tourism, fishing and leisure too. This year we celebrate 50 years of the Protection of Wrecks Act 1973. It is estimated that there are more than 6,000 wrecks around the UK coast, but only 57 of them are listed, so will my right hon. Friend speak to his colleagues in the Department for Culture, Media and Sport about how we can co-ordinate activity between new wind farms and marine archaeologists so that we can boost both our efforts to combat climate change and our cultural protection, which will give particular assistance to coastal communities?
Graham Stuart
As ever, my hon. Friend puts his finger on an important point. Existing assets such as wrecks have so many uses, all of which need to be understood. Our seas look so large, but they have multiple uses for shipping, defence and energy. We are working to ensure that we have a strategic, joined-up energy plan and a spatial strategy so that wrecks, marine protected areas and other interests can all be protected in an integrated manner.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
Richard Fuller (North East Bedfordshire) (Con)
The Minister for Energy Security and Net Zero (Graham Stuart)
I thank my hon. Friend for all his work championing both this area and the concerns of his constituents. As he rightly says, planning policy and guidance encourage large solar projects to locate on previously developed or lower value land and we will indeed undertake to be vigilant in ensuring that those principles are respected.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
Graham Stuart
The hypocrisy and the ignorance coming from the Labour party is extraordinary. We have decarbonised more than any major economy on this earth and we will decarbonise more to 2030, and we are doing it by unlocking a level of investment into renewable energy double that we have seen in the United States. So, Labour can take its selective facts and put them where the sun don’t shine.
Mr Speaker
I think that we have had a few problems with language already. I am sure the Minister will think carefully before he answers again.
Nick Smith (Blaenau Gwent) (Lab)
Graham Stuart
As I have said in earlier answers, we are seeking to encourage more applications. As far as I know, the hon. Member for Southampton, Test (Dr Whitehead) may be right, which is exactly why we are consulting on improving community benefits and have consulted on changing the planning system.
Anna Firth (Southend West) (Con)
I welcome the fact that the UK is doing more offshore wind than any other country in Europe, but fishermen in Leigh-on-Sea are deeply concerned about the effect of expanding offshore on fish stocks. Can the Minister assure me that renewable power production on the south Essex coast will also focus on tidal, and will he join my vision to make Southend pier a shining beacon of renewables, completely powered by tidal energy?
Graham Stuart
I share my hon. Friend’s enthusiasm for tidal. We have had a specific pot in previous rounds of the CfD precisely to develop that. We are the world leader in deployment and will continue to be, and I hope that her vision for her local area will be fulfilled.
Liz Twist (Blaydon) (Lab)
Graham Stuart
The Government are collaborating with industry to identify solutions to unblock barriers to offshore wind deployment. I know that the UK Infrastructure Bank is providing support to the Port of Tyne. The FLOWMIS project is currently live, so I cannot comment on it, but I would be happy to meet the hon. Lady to discuss these issues.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
My right hon. Friend the Secretary of State has made a lot of progress in trying to bring together a holistic network, but it is too late for communities in Suffolk, Norfolk and Essex. In that regard, will she request that the electricity system operator publishes its survey of the Bradwell site, and that it undertakes a fresh one, with a full cost-benefit analysis, as a pilot for future connections?
Caroline Lucas (Brighton, Pavilion) (Green)
It now seems clear that the funds that the Government plan to commit to loss and damage at COP28 will come from the UK’s existing climate finance commitments. We cannot tackle the climate crisis by robbing Peter to pay Paul. Given that a properly resourced and operational loss and damage finance fund has to be a litmus test of success, will the Minister commit to looking at new and additional forms of funding, including a permanent windfall tax on fossil fuel companies and a tax on high-emission travel, to deliver new finance and make polluters pay?
Graham Stuart
The hon. Lady is right to highlight loss and damage as we approach COP28. We were pleased to play our part on the transitional committee in getting a recommendation to COP, and we look forward to its being operationalised in the near future. I agree with her that, if we are to get the scale of finance that is required, particularly for the most vulnerable countries at the front end, we need to look at innovative ways of adding to that finance.
Alicia Kearns (Rutland and Melton) (Con)
Wind energy projects have a standard compensation scheme for all local communities, but solar projects do not. Industry will not act, so I urge my right hon. Friend the Secretary of State to bring in a standard measure for all solar projects to bring fairness to clean energy in our communities.
Graham Stuart
I thank my hon. Friend for her question and for pursuing this matter assiduously; we have met and discussed it, among other issues. I think both industry and communities would appreciate greater clarity about community benefits, and I look forward to discussing that with her further.
Imran Hussain (Bradford East) (Lab)
One in four households in my constituency is now living in fuel poverty, compared with the national average of one in 10. Why do the Government continue to give millions to gas and oil giants, which enjoy billions in bumper profits, while our constituents continue to be dragged into poverty?
Graham Stuart
Regrettably, the content of so many Opposition Members’ questions this morning is absolutely not in line with reality. Oil and gas production in the UK not only typically has lower emissions than the alternative of imports, but supports 200,000 jobs, all of which would be at risk if the Labour party came to power. To answer the hon. Gentleman’s specific question, it is expected to raise £50 billion of tax over the next five years, all of which—including the safety of his constituents—would be at risk if Labour ever came to power.
Trudy Harrison (Copeland) (Con)
Do my right hon. Friend the Secretary of State and the Minister for Nuclear and Networks, my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie), agree that the very best location for two 470 MW Rolls-Royce small modular reactors is next to Sellafield, which will use some of the power and is a centre of nuclear excellence?
Sammy Wilson (East Antrim) (DUP)
This year, receipts from the emissions trading scheme will reach a new peak of £6.2 billion. The effects of attacks on energy-intensive industries are felt by workers in the aluminium and steel industries, and this week by workers at Grangemouth, where one of our few remaining oil refineries is going to close. Despite what the Minister said earlier, is it not a fact that, rather than helping energy-intensive industries, net zero policies are destroying them and sending them overseas?
Graham Stuart
The right hon. Gentleman will be aware that the EU has already legislated for a carbon border adjustment mechanism. Following our hosting of COP26, 90% of global wealth was covered by net zero pledges. At the beginning of that conference, the figure was just 30%. The right hon. Gentleman may not see it, but this is the direction the world is going in, and if he wants to future-proof British jobs he will get with the decarbonisation programme. Opposing it is to oppose the interests of his constituents and the sustainability of their of their jobs.
Sara Britcliffe (Hyndburn) (Con)
Melton CLP has of the biggest sites in Hyndburn and Haslingden. The renewables obligation certificate is due to end in 2027, and certainty is needed on whether the scheme will be extended or another scheme will take its place. Will the Minister give us some assurances as to what comes next?
Graham Stuart
Mindful of how loquacious I am, I simply say to my hon. Friend that I will meet her to discuss the matter.
Tim Farron (Westmorland and Lonsdale) (LD)
Over the space of a year, living in a cold home cost 21 of my constituents their lives. One reason behind that tragic figure is that homes in rural communities are more difficult to insulate. On that basis, will the Minister urgently review the ECO4 and ECO+ guidelines to prioritise the hardest properties to insulate so that we cut bills and save lives?
Draft Green Gas Support Scheme (Amendment) Regulations 2023
Graham Stuart Excerpts(5 months, 4 weeks ago)
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The Minister for Energy Security and Net Zero (Graham Stuart)
I beg to move,
That the Committee has considered the draft Green Gas Support Scheme (Amendment) Regulations 2023.
It is a pleasure to serve under your chairmanship, Mrs Murray. The draft regulations, which were laid before the House on Monday 16 October, make a set of changes to improve the administration of the green gas levy, which is charged to licensed gas suppliers in Great Britain, and ensure it works in line with policy intent. The regulations will reduce burdens arising from the levy for Ofgem, which administers it, and for gas suppliers. The green gas levy funds the green gas support scheme, which is a Great Britain-wide tariff-based scheme that facilitates ongoing investment in the biomethane industry and enables the development of new production plants for injection into the gas grid.
The amendments made by the regulations are technical and do not alter the aims of the GGSS or GGL; they will not add to the amount raised by the GGL or the rate at which it is charged. We have consulted the Scottish and Welsh Governments on the regulations. The Scottish Government have consented to them, as required under the Energy Act 2008, which provides the underlying primary powers for the regulations. The Welsh Government have also agreed to the changes.
The amount that the green gas levy collects is set according to a formula specified in regulations, and this statutory instrument will change the formula so that it will operate as always and originally intended. Regulations require the Secretary of State to publish a maximum amount that the green gas levy can collect, which is called the maximum levy amount. That is set at the total that the levy is expected to collect in its peak year. The statutory instrument will allow the maximum levy amount to be set by reference to whatever year is expected to be the peak year, members of the Committee will be thrilled to learn. The regulations introduce powers for the Secretary of State to set a de minimis amount for the green gas levy. That amount will apply to selected payment obligations and credit cover requirements. Obligations below the threshold will automatically be disapplied. The instrument makes five further minor changes.
In conclusion, the changes made by this statutory instrument provide the basis for the green gas levy to be collected efficiently and at the intended rate over the lifetime of the green gas support scheme. The instrument will help Ofgem to administer the policy effectively and as intended. It will reduce administrative burdens and ultimately benefit bill payers by reducing levy administration costs. I commend the draft regulations to the Committee.
Dr Alan Whitehead (Southampton, Test) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Murray; we seem to be meeting rather frequently today, but that is always a pleasure.
The SI concerns the green gas support scheme, which is a scheme that I advocated for a very long time. I was delighted when it came in in 2021, and it has proved very successful in bringing about substantial advances in biomethane production and substantial increases in the amount of biomethane injected into the grid, thereby decarbonising the gas grid to a considerable degree. I hope it continues to be successful. We have to be careful that people who are in favour of sustainable aviation fuel do not seek to pinch that biomethane in the not-too-distant future, but that is perhaps a debate for another day.
As the Minister outlined, the instrument makes some very minor changes that streamline and make more efficient the operation of the scheme. Those are unexceptional changes, which we certainly support. I have two very brief questions—or rather, one brief question and a suggestion—as far as the changes are concerned. I would be grateful if the Minister could respond, and I am sure he will do so very briefly and succinctly when we get to that in a moment.
The first issue is that, as hon. Members will have seen, the interest that accrued in Ofgem’s account from the levy was, from the beginning of the scheme, added to, rather than deducted from, the levy collection target. Of course, that does not make much sense unless it was a mistake when it was first introduced in the framework. This instrument changes that addition to a deduction. My question is, what has happened to what appears to be an over-collection into the levy from gas suppliers, which are levied for the purpose of the support scheme? I am not a great advocate of handing back money that has been collected to make a scheme work, but has the Minister ever received any complaint or concern from the gas industry that it was being over-levied and would like its money back? I would imagine that, otherwise, it would stay in the support scheme and therefore make the MLA more appropriate to enabling the scheme to last longer.
The other point, which the Minister has mentioned, is that the maximum levy amount in the scheme is designed to, among other things, cope with the maximum point at which the levy is likely to be called on. It is a sensible change to make that maximum point rather more flexible on the decision of the Secretary of State. We want the levy to remain sufficiently flexible to finance the green gas support scheme after 2028-29, because we hope it will go on considerably longer than that.
Although the change is positive, it seems to me a little clunky. It is a fixed rate which requires the Secretary of State to take a decision on it. At that distance in the future, it is quite likely that inflation will begin to eat into the MLA seam. It might have been a better idea to index the MLA against inflation over the periods, leaving the Minister to take a decision only in the event that matters proved adverse to the passage of inflation over a period of time, rather than having to take a decision should things need adjusting even within that parameter.
Those are my only two comments on the scheme. I am sure the Minister will be delighted to know that I am going to stop very shortly.
Dr Whitehead
Those two clarifications would be very helpful to understand exactly where the changes to the scheme can best go, and whether we need to do any more work to make sure these amendments to the scheme stick as well as they are clearly intended to.
Graham Stuart
I thank the hon. Gentleman for his questions, and for his enthusiasm. He may be one of a tiny number of people who has quite that level of enthusiasm for these schemes, and I congratulate him on that, because they are important and excellent.
The hon. Gentleman asked whether the money being added rather than deducted was a mistake—yes, it was—and whether that money has been taken. To date, none of it has been taken because of the structure of the system, so there is no money to talk about. If it had been, it would have stayed in the levy and been rolled over, as any spare funds are in any case. It would have just been rolled over to the following year and thus have helped to reduce the levy the following year, so there are no worries on that front.
On the maximum levy amount, it now has the flexibility it requires. The Secretary of State can change the levy rate annually when the levy rate is set.
With no further ado, and with thanks to the Committee for its support for these technical arrangements, I commend this instrument to the House.
Question put and agreed to.
Draft Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2023
Graham Stuart Excerpts(6 months ago)
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The Minister for Energy Security and Net Zero (Graham Stuart)
I beg to move,
That the Committee has considered the draft Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2023.
It is a great pleasure to serve under your chairmanship, Sir Gary, and to be with colleagues from across the House on this clearly brilliantly whipped Committee.
The UK emissions trading scheme—the UK ETS— was established under the Climate Change Act 2008 by the Greenhouse Gas Emissions Trading Scheme Order 2020 as a UK-wide greenhouse gas emissions trading scheme to encourage cost-effective emissions reductions, contributing to the UK’s emissions reduction targets and net zero goal. The scheme is run by the UK ETS Authority, a joint body comprising the UK Government and the devolved Governments—we are all in this together. Our aim is to be predictable and responsible guardians of the scheme and its markets. In so doing, we will ensure that the scheme remains a cornerstone of our ambitious climate policy.
Shailesh Vara (North West Cambridgeshire) (Con)
My right hon. Friend mentions that the UK Government are working with the devolved assemblies. Given that the Northern Ireland Assembly is not working at the moment—or not sitting, anyway—are there other mechanisms in place to ensure that the civil servants in Northern Ireland are dealing with this matter and co-operating so that we can move forward as four nations?
Graham Stuart
My right hon. Friend, with his customary acuity, will have noticed that the draft order does not apply to Northern Ireland. As it happens, there are not counterparties in Northern Ireland to which these particular provisions apply, but energy in general is devolved to Northern Ireland, and it is up to Northern Ireland to take care of it.
The statutory instrument will implement a number of necessary changes and improvements to the UK ETS. The changes relating to aviation free allocation rules and to the treatment of electricity generators follow the announcements made by the UK ETS Authority in July, in our response to last year’s consultation on developing the UK ETS. The final change remedies an inconsistency with free allocation and carbon capture at UK ETS installations.
On aviation, the SI will cap the total amount of aviation free allocation that operators are eligible to receive at 100% of their verified emissions.
The SI makes technical changes to free allocation rules regarding the electricity generator classification for industrial installations—a minority sport, if ever there were one. It will amend the electricity generator classification to consider only electricity exports in the baseline period, instead of all electricity exports since 2005, allowing operators to change their installation’s electricity generator classification if they have put a stop to the export of electricity. Electricity exports representing no more than 5% of the total produced will also be excluded from consideration in this classification.
The SI will amend the electricity generator definition to exclude installations that have produced electricity for sale if that electricity was produced by means of a high-quality combined heat and power plant operating as part of an operator’s industrial activity. That will limit reductions in free allocation entitlements and provide further encouragement for industrial operators to achieve improved efficiency for their combined heat and power plants.
The SI makes an operational amendment to the electricity generator classification to allow electricity generators to be eligible for free allowances after the application date if they can demonstrate that they produced measurable heat by means of high-efficiency co-generation during the allocation period.
The SI remedies an inconsistency in legislation to make it clear that carbon capture and other types of regulated activity may be carried out on the site of the same installation. It will allow provision of free allowances to industrial installations at the same site as a carbon capture plant.
As the Northern Ireland Assembly is not sitting and cannot consider affirmative legislation, the SI covers only Great Britain. Officials in Northern Ireland have agreed that none of the provisions currently affects operators in Northern Ireland.
These changes will deliver on commitments made by the UK ETS Authority and improve the operation of the scheme. For aviation, the SI will ensure that free allocation is distributed appropriately until full auctioning for the aviation sector begins in 2026. That follows the decision announced in July that aviation free allocation will be phased out by 2026.
On free allocation technical changes, the SI will ensure that installations classed as electricity generators, whose eligibility for free allocation is limited, are able to change their classification if they are no longer exporting electricity. The SI will also ensure that industrial installations with high-quality combined heat and power plants that export excess electricity to the grid are not classified as electricity generators, in order not to limit their eligibility for free allowances.
On the electricity generator operational amendment, the SI will ensure that electricity generators can become eligible for free allowances during an allocation period if they meet the eligibility criteria.
On free allocation rules for carbon capture, the SI will prevent industrial installations from being disqualified from receiving free allowances because they are on the same site as a carbon capture plant—a situation that would pose a risk of disincentivising the uptake of crucial carbon capture technology.
These changes either follow appropriate and comprehensive consultation with stakeholders or did not require consultation. In the “Developing the UK ETS” consultation in 2022, the UK ETS Authority considered what technical improvements could be made to the current aviation free allocation methodology until aviation free allocation is phased out. The responses to the consultation called for an end to over-allocation. The policy intent of aviation free allocation is to mitigate the risk of carbon leakage, and the policy did not intend for aircraft operators to receive more allowances than their verified emissions. To that end, in July the UK ETS Authority announced the decision to cap aviation free allocation at 100% of verified emissions.
In the “Developing the UK ETS” consultation, we considered technical changes to free allocation rules regarding the electricity generator classification. The majority of respondents agreed with our suggested amendments, and the UK ETS Authority announced that it would proceed with changes to the electricity generator classification.
A consultation was not carried out for the CCS free allocation amendment as that is a clarification of existing policy intention and not a change to the policy.
Richard Fuller (North East Bedfordshire) (Con)
Would the Minister, either now or in summing up the debate, explain a bit about the phrase “free allocation”? On the face of it, if free allocation is to be set at 100% of the sector’s verified emissions, it does not sound like there is a lot of free space. He mentioned that free allocation was originally set at 127% because of concerns about carbon leakage. What has changed so that the Government are now satisfied that cutting it to 100% will not result in carbon leakage?
Graham Stuart
Fundamentally, due to the way the scheme was brought in, the airlines have had more free allocations than their actual emissions. The scheme was designed to cover their emissions until we phased out those allocations, as we are now doing, but they were being over-compensated, based on historical figures that no longer apply. These provisions will ensure that the airlines are not being given free allocations with a commercial value on the market over and above that which they need in order to operate. I hope that answers my hon. Friend’s question.
These alterations to the UK emissions trading scheme will support its role as a key pillar of the UK’s climate policy. They show that we will take action to improve the scheme where necessary, and they continue our record of delivering on our commitments. I commend the draft order to the Committee.
Dr Whitehead
I am afraid not. I distinctly detect that that was part of an overture, not a final movement.
As I said, the agreement states that
“the Parties shall cooperate on carbon pricing”,
but there is no evidence of such co-operation. Not only that, but the two systems are diverging significantly. Hon. Members may ask whether that matters. It matters a lot in view of what is happening in the EU on the development of carbon border adjustment mechanisms.
The Chair
Order. Minister, sedentary interventions are never helpful. May I just ensure that we are talking about the order that the Committee is considering and not the issue generally?
Graham Stuart
I thank hon. Members for their contributions to this debate on pretty technical adjustments to the ETS.
By capping aviation free allocation, we are ensuring that it is distributed appropriately until full auctioning in 2026. The current situation is not deliberate; the policy did not intend for aircraft operators to receive more allowances than their verified emissions. It is noteworthy, though, that those allowances meant that operators were doubly encouraged to invest in cleaner operations, since they were incentivised not only by any savings from investment in more fuel-efficient aircraft, for instance, but by the credits that they received within the ETS. The Government have no plans to claw any of that back.
On the overall position of the UK carbon market, the UK ETS is of course a market mechanism. The price of carbon allowances in the UK ETS is set by the market. In line with the net zero cap we announced in July, the supply of emissions allowances entering the market will fall significantly every year from 2024. We are committed to continuing to deliver on these changes, as we have shown, by legislating to amend the supply of allowances over the coming years and publishing an auction calendar.
The hon. Member for Walthamstow mentioned the CBAM. We are closely following developments on the EU CBAM and engaging with the Commission on technical considerations that are relevant to UK manufacturers. As the hon. Lady will know, EU CBAM charging does not start until 2026.
I am nervous of opening up wider matters, although you have been generous, Sir Gary, in allowing discussion of issues that are broader than the technical amendments that the SI makes. If Members want a broad debate on the ETS and its interaction with Europe, there are many opportunities in the parliamentary calendar to do exactly that.
Dr Whitehead
Given that the Minister has mentioned the CBAM in response to the inquiry of my hon. Friend the Member for Walthamstow, I want briefly to record that iron and steel are in the first phase of the EU CBAM, and that that may affect UK iron and steel negatively. They could be treated as if they were imports to the EU, similar to iron and steel from India or other parts of the world. That should give substantial pause for thought about how we proceed with the UK ETS.
Graham Stuart
The hon. Gentleman is right about that being a substantial prompt for thought, but not on the particular order that the Committee is considering. As hon. Members will know, we ran a consultation earlier this year on domestic measures to mitigate carbon leakage, including consulting on a potential UK CBAM and mandatory product standards.
In answer to the point that the hon. Member for Walthamstow made, our commitment to the UK steel sector is clear. We continue to work closely with industry, including British Steel, to secure a sustainable and competitive future for the sector and its workers. We will continue to fulfil that commitment.
As I said, the UK ETS is a market mechanism, and the price of carbon allowances is set by the market. That continues to be our position.
The UK ETS is a cornerstone of UK climate policy. It is worth noting, to look momentarily at the bigger picture, that since 1990, the UK has cut its emissions by more than any other major economy on the planet. The Government put net zero into law for the first time, and the former Conservative leader, now the Foreign Secretary, was the first leader of a major party to call for a climate Act, which was introduced in 2008. I was proud to serve on the Joint Committee on the Draft Climate Change Bill under the excellent chairmanship of Lord Puttnam.
Graham Stuart
Yes. The SI sets a cap on emissions in the sectors covered—currently a quarter of the UK’s emissions. In doing that, it guarantees that those sectors will reduce their emissions in line with our world-leading net zero target,
Only yesterday, I was in The Hague, not, as some members of the Committee might have thought or hoped, answering for my crimes, but meeting Energy Ministers from the North Seas Energy Cooperation and Kadri Simson, the European Commissioner for Energy. I called for the full implementation of the energy chapter of the TCA and urged the EU to put the same energy into it as we are determined to show. We want the chapter to be fully implemented because, as the hon. Member for Southampton, Test said, we signed up to it in all solemnity.
In July, the UK Government and the devolved Governments, as the joint UK ETS Authority, set out a comprehensive package of reforms to the scheme. It increased the ambition of the UK ETS and set it on a path to net zero. As that package set out, a wide range of changes is required to ensure that the UK ETS remains a key part of the UK’s approach to achieving net zero.
We can be proud of our record to date: cutting more emissions than any other major economy on Earth and having the most ambitious nationally determined contribution up to 2030—a 68% reduction on 1990 levels —of any major economy on the planet, far ahead of the EU at 55%, as you will have noted, Sir Gary.
With that, I have probably said enough. I commend the order to the Committee.
The Chair
I can confirm that you have said enough.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2023.
COP28
Graham Stuart Excerpts(6 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Minister for Energy Security and Net Zero (Graham Stuart)
I beg to move,
That this House has considered COP28.
I am glad to come to the House today to discuss this important subject. We discussed COP28 at a recent reception hosted by the all-party parliamentary group for climate change last month, and also at a recent meeting of the Environmental Audit Committee. I welcome the interest of colleagues from across the Chamber. I note that the all-party parliamentary group on the environment has just released its report on the subject, including nine recommended priorities for COP28. That, too, is a welcome contribution to the debate.
The upcoming conference of the parties, hosted by the United Arab Emirates, comes at a really important moment in tackling the climate crisis. Amid record temperatures and emissions, the first comprehensive stocktake of progress against the Paris agreement at COP28 will show that the world is badly off track. We have made significant progress through the Paris agreement, with temperature projections shifting from a 4° increase before Paris to an increase of between 2.4° and 2.7° after Glasgow, thanks to the nationally determined contributions that countries have said they will make.
But we know that is not enough. In Glasgow, we cemented the goal of limiting global temperature increases to no more than 1.5° and made that our north star, and that has been carried forward by the UAE presidency. The latest science, and the impact that we see even at 1.1°, shows us why that is so important. A top priority for the UK is to leave COP28 with a clear road map to keep a ceiling of 1.5° in reach.
The UK heads to COP28 with a record at home and internationally that is second to none. The Prime Minister recently reaffirmed our commitment to net zero and set out a new approach to get there. This will make it easier for businesses, supply chains and households to adapt to the new normal. We will build on our previous successes and continue to lead.
I am not sure that we are always as good as we should be at sharing this story, of which the nation can be proud. At home, we have decarbonised more than any major economy on this planet, cutting our emissions by 48% since 1990. Not only have we decarbonised faster than any major economy on the planet to date, but we have the most ambitious plans and the most ambitious nationally determined contribution for 2030 of any major economy. Our commitment is to a 68% reduction by 2030. By comparison, the EU, which has been a genuine force for good in this space, has an NDC of 55% by 2030, although it hopes and expects to exceed that. How have we done that? Our inheritance was not a great one. As recently as 2012, nearly 40% of our electricity came from coal. Next year, thanks to the policies of this Government, it will be zero.
We inherited in 2010 an electricity system in which, almost unbelievably, less than 7% of our generation came from renewables. In the first quarter of this year, it was nearly 48%. We have transformed our renewables base. We have eliminated coal. I am aware of no country anywhere that has done more and gone further, faster, but leading in that way is not enough for us, as a country that produces less than 1% of global emissions, right though it is that we should do so. We also have to lead the global conversation, and that is exactly what we did at COP26. When we took on the presidency of COP26, 30% of global GDP was covered by net zero pledges. When we handed on to Egypt, it was over 90%, and I am proud to say that this country led that conversation.
Not only are we leading, but the rest of the world is accepting the need to act, even if nationally determined contributions and national plans do not yet match what is needed to meet the net zero challenge, but I am pleased to say that ours do. We have ambitious targets, and we will deliver on them. As I said, we have to make sure that the other 99% of global emissions start to follow the same trajectory, so our offer and engagement will be all about encouraging the rest of the world to join the UK on a net zero pathway.
Two years on from Glasgow, the need to accelerate action is more urgent than ever. The world needs to decarbonise more than five times faster than we did in the last two decades. The country in the world that has cut its emissions more than any major economy, namely the UK, has reduced them by 48% in 31 years, but according to the Intergovernmental Panel on Climate Change, the scientific body that advises us on this, the world needs to cut its emissions by 43% by 2030 from a 2019 baseline to keep net zero alive. That shows us the challenge. We need to be peaking globally by 2025.
The latest United Nations framework convention on climate change nationally determined contributions synthesis report shows that emissions are set to be 2% below the 2019 level by 2030 if all the commitments made so far are met—2%, when the science says that we need a 43% reduction. The latest “State of Climate Action” report from the World Resources Institute carries a similarly stark message: we need to accelerate the transition rapidly. Only one of its 42 indicators for the progress needed by 2030 was on track.
We also have to be up front about the fact that we face significant challenges coming into this COP: geopolitical tension, conflict and a challenging macroeconomic context in which Governments are battling inflation and debt. G20 relations are strained, as I witnessed at first hand when I went to the Climate Ministers G20 meeting in Chennai. Some countries are seeking to stoke divisions, to deflect from their own responsibility to take action. At the same time, record temperatures and widespread climate impacts are increasing the need to act on adaptation, loss and damage, as well as reduce emissions. We need broad-based progress across all pillars of the Paris agreement at COP28.
Finance will be a critical part of the transition. Developed economies need to deliver on their promise to mobilise $100 billion in climate finance for developing countries. We all know that we were due to deliver this in 2020 and, collectively, we fell behind. In Glasgow, we set a course correction to meet the goal by 2023. I am pleased that today’s report from the OECD shows that we are ahead of the projections we set out in Glasgow. We delivered $89.6 billion in 2021, and the OECD has indicated that it is likely—not definite, but likely —that the $100 billion goal was in fact met in 2022. Delivery of that commitment is something that the UK has championed, and I am pleased to say that we recently made our biggest ever climate finance commitment through our $2 billion contribution to the green climate fund.
There is also an urgent need to realign the financial system so that it is fit to address the challenges we face today, including climate and development. The science is unequivocally clear that urgent action is needed. The vital work done by the IPCC and other scientists makes clear that the risks and impacts we face will grow significantly as temperature increases, including the risk of breaching tipping points, which will accelerate that negative trend.
At COP28, we want to see progress across five areas, the first of which is commitments to keep 1.5° alive. Coming out of the global stocktake, we need renewed consensus and increased ambition to keep 1.5° within reach. We also need a clear, forward-looking road map with a commitment to peak global emissions by 2025; global targets for key sectors, particularly those that are hard to decarbonise; and commitment to action, including through initiatives such as the breakthrough agenda and in other key areas such as forests, the phasing out of hydrofluorocarbons and clear guidance for the next round of NDCs, which will be a central feature of the Belém COP in the Amazon in two years’ time.
The second area is clear progress towards a clean energy future, including a commitment to triple global renewable energy deployment and double energy efficiency by 2030. That sits alongside a clear commitment on phasing out unabated fossil fuels—our position on that issue is unchanged since the G7 commitment that the UK helped to deliver earlier this year—and to phase out coal power, building on COP26 outcomes.
The third area is reform of the international financial institutions to unlock trillions for global challenges including development and climate action, and delivery of our existing commitments, alongside $100 billion per year in climate finance for developing economies. As I have mentioned previously, the OECD’s latest report on 2021 figures shows that developed countries are on track to meet that goal.
The fourth area is improving adaptation to climate change, delivering on our Glasgow commitment to double adaptation finance by 2025, and establishing an effective loss and damage fund to support countries that are particularly vulnerable to the adverse effects of climate change. We are pleased that the transitional committee that was set up to reach agreement on what that loss and damage fund should look like has put forward a recommendation to COP28. The UK was instrumental in securing that recommendation, and we hope it will be agreed by all parties at COP28. We will continue to advocate for the priorities of the most vulnerable: we held a third climate and development ministerial at the pre-COP event last month in Abu Dhabi, which I co-chaired, to do just that.
The fifth area is that we want real progress towards protecting, restoring and sustainably managing nature—for example, by making concrete progress on the historic agreement we landed to halt and reverse deforestation by 2030.
Action to deliver net zero is not just a matter of doing the right thing, or of avoiding harm: it is crucial to our security and prosperity here in the UK, both now and in the future. The global net zero transition could be worth £1 trillion to UK businesses between 2021 and 2030. UK businesses are in the vanguard of recognising the opportunity that springs from net zero: over two thirds of FTSE 100 companies and thousands of small businesses have pledged to reduce their emissions in line with the 1.5° target under the Race To Zero campaign. Over half of the signatories to that campaign are from the UK.
Net zero is already an engine for growth and revitalisation of formerly deindustrialised areas in the UK. We are a leader across a number of areas: we have the world’s five largest offshore wind farm projects and the world’s No. 1 ranked green finance centre, and we are leading the way in developing an approach to carbon capture and storage, to name a few examples. Action on climate and nature is also crucial for our energy security and to reduce exposure to future global shocks, such as those caused by Russia’s invasion of Ukraine. The North sea’s transition to a clean energy powerhouse with 50GW of offshore wind by 2030 will reduce exposure to volatile international energy markets and be an engine for clean energy exports. Action on adaptation and nature is crucial in a world where food security is increasingly under threat.
However, we need everyone with us on this journey. The opportunities are huge: in 2023, we will see a record $1.8 trillion invested in clean energy alone. According to the International Energy Agency, electric vehicles are on track to account for two thirds of new car sales globally by 2030; the transition to clean energy and electric vehicles is taking off, and it will spread to other sectors quickly. At COP28, we need to show progress on delivering the historic agreement we landed in Glasgow. We must use UK expertise to scale green finance, support others to accelerate the transition in key sectors of the global economy, and set a clear pathway to 1.5°. At this point, I am happy to hear from other Members.
Kerry McCarthy
In all the conversations I have with businesses, they say that they want certainty and a strategic sense of direction; they want to know where they are going, so we should not move the goalposts. There was no reason to row back from that target, and as I have said, the motor industry itself has expressed concern. That industry needs to develop a market in new vehicles now, so that in a few years’ time, we will have the affordable second-hand market that we need so that people can afford to make the transition. The right hon. Lady is absolutely right that the infrastructure is not there, but that is a challenge that we should rise to, getting a comprehensive network of public sector charging points, grid connections and so on. She will have heard that from Labour at its recent party conference.
Let me turn to domestic progress. Again, to listen to the Minister, one would think that everything was going swimmingly. The Climate Change Committee has assessed that the UK is unlikely to meet its NDC to reduce emissions by 68% between 1990 and 2030. The Government’s own carbon budget delivery plan conceded that Ministers only have plans for 92% of our NDC, but they have said that they are confident about delivering those emissions savings—that is something we often hear from the Minister, without any actual detail about how we will get there. In fact, it has been assessed that the Government have credible plans for only 28% of the required emissions reduction. There is a lot of work to be done.
The Climate Change Committee assessed the Government’s policies in October with and without the Prime Minister’s climate climbdown, and found a 20% increase in the proportion of the NDC pathway covered by “insufficient plans” having taken into account the Prime Minister’s intervention. It said that the
“widespread uncertainty for consumers and supply chains”,
is more difficult to quantify, but, as I have said, at all the meetings I have had, people are saying that this has absolutely knocked them off course. There is a huge amount of enthusiasm for going down the path to net zero and I am told that there is a lot of private sector finance ready to invest, but they need a stable economic climate, not a Prime Minister who is U-turning just when action is needed.
Following the disastrous contracts for difference auction, the proportion of the electricity supply pathway with significant risks increased by over 5,000%. The refusal to help renters contributed to a fivefold increase in insufficient plans for buildings. When the Government’s policies are, as the Climate Change Committee found,
“making Net Zero considerably harder to achieve”
and driving up energy bills, how can Ministers go to COP trying to boast about how well things are going in the UK? I do hope for action before COP. We have the autumn statement next week, and we were expecting some plans—I think the Chancellor promised in the spring that he would bring them forward—in response to the Inflation Reduction Act and the measures we then saw in the EU. I hope that we do get something on that front to at least reassure businesses that the Government still have net zero in their sights and see it as an important part of a future industrial strategy for us.
The UK used to be at the forefront of global climate action, and again the Minister was being a bit cheeky when talking about the progress that has been made since 2010. I think he entered Parliament when I did in 2005. Is that right?
Kerry McCarthy
The Minister may recall being on the Green Benches in 2008 when the Labour Government introduced the world’s first Climate Change Act, which was then adopted by more than 100 countries around the world. It was groundbreaking.
Graham Stuart
If the hon. Lady wants to have a history lesson—and we did, indeed, come in together—she will remember that it was David Cameron, as the leader of the Conservatives, who was the first leader of a major party in this country to call for a climate Act. I think the Liberal Democrats leader followed suit a few hours later, and the Labour Government then eventually did so. I served on the Joint Committee, chaired by the brilliant David Puttnam, that put this into place, so I will not take any lectures from her. It was the Conservatives who led the charge to get that going—the first major party to support it—and I was pleased to see it put on the statute book. We were of course the first major economy in the world, and the first Government, to legislate for net zero overall.
Kerry McCarthy
It was a Labour Climate Change Act brought in by the now shadow Secretary of State for Energy Security and Net Zero, my right hon. Friend the Member for Doncaster North (Edward Miliband). I can see why the Minister may be desperate to try to claim credit for it, because the Government have so little else that they can claim credit for, but it was a Labour Act introduced by a Labour Government. It is because that was enacted that we have seen so much progress, and as I have said, it was taken as a model for many other countries to follow. However, we are now setting entirely the wrong example to other countries by scaling back on our net zero ambition and last year the Prime Minister had to be forced to attend COP.
Kerry McCarthy
The Minister will have an opportunity to respond in his wind-up at the end, but I suppose I will give way once more.
Graham Stuart
This is a really important topic, and it is important that we get our language right. The Government have not scaled back our net zero ambitions for either our NDC in 2030 or net zero by 2050. The hon. Lady can make lots of points, partisan or otherwise, but it would be great if she acknowledged that this country has, under this Conservative Government, cut emissions by more than any other major economy on earth and has the most ambitious plans for 2030.
Kerry McCarthy
The Minister will also know that the Government had to be taken to court, because it is one thing declaring targets and ambitions, but unless they have the strategy—[Interruption.] The Government were taken to court, and that is why they had to produce the delivery plan earlier this year. The Climate Change Committee, which by his account was all his idea because it was all his idea to introduce the Climate Change Act, has said that the Government are not on track to meet their ambitions. So the Minister cannot just rely on grandiose boasts about where he wants to get us to if he does has not have a plan to get us there, and it is very clear that he does not have a plan to get us there.
The Minister said that we represent only 1% of global emissions, which is true, but the NDC emissions gap is approximately the total combined annual emissions from the top three emitting countries. Yes, they have responsibilities, but this does need everybody everywhere to play their part. I do not think we would want to try to suggest that we were insignificant in the big global picture because we represent only 1% of the total population.
I will move on specifically to the COP agenda and what we hope to see. Will the UK be calling for the phase-out of unabated fossil fuels, and does the Minister agree with the global stocktake report—[Interruption.] I am just about to come to that. I know the Minister mentioned it, but does he agree with the global stocktake report that fossil fuel subsidies are stifling cost-effective low-carbon alternatives? The global stocktake report states that
“lifetime emissions from existing and planned fossil fuel infrastructure will exceed estimates for keeping…1.5 °C within reach”.
My point is that, if the UK will be calling for the phase-out of unabated fossil fuels, how does he think going to COP when the Government have just announced the Offshore Petroleum Licensing Bill in the King’s Speech will sit when he tries to lecture other countries on moving away from fossil fuels?
The global stocktake report is clear that CO2 removals have a role, but are
“not a substitute for deep emissions reduction.”
It states:
“A rapid reduction of the world economy’s reliance on fossil fuels towards clean energy is central for reaching global net zero”.
That sounds to me like an endorsement of Labour’s clean energy mission for 2030. Unlike the Government’s short-term approach, this will increase our energy security, create good jobs and reduce energy bills—unlike, as the Secretary of State for Energy Security and Net Zero admitted the other day, the Offshore Petroleum Licensing Bill—and it will mean that the UK is leading the world in tackling the climate crisis.
The Minister mentioned nature-based solutions, and I was very pleased to hear that, but can he say a bit more about what global action the Government will be supporting with sustainable land management—I understand that that will be on the agenda at COP in a way that it has not been in the past—as well as terrestrial and ocean carbon sequestration? What discussions are there likely to be on the role of setting up credible international carbon markets? To give one example, we know that wetlands have huge potential, but we are still waiting to hear about the saltmarsh code—the former Secretary of State for Department for Environment, Food and Rural Affairs, the right hon. Member for Suffolk Coastal (Dr Coffey), may have something to say about that—and whether we can add saltmarshes to the greenhouse gas inventory. With the UK’s leading position as a world financial centre, we are ideally placed to be playing a role in creating these markets both on the nature side and on the carbon side.
It is estimated that tree loss last year was 2.1% higher than the maximum level. Will the Minister update us on that? He mentioned halting and reversing deforestation by 2030, and on the international side that is very much about stamping out links to deforestation in our supply chains. Could he give an update on how that is going, because as I understand it, it is not going well? Those issues were all highlighted in the global stocktake.
The built environment and transport are also on the COP agenda, and it would be helpful if the Minister could tell us a little more about the Government’s priorities for the talks. He mentioned the loss and damage fund, and the work of the transitional committee. It would be interesting to know more about what conversations he has had with climate-vulnerable countries, and the small island developing states in particular, because it is one thing to set up these financial arrangements, but in the past the smaller a country, the fewer resources it has, and it finds it very difficult to access the finance that is out there.
The Minister also mentioned the need to reform international financial institutions, which was welcome. I do not know whether he intends to reveal much about his actual agenda at COP before he goes—and it would be useful to know who else is going with him—but one question that has been asked of me is whether he will be attending the ministerial event on methane on 4 December. I think it is really important that we start addressing methane in connection both with the fossil fuel sector and with agriculture and waste. I hope that will be a priority for him.
To conclude, the UN has previously warned that the world is on course for a catastrophic 2.8°C of warming, in part because promises made at COP26 and COP27 have not been fulfilled. We are running out of last chances, but we can still avert the very worst of it, because we have the knowledge and tools to do so; it is just the willpower that is lacking at the moment.
The UK under Labour will, as called for in the global stocktake, transform our energy system with a plan to double onshore wind, treble solar, and quadruple offshore wind. Our warm homes plans will see 90 million cold and draughty homes brought up to standard, and Labour’s answer to the Inflation Reduction Act will restore Britain’s international leadership and create jobs across the country. Our proposals for a clean power alliance will lead ambitious countries and support the most vulnerable. A net zero target should not lead to complacency. There is so much more that the UK can and must do, not only to reduce emissions but to deliver energy security, reduce energy bills, and enable British industry to thrive over the long term. That is the vision we need to see at COP.
Fleur Anderson (Putney) (Lab)
As chair of the all-party parliamentary group for water, sanitation and hygiene, I declare an interest relevant to this debate and to the future of our globe. I am honoured to be part of this debate on such an important issue. No other important issue is raised so many times by young people when I visit schools in Putney, Southfields and Roehampton, and by the many members of the Putney Environment Commission, which I set up shortly after I was elected for local people interested in taking action on climate internationally, nationally and locally. Last night we had a meeting about what we can do to rewild local streets in London, and are looking forward to playing our part in action before and after the United Nations climate change conference, COP28. I will attend the conference, with a delegation of 10 MPs. It is important that parliamentarians are at the conference, meeting experts and activists who are all working towards ensuring a green future and the action on climate and nature that is so important for our long-term survival.
This year, 2023, will be the hottest year on record. Every day we witness the climate crisis unfold, from the effects of El Niño to the UK battered by storm after storm. Currently, between 3.3 billion and 3.6 billion people live in areas that are highly vulnerable to climate change. The world’s poorest people, including women and girls so often on the frontline, are paying the highest price. Under current estimates, we face a 40% shortfall in fresh water by 2030—not very far away. Water scarcity is escalating, which affects trade, economies, poverty reduction, food and nutrition, but also migration—an issue that is a subject of many debates in this House and will only be exacerbated by climate change. That is the tip of the iceberg. The disruption and damage that the climate crisis causes and will cause to all our lives cannot be overstated. As the Minister said, the world is badly off track to agreeing the Paris agreement targets and keeping 1.5° alive.
The right hon. Member for Suffolk Coastal (Dr Coffey) mentioned mangrove forests. I am also a fan, having been to visit mangrove forests in Bangladesh when I worked for Water Aid. I had the privilege of visiting a coastal community in Bangladesh, where the climate crisis is already extremely real. It used to be a freshwater area where people survived by fishing, but it has been salinated. I sat with a group of women in that rural area where they could not harvest or grow anything—there was nothing they could do. They wanted to move anywhere else, but were stuck in an area that seemed arid, like a desert from the future, where climate change was making such an impact on communities. I have said many times that climate change is not something that will happen to us; it is happening now. That was understood by the recent COPs, but needs to be understood even more. If we are too late, there will be no concrete action to effect change at the scale we need.
The main outcome needed at COP28 is obvious: an agreement for no new fossil fuels. Many organisations such as the International Energy Agency have said that to achieve global net zero emissions by the year 2050, there should be no new fossil fuel extraction projects beyond those already committed. How can the Government believe that approving more than 100 new North sea oil and gas projects is in any way in line with that, the legal frameworks or the views of the vast majority of voters? As other countries forge ahead with renewables, the UK is lagging behind. We need to keep it in the ground, it is very simple. Unless we and other countries get this right, there will not be the progress we need.
Climate justice is very important. Making sure that lower and middle-income countries can respond to climate impacts is essential. I hope that will be one of the biggest outcomes of COP28. In 2009, rich Governments agreed to provide $100 billion in climate finance annually to developing countries. But that goal, which originally was meant to be fulfilled by 2020, has still not been met. The £11.6 billion adaptation and mitigation finance that the UK pledged in 2019 is more loan-based than grant-based, and so only increases debt for the world’s most indebted countries.
Fleur Anderson
I am very glad to hear that. That needs to be the future, because grant-based instead of loan-based is vital. I am glad that there have been changes along the way, as a result of a lot of campaigning.
I highlight five areas of concern. First, on phasing out fossil fuels, the UK Government must play their part in ending the fossil fuel era by committing to cease direct and indirect funding of overseas fossil fuel projects, including those financed by British international investment, and instead committing to rapidly scaling up investment in renewable energy at home. Secondly, on the loss and damage fund, Governments at COP28 must commit to designing a loss and damage fund with adequate grant-based funding arrangements and specific plans to support countries facing economic and non-economic losses and damage. The polluters must pay. The fossil fuel industry is posting record profits, but it should be paying for the damage it is causing. The UK Government must commit to providing their fair share of funding through grant-based funding arrangements, and should have specific plans to support countries that face both economic and non-economic losses and damages.
The third concern is the need to fulfil climate finance pledges. The UK Government must meet their own climate finance commitments with additional, new funds, not by re-badging finance already given to British International Investment or the World Bank. The fourth concern is the need to reform the global food system in order to tackle the climate crisis. Action on food and action by farmers go hand-in-hand with tackling climate change. Governments at COP28 must to commit to transforming food systems through progress on the Sharm el-Sheikh joint work on agriculture. Alongside that, the UK Government must develop a cross-departmental strategy on providing support for more resilient food systems internationally that prioritises the needs of small-scale farmers. Small-scale farmers are really the climate activists on the frontline of climate change; they will be the best advocates, and will take the best actions on climate change, but they need funding and support to do so.
The fifth concern is the need to invest in climate-resilient water sanitation and hygiene projects, and the need for policies that enable people to respond to immediate threats and to adapt to the impacts of climate change where they are. People do not want to leave where they live because of climate change. They absolutely want to stay where they are, but with water for agriculture, to grow crops and to live in hygienic conditions.
The climate crisis is also a crisis of health around the world. As we saw with covid, we need to be able to wash our hands. That is such a basic need. Healthcare centres need adequate water and sanitation. The climate crisis threatens advances in sanitation, which threatens advances in poverty reduction. We must also ensure we keep clean water, wherever it is found.
Labour will take further, faster action on the environment. Labour knows that this is an exciting opportunity for economic growth, for a new industry, and for job creation. We will insulate 19 million homes within a decade under our warm homes plan, which will cut bills by up to £500 and create 4 million jobs. We will act fast to lead the world as a clean and cheap energy superpower by 2030. We will establish GB Energy, a new home-grown publicly owned champion of clean energy generation, so that we can be really world-leading in the action that we take at home. We will deliver thousands of high-quality jobs to every corner of this great country.
Labour believes that we need a just transition to a net zero economy. That cannot be left to the whims of the market, as was the de-industrialisation of the 1980s. Social justice must be at the centre of our response to the climate and environment emergency, and fairness must shape our approach to the green transition here at home. We have to actively shape that green transition, so that no one is left behind and people and places are protected throughout. Ecological breakdown is also a major problem; the UK is one of the most nature-depleted countries on earth. Labour will ensure that we not only halt but reverse the loss of biodiversity in the UK by 2030.
In conclusion, I look forward to attending COP28 this year. I went to many international conferences in my previous work before I was an MP. I always go with high hopes, and always leave with a high degree of disappointment, feeling that we could have gone further. I could almost write the conference press releases before I go, but I maintain a high degree of hope and optimism, as more and more people work together internationally to take on the crisis. All around the world, the green sprint has now begun; there is a surge in renewables, green technology and economic growth. We are making, at pace, some of the technological advances that are needed if we are to achieve the necessary outcomes for our climate, and they are becoming affordable. I hope we can come together to stave off the worst of the impacts to climate and nature, and together create a better and more prosperous world.
Graham Stuart
I congratulate all the Members who have spoken in the debate, which is an important one ahead of COP28. Further to the other interactions that I mentioned in my opening speech, we will be making a written ministerial statement on our priorities for COP before we go, and I will be responsible for the negotiations there.
It has been a very interesting debate, but it is a shame that the hon. Member for Bristol East (Kerry McCarthy) struggled so much to acknowledge the position that we are in. I have never heard it come out of her mouth that this country has cut its emissions more than any other major economy on this earth, which it has, or that it has the most ambitious plans of any economy on this earth, which it has. It would be good to have that as a baseline; there is plenty of room to pick up on issues and concerns about our performance while also acknowledging that the UK truly is a global leader. I am pleased to say we are not only leading domestically, but leading in the international space as well.
A couple of Members mentioned the Climate Change Committee in the context of the Prime Minister’s speech in September. It is worth noting that the Climate Change Committee’s analysis shows that there is “no material difference” in our progress in cutting emissions since its last report in June. We are tacking, as I would put it. However, our destination remains exactly the same. We are reassuring people in rural areas who were fearful that they could neither afford heat pumps nor be sure of their functionality, while increasing the subsidy for them by 50%, and working to build the system and drive the cost curve down, so that more and more homes can have them. That is right the way to ensure that we maintain public support for delivering net zero.
The same applies to zero-emission vehicles. Manufacturers have a ZEV mandate—an obligation to “green” their fleet up to 2030. That builds on our successful record to date; we are ahead of the Climate Change Committee’s and our own projections. We are maintaining that ZEV mandate. The Climate Change Committee spoke of “no material difference” in progress on particular changes, but the focus on grid and other aspects of the Prime Minister’s speech are all about turbocharging our efforts to deliver not only the nationally determined contribution in 2030, but net zero by 2050.
Methane was mentioned, and it is an important issue. The global methane pledge is a collective commitment intended to mobilise international action on methane. I am pleased to say that UK methane emissions between 1990 and 2021 dropped by 62%, one of the largest reductions in any OECD country, but I should also to highlight the fact that methane represents one of our biggest opportunities—the opportunity to ensure that that pledge is delivered not only domestically but internationally. It should also be noted that we are the only major economy to set a legally binding emissions reduction target, of 77%, for 2035 as part of carbon budget 6. We will see what happens at the 2025 COP in Brazil—10 years on from Paris—but the expectation is that new NDCs will come forward for 2035.
Finance was touched on in the debate. We remain one of the largest and most active donors in international climate finance, and we are making record commitments. With the aim of helping the world to adapt to the inevitable climate change impacts that we can already see, at COP27 the Prime Minister made a commitment to triple UK adaptation finance from £500 million in 2019 to £1.5 billion in 2025. The UK is also committed to maintaining a balance between mitigation and adaptation spending, and to providing at least £3 billion of UK climate finance for the purpose of protecting and restoring nature. We provide the majority of our climate finance in the form of much-needed grants rather than loans—which I think compares well with what is provided by some other donor countries—and we prioritise our contributions for the biggest challenges faced by the poorest and most vulnerable.
Alongside Malawi and Vanuatu, I co-chaired the climate and development ministerial ahead of the Abu Dhabi pre-COP meetings. It focused on the issue of access, which was absolutely right. We hear again and again from countries such as Samoa, whose Minister has said that the access process takes too long. At the CDM, we set out a “vision statement” expressing greater recognition of the need for national programme development to ease access to money as well as increasing the quantum. The hon. Lady is right: it is not enough to have this notional money if it does not actually flow to those who by definition, as she said, are the least able administratively to meet the requirements of some vast organisation. We need to make sure that the system fits the needs of those it serves, rather than the other way round.
Kerry McCarthy
I welcome what the Minister has said. I think that another problem for those countries is coming up with the evidence base to demonstrate the impact that climate change is having on them. There are currently some very good initiatives: for example, science students from the UK are going out to study marine areas. There is a great deal of interchange. Does the Minister think we could do more to facilitate that evidence-gathering, which could then be used as a basis for making an application to show the need for climate adaptation funding?
Graham Stuart
The hon. Lady is absolutely right. We need to make sure that technical assistance is there because, even as we try to get the green climate fund, the global environment facility, the World Bank and various others to improve their systems and ambitions to better meet the needs of the most vulnerable—shouting at both parties is like shoving a nine-pin plug and a three-pin plug together and wrapping them in gaffer tape—we also need to get a smoother system that helps them both to step up so that it genuinely flows, otherwise we will have endless frustration. Hearing Ministers from Vanuatu, Tuvalu, Samoa and elsewhere brings it alive, which is why these international meetings are useful. They remind us of the realities on the ground.
Since 2011, The UK’s climate finance has supported more than 100 million people to cope with the effects of climate change, improved the climate resilience of more than 32 million people and reduced or avoided more than 86 million tonnes of greenhouse gas emissions.
Nature has rightly been mentioned, and we want to see action and ambition from the presidency and all parties on transforming food systems and building policy, practice and investment for sustainable agriculture at scale. That includes endorsement of the leaders’ declaration on food, agriculture and climate action, supported by a further commitment to policy action, innovation and investment through the policy dialogue for sustainable agriculture and the agriculture breakthrough.
It is always difficult to keep our head around all these issues, as there is an alphabet soup of initiatives. I always want to check that they are not duplicative, but they are often complementary and working together.
Dominic Raab (Esher and Walton) (Con)
The Minister is making a very strong case for the disparate issues that the Government are pressing on climate change. If we are to reach net zero by 2050, there will also need to be a massive increase in the supply of critical minerals, whether for EV batteries or solar panels. When he is going around all these initiatives at international level, what discussions is he having with the likes of Brazil, Indonesia and other lynchpin partners about joining the Minerals Security Partnership? That is the primary multilateral vehicle for addressing critical minerals.
Graham Stuart
I thank my right hon. Friend for his question, which comes up frequently. When I was in Riyadh recently, I spoke about critical minerals with His Royal Highness, Prince Abdulaziz, the Energy Minister of Saudi Arabia, which is critical in this piece.
Whereas my right hon. Friend the Member for Suffolk Coastal (Dr Coffey) went on to the mangroves, I went on to Indonesia by way of Vietnam, and these conversations came up all the time. My right hon. Friend the Member for Esher and Walton (Dominic Raab) is right that making sure we have resilient supply chains is fundamental to delivering this. We are doing more on supply chains, and we are doing it faster than ever before—even faster than the industrial revolution—and it is not only happening here. It is happening in other countries at the same time, as it needs to, so we have to make sure that our supply chains can meet that action. We can best do that through collaboration. It is not just about reaching agreement on things such as critical minerals; it takes many years to develop projects and bring them through to production, which creates even more urgency.
To promote improved and responsible governance, we are also looking for a commitment to support the forest and climate leaders partnership at the world climate action summit at the beginning of COP. We also want to see partnership on water resources at all levels. Donor countries and the private sector need to be involved, too.
Fleur Anderson
I thank the Minister for mentioning water. He is talking about the many issues he will cover when he goes to the various meetings, so does he agree that water, sanitation and hygiene are important issues to raise? Will he look out for them in the outcome documents, press releases and statements that come out after the conference?
Graham Stuart
I enjoyed the hon. Lady’s speech. Unsurprisingly, when I was in the middle east recently, water was right at the top of the agenda, reflecting its importance. I attended the Net Zero Council meeting in Manchester last Thursday, and it was my pleasure on the following day to go to the Severn Trent water treatment works in Stoke. By the end of next year, it is expected to be the world’s first carbon-neutral water treatment works, for which I pay tribute to Severn Trent. Again, it shows the importance of water, which is so often forgotten. Water is one of the workstreams of the Net Zero Council, which was established this year to bring together the Government and business to develop road maps for each sector of our economy.
I pay tribute to my right hon. Friend the Member for Suffolk Coastal for her driven, heartfelt efforts to make sure that nature’s contribution to the climate is fully recognised. The reason for holding the climate and development ministerial is that climate and development are two sides of the same coin. If there could be a three-sided coin—I am stretching my metaphors—the third side would be nature, because climate, development and nature go together.
We have talked about the importance of forests, and we have to make sure that the people who live in and around these carbon sinks—they are not just carbon sinks; they have many other qualities—have economic incentives that align with what we want. We have to make sure that they see development and opportunity for their families. It is only on that basis that we can even ask them to protect the nature that has been so denuded here. If we are to ask others to protect their nature for the general benefit, we need to make sure that it fits with development, as well as contributing to climate and nature.
I thank my right hon. Friend for Suffolk Coastal for all she has done. Her enthusiasm for mangroves is clearly shared across the House. They are a bit of a miracle. Making a difference often costs a lot of money, so we have to try to align incentives as much as possible. We need projects in which very small amounts of funding can make all the difference, so that mangroves stop shrinking and start expanding, and so that people return from the city to work with their families around the mangroves as part of a prosperous community. The mangroves need to be prosperous while developing as a carbon sink.
Deidre Brock
It was very interesting to hear about the importance of mangroves. I would also be interested to hear what the Minister has to say about peatlands. How will he be supporting them at COP?
Graham Stuart
The hon. Lady is absolutely right. The Congo has extraordinarily large and important peatlands, which have the same basic dynamics. Everything is different, and every country is different, which is why we have to pull different things together, but the fundamental principle is that we have to create a system in which the local people—from the governor of the province down to the indigenous villagers—are better off by maintaining and keeping these peatlands. We are keen to make sure that the role of peatlands is understood because, again, they are a critical enabler. Lost peatlands cannot easily be replaced, and they are part of the negative tipping point we could reach if we do not take urgent action.
Kerry McCarthy
I welcome the Minister’s enthusiasm and recognition that peatlands have an important role to play but, at the moment, they are emitting carbon because of how they are treated in this country, particularly when it comes to grouse moor management. Does he agree that we need to address those practices? Many peatlands are also sites of special scientific interest or are meant to be protected for nature in other ways.
Graham Stuart
I will not stumble into another Department’s area of responsibility. We work collectively across Government to share the burden of making sure we meet our net zero targets.
In wrapping up the debate, I assure hon. and right hon. Members of the Government’s commitment to delivering on net zero at home and internationally. Although there is evidence that a peak in global emissions is within sight this decade, we need emissions to peak by 2025 and to reduce by 43% by 2030. The sobering reality is that, this year, global emissions are likely to reach a new peak, as Members across the House have said. Keeping 1.5° within reach requires nothing less than a paradigm shift.
As I said in my opening remarks, the UK accounts for less than 1% of global emissions. Beyond what is directly within our grasp, the question before us is how we can help to create the will and the capability to move the remaining 99%, for which the major emitters, in particular, will be crucial.
I would like to close by offering some reflections on the UK’s role in helping to drive forward international progress in this critical decade. For hon. Members who are interested, we have set out in greater detail the UK’s vision and role in driving forward international action on climate and nature to 2030 in our 2030 strategic framework, which is available online. It sets out six key global challenges, and how we will use our international partnerships, strengths in finance, expertise and domestic leadership, trade and investment, and world-leading strengths in science and innovation to drive forward progress.
The first point to make is that though the gap looks unassailably large, we must not lose hope and fall into a council of doom. The reality is that efforts to date have succeeded in bending the emissions curve away from apocalyptic levels of warming of 3° or more. In some sectors, notably energy and electric cars, the transition is taking off. The IEA’s latest world energy outlook predicts a peak in fossil fuel use by 2025, due to what it describes as the “unstoppable” growth of low-carbon technologies. Solar and electric vehicles particularly stand out. Since only last year, the IEA has revised up its global solar 2050 capacity forecast by 69% and increased by 20% the number of electric vehicles it expects to be on the roads by 2030, such that it is expecting electric vehicles to comprise two thirds of new car sales by 2030.
The lesson we should draw here is clear: rapid, large-scale transformation is possible. The challenge is that we need to replicate this success across all sectors of the economy. There will be no single silver bullet to driving the transformational systemic change that we need on a global scale. We will deploy every important lever we have to accelerate action in this critical decade, building on the framework we put forward in the Glasgow pact and our 2030 strategic framework. That includes working through the United Nations framework convention on climate change, bilaterally and through other channels. Working with others who are like-minded, and others, we need to see countries upgrading their climate targets. There is no point in having a global stocktake eight years after the Paris agreement if it does not lead to a ratcheting up of the nationally determined contributions to match the requirements that we find from the science. In particular, we need the major emitters to do that. Countries representing more than 90% of global GDP are covered, as I have said, by some form of net zero target. Those countries now need to align their near-term targets with the commitments that they have made. We will harness our global diplomatic network, international development offer and partnerships to drive forward action.
We will also be taking action to realign financial flows in line with the Paris agreement and a nature-positive future. We will use our strengths as a global green finance centre and role as a shareholder of key financial institutions to reorientate finance flows and tap the power of markets to make progress towards unlocking the trillions required. We will accelerate transitions globally through targeted collaboration with others, focusing on the most important, highest-emitting sectors, through initiatives such as the breakthrough agenda, so that we can reach positive tipping points and avoid negative ones, and so that clean tech is affordable and accessible across all sectors of the global economy. We will also continue to push to accelerate the global energy transition, for example, through our long-standing leadership on phasing out coal in the Powering Past Coal Alliance. We will also champion the need to phase out unabated fossil fuels and at the same time transition the North sea into a clean energy powerhouse here at home.
Let me touch on that issue, as it was raised by others. We have new licences in the North sea for oil and gas because we continue to need oil and gas. We will need oil and gas in 2050 and beyond. Our production is falling, without new licences, at a rate of about 9%. With no new licences and no new investment, we will not see a greening of the basin. Worse, we will see the loss of the subsea and offshore engineering capability we need, as it will either leave this country or be made redundant, rather than being retained here.
The hon. Member for Edinburgh North and Leith (Deidre Brock) raised the issue of a just transition. There is a true transition to be made, and opposing new oil and gas licences in this country when we are a net importer of both, and when the emissions that will come from imports such as liquified natural gas would be higher, makes the Opposition parties friends of oil and gas workers, but just not those in this country. The approach of those parties will not make any difference to how much we consume, but it will make a difference to our emissions, and not in a good way, and it will lose the very engineering capability we need to deliver the transition, as well as a very material contribution to our ability to make that change, which is of course the £50 billion of taxes that we expect to get from the sector over the next five years. The Opposition parties are in entirely the wrong place. They have put optics ahead of doing the right thing, and it does not take a lot of reflection or analysis to come to the conclusion that we are doing the right thing.
We must globally focus on the positive tipping points we need to accelerate the global low-carbon transition. I thank hon. Members from across the House for their contributions to this debate, and I hope that my team and I will be able to count on the support of everyone in the House, despite all of the global challenges we face, to make the upcoming COP the success that the world needs it to be.
Question put and agreed to.
Resolved,
That this House has considered COP28.
Energy Infrastructure Planning Projects
Graham Stuart Excerpts(6 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Energy Security and Net Zero (Graham Stuart)
My noble Friend the Parliamentary Under-Secretary of State (Lord Callanan) has today made the following statement:
This statement concerns an application for development consent made under the Planning Act 2008 by North Lincolnshire Green Energy Park Ltd for development consent for the North Lincolnshire Green Energy Park project, located in Flixborough, Scunthorpe.
Under section 107(1)(b) of the Planning Act 2008, the Secretary of State must make a decision on an application within three months of the receipt of the Examining Authority’s report, unless exercising the power under section 107(3) of the Act to set a new deadline. Where a new deadline is set, the Secretary of State must make a statement to Parliament to announce it. The current statutory deadline for the decision on the North Lincolnshire Green Energy Park project is 15 November 2023.
The Secretary of State has decided to set a new deadline of no later than 15 March 2024 for deciding this application to enable my Department to seek further information from interested parties and to ensure there is sufficient time to allow for consideration of that information.
The decision to set the new deadline for this application is without prejudice to any decision on whether to grant or refuse development consent.
[HCWS35]
Contracts for Difference Scheme
Graham Stuart Excerpts(7 months ago)
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Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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The Minister for Energy Security and Net Zero (Graham Stuart)
It is a pleasure to serve under your chairmanship, Dame Angela. I join others, and not least on this occasion the Scottish National spokesperson, the hon. Member for Coatbridge, Chryston and Bellshill (Steven Bonnar), in applauding his favourite Unionist—sitting behind him there—the ever-present, ever-active and ever-decent hon. Member for Strangford (Jim Shannon).
As the hon. Member for Strangford knows, and as he has mentioned, he and I have communicated extensively over the past year or so on the question of extending the GB contracts for difference scheme to Northern Ireland. He has asked questions in Parliament about this issue, most recently last month. I believe we know each other’s positions very well by now. Let me say at the outset that I admire his tenacity in continuing to raise this matter with me, which I know he does with the best interests of his constituents and the people of Northern Ireland in mind. However, I am afraid I have to say to him again that I do not believe that what he proposes is feasible—although I understand why he proposes it and why he hopes to find a solution—and nor would it lead to renewables or their associated benefits being delivered faster for Northern Ireland, as he hopes. I will explain why I believe that shortly.
First, though, to set the context, I would like to say a few words about the CfD scheme. The scheme was introduced in 2014 and is the Government’s main mechanism for supporting new low-carbon electricity generation projects in Great Britain. CfDs are awarded through competitive auctions that, from this year, are held annually. The lowest-priced bids are successful, which drives efficiency and cost reduction and is a low- cost way to secure clean electricity.
It is an interesting—but not necessarily surprising—fact that in every single year that the CfD has existed, industry has said that the prices we have suggested are too low, so this year is no different. I suppose it is also unsurprising that His Majesty’s Opposition should always speak up for the producer interest and be so indifferent, if not deaf, to the interests of the consumer, around whom we should build policy.
Winning projects are guaranteed a set price per MWh of electricity for 15 years, indexed to inflation. That provides income stabilisation, making projects that have high up-front costs but long lifetimes and low running costs attractive to investors and lenders. Importantly, the CfD also protects consumers when electricity prices are high, as it did last year. Understandably, this Conservative Government are extremely proud of the CfD scheme and its effectiveness, in not only securing clean generation but doing so at the lowest possible price to consumers—that is what has triggered the 70% reduction in costs for offshore wind. As I say, industry has always suggested that it wants to be paid more, and we have heard from His Majesty’s Opposition that they would be delighted to do so at the expense of ordinary consumers.
It was in the light of the challenge of setting the parameters of each CfD that we decided to move to an annual system. The hon. Member for Manchester, Withington (Jeff Smith)—he is not my favourite Unionist, but he is one of my favourite members of the shadow team—seems to have been deliberately innumerate. He will be aware that AR4 covered three years, and AR5 was the first annual auction. Like me, he will be able to divide by three the total generation that was in AR4, and to divine that in terms of annualised generation AR5 was the most successful round of the CfD that has ever existed. I would even gently chide my always loyal and fair colleague, my hon. Friend the Member for Waveney (Peter Aldous), for buying into the idea: at a time when other countries’ rounds have failed, we generated 3.7 GW. We supported geothermal and tidal and, I think, saw a near doubling of onshore wind.
That is not to say that I do not regret, and have not previously publicly regretted, the fact that in a highly turbulent geopolitical situation the window for offshore wind did not ultimately allow bids to come in from industry. However, that was one of the key reasons why we decided to move to an annualised system, so that we could quickly move forward. Of course, unlike a solar scheme, for example, these schemes are not things that are brought up quickly: they are developed over many years, with parameters informed by the behaviour of the industry.
We always gather the data each year from the industry—companies sign non-disclosure agreements with us and we commission external research—but the most important of all the data we use is behaviour in auctions, because we need that real-world data to inform the parameters we set. It is exactly that process—unchanged but better informed by behaviour in AR5—by which we will set AR6’s parameters, and I am confident that it will be successful.
Graham Stuart
I see that, having been chided, my hon. Friend is looking to intervene on me.
Peter Aldous
I was listening with interest to what my right hon. Friend was saying. To a degree, I hear what he says, but does he not agree that with offshore wind not being successful in AR5, the costs go up in future allocation rounds? It was ready to go, and there were economies of scale that it was ready to take full advantage of, but it was not able to go. The feedback that I am getting from industry is that these things cannot take place in a vacuum, ignoring what is going on throughout the world. Does my right hon. Friend not agree with me that it would have been much better if offshore wind had been successful in AR5?
Graham Stuart
Having been chided, my hon. Friend is of course—quite rightly, and characteristically—straining to justify his position, and I have a lot of sympathy with it. I have said that we would ideally have got the window in a way that better matched that reality. But there are reasons for having the annual auction. We always come up with a window that industry says is not enough. We have managed to bring down the costs by 70%. It is hard to overestimate the importance of this. This country, the CfD mechanism and, I have to say, this Government have transformed the economics of offshore wind—not just to the betterment of UK consumers, but to the benefit of the whole world. It is only because of what has happened here with this approach, which every year is in a state of tension with industry, that we have been able to show and reveal these prices. We are now able to export our expertise to the north-east of the United States, to the Gulf, to Taiwan—all over the world—as a result of this process.
I said that I wished we could have better attuned the window to the realities—they changed even after we set the prices in November. That was precisely why we decided on having an annual auction. To put it another way, if what someone offers is always accepted, they might want to consider whether they are overpaying. That is not to say that I in any way revel in the fact that we did not get offshore wind in that round, but I am glad that we had the foresight to move to an annual system and that we are able so swiftly to move on. It will just be the middle of next month when we set out the core parameters for the next round, which will happen next year.
Graham Stuart
I will make a little more progress, if I may.
The CfD scheme is a major UK success story. It has secured more than 30 GW of capacity, including 20 GW of offshore wind, since 2014. It has driven down the price of offshore wind by about 70% in that time, helping to grow the industry and its supply chain both in the UK and globally, although as the hon. Member for Manchester, Withington says, I have previously publicly expressed the desire to do more. We are coming forward with non-price factors as a way of encouraging more of the supply chain to be in the UK. But have no doubt: this has been a phenomenal success for us, for British jobs, for British consumers and for the world. We have the four largest offshore wind farms in the world, with more than 14 GW already in operation and a further 77 GW in the pipeline. It is a pleasure for me that of course the largest offshore wind farm in the whole world is Hornsea 2, named after a small town in my constituency. The UK is a world leader in floating offshore wind, with one of the largest amounts of operational capacity anywhere in the world, at 80 MW to date.
The hon. Member for Strangford says that the results of allocation round 5, which concluded in September, were disappointing because the total capacity secured was less. As I have said, I do not accept the characterisation of that round, because it has in fact realised the highest amount, on an annualised basis, of any of the rounds we have ever run. It resulted, in fact, in more projects—95—than we have ever seen successfully done, even though it covered just a one-year window. The round delivered a combined total of 3.7 GW, which is enough to power the equivalent of 2 million homes. As I have said, there was more than double the number of onshore wind projects. We also secured—I have touched on this already—another good result for solar, and four times as many tidal stream projects as AR4 did.
I pay tribute to the right hon. Member for Orkney and Shetland (Mr Carmichael) for his doughty support for the sector. I did not realise that his involvement had stretched to 20 years, but when I visited his constituency he was there to characteristically champion the industry. For the first time in our CfD, we had success with geothermal. This vital new renewable capacity was procured in a competitive auction set against, as I say, a backdrop of highly challenging macroeconomic conditions.
Jim Shannon
I thank the Minister for that clear achievement. I remind him that the key technology for Northern Ireland is onshore wind. There have been some advances, and I attended a meeting in Bangor, in the neighbouring constituency of North Down, where an offshore wind turbine was put forward as a possibility for the future. We cannot be part of that process unless the Minister’s Department can reconsider the fact that there is an absence of a functioning Northern Ireland Executive. Northern Ireland’s renewables projects are being uniquely disadvantaged. There is an opportunity to go forward—I am ever mindful of time, Dame Angela; please bear with me one second—and in 2013-2014 a decision was made. That was changed by the consultation process in 2019-2021. The recommendation was endorsed by 93% of the respondents. I gently ask the Minister that with that unique and changing position, there is a chance now and we should be looking at how we can better move forward together.
Graham Stuart
I thank the hon. Gentleman for that intervention. I will return to the issues relating to Northern Ireland, if I may. I entirely forgive the hon. Member for Coatbridge, Chryston and Bellshill, who is always a very genial Member, and anyone who has such a high opinion of the hon. Member for Strangford as he does is always welcome in this Chamber as far as I am concerned. This is not what the hon. Member for Coatbridge, Chryston and Bellshill does as a day job, so perhaps that explains the nature of his speech.
Let me dispense once again with the suggestion that consumers are £2 billion a year worse off because we did not secure any offshore wind in AR5. That figure is entirely wrong and misleading, because it does not take account of future wholesale energy prices. Projects that were unsuccessful in AR5, or chose not to bid, can participate in AR6 in 2024, which is just five months away. Having annual rounds means that there will be minimal delay to deployment at minimal or no additional cost to consumers.
The hon. Member for Coatbridge, Chryston and Bellshill highlighted the broader point that the UK, alone among major economies, has halved its emissions since 1990. It can be argued that it is alone among major economies on its path to reach net zero. It is important to note that if we are to stay on track to net zero, which is one of the reasons why the hon. Member for Strangford is so passionate, and he knows this, we need Wales, Northern Ireland and Scotland alongside England to make the appropriate changes. The hon. Member for Coatbridge, Chryston and Bellshill may or may not be aware, given that this is not his day job, that Scotland is behind the curve on performance. It is high on ambition, low on delivery relative to England, and he might want to bear that in mind and have slightly more—
Dame Angela Eagle (in the Chair)
The hon. Member for Coatbridge, Chryston and Bellshill came in at short notice to deal with an issue, and the Minister ought to be more sensitive to that in his remarks.
Graham Stuart
Whoever comes into this Chamber, I would always take your advice, Dame Angela, but of course the hon. Member represents his party, and when he make allegations against the Government that are unfounded, and when his own Government are failing to deliver on their ambitions and are, in fact, behind the trend for England, it is only right and proper in the spirit of honesty and transparency that that is properly exposed. I know the hon. Member for Coatbridge, Chryston and Bellshill, who himself is not normally a shy person in the Chamber or otherwise, is someone who can easily take it, so I am pleased about that.
I will take no lessons either from Labour, which had only 5.4 GW of wind power when it left government in 2010. The Government have more than five times that amount, at more than 28 GW of wind power, and the four largest operational offshore wind farms in the world. It may be difficult for some to hear, but we know that Labour’s record on renewables is truly dismal. When Labour was in power, as recently as 2010, renewables made up less than 7% of our electricity mix; in the first quarter of this year, we had reached nearly 48%. Lessons will not be taken from His Majesty’s Opposition, let alone the Scottish Government, on this front.
The absence of offshore and floating offshore wind from AR5 was, as I have said, regrettable. These are challenging times for the offshore wind sector, with increasing global demand putting pressure on supply chains at the same time as increasing costs and core materials, resulting in price uncertainty both here and abroad. As both the Secretary of State and I have repeated on many occasions, our ambition for 50 GW of offshore wind, including up to 5 GW of floating by 2030, remains. I indicate to Members to look at the 77 GW of pipeline that we can see ahead. We are listening to the sectors and, as I have said, the annual auctions mean that we can respond quickly and incorporate learnings into the next round. We will publish the core parameters, including the administrative strike prices and pot structure, for allocation round 6 in the middle of next month.
I will turn to the main focus of the debate for the hon. Member for Strangford: the GB CfD scheme being extended to Northern Ireland. When the CfD scheme was being developed around 10 years ago, it was originally intended that it should extend to Northern Ireland as well as GB. For various reasons, which I will not go into here, that did not happen. In December 2021, the Northern Ireland Executive published their energy strategy, the “Path to Net Zero Energy”, in which they set out the intention to implement a support scheme to bring forward investment in renewable electricity generation in Northern Ireland. The strategy indicated that the Northern Ireland Executive were, at that time, exploring with the UK Government the possibility of extending the GB CfD scheme to Northern Ireland, with a view to the inclusion of projects from Northern Ireland in the 2023 allocation round. If that was not possible, the strategy said that the Executive would seek to put in place an alternative support mechanism for investors.
In January 2022, the Northern Ireland Executive published the first of their two action plans, outlining progress towards implementing their net zero strategy. In it, the Executive said that they would consult on proposals for a renewable electricity support scheme for Northern Ireland. In February this year, the Executive made good on that commitment and published a consultation inviting views on design considerations for a renewable electricity support scheme for Northern Ireland. The consultation closed in April, and the Northern Ireland Executive are currently undertaking follow-up work on the scheme’s design, informed by the consultation responses they received.
I understand that officials in the Northern Ireland Department for the Economy aim to publish the design of the scheme this year, as committed to in its 2023 energy strategy action plan. The consultation clearly sets out the direction of travel: Northern Ireland wants to have its own bespoke support scheme for renewables. In June 2022, Northern Irish and UK Government Ministers agreed that the significant challenges of integrating Northern Ireland into the CfD scheme meant that Northern Ireland would be better off pursuing its own scheme. That objective had cross-party endorsement in the Northern Ireland Executive before they dissolved last year.
I believe that the hon. Member for Strangford and I agree that a bespoke support scheme for renewables is the preferred means of securing investment in renewables for Northern Ireland. However, he has argued that the Northern Ireland support scheme cannot be implemented while the Northern Ireland Executive are suspended. If I am putting words in his mouth that he does not agree with, he will intervene on me. He believes that allowing Northern Irish projects access to the GB CfD scheme is the best available option for delivering investment and faster deployment of renewables in Northern Ireland. He knows that I do not agree with him on this.
I do not believe that integrating Northern Ireland into the GB CfD scheme is viable. There are several significant challenges to integration, including systemic and technical barriers incorporating the characteristics of the single electricity market into the GB CfD model, as well as the reforms being considered in the GB review of electricity market arrangements. Furthermore, integration would require complex changes to the CfD payment mechanism, secondary legislation and industry codes, and would likely take several years to complete. Integration therefore would not lead to faster delivery of renewable energy in Northern Ireland, which I know the hon. Member for Strangford so fervently hopes for.
Jim Shannon
The Minister is summing up very well his opinion and my opinion. What we do not have is an agreement on how we take this forward. I know the Minister recognises that Northern Ireland is disadvantaged at the moment. What I was trying to seek was a method and a way forward. For that to happen, perhaps further discussions are needed with the Department of Enterprise, Trade and Investment to get its opinion. I feel that there is a consensus of opinion among those who wish to see that investment coming through. Perhaps what I am really asking is for the Minister to explore those possibilities as a potential way forward.
Graham Stuart
The hon. Gentleman always makes an extremely plausible and effective advocate for the ideas that he espouses. I—and the Government, I am sure—will remain open to discussions with those in Northern Ireland and with the hon. Gentleman to find solutions. We talked about some of the challenges of staying on the overall net zero pathway. Of the four Administrations, Northern Ireland is potentially the most off track, so there is a real need to find solutions and we always stand ready to work constructively to find the best way forward.
I continue to believe, however, that the development of a bespoke support scheme offers the best and quickest way for Northern Ireland to secure the investment in renewable electricity generation that it needs to achieve its net zero goals. I have not said it explicitly but, of course, energy is devolved, so we are looking to the institutions in Northern Ireland, on behalf of the people of Northern Ireland, to take this on. That is what we would profoundly like to see. I commend the work done by the hon. Gentleman and the Department for the Economy so far, and I encourage us all to support their efforts.
I will try—I hope reasonably briefly, with your permission, Dame Angela—to respond to a few of the other points that have been made. My hon. Friend the Member for Waveney chided me in return, to ensure that we do not rest on our laurels and that we respond appropriately to IRA and perhaps EU initiatives in the space. He talked about creating incentives, picking up on the supply chain development issues that many Members have touched on, and ensuring that seabed auctions are a good place to do that. As he knows, I set out the work that the Crown Estate is already doing to put conditions on at that stage, in addition to changes to the CfDs.
I take on board my hon. Friend’s points about the administrative strike price, and ensuring that we get it in the right place in order to balance keeping costs down for consumers with getting the generation that we want and need. We will set out the pot details in just a few weeks, so I will leave commenting on his appeal for a ringfenced pot for offshore wind. On his request for the pot to reflect the pipeline, that is the mechanism we use for the CfD. That is one of the reasons for setting out the core criteria in November and providing more details in March—precisely so that we can match the budget and the other elements that make up the CfD with a realistic assessment of the pipeline in place. His Majesty’s Treasury and the Chancellor will have heard my hon. Friend’s points on the issues that, sadly or otherwise, sit with the Treasury rather than my Department.
From the right hon. Member for Orkney and Shetland, I heard, as ever, his espousal and support for tidal, and he talked about setting a target for that. The Government remain open and we will continue to consider that, but we have not yet made a decision on whether it would be the right thing to do. It is about doing the right intervention at the right time, based on the stage of development of a particular technology. However, like him, I am proud of the fact that we have been able to see it come on, and see some of the developments in his constituency. The hope to see those operationalised and scaled up here in the UK, with a big and strong domestic supply chain, is one that gives real optimism for the future.
Mr Carmichael
I was minded to offer myself as a mediator between the Minister and the hon. Member for Waveney, but they seem to have found a better pitch since that stage in the debate.
On the point of the 1 gigabit target by 2035, does the Minister not take on board the fact that this is now the only technology that does not have such a target? It was sustainable to argue his position in AR4; it is more difficult in AR5, and with every round it will become more difficult still. I say to the Minister again that this is an opportunity to talk to the industry, and engage in a way that works to his advantage by restoring some of the damaged engagement credibility.
Graham Stuart
I can go no further than to say that the right hon. Gentleman, as so often, makes a very strong argument. We will continue to engage and will come forward with any decision on that in due course, if that was thought appropriate.
The Opposition spokesman, the hon. Member for Manchester, Withington, talked a little about being able to bring hope to oil and gas communities around the United Kingdom. That is ironic considering the ambition of any Labour Administration, were one to be elected, would be to strangle that industry. Even though, as of last year, we are the most decarbonised major economy on earth, we are still 77% dependent on oil and gas for our primary energy needs.
Over the coming years, due to the precipitous fall in production because of the maturity of the basin in oil and gas production from the North sea, and those expected falls in Norwegian production, our dependence on LNG imports and the like is expected to increase. Having seen the price spikes of the last two years and the risks and issues that arise from not having reliable and ideally domestic energy, the Opposition want to put at threat 200,000 jobs supported by the oil and gas industry —cheered on, bizarrely, by the fortunately ever less popular Scottish Nationalist Government—through wanting to stop any new licences. That is despite the fact that the only alternative realistically available is LNG, which the North Sea Transition Authority recently announced had embedded in it four times the production emissions of domestically produced gas. It is environmentally nonsensical and disastrous for 200,000 jobs. Just as a small addition, the industry is expected to bring in £50 billion of tax revenue over the next five years—goodbye to that as well.
It is absolutely crazy to have an Opposition spokesman saying he is here on the side of oil and gas communities—he absolutely is not. We have an integrated energy system encapsulated within a legal framework in the Climate Change Act 2008, which means we are making the transition. We are leading the world on making that transition, but we will not speed it or help it, but in fact weaken it, if we do not support new oil and gas licences in order to minimise the necessary inevitable reduction in oil and gas production in our waters. It is bad for jobs, for the environment, for the economy and for tax. On no front does it make any sense at all.
I have gone on long enough. I thank everyone for their contributions, not least the hon. Member for Strangford who led the debate. I am happy to keep engaging with him. I admire his tenacity. I recognise what drives him to want to find a solution in Northern Ireland and I entirely share that desire to see something happen. I am confident in our CfD system. It has been a world leader. AR5 was a success even though it did not deliver the way I would like it to have done in offshore wind. I am extremely confident about AR6, where we will again balance getting the generation we seek with ensuring that we look after the interests of consumers and the long-term interests of the United Kingdom.
Green Energy: Ports
Graham Stuart Excerpts(7 months ago)
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The Minister for Energy Security and Net Zero (Graham Stuart)
It is a pleasure to serve under your chairmanship, Mrs Cummins. I begin by thanking and congratulating my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) on securing this important debate. We have heard high-class contributions from pretty much every person who has spoken so far. I will return, if I have time, to the trite and empty remarks—which were perhaps written by others—from the shadow Minister, the hon. Member for Manchester, Withington (Jeff Smith).
Just by way of context, it is worth highlighting the record, because track records should count for something. Less than 7% of our electricity came from renewables in 2010. That was the dire inheritance of this Government. It was the CfDs developed and delivered by this Government that transformed the economics of offshore wind and which led us from the Labour record of less than 7% to nearly half in the first quarter of this year. We have gone from a desperate legacy, where nearly 40% of our electricity came from coal—the filthiest of fossil fuels—as recently as 2012 to that being eliminated next year under this Conservative Government. It is this Conservative Government who have led the world. We have cut emissions more than any other major economy on earth and grown our economy significantly at the same time.
We heard about crowding in private investment, Great British Energy and writing cheques, which is the last thing we need. We have heard that from Labour before, yet every Labour Government in history have ended with unemployment higher than it was at the beginning, when they started. They all offer hope and cheques for all, promises of huge support and endless taxpayer subsidy, which will deliver nirvana. Nirvana has never been delivered by Labour—not a green one and not any other kind. I said that bit would come at the end, but I had to indulge myself and do it at the beginning.
As has been said by everyone here today, ports are so important to unlocking the green revolution. As colleague after colleague have highlighted, from the Humber to Wales to Scotland, the southern North sea and Northern Ireland, ports have an enormous contribution to make to economic regeneration. The fact that we are blessed with this phenomenal renewable energy opportunity in the UK—which this Government, uniquely and unlike the previous, are committed to unlocking—means that we can turn levelling up from an excellent concept into genuine delivery. The previously highly carbon-dependent areas of this country are the very areas that genuinely need that, and they are best set to benefit from it. Their ports are what will make that possible.
I recognise the importance of existing port activity in south Wales in securing the UK’s and indeed Europe’s energy supply. Last year, rather than being, as in the previous year, a net importer of a billion cubic metres of gas, we moved to being an exporter of 19 billion cubic metres of gas, making a significant contribution to storage in Europe and the energy security of an entire continent. A lot of that came through south Wales. Of course, it is the two LNG terminals in the constituency of my right hon. Friend the Member for Preseli Pembrokeshire, on the Milford Haven waterway, that helped to deliver that. Looking forward, the success of the Celtic freeport bid, covering Milford Haven and Port Talbot, demonstrates the opportunity to unlock investment and therefore growth for the south Wales area and delivering those high-paid, long-term jobs that so many colleagues on the Government side of the House not only talked about, but have a history of delivering.
The right port infrastructure is vital to deliver offshore wind and other renewables, as part of our transition to net zero. Big though the energy business, carbon capture and related things are, perhaps the biggest opportunity here is what all this will facilitate. When we took on the COP presidency, just 30% of global GDP had made net zero pledges. By the time the presidency was handed on by the UK to Egypt, that figure stood at more than 90%. The world is following. If we create among the world’s first genuine net zero industrial clusters, the inward investment that will come—into non-directly energy-related, yet still energy-dependent businesses, as every business is—could be quite phenomenal. That is why colleagues are right to share their excitement and why my right hon. Friend the Member for Preseli Pembrokeshire is right, again and again—alongside, as always, the hon. Member for Strangford (Jim Shannon)—to come here and enthuse about the importance of this and the opportunity it brings.
The Government’s policies, as set out in the British energy security strategy and endorsed in “Powering Up Britain” earlier this year, include bold new commitments, so that we can supercharge clean energy and accelerate renewable energy deployment. The Government set an ambition of 50 GW of offshore wind by 2030, up from just 14 GW today. The UK has the largest offshore wind sector in Europe and is home to all four of the largest offshore wind farms in the world. As part of that ambition, we are aiming for up to 5 GW of floating offshore wind. Colleagues have rightly highlighted the importance of ports to that, given the gargantuan scale of the products that will be required. Ports will play a vital part.
Colleagues have raised the issue of ensuring that we maximise the industrial heft and capability from this sector, which is why we are looking at reviewing the contracts for difference scheme and improving it with non-financial factors and other ways of encouraging industrial development.
The hon. Member for Aberavon (Stephen Kinnock) asked me what work we could do with the Crown Estate. The first thing is to work super closely with it, which we do. We are backed by colleagues from His Majesty’s Treasury, and it has been great to see how we can work together co-operatively to unlock this. As part of the tender for the offshore wind leasing round 5 in the Celtic sea, the Crown Estate will require floating wind developers to set out specific commitments to ports, as well as binding commitments on wider issues such as enhancing skills, addressing environmental impacts and delivering community benefits. I hope that that answers the hon. Gentleman’s reasonable question.
Douglas Chapman
During my summing up, I mentioned the ferry terminal from Rosyth to Europe. The Minister has brought in other issues such as skills, training and so on, but the other thing that we should think about is our ports for exports and ferry services. I noticed that he made a note that he would contact his colleagues at border control—that is a complete roadblock at the moment—to make sure that the ferry service can go ahead and be a success.
Graham Stuart
I certainly sympathise with the Scottish Government’s troubles and challenges with ferries. As the hon. Gentleman suggests, through my officials I will pass on that message to other Departments to facilitate that. Anything we can do to help, we will seek to do.
Graham Stuart
I will not.
The offshore renewable energy catapult has estimated that floating offshore wind could deliver more than £40 billion for our economy by 2050, creating about 30,000 jobs in the process. We are moving at pace to deliver those benefits, with more than 25 GW of floating wind projects with confirmed seabed exclusivity—the most in the world. The last thing we need to introduce into the excellent track record and system for bringing in private sector investment from all over the world—which we are proud of—is Labour’s plans for Great British Energy clunking into a carefully calibrated set of market mechanisms. That will have exactly the opposite effect of the objectives that the shadow Minister, the hon. Member for Manchester, Withington, set out.
Going further, the Crown Estate has announced its plans to hold a seabed leasing round in the Celtic sea, capable of supporting up to a further 4.5 GW, as we have heard. We also understand the importance to investors of certainty on a long-term leasing pipeline. If they can see the scale, we can get large-scale investment. We are acutely aware of that issue and are working closely with the Crown Estate and with other Government Departments. We must ensure that the multiple uses of our seas are thoroughly considered, so that we can then provide the visibility to unlock investments in ports, which will then unlock further investment.
The Government recognise the critical role that ports will play in achieving our green energy ambitions and the importance of securing investment in the infrastructure. They will also be a big enabler for offshore wind and a catalyst for wider supply chain development.
Stephen Kinnock
I am sure that the Minister is absolutely delighted that the voting interruption has given us some additional time. He was talking about floating offshore wind infrastructure. I do not know if he is coming to this, but I asked about grid capacity. There are real concerns that there will not be the grid capacity to facilitate all this, which is having an impact on developers’ thinking, too. What comments does he have on that?
Graham Stuart
I thank the hon. Gentleman for another excellent and well-made point. One of the biggest challenges facing my Department is ensuring that we have the facilitating infrastructure. No matter how interesting the generation is—nuclear, floating, fixed-bed, onshore, offshore—it does not really matter if the electrons cannot get where they need to. That is why we commissioned the Winser review on transmission, and I am really grateful to him for his work. We are going to be reporting back on that as soon as we can. We are working closely with National Grid and others to speed up the extraordinarily long times it takes to put that infrastructure in place. The hon. Member for Aberavon was right to say that if we want to realise our Celtic sea ambitions or our other ambitions around the UK, we need the facilitating infrastructure.
More locally, we are also focused on connections. We will shortly be coming out with a connections plan, because we have queues filled with projects that may never go ahead. We need to find ways to deal with that legally and properly. We now have a dedicated Minister for Nuclear and Networks, precisely because we recognise the challenge. The hon. Member for Aberavon is right to highlight that. We are working flat out on it and it is probably our top priority.
Stephen Crabb
On the important issue that the hon. Member for Aberavon (Stephen Kinnock) raised about the grid, is the Minister aware of any specific work by National Grid looking at the grid needs of ports, so that we know which UK ports are going to be energy ports? We can predict where those locations are going to be and we can see activity already happening. Is National Grid doing a piece of work to map the grid requirements of the next 20 to 30 years and put together plans for individual port locations?
Graham Stuart
One recommendation of the Winser report was that we pull together a much more coherent overall spatial plan. In previous years, things were done on a fairly linear basis, as we have seen in East Anglia. We have been taking steps through the holistic network design—not necessarily the best title—in phases simply to ensure that we have a more strategic and joined-up approach. We cannot do it project by project; we have to plan the whole thing out. We want to take it from a regional basis to a national basis. Further information will be set out by the Government.
We are working with our European neighbours. I spoke to the German ambassador only this morning about the fact that all of us around the North sea need to think and work together on a common basis. If we do so, we will be better able to realise the huge opportunities in the surrounding seas, do so at the lowest possible cost and maximise European energy security and the jobs and benefits that spring from doing that work.
For floating offshore wind specifically, the industry road map 2040, developed by the floating offshore wind taskforce, identified the need for up to 11 ports across the UK to support the roll-out of commercial-scale floating offshore wind. That is a significant opportunity for the years to come. To support the industry, the Government launched the £160 million floating offshore wind manufacturing investment scheme, which the shadow Minister, the hon. Member for Manchester, Withington, asked about in one of the much more reasonable comments in his speech. We are doing everything we can to bring the timing of that forward and do the assessment, and I hope that we will be able to announce the next stage—due diligence—before the end of this year, but that is tight.
In the coming years, the UK and other countries will exponentially increase their offshore wind deployment in the North sea, the Celtic sea and across a range of new markets. We signed a memorandum of understanding with countries surrounding the North sea in the week before Christmas last year about our rejoining the North Seas Energy Co-operation forum, and we will be having another ministerial next month to ensure that we are working closely together.
We will work with industry, through RenewableUK and the Offshore Wind Industry Council, to assess supply chain needs, which so many colleagues have rightly raised, and to identify the opportunities for the UK to lead and benefit from sustainable growth in the industry, including through building new export opportunities. As a former exports Minister, I recognise that by leaning in ahead as we have done—we have cut our emissions more than any other country on earth—and developing the technologies and solutions, we then have the long-term opportunity to export it. If we can capture more than enough of that energy to meet our own needs, we can export it directly. We could also convert it into green hydrogen, and we can export that. We can also bring in the carbon that will still necessarily be emitted by certain industries and our western European neighbours and put that into the 78 gigatonnes of capacity we have in the North sea. There is so much to be done here, and it can make such a difference: it can bring about the renaissance of industry in the north-east and north-west of England, in Scotland, in Wales and in Northern Ireland, as well as all around the country. It is a very exciting thing.
As I said, ports are not just important for offshore wind. They will also play a key role for carbon capture and storage, supporting the decarbonisation of emitters. Maritime shipping will play a key role, linking emissions captured from the dispersed sites with offshore CO2 storage sites. Import and export ports across the UK that can handle large volumes of CO2 will be required to facilitate the transport and storage of CO2 via ships. We heard about the plans for the Humber and elsewhere, indeed including on the south coast as mentioned in the brilliant, albeit short, speech by my hon. Friend the Member for Southampton, Itchen (Royston Smith).
On hydrogen, the Government recognise that port infrastructure will have a big role to play. We have a target of 10 GW of low-carbon production by 2030. As the hydrogen economy matures and the UK exploits export opportunities, we will need the right port infrastructure to accommodate large transport ships bringing in or taking away hydrogen, and we are determined to seize those opportunities for the UK economy. It is so important that we do not have an Administration who would do the exact opposite—and who have a track record of that.
Peter Aldous
Offshore wind champion Tim Pick has highlighted some of the obstacles that need to be overcome for the industry to realise its full potential. Some of that focuses on ports. Will the Minister provide a bit more detail on the Government’s response to his proposals and recommendations?
Graham Stuart
We are working with industry through the Offshore Wind Industry Council, of which I am a co-chair, to consider Tim Pick’s wide-ranging recommendations, including developing an industry growth plan. Again, this is to do with supporting the development of the UK supply chain and, as we do this massive deployment, trying to ensure that as much as possible of the industrial heft of that can be delivered through the UK and UK jobs. That work is ongoing, and we will keep going.
The hon. Member for Strangford will be aware that Northern Ireland has a target for 1 GW of offshore wind from 2030. SBM Offshore and Simply Blue are developing FLOW projects in Northern Ireland. Likewise, Simply Blue is developing the Erebus project in the Celtic sea.
I was asked about meetings. Notwithstanding any transport and logistical challenges, I would be delighted to come to Wales. I must pay tribute once again to my right hon. Friend the Member for Preseli Pembrokeshire, who is relentless, albeit always cheerful and well-considered, in promoting the need for understanding and engagement with his part of the world and the opportunities that offers for the whole of the UK in contributing to the global challenge on climate change and, most importantly, in delivering a more prosperous and better future for constituents in his part of the world. Thank you, Mrs Cummins, for chairing the debate.
Oral Answers to Questions
Graham Stuart Excerpts(8 months ago)
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Paul Maynard (Blackpool North and Cleveleys) (Con)
The Minister for Energy Security and Net Zero (Graham Stuart)
The Government have ambitious plans to tackle methane emissions from oil and gas production. With support from Government and key regulators, industry is on track to end routine flaring and venting prior to 2030, in line with the World Bank’s initiative.
Paul Maynard
While I welcome the Government’s introduction of new oil and gas licences in the North sea as part of a just and graduated transition to more reliance on renewables, the Minister will be aware that methane is a far more warming gas than carbon dioxide. Given that much more can be done, will the Government look at how they can ensure that flaring, venting and leaks are fixed by the new licence holders as and when they occur and, in the context of the North sea transition plan, ensure that the new Affleck oil field is not allowed to flare until 2037, as set out in the permission granted to it? This is all part of how we can reach net zero without it costing my constituents the earth.
Graham Stuart
The North Sea Transition Authority already expects methane emissions to be as low as possible and all new developments to be developed on the basis of zero routine flaring and venting, and that they should be electrified or electrification-ready. Of course, what is required and will help facilitate that is new investment in the North sea facilitated by licences, without which we are unlikely to see the reduction in emissions that we have so successfully driven so far.
Caroline Lucas (Brighton, Pavilion) (Green)
The Minister has not really given any reassurance to the hon. Member for Blackpool North and Cleveleys (Paul Maynard). As we know, methane is a whopping 80 times more powerful than carbon dioxide over a 20-year period, so if the Minister is serious about tackling this issue, will he explain why the Government failed to use the Energy Bill to ban flaring and venting? Why did they whip their own MPs to vote against an amendment that would have outlawed it, and given that the practice has been illegal in Norway since the 1970s, will he finally recognise that this makes a mockery of Ministers’ claims about UK oil and gas being greener?
Graham Stuart
Unusually, the hon. Lady has got her facts wrong: I do not think that amendment was even selected for debate that day. According to the North Sea Transition Authority, flaring was reduced by more than 10% just last year, contributing to a reduction of nearly 50% between 2018 and 2022. As I have said, the North Sea Transition Authority estimates that methane emissions have fallen by more than 40% to fewer than 1 million tonnes of carbon dioxide equivalent—a record low. We have old existing infrastructure and are moving with a maximum of ambition to reduce emissions, and we have a successful track record to date.
Liz Twist (Blaydon) (Lab)
The Minister for Energy Security and Net Zero (Graham Stuart)
I am grateful for the work of the Climate Change Committee, and I pay tribute in particular to the commitment of its outgoing chair, Lord Deben. The Government will respond to the committee’s report in October.
Liz Twist
The latest Climate Change Committee report found that, out of 50 key indicators of Government progress on tackling climate change, just nine were on track. According to Energy UK, even before the disastrous offshore wind auction, the UK was forecast to have the slowest growth in low-carbon electricity generation of the world’s eight largest economies up to 2030. Does the Minister recognise that the Government’s failure has cost every family £180 in higher bills?
Graham Stuart
Our climate leadership is measurable and real. We have reduced emissions by more than any other major economy since 1990. We were the first to legislate for net zero. We have eliminated coal, which as late as 2012 produced nearly 40% of our electricity supply—the legacy of the Labour party—and we have lifted renewables from 7% to 48%. We have cut emissions by more than others, transforming our energy system, and we are leading on this issue internationally and domestically. That is exactly what the Government rely on in fulfilling their aspiration to climate leadership.
Sir Christopher Chope (Christchurch) (Con)
Does my right hon. Friend accept that one consequence of the Climate Change Committee report is to increase our country’s reliance on Chinese technology and raw materials?
Graham Stuart
China has even greater offshore wind capacity than ourselves—it has the largest wind and largest solar capacity in the world—and it has a significant level of production. We recognise that we will need technology from all over the world, including China, if we are to meet our net zero aspirations.
Kerry McCarthy (Bristol East) (Lab)
According to the Climate Change Committee,
“the private sector…is being held back…by weak policy signals, uncertainty, and barriers to investment,”
and perhaps we would not need to be so reliant on China if those issues were addressed. Just last month, UK investors representing £1.5 trillion in assets wrote to the Prime Minister, warning that that could mean the UK missing out on 1.7 million jobs. Will this zombie Government listen to investors and their own advisers, look at the game-changing interventions in the States and bring forward a UK version of the Inflation Reduction Act before it is too late to save British businesses and British jobs?
Graham Stuart
Yet another unfunded spending commitment from the Labour party—the party that left us with less than 7% of our electricity coming from renewables and that left us reliant on coal; a party that wants to nationalise the industry and drive out all those companies that have transformed the North Sea basin, led the world in cutting the cost of offshore wind, and made us the European leader in offshore wind and the global leader in cutting emissions. The Labour party is the biggest enemy of net zero and the biggest enemy of the private investment in this country that will help us get there.
Richard Burgon (Leeds East) (Lab)
Helen Hayes (Dulwich and West Norwood) (Lab)
The Minister for Energy Security and Net Zero (Graham Stuart)
The Government recently announced changes to national planning policy, giving greater flexibility to local authorities to respond to suitable opportunities for onshore wind. The Government also want communities to benefit from hosting onshore wind and have consulted on improving the current system of community benefits for England.
Richard Burgon
The truth is that the Government have failed to properly lift the ban on onshore wind, while bending over backwards to support expensive new oilfields and even giving billions in tax breaks for those polluting projects. That ban has already added hundreds of pounds to people’s bills, undermining the investment we need in the cheapest form of energy, and cost thousands of good green jobs. Will the Minister not admit that the Government’s failure to properly lift the ban on onshore wind will continue to keep bills higher and makes us less energy-secure?
Graham Stuart
More than 15 GW of onshore wind are deployed in the UK. In our allocation round 5 just the other day, we secured 1.7 GW of onshore wind capacity; allocation round 4 secured 1.5 GW. It is extraordinary: an industry—domestic UK oil and gas—has lower emissions than the alternative from abroad and employs 200,000 people, every one of whose jobs is at risk if the Labour party ever gets into power. Labour Members are suggesting that there is a negative fiscal impact, when that industry is expected to contribute £50 billion over the next five years. The Labour party is an enemy of the transition to net zero and of British jobs and prosperity.
Helen Hayes
If the Minister will not accept the argument of my hon. Friend the Member for Leeds East (Richard Burgon) , will he at least listen to industry, which described the recent announcement on onshore wind as a “missed opportunity” to end the ban? RenewableUK said:
“The proposed changes don’t go far enough”
and would not make up for
“eight years of lost progress.”
When will the Minister listen to industry and lift the ban properly so that we can cut bills?
Graham Stuart
On 5 September, the Government announced changes to national planning policy for onshore wind in England, giving greater flexibility to allocate suitable areas and to address the planning impact of onshore wind. I agree with the hon. Lady; I am an enthusiast for more onshore wind where it goes with the grain of communities, and we will continue to pursue that to make sure that we can realise the benefits that come from it.
Dr Alan Whitehead (Southampton, Test) (Lab)
The Minister will know, although he unaccountably did not tell us, that there was precisely no new onshore wind in England in the recent AR5. The Minister claims that the latest compromised wording, which he alluded to, will lift the ban on onshore wind, but he knows really that that is not so and he knows what the industry has been saying about it and why it will not invest for the future. The result is no new onshore wind getting built in the medium-term, higher bills for families and less energy security for the country. Why will his Department not just face down his luddite Back Benchers, introduce fair planning regulations for onshore wind and get the industry restarted across England?
Graham Stuart
As I have just said, we announced changes as recently as 5 September. Like the hon. Gentleman, I look forward to a positive future for onshore wind in England, as well as in the rest of the United Kingdom.
Alicia Kearns (Rutland and Melton) (Con)
Sir Desmond Swayne (New Forest West) (Con)
The Minister for Energy Security and Net Zero (Graham Stuart)
The Government have created an online advice service to help consumers in replacing fossil fuel heating systems, including oil boilers, with a heat pump. We are also providing funding through the boiler upgrade scheme.
Sir Desmond Swayne
Absolutely, Mr Speaker. There is a panic now in Germany as its premature ban on gas-fired boilers approaches. The Minister will want to avoid a similar panic as we approach our own premature ban on oil-fired boilers, won’t he?
Graham Stuart
As ever, I thank my right hon. Friend. We are listening. As the Prime Minister set out, we will reduce our emissions in line with our obligations but do so in a way that recognises the challenges that families face. Off-grid households will be supported through the transition, and we will respond to the consultation in due course.
Richard Foord (Tiverton and Honiton) (LD)
During the summer recess, when I was touring villages, I found in my corner of Devon that some constituents are worried about whether they should replace their oil-fired boiler in the next couple of years with a heat pump or put their faith in hydro-treated vegetable oil. Some have been encouraged by the pilots of so-called HVO as an alternative source to heating oil. What assurances can the Minister offer that it will be a truly sustainable source of fuel and not made from palm oil, which encourages deforestation? Or should we put 100% of our efforts into heat pumps?
Graham Stuart
As the hon. Member doubtless knows, we have conducted a consultation on the use of HVO in heating, and we are determined to ensure that we decarbonise heat in homes, including off-grid homes, in a way that is practical and aligned with minimising any negative impacts on those families.
Stella Creasy (Walthamstow) (Lab/Co-op)
Elliot Colburn (Carshalton and Wallington) (Con)
The Minister for Energy Security and Net Zero (Graham Stuart)
The Environment Agency’s recent consultation on varying the environmental permit for the Beddington energy recovery plant closed on 1 September. The Environment Agency will carefully consider all relevant responses and issue a final decision in due course.
Barry Gardiner (Brent North) (Lab)
In the Select Committee inquiry into preparations for this winter, one of the repeated calls that we have heard from expert witnesses is to support the vulnerable and fuel poor with a social tariff. Will the Minister do that?
Stephen Hammond (Wimbledon) (Con)
Graham Stuart
The zero-emission vehicles mandate supports our commitment to end the sale of new petrol and diesel cars and vans. By setting it many years in advance and giving clear notice to the market, it provides appropriate stimulus to industry in a way that the ultra low emission zone singularly fails to do, as my hon. Friend will have noted.
Wera Hobhouse (Bath) (LD)
The Energy Minister got his facts wrong in his earlier response to the hon. Member for Brighton, Pavilion (Caroline Lucas), so he might want to correct the record. The Liberal Democrat amendment to the Energy Bill to tackle flaring, venting and leaking of methane was selected for a separate vote. It would have reduced methane emissions by 72 %. Why did his Government vote it down?
Graham Stuart
I stand corrected. On that issue, we have infrastructure, some of which dates from the 1970s, and we are moving at the maximum possible speed. It is technologically and economically challenging to make this change, and yet, as I set out earlier, we are already showing significant efforts, and of course we are champions of the methane pledge, which we plan to exceed. When I am at COP28, I will be urging other countries to follow us in agreeing and supporting that World Bank methane pledge.
Tom Randall (Gedling) (Con)
Graham Stuart
My hon. Friend is right to talk about the challenge of bringing all the pieces together to unlock opportunity. The Government will promote the whole hydrogen economy—production, demand, networks and storage—and stimulate private sector investment. In August, the Government published the low-carbon hydrogen agreement, setting out the hydrogen production business model’s terms. We will award contracts for that in quarter 4 of 2023. My colleagues and I are happy to meet my hon. Friend to talk about making sure we get this absolutely right so that we maximise its benefits.
Justin Madders (Ellesmere Port and Neston) (Lab)
Biodiesel producers in my constituency are being undercut by cheap Chinese imports because of the Government’s decision to award them inward processing relief. This is making it difficult for us to support UK industry, so can we have an explanation for why that decision was made?
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
Writing for The Daily Telegraph last year, our now Prime Minister said:
“On my watch, we will not lose swathes of our best farmland to solar farms.”
Yet the industry has not heard that, and vast swathes of farmland in my constituency, totalling 16 square miles, are open to planning, engulfing whole villages and using the best and most versatile land. Will my right hon. Friend meet me to discuss how he and the Department can ensure that the Prime Minister keeps his very important promise?
Graham Stuart
I can assure my hon. Friend that planning policy and the associated guidance encourage large-scale solar projects to be located on previously developed or lower-value land. Where greenfield sites or high-grade land are used, developers are required to justify using such land and to design their projects to avoid, mitigate and, where necessary, compensate for any impacts. I hear my hon. Friend’s personal testimony, and I will be happy to meet her to discuss this further.
Samantha Dixon (City of Chester) (Lab)
Almost 20% of the housing stock in my constituency dates from before 1919 and is therefore classified as historical. What plan does the Department have to improve skill levels in retrofitting historical residential buildings?
Graham Stuart
My hon. Friend is right. Last year we were dependent on fossil fuels for 77% of our energy. If we import more gas from abroad, it will be in the form of liquefied natural gas, which, according to a report from the North Sea Transition Authority two weeks ago, has four times the production emissions of domestic gas. The Scottish National party, ably supported by the Labour party, wants to threaten 200,000 jobs, £50 billion of tax revenue over the next five years, and the very subsea engineering and technological capability—not to mention the balance sheets—that we need to develop hydrogen, carbon capture, usage and storage, and the rest of the transition. It is madness, and it is the policy of the SNP.
Dame Nia Griffith (Llanelli) (Lab)
Yes, we need increased electric arc capacity to reprocess more scrap steel in the UK, but Trostre tinplate packaging works in my constituency needs a grade of steel that can be produced only by the blast furnace process, until green production technologies are developed. With 23 such projects elsewhere in Europe, will the Secretary of State commit to investing in developing these technologies at Port Talbot, thus reducing emissions and keeping jobs in Port Talbot and Llanelli?
Graham Stuart
I share the hon. Lady’s enthusiasm for keeping those jobs, which is why we are investing hundreds of millions of pounds to ensure that these industries can make that transition. I entirely agree with her on the importance of innovation and making sure it is embedded so that not only do we sustain those industries but so that, through innovation, we can strengthen them in the years ahead.
Alicia Kearns (Rutland and Melton) (Con)
A decade ago, the onshore wind industry committed to a community benefit protocol to provide compensation of £5,000 per MW installed per annum to communities for the duration of a wind scheme. So far, solar developers have refused to do something similar, and surely that is not fair. Does my right hon. Friend agree that compensation schemes must be equal, whether wind or solar is involved?
Graham Stuart
It is perhaps typical of my hon. Friend that not only is she asking a question and championing this issue, but she has scheduled a meeting with me immediately afterwards. I look forward to discussing this with her and making sure that we have the most coherent position possible as to where we are set on rewarding communities that host transmission infrastructure and other parts of our transition. I look forward to having that conversation with her in the coming minutes.
Alison Thewliss (Glasgow Central) (SNP)
My constituent Lee Haywood is on a communal heat network, and he and his neighbours saw their price per kWh double last winter. What protection can the Minister give as we come into the next winter, as residents in Dalmarnock are really worried that prices will again soar in this unregulated area?
Patrick Grady (Glasgow North) (SNP)
Do the Government think the UK is on track to meet the 2050 net zero target? Do the Government think the UK will meet that target? Do the Government even really care?
Graham Stuart
We have, of course, met all our carbon budgets to date. In the progress report, the Climate Change Committee said it had increased confidence in our meeting carbon budget 4 and, yes, this country will meet its net zero targets by 2050. It will do so in line with the advice that we are given, and I am proud of the fact—the hon. Gentleman could share this with his constituents, who may be concerned otherwise—that this country has cut its emissions by more than any other major economy on earth, thanks to the policies of this Government.
Tim Farron (Westmorland and Lonsdale) (LD)
This morning, I received a text from one of the leadership team at one of our local hospices. It said that
“there has been no additional support for our energy costs. Costs have gone up while statutory support hasn’t changed... Hospices UK lobbied for additional support…to no avail… We operate 24/7 and have to keep the heating on—you know what the weather is like in Cumbria in the winter!”
When will the Minister come up with a bespoke support scheme for our vital hospices?
Caroline Lucas
On a point of order, Mr Speaker. In the exchange about the amendment on flaring just now, I do not think I heard the Minister formally withdraw his accusation that I got my facts wrong, and I certainly did not hear him apologise. Given that he has now accepted that he got his facts wrong and my facts were right, I would love him to formally correct the record and perhaps even to apologise as well.
Graham Stuart
Further to that point of order, Mr Speaker. The hon. Lady is quite right to raise this in that way, and I am happy both to withdraw that and to apologise to her for getting my facts wrong on that occasion.
Residential Co-operative Power Production
Graham Stuart Excerpts(8 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Minister for Energy Security and Net Zero (Graham Stuart)
I congratulate my hon. Friend the Member for Bridgend (Dr Wallis) on securing this important debate, and thank him for sharing his thoughts during the conversation that we were able to have ahead of it. As we heard in his moving and well-thought-out speech, he has continued to be a champion in this regard. I want to begin by assuring him that the Government recognise the importance of empowering local communities to come together to deliver renewable energy projects for their areas, be that putting solar panels on school roofs, setting up electric vehicle chargers in local communities or developing residential power production using hydro, say, to power a village.
My hon. Friend has raised a concern that people who invest in their own renewable energy are still required to pay the green levies that are part of their energy bills and he made an appeal that they should cease to do so. Levies more than pay for themselves by driving investment in renewables. He mentioned the fact that large-scale renewables have driven down costs enormously over the last decade or so, not least through our contracts for difference scheme, which this Government are very proud of. These levies provide vital support to low-income and vulnerable households and, because of the way they have been used in the system, they have saved consumers money on their energy bills overall over the past 10 years.
Having a fair system relies on everyone being part of it. If consumers anywhere are reliant on the infrastructure that is developed by the whole, there is a strong case that they should contribute to that whole; otherwise, there is a danger of creating a system that is the opposite of what my hon. Friend seeks—namely, a system that is less fair, in which people can buy their way out of a system that is designed to cater for all.
The Government are committed to ensuring that the cost of the UK’s transition to net zero is fair and affordable for all energy consumers and, over the past decade, environmental and social schemes have been instrumental in driving the decarbonisation of the system. It is fair that all consumers should contribute towards the cost of these schemes, as the UK’s transition to abundant low-carbon energy over the coming decades will bring benefits to households and businesses everywhere. Our recent exposure to volatile global gas prices underscores the importance of our plan to build a strong home-grown renewable energy sector in order further to reduce our reliance on fossil fuels, but one that, importantly, ensures that everyone everywhere, whether or not they can invest in their own local renewable energy, is protected and looked after.
Some billpayer-funded schemes are important for tackling fuel poverty by providing financial support or home upgrades to low income and vulnerable households. We do not wish to see a system in which people can withdraw from supporting that. Ofgem, the energy regulator in Great Britain, administers renewable energy and social schemes on behalf of the Government and ensures that policy targets are met in as economical and consumer-friendly a way as possible. A list of the current environmental and social schemes that are funded through those bills can be found on Ofgem’s website.
In response to my hon. Friend’s point about changing the tax rules specifically on bill savings from off-site renewable ownership—he will know what is coming—I have no choice but to comment that taxation is a matter not for me but for the Chancellor. However, I would like to reassure him that we see value in, and support, community energy, including co-operatives that come together to create community energy projects such as Graig Fatha, which he mentioned. They play a role in our efforts to eliminate our contribution to climate change.
The Government offer a range of support to that type of project, perhaps just slightly different in nature to the ones that he has so passionately espoused today. They include the brilliant new £10 million community energy fund. This enables both rural and urban communities across England to access grant funding to develop local renewable energy projects for investment. The community energy fund follows on from the success of the rural community energy fund, which was delivered through our local net zero hubs and has funded several innovative projects. An example is Swaffham Prior in east Cambridgeshire, a pioneering project in a village of around 300 homes. It is one of the first villages in the UK to install a heating network into the existing infrastructure. In order to get more brilliant projects such as Swaffham Prior set up, we are aiming to launch applications to the community energy fund as soon as possible.
I recognise that the community energy fund is open only to communities in England. This is because the devolved nations have their own support schemes for community energy. For instance, the Welsh Government have the Energy Service, which works with both the public sector and community enterprises to reduce energy use, to generate locally owned renewable energy and to reduce carbon emissions. Similarly, the Scottish Government’s community and renewable energy scheme supports communities across Scotland to engage with, participate in and benefit from the energy transition to net zero.
Community energy funding is available alongside UK-wide growth funding, and we encourage community energy groups and residential co-operatives to work closely with their local authority to support the development of community energy projects within these schemes. The UK shared prosperity fund supports interventions that reinforce our commitment to reach net zero, and that includes £2.6 billion of funding for investment in places, including for community infrastructure projects. An example of that is West Devon District Council, which has been among the local areas to benefit from this type of UK growth funding. It received £1.1 million under the shared prosperity fund, which includes provisions to support community energy groups, helping them to bring projects forward and to access funds to support their goals. I entirely share the vision and the aspiration set out by my hon. Friend, and we have measures in place to ensure that can be brought to reality.
Beyond this, Ofgem also supports community energy projects and is now welcoming applications from community interest groups, co-operative societies and community benefit societies to the industry voluntary redress scheme, which is much more helpful than its name suggests. This allows groups to apply for funds to deliver energy-related projects that support energy consumers in vulnerable situations, that support decarbonisation and that benefit people in England, Scotland and Wales.
We also regularly engage with the community energy sector through the community energy contact group. This is our central engagement method to stay in touch with community energy, to hear from the voices of that community and to allow the people involved to feed into Government policy.
I know many Members, including my hon. Friend, will have supported the Local Electricity Bill and the amendments on community energy that were tabled on the Energy Bill. During the passage of the Energy Bill, which I am delighted to say has now completed its Commons stages, the Government carefully considered the amendments that sought to ensure a right to local supply. We set out the reasons why we were unable to accept those amendments and why it was not right to do so, which included ensuring the best outcomes for consumers and the sector overall, but the Government recognise that community energy projects have real benefits for the communities in which they are based and for the nation as a whole, and we are keen to ensure that they deliver value for money for consumers nationally and locally alike.
We have worked closely with many parliamentarians and the community energy sector to develop commitments that will better support the development of this type of energy. These commitments include the launch of the £10 million community energy fund, which I have already mentioned, alongside which we have committed to publishing an annual report and to consulting on the barriers that the sector faces when developing projects, precisely to ensure that we can have more of them. We are working with the sector through the community energy contact group so that we have the most effective routes available and so that we make it as easy for communities to understand the help that is available in the system.
I close by thanking my hon. Friend for securing this important debate and for the manner in which he opened it. I am proud of the wide range of support that the Government offer to community energy groups across the country. This support enables local community groups to come together to deliver renewable energy projects for their area, including in residential co-operatives. I share the vision that my hon. Friend set out, and I look forward to working closely with him, in Wales, Scotland, England and right across the United Kingdom, to see that vision made even more of a reality than it is today.
Question put and agreed to.