Climate Change Committee Progress Report 2021
Greg Hands Excerpts(2 years, 6 months ago)
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The Minister of State, Department for Business, Energy and Industrial Strategy (Greg Hands)
Let me begin by thanking the Backbench Business Committee for nominating this important debate today, and I also thank my hon. Friend the Member for South Cambridgeshire (Anthony Browne) for his very able introduction to it. We were sitting in exactly these seats yesterday during his last Westminster Hall debate, which was on the interesting subject of carbon capture and storage, a subject that has also cropped up in today’s debate.
Of course it is vital that we focus on clean growth and the Government’s vision for transitioning to a net zero economy. This has been a very useful debate, with a very high degree of consensus, which of course the Government welcome.
First, the Government welcome the Climate Change Committee’s 2021 “Progress in reducing emissions” report, which highlights our successes in setting an ambitious climate mitigation agenda while also providing healthy challenge to our progress to net zero by 2050. The point of having this kind of Committee is for it to keep challenging the Government and to ensure that the Government are straining every possible muscle to get to that target and get there in good time.
The report correctly emphasises that the journey to net zero is not yet half-completed and that this decade is the decisive one for tackling climate change, which Britain must take a leading role in. Of course, that is why on Tuesday we published our net zero strategy, which has been referred to many times; I welcome the Opposition’s praise for my officials and my ministerial team for the work that they have put into it. I know that a lot of my team have been working very long hours to get the strategy out there and to do so on time.
The strategy delivers a comprehensive set of measures to support and capitalise on the UK’s transition to net zero by 2050. It outlines measures to transition to a green and sustainable future, and to help businesses and consumers to move to clean power, supporting hundreds of thousands of well-paid jobs and leveraging up to £90 billion worth of private investment by 2030.
We have already set out a lot about our journey to net zero. Over the past year alone, we have published the Prime Minister’s 10-point plan for a green industrial revolution, the energy White Paper, the North sea transition deal, the industrial decarbonisation strategy, the transport decarbonisation plan, the hydrogen strategy and, most recently, our heat and buildings strategy.
Dr Whitehead
Would the Minister be able to provide us with some helpful guidance on the production of those documents, and set it against what the Climate Change Committee has been doing with its carbon budgets and so on? Does he consider that as a result of those documents being published and their contents, we are now on course to meet the terms of the sixth carbon budget?
Greg Hands
Our position on the sixth carbon budget is unchanged, as the hon. Gentleman knows. However, I am a believer in an active Government, and publishing a set of strategies does not necessarily mean that we have reached the point that we want to reach: it merely lays out the map and sets out the process, which I think is very helpful. In terms of delivery, obviously the onus to fulfil these objectives is on not only the Government, but every citizen of this country and, indeed, the whole world.
We have just unveiled a landmark commitment to decarbonise the UK’s electricity system by 2035, to help us build a secure home-grown energy sector that is not reliant on fossil fuels and exposure to volatile wholesale energy prices, which as we know are very much in the news at the moment. However, the science could not be clearer: by the middle of this century, the world needs to reduce emissions to as close to zero as possible, with the small amount remaining sucked up through natural carbon sinks such as forests and relatively new technologies such as carbon capture. We are proud to lead the world in ending our contribution to climate change, not just because it is the right thing to do, but because we are determined to seize the unprecedented economic opportunity it brings. We want to build back better from the pandemic by building back greener and levelling up our country with new high-skilled, high-wage, sustainable jobs in every part of the United Kingdom. Those jobs will be spread across the UK, with specialists in low-carbon fuels in Northern Ireland, low-carbon hydrogen in Sheffield, electric vehicle battery production in the north-east of England, green finance in London, more engineers in Wales, and offshore wind technicians in Scotland.
The strategy builds on all the progress that the UK has already made. In June 2021, the UK Government set the sixth carbon budget at 965 megatonnes of CO2 equivalent, a world-leading target that will mean a 78% reduction in greenhouse gas emissions by 2035 compared with 1990 levels. This is in line with the latest science, as the level recommended by our expert advisers at the Climate Change Committee, and is consistent with the Paris agreement’s goal of limiting global warming to well below 2 °C and pursuing efforts to limit it to 1.5°. The target would achieve well over half of the required emissions reductions from now to 2050 in the next 15 years.
Turning to the points raised during the debate, my hon. Friend the Member for South Cambridgeshire has pointed out that a parallel debate on COP26 is taking place in the main Chamber, so anybody watching the debate might wonder why there are not more Members here. The overlap has been considerable. He also rightly pointed out the UK’s huge success—in 2015, we emitted the lowest amount of CO2 per annum since 1859—and then he got Opposition Members a little bit excited with his reference to the 1926 general strike. I do not think my hon. Friend thought of the 1926 general strike as something we would wish to emulate, but I noted from interventions and comments made by Opposition Members that they perhaps thought it was. It was very important that my hon. Friend quoted the 2019 figure, because emissions obviously went down quite a bit during the pandemic, so it is important that we look at a more robust figure, such as that from 2019. As he said, it was the biggest decline in the whole of the G20 since 1990: we emit less per person than the EU average, and less than Denmark or Norway. All of those were incredibly strong points.
I was thinking back to the 1990 benchmark for all those emissions. The nearest election to that time was the 1989 European elections, which were not memorable for anything other than the fact that they were the high point in the performance of the UK Green party. It was the year when the Green party got more than 10% of the vote overall. It ran on a manifesto that it was impossible to do anything to reduce emissions while still growing the economy. We had to reduce growth in the economy and reduce its size to do something about emissions.
As my hon. Friend the Member for South Cambridgeshire has pointed out, the incredible success in the 30 years since, during which the UK has grown the economy by 78% while reducing emissions by 44%, demolishes the case that was made at that time by the UK Green party and others. He also makes the good point that the hard work is yet to come. It gets more difficult and the low-hanging fruit has already been picked. Now we have the harder job ahead of us. He talked about carbon capture utilisation and storage and I refer, as in yesterday’s debate, to the fact that the Carbon Capture and Storage Association described Tuesday’s news as “amazing”. I will come back to the Scotland issue in just a moment.
On peatland, my hon. Friend rightly pointed out the Climate Change Committee’s recommendation to restore 67,000 hectares. Currently, only 32,000 hectares have been restored. We are committed to restoring 35,000 hectares by 2025 and 280,000 hectares by 2050. Other points included consumer choice and diet style and those also cropped up later in the debate, as well as the importance of nuclear power. I noticed that two Opposition MPs here today, the hon. Member for Southampton, Test (Dr Whitehead) and the hon. Member for Rochdale (Tony Lloyd), were first elected in 1997, running on a manifesto of ending new nuclear power plants in this country. It was part of the new Labour manifesto of 1997, which I think did so much damage to the nuclear industry in this country and effectively cost us a lost generation in nuclear capability.
I agree with my hon. Friend the Member for South Cambridgeshire that the decade of delivery has come.
Alan Brown
What is the Minister’s estimate of the capital cost of new nuclear that the Government are willing to commit the UK to?
Greg Hands
That is a slightly open-ended question, as the hon. Gentleman knows our commitment is to the existing Hinkley Point C facility. We are committed to bringing forward one further station for its investment case in this Parliament and on Tuesday we also allocated £120 million for a new nuclear innovation fund, which increases the optionality. What are the options for the UK in nuclear capability and capacity going forward? I just wish we had a more positive attitude on nuclear from the SNP. Scotland is part of this country’s nuclear heritage and it disappoints me continuously to see the SNP not seeing the opportunities available for Scotland in so many of our energy and climate change programmes.
Greg Hands
I will make some progress.
On transport, the hon. Member for Rochdale makes some good points. Let me tell him what we are doing on transport: the zero-emission vehicle mandate, improving consumer choice; further funding of £620 million for zero-emission vehicle grants; allocating a further £350 million of our up to £1 billion automotive transformation fund to support the electrification of UK vehicles; £3 billion on integrated bus networks; and a £2 billion investment to enable half of journeys in towns and cities to be cycled or walked by 2030. Those are big commitments.
The hon. Gentleman talked about homes and the boiler upgrade scheme. It is exciting, but slightly buried in all the news about net zero overnight, that one of the energy companies—it is Octopus Energy, but I expect others are either there or will follow—said that it is confident that by April next year, the installation price of a new heat pump will be equivalent to the price of a natural gas boiler. This is one of the important points about what the Government can do. The Government will not come round to everybody’s home, across the whole UK, and install a heat pump. That would be impractical and it would potentially be beyond the means of the Government and the taxpayer to do that. What we are doing is kick-starting a market and kick-starting private sector innovation to come along and do it, and we are already having an impact in what we are doing on heat pumps.
Alan Brown
The Minister is citing Octopus again, but can he tell me, then, what he thinks the installation price of an air source heat pump will be in a year’s time? Did he listen to the points that I made about all the other installation costs that need to accompany an air source pump? Can he give an estimate of what the total cost of that installation would be?
Greg Hands
I will not go further down the road of making price or market predictions. What the Government need to be in the business of doing is kick-starting the market, stimulating the market, and getting it going. I do not think it is in my interest to set out predictions of what I think supply, demand or pricing might be in a year’s time.
Tony Lloyd
I am genuinely grateful to the Minister for giving way. By the way, I was first elected in 1983 on what was euphemistically called “the longest suicide note in history”, so there are many examples that we can quote.
On the issue of heat pumps, I would put it to the Minister that to give the public confidence in the installation of heat pumps, they first need to know the technical specifications, that they are sound and that there are qualified installers. That means training, which we have discussed already today, but it also means something else. Heat pumps do not work very well unless we have well insulated properties. A combination of things are required in order to make that real difference. I hope that the Minister will address not the ’83 question, but the question of how we deliver heat pumps that work.
Greg Hands
The hon. Gentleman makes a very good point. I will come on to the point about installation. He also makes a very good point about insulation and the importance of well insulated homes, which I think nobody denies. But let me just return to the points that he made in his speech.
Local government and local delivery are incredibly important. It is very important that local leadership is seen on climate change. I see it from Mayors such as Andy Street and Ben Houchen and also some Labour Mayors. I think Andy Burnham, the hon. Gentleman’s local Mayor, has been quite good in this space as well. It is important that we all see climate change and taking action on climate change as a cross-party issue involving all the tiers of government and all the available parts of government across the whole United Kingdom.
On energy usage, the hon. Member for Rochdale asked what more the Government can do to address consumption and reduce emissions. The heat and buildings strategy addresses consumption in homes. For example, we provide increased support for low-income households through the home upgrade grant. We are committed to upgrading fuel-poor homes to energy performance certificate band C by 2030 where reasonably practicable. And there is our social housing decarbonisation fund, with £800 million provided. I think that the hon. Gentleman also asked about hydrogen investment. The net zero strategy confirms the industrial decarbonisation and hydrogen revenue support scheme, supporting blue and green H2 production. It could lead to 1.5 GW of new capacity.
The hon. Member for Bristol East (Kerry McCarthy) asked about quite a number of things, some of which are familiar themes. I just remind her that Cambo has already been licensed as a field, in 2001 and 2004.
I could fill the remaining time on airport expansion. Mrs Murray, you will remember that I resigned from the Government in 2018 over airport expansion at Heathrow. I note that, since I resigned, that airport expansion has not happened and I am not seeing any sign of it happening anytime soon.
The hon. Lady asked about trade agreements.
Kerry McCarthy
Would the Minister like to advise us as to whether, if proposals to expand Heathrow are resurrected—obviously, over the last couple of years there has been the pandemic, which has hit aviation—he will resign again?
Greg Hands
Again, that is a temptation down a particular road, but let me say this. The Government are absolutely clear that all further airport expansions must be consistent with our climate change obligations. Government policy is absolutely clear on that.
Greg Hands
I will make a bit more progress.
Nothing in a trade agreement prevents our ability to regulate environmentally or prevents the UK fulfilling its climate change obligations. The hon. Lady asked about COP26 leaders, and I can give her an update. We have a stellar array of world leaders coming for COP26, including President Biden and the four Ms—Prime Minister Modi, Prime Minister Scott Morrison of Australia, President Macron and Chancellor Merkel. We have leaders of medium-sized economies who will be really important. I spoke earlier today with the Vietnamese Energy Minister Dien and the Vietnamese Prime Minister Chinh is coming. Vietnam is an important player, as well as an important ally and friend to the UK. Its current plans are to double coal usage over the next decade, which will not set the right tone at COP26. We are looking forward to welcoming a wide variety of leaders, some of which are close friends and allies of the UK, and developing economies, of which Vietnam is just one, are also coming.
In terms of the carbon border adjustment mechanism, we watch all the proposals very closely. We need to make sure they are World Trade Organisation compatible, that they are not a disguised form of protectionism and that they do not discriminate unnecessarily against developing countries. Departmental policy decisions are consistent with net zero. We have established two Cabinet Committees dedicated to climate change. The Environment Bill requires the Government to reflect environmental issues in national policy making through consideration of the five environmental principles.
Where are the two EV buses? We have delivered the national bus strategy, investing £12 billion in local transport systems over the current Parliament and delivering 4,000 new zero-emission buses.
The hon. Member for Leeds North West (Alex Sobel) spoke of a scenario where one person on a street puts in solar panels and everybody else says, “I want a piece of the action.” That is a great example of the Government simulating demand. It does not mean that the Government should come down the road and install everybody’s solar panels, though. It shows the effectiveness of Government policy in getting people to sit up, take notice and want to take advantage of something. That is what the role of the Government can be. Heat pumps will be exactly the same.
Alex Sobel
To complete that programme, the local authority and housing associations need a payment mechanism. Would the Government not consider using feed-in tariffs just for councils and social housing, not for the private housing sector?
Greg Hands
I have already outlined the support we are giving to the housing sector overall. If the hon. Gentleman or any other hon. Member wants to write to me with a specific proposal, I am happy to look at it. I have to say, I was not entirely sure about his recent history—he mentioned COP21 in relation to the election of Donald Trump, which of course came after that, but I may be misremembering his speech, so I will not go down that road.
How many people have been trained in heat pumps so far? We want more to be trained. The figure is around 3,000 and we require 35,000, so that is definitely a challenging position. We have set out Government policy and the direction of travel on heat pumps very clearly and we are waiting for the market to respond.
Greg Hands
I am going to make progress. On Germany’s net-zero strategy, I shared a platform with the German ambassador last night, and both of our countries are very supportive of each other’s policies on net zero and the environment. We consider ourselves to be world leaders in this space. On retrofitting, we are committed to supporting businesses and households to upgrade energy efficiency in buildings.
Greg Hands
I am going to make a bit more progress. We intend to upgrade as many homes as possible to energy performance certificate band C by 2035.
The hon. Member for Kilmarnock and Loudoun (Alan Brown) talked about the heat pump grant scheme. I am amazed by that. It is a devolved matter, but there have been discussions with the Scottish Government about the Scottish Government joining up with us and participating in this scheme; but if I understand the situation correctly, they have refused. The irony is that the Ofgem team that will be administering the England and Wales scheme will be based in Glasgow, with more than 100 new members of staff. Unless they have a very long commute, they will not be able to benefit from the scheme that they are helping to administer, due to the fact that the Scottish Government have said that they will not be joining the UK Government in the scheme. That is a great pity.
Greg Hands
If the hon. Gentleman has some hot news from the Scottish Government, over to him.
Alan Brown
I have not had time to get on the hotline to them. On the point about the additional members of Ofgem working in Glasgow, that is very welcome and I hope they will not have a long commute—that would not be good for climate change overall. The more serious point is about what funding is coming to the Scottish Government to run their own scheme.
Greg Hands
The Barnett consequentials will of course be enacted in the usual way as we would expect, but why not join with a scheme that has been very well received, that I think will be a market leader and that will, ironically, be administered out of Glasgow? It makes perfect sense for the Scottish Government to come on board with us.
We have made huge investments in offshore wind and other renewables in Scotland. The hon. Member for Kilmarnock and Loudoun mentioned the 5 GW target for hydrogen being less than in Germany. It is the same as Germany’s target—they have exactly the same target. On wave and tidal, we have already put down more than £175 million in innovation funding across this country, with 10 MW already deployed. In many senses, they are still pre-commercial technologies, but we are making the investment to increase the optionality that will be available in wave and tidal.
I welcome the hon. Gentleman’s overall support for the UK’s targets and ambitions. He mentioned reforms to the electricity market. We recently published a call for evidence on actions to align capacity markets with net zero and actions to encourage the participation of more low-carbon capacity. We are committed to accelerating the deployment of low-cost renewable generation through the contracts for difference regime and by undertaking the review of the frequency of CfD options.
The hon. Member for Southampton, Test, in a comprehensive speech, congratulated us on our success in decarbonising electricity generation. I go back to the commitment given to complete that process by 2035. He said that we are ignoring other areas. I do not think that is fair and I do not think that is the case. He talked about adaptation. We are currently developing a national adaptation programme, which is due in 2023. DEFRA published the response to the Climate Change Committee’s adaptation report, which goes into more detail on our progress on adapting to climate change.
On fossil fuels and net zero, of course net zero does not necessarily mean zero residual emissions in all sectors of the economy. It is, after all, a net zero figure. In aviation, agriculture and industry it may not be feasible, practical or cost-effective to eliminate all emissions.
I thank the hon. Member for Southampton, Test for his praise for the hard work put in by my officials on producing the reports.
The hon. Member for Kilmarnock and Loudoun asked, “Where is the Treasury review of the cost of net zero?” I have news for him—I emailed it to him about 15 minutes ago. It was published on Monday night. It is entitled, “Net Zero Review: Analysis exploring the key issues”. There are 135 pages for him to digest before I see him next, when he can ask me questions about it. It was published at the same time as, or just before, the net zero strategy.
In the past few years, the Government have gone further than ever before to ensure that the climate is at the heart of our decision making. We have taken new approaches to embed net zero in spending decisions, including requiring Departments to include greenhouse gas emissions in their spending review bids and their impact on meeting carbon budgets and net zero. As I already said, we have established two Cabinet Committees. The integrated review reflects that and ensures that it is the Government’s No. 1 international priority. We are also using the Environment Bill to require the Government to reflect all these issues in national policy.
We are committed to taking a whole-system approach to the net zero challenge, ensuring that we understand and can navigate the complex ways that our climate goals will interact with other priorities for the country. As I mentioned, we published the heat and buildings strategy, which sets out the required actions to decarbonise buildings over the next decade, helping meet near-term carbon budgets and getting us on track for net zero by 2050.
Dr Whitehead
Now that he has almost finished, will the right hon. Gentleman give way?
Greg Hands
I will finish, as I have been speaking for almost half an hour. The net zero strategy sets out clear principles on how we will engage the public and support them to make green choices. We will explore how to enhance public-facing climate content and advice on gov.uk and our Simple Energy Advice service to provide homeowners with advice for decarbonising their homes, including tailored retrofit advice in local areas.
I thank the CCC once again for its expertise and advice in producing its annual report. The Government are committed to delivering a net zero economy, and we welcome the committee’s contribution to this obligation. The net zero strategy sets out a roadmap to cut emissions and create new jobs across the whole country. It comes as the UK prepares to host the UN COP26 summit next week, where the Prime Minister will lead by example and call on other world economies to set out their own domestic plans for cutting emissions. Through the strategy, we are accelerating towards more resilient futures, towards our green recovery and towards protecting our planet for this generation and those to come.
Carbon Capture and Storage
Greg Hands Excerpts(2 years, 6 months ago)
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The Minister of State, Department for Business, Energy and Industrial Strategy (Greg Hands)
Let me start by congratulating my hon. Friend the Member for South Cambridgeshire (Anthony Browne) on securing this important debate, and I thank all Members who have spoken.
We have already made huge progress in this country on decarbonising the electricity sector. In 2019, greenhouse gas emissions from electricity generation were down 13% on 2018 levels and were 72% lower than 1990 levels. Earlier this month, the plan to decarbonise the UK’s electricity system in its entirety by 2035 was confirmed by the Prime Minister and the Secretary of State, to help boost the country’s efforts to achieve its net zero ambitions.
Carbon capture, usage and storage has a key role to play in decarbonising the electricity system, but its role in supporting our ambitions to reach net zero by 2050 goes further than that. The industrial decarbonisation strategy, which we have already launched, marks the beginning of a process that will see wide deployment of key abatement technologies across industry. CCUS is, obviously, one of those key abatement technologies. It will be vital as we make this transition—something that is already acknowledged in our world-leading North sea transition deal, signed earlier this year.
The Climate Change Committee has described CCUS as a necessity, not an option, for the transition to net zero. We agree, and that is why in the Prime Minister’s 10-point plan for a green industrial revolution we set out to establish CCUS in at least two industrial sites by the mid-2020s and a further two by 2030 at the latest. CCUS is vital to transforming sectors such as steel—as was ably demonstrated by my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates)—cement, chemicals and other energy-intensive industries that lack viable alternatives to achieve decarbonisation. This summer we published the UK’s first ever hydrogen strategy, and we are moving forward quickly.
The net zero strategy, which was published yesterday, confirmed that the Government will set up a new revenue mechanism called the industrial decarbonisation and hydrogen revenue support scheme to fund industrial carbon capture and hydrogen projects, and to provide long-term certainty for private sector investment. The scheme will initially commit to awarding up to £100 million of contracts in 2023, and we will announce a funding envelope in 2022 that will enable us to award the first contracts to CCUS-enabled hydrogen. That was one of the key questions asked by my hon. Friend the Member for South Cambridgeshire. It will provide the certainty required to deploy CCUS at pace and at scale and will form part of a package of Government support, which will include the industrial decarbonisation and hydrogen revenue support fund and the £240 million net zero hydrogen fund.
To deliver our ambitions, we launched the phase 1 CCUS cluster sequencing process in May this year. Its aim was to provisionally sequence those clusters that are most suited to deployment in the mid-2020s. As we announced yesterday, following the phase 1 assessment, we have identified HyNet and the east coast cluster as track 1 clusters for the mid-2020s, with the Scottish Acorn cluster as a reserve cluster—I will explain what that means in a moment. This puts those places—Teesside, the Humber, Merseyside, north Wales and the north-east of Scotland—among the potential early super-places that will be transformed over the next decade. The track 1 clusters will be taken forward into negotiations, as the start of a process to determine their support under the Government’s CCUS programme. Those negotiations will allow us to confirm whether the clusters are affordable for Government, as well as whether they represent value for money for both the energy consumer and the taxpayer, prior to making final funding decisions.
For the Acorn Project—the Scottish cluster—we will continue our engagement to ensure that it can continue its development and planning. This means that if the Government choose to discontinue engagement with a cluster in track 1, we will engage with this reserve cluster instead. That decision was made following a transparent, objective and expert-led assessment process.
David Duguid
I repeat my thanks to the Minister for his commitment yesterday to meet with me later this week to discuss the evaluation criteria in more detail, particularly as they refer to the Acorn Project. As he referred to earlier, the Prime Minister said in his written statement yesterday that
“The UK Prime Minister’s 10 Point Plan established a commitment to deploy CCUS in a minimum of two industrial clusters by the mid-2020s, and four by 2030 at the latest.”
The Scottish cluster is a reserve cluster that met the eligibility criteria and, we are told, performed well against the evaluation criteria. Will my right hon. Friend the Minister confirm that that status puts the Scottish cluster in a prime position to benefit from any acceleration of the programme that might be considered?
Greg Hands
I thank my hon. Friend for that intervention. We have been absolutely clear that the Acorn Scottish cluster is a reserve cluster, and we also have the existing commitment to have four clusters by the year 2030. Being a reserve in track 1 in no way prejudices a cluster’s position in track 2—in fact, it rather enhances it—so I will leave my hon. Friend to draw a conclusion from what I am saying without prejudicing proper process. I think that cluster is well placed.
Several hon. Members rose—
Greg Hands
I will deal with the points raised by the hon. Members for the Scottish National party before taking further interventions. As I say, this was a transparent process. We looked at the five criteria: deliverability, emissions reduction potential, economic benefits, cost considerations, and learning and innovation. Scoring was informed by robust, expert-led scrutiny of the cluster submissions, and the clusters selected to be sequenced as track 1 were those with the highest combined weighted score across the criteria.
Turning to the points raised during the debate, I praise my hon. Friend the Member for South Cambridgeshire, first of all for his excellent introduction. I know he likes his history and his science, and he gave us a masterclass in both. He has been combining the two from the first time he took a call on this topic while on The Times news desk. He is right about the potential for the UK to be a CCUS superpower, given the UK’s geology, geography and economy, and the interaction between those three things. I also thank him for praising this Government for being more committed than any other.
We had a collection of fantastic contributions from Teesside to South Yorkshire. My hon. Friend the Member for Darlington (Peter Gibson) praised the proposal and the role of the private sector. We heard from my hon. Friend the Member for Hartlepool (Jill Mortimer); my very first ministerial visit in this new job was to Hartlepool. We also heard from my hon. Friend the Member for Penistone and Stocksbridge, who I have already mentioned.
The hon. Member for Stockton North (Alex Cunningham) has been full of praise for the Government decision. He is right that Teesside is delighted. Other Members have referred to Ben Houchen, the Teesside Mayor, who said:
“This project would create thousands of jobs and put Teesside at the forefront of the new green industrial revolution.”
May I correct the hon. Gentleman on one thing, though? It is popular in UK politics to kick George Osborne, but I have to correct the hon. Gentleman, who said that Claire Perry’s proposal was thwarted by George Osborne. I checked back, and Claire Perry became Energy Minister on 12 June 2017, a full year after George Osborne ceased to be Chancellor of the Exchequer.
Greg Hands
I will not. It was also four days after George Osborne left the House of Commons.
Greg Hands
I can check back, and I can check with George, but I think the hon. Gentleman’s dates are not correct.
On the points raised by the Scottish National party Members, there was quite a bit of heat about this yesterday, and I really dislike the implication that the UK is making a political decision to favour one place in this country as compared with any other. This has been a transparent process, and we set out the criteria. They called it an arbitrary decision, and it definitely was not. We have been full of praise for the Acorn Project and we remain absolutely committed to track 2. The commitment is to two such projects by the mid-2020s and four by 2030.
Finally, the Carbon Capture and Storage Association called yesterday’s announcement “amazing news”.
Carbon Capture, Usage and Storage
Greg Hands Excerpts(2 years, 6 months ago)
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The Minister of State, Department for Business, Energy and Industrial Strategy (Greg Hands)
I am today providing an update on the UK’s CCUS cluster sequencing process which was launched in May this year. Carbon capture, usage and storage, or CCUS, will be essential to meeting our net zero ambitions and will be an exciting new industry to capture the carbon we continue to emit and revitalise the birthplaces of the first industrial revolution.
The Prime Minister’s ten-point plan established a commitment to deploy CCUS in a minimum of two industrial clusters by the mid-2020s, and four by 2030 at the latest. Our aim is to use CCUS technology to capture and store 20 to 30 MtCO2 per year by 2030, forming the foundations for future investment and potential export opportunities. CCUS will be crucial for industrial decarbonisation, low-carbon power, engineered greenhouse gas removal technologies and delivering our 5GW by 2030 low-carbon hydrogen production ambition.
Our cluster sequencing process, which has, through the CCS infrastructure fund, £1 billion to provide industry with the certainty required to deploy CCUS at pace and at scale, has completed the first phase of the evaluation of the five cluster submissions received by my Department.
I am today confirming that the Hynet and East Coast clusters have been confirmed as Track 1 clusters for the mid-2020s and will be taken forward into Track 1 negotiations. If the clusters represent value for money for the consumer and the taxpayer then subject to final decisions of Ministers, they will receive support under the Government’s CCUS programme. We are also announcing the Scottish cluster as a reserve cluster if a back-up is needed. A reserve cluster is one which met the eligibility criteria and performed to a good standard against the evaluation criteria. As such, we will continue to engage with the Scottish Cluster throughout phase 2 of the sequencing process, to ensure it can continue its development and planning. This means that if Government choose to discontinue engagement with a cluster in Track 1, we can engage with this reserve cluster instead.
Deploying CCUS will be a significant undertaking; these are new major infrastructure projects for a new sector of the economy and carry with them significant risks to deliver by the mid-2020s. Government will continue to play a role in providing long-term certainty to these projects to manage these risks and bring forward the UK’s first CCUS clusters.
We remain committed to helping all industrial clusters to decarbonise as we work to reach net zero emissions by 2050, and we are clear that CCUS will continue to play a key role in this process. Consequently, the Government continue to be committed to Track 2 enabling 10Mtpa capacity operational by 2030. This puts these places—Teesside, the Humber, Merseyside, north Wales and the north-east of Scotland—among the potential early super-places which will be transformed over the next decade.
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Net Zero Strategy and Heat and Buildings Strategy
Greg Hands Excerpts(2 years, 6 months ago)
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The Minister of State, Department for Business, Energy and Industrial Strategy (Greg Hands)
With permission, Mr Speaker, I will make a statement on the net zero strategy and the heat and buildings strategy—but first, if I may, I will congratulate my right hon. Friend the Business Secretary and his wife Harriet on the birth of their daughter on Friday. I can report to the House that both mother and baby are healthy and doing well, as is the Secretary of State. I am sure that the whole House will join me in offering our congratulations. [Hon. Members: “Hear, hear.”]
The statement is all about future generations as well, because we know that we must act now on climate change. The activities of our economies, communities and societies are changing our environment. If we do not take action now, we will continue to see the worst effects of climate change.
We have already travelled a significant way down the path to net zero. Between 1990 and 2019, we grew our economy by 78% and cut our emissions by 44%, decarbonising faster than any other G7 country. Since 2010, the UK has quadrupled its renewable electricity generation and reduced carbon emissions in the power generation sector by some 70%. In the past year alone, we have published the Prime Minister’s 10-point plan for a green industrial revolution, the energy White Paper, the North sea transition deal, the industrial decarbonisation strategy, the transport decarbonisation plan, the hydrogen strategy and more. Earlier this month, we unveiled a landmark commitment to decarbonise the UK’s electricity system by 2035.
But there is still a substantial length of road to travel. We must continue to take decisive action if we are to meet our net zero goal, so today I am pleased to announce two major Government initiatives: the net zero strategy and the heat and buildings strategy. This is not just an environmental transition; it also represents an important economic change, echoing even the explosion in industry and exports in the first industrial revolution more than 250 years ago.
We will fully embrace this new, green industrial revolution, helping the UK to level up as we build back better and get to the front of the global race to go green. We need to capitalise on it to ensure that British industries and workers benefit. I can therefore announce that the strategy will support up to 440,000 jobs across sectors and across all parts of the UK in 2030. There will be more specialists in low-carbon fuels in Northern Ireland and low-carbon hydrogen in Sheffield, electric vehicle battery production in the north-east of England, engineers in Wales, green finance in London and offshore wind technicians in Scotland.
The strategy will harness the power of the private sector, giving businesses and industry the certainty they need to invest and grow in the UK and make the UK home to new, ambitious projects. The policies and spending brought forward in the strategy, along with regulations, will leverage up to £90 billion of private investment by 2030, levelling up our former industrial heartlands.
The strategy also clearly highlights the steps that the Government are taking to work with industry to bring down the costs of key technologies, from electric vehicles to heat pumps—just as we did with offshore wind, in which we are now the world leader. Those steps will give the UK a competitive edge and get us to the head of the race.
We have spoken often in this place of late about the importance of protecting consumers, and consumers are indeed at the heart of the strategy. Making green changes such as boosting the energy efficiency of our homes will help to cut the cost of bills for consumers across the UK. Switching to cleaner sources of energy will reduce our reliance on fossil fuels and, again, bring down costs down the line.
This plan is also our best route to overcoming current challenges. The current price spikes in gas show the need to reduce our reliance on volatile imported fossil fuels rapidly. Although there is a role for gas as a transition fuel, moving away from imports quickly is in the best interests of bill payers. With our ambitious set of policies, the strategy sets out how we meet carbon budgets 4 and 5 and our nationally determined contribution. It puts us on the path for carbon budget 6 and ultimately on course for net zero by 2050.
We are now setting up the industrial decarbonisation and hydrogen revenue support scheme to fund these business models and enable the first commercial-scale deployment of low-carbon hydrogen production and industrial carbon capture. We have also announced the HyNet and East Coast clusters as track 1 economic hubs for green jobs.
We have previously announced that we will end the sale of all new non zero emission road vehicles from 2040, and the sale of new petrol and diesel cars from 2030. The strategy explains that we will also introduce a zero emission vehicle mandate that will deliver on our 2030 commitment to end the sale of new petrol and diesel cars and vans.
To increase the size of our carbon sinks, we will treble the rate at which we are planting new trees in England by the end of the current Parliament. We will be a global leader in developing and deploying the green technologies of the future. The strategy announces a £1.5 billion fund to support net zero innovation projects, which provides finance for low-carbon technologies across the areas of the Prime Minister’s “Ten Point Plan”.
We have also published our heat and buildings strategy, which sets out our plans to significantly cut carbon emissions from the UK’s 30 million homes and workplaces in a simple way that remains affordable and fair for British households. We will gradually move away from fossil fuel heating and improve the energy performance of our buildings through measures such as grants of up to £5,000 towards the costs of heat pumps, a further £800 million for the social housing decarbonisation fund to upgrade social housing, and a further £950 million for a home upgrade grant scheme to improve and decarbonise low-income homes off the gas grid.
The year 2021 is a vital year for action on climate change. In just two weeks’ time, the UK Government will host the crucial United Nations COP26 conference in Glasgow. As the Prime Minister has said, it needs to be a “turning point for humanity”, the point at which we pull together—and pull our socks up—to keep 1.5 °C in reach. Hosting COP26 will also give the UK a huge opportunity to showcase our world-leading climate credentials and set an example to other countries to raise their own ambitions. The net zero strategy will take centre stage in our display, setting out our vision for a UK that is cleaner, greener, and more innovative.
Mr Speaker, we are ready for Glasgow, and I commend this statement to the House.
Edward Miliband (Doncaster North) (Lab)
I thank the Minister for his statement, and send my warmest congratulations—as I have already done directly—to the Secretary of State on the birth of his new baby.
Let me start by saying that it is good that tackling the climate crisis is a shared national objective across the House, and that we want the Government to succeed at COP26 in just ten days’ time. However, there are two central questions about the strategy that has been published today: does it finally close the yawning gap between Government promises and delivery, and will it make the public investment which is essential to ensure that the green transition is fair and creates jobs? I am afraid that the answer to both questions, despite what the Minister said, is no. The plan falls short on delivery, and while there is modest short-term investment, there is nothing like the commitment that we believe is required—and we know why. When asked at the weekend about the Treasury’s approach to these issues, a source from the Department for Business, Energy and Industrial Strategy said:
“They are not climate change deniers but they are emphasising the short-term risks, rather than long-term needs”.
The Chancellor’s fingerprints are all over these documents, and not in a good way.
We have waited months for the heat and buildings strategy, but it is a massive let-down. We are in the midst of an energy price crisis caused by a decade of inaction. Emissions from buildings are higher than they were in 2015. The biggest single programme that could make a difference is a 10-year house-by-house, street-by-street retrofit plan to cut bills and emissions and ensure energy security. There are 19 million homes below EPC band C, but according to the best estimates of today’s proposals, they will help just a tiny fraction of that number. Indeed, there is not even a replacement for the ill-fated green homes grant for homeowners. Can the Minister explain where the long-term retrofit plan is? Did BEIS argue for it and get turned down by the Treasury, or did he not make the case?
According to the Government’s own target, we need 600,000 homes a year to be installing heat pumps by 2028, but the Government are funding just 30,000 a year, helping just one in 250 households on the gas grid. Why does the Minister’s plan on heat pumps fall so far short of what is required? As for transport, we agree with the transition to electric cars—and I support and welcome the zero emissions mandate—but we need to make it fair to consumers. We should at the very least have had long-term zero-interest loans to cut the costs of purchasing electric cars. What is the plan to make them accessible to all, and not just the richest? Will the Minister tell us that in his reply? On nuclear, I was surprised, given the advance publicity, that the word did not even cross the Minister’s lips. We have seen a decade of inaction and delay on this issue, so can he tell us why there is still no decision on new nuclear?
The failure to invest affects not just whether this transition is fair for consumers but workers in existing industries. Take steel: it will cost £6 billion for the steel industry to get to net zero over the next 15 years. If we want a steel industry—as we do across the House—we will need to share the costs with the private sector. However, there is nothing for steel in this document, and a £250 million clean steel fund some way down the road will not cut it. Can he give us his estimates of the needs of the steel industry and how he thinks they can be met?
The same is true of investing in new industries such as hydrogen. There is a global race in these areas and I am afraid that the UK is not powering ahead but falling behind. Germany is offering €9 billion for a new hydrogen strategy; the UK is offering £240 million, and we are putting off decisions until later in the decade. We see the same pattern across the board, including on land use, industry and transport, and because of this failure to invest, there remains a chasm between promises and delivery.
Finally, it was noticeable that the Minister did not say that the plan would meet the target for the 2035 sixth carbon budget, but surely that is a basic prerequisite of the strategy to 2050. At less than halfway to net zero, do the policies in this document meet the target, or fall short of it? Despite hundreds of pages of plans, strategies and hot air, there is still a chasm between the Government’s rhetoric and the reality? My fear is that the plan will not deliver the fair, prosperous transition that we need and that is equal to the scale of the emergency we face.
Greg Hands
I thank the right hon. Gentleman for his warm words of congratulation to the Secretary of State and for his intention to join us in showing real leadership. I agree with him that this should not be a particularly partisan matter. The UK as a whole country expects to see our politicians working together, particularly in the run-up to our hosting the vital COP26. I will deal with his various points in turn.
On power, it is worth pointing out the success that we have had on renewables. The right hon. Gentleman was Secretary of State for Energy and Climate Change up to 2010. When he left office, renewables were only about 10% of our power mix; now the figure is around 43%. Offshore wind costs have come down by two thirds. He mentioned nuclear, but I am just about old enough to remember the 1997 new Labour manifesto, which stated that there would be no new nuclear projects. It took Labour 10 years to do anything at all on nuclear.
The right hon. Gentleman called our investment in heat and buildings a modest one, but it is £4 billion. The difference between us is that we want to go with the natural choices that families make and to work with businesses, finding the natural point at which a homeowner needs to replace his or her boiler and to incentivise the take-up of a greener choice. He says that the £450 million investment is somehow inadequate, but I think that it will kick-start demand. Octopus Energy and others have said overnight that they think that they can make heat pumps at an equivalent cost to natural gas boilers by April 2022. I have confidence in the ability of British industry and British energy companies to innovate.
On energy-intensive industries, we have our £350 million industry energy transformation fund and we are speaking continually with the sector. We will keep the House informed on that. On nuclear, I have said that new money has been announced. There is the £120 million future nuclear enabling fund for optionality for future advanced modular reactors. Of course we are sticking to our commitment for a final investment decision on a further nuclear power station to be taken in this Parliament.
On hydrogen, the right hon. Gentleman is right to say that the German Government have done good work, through my good friend Peter Altmaier, the German industry and trade Minister, but the UK also has a world-leading hydrogen strategy, which was launched in August. We are aiming for 5 GW of low-carbon hydrogen generation capacity by the year 2030.
On the right hon. Gentleman’s final comment about 2030, our commitment is unchanged, but let us look at his commitment for a moment. [Hon. Members: “It was 2035.”] His leader, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), backed a 2019 manifesto commitment to go to net zero by 2030. Such a commitment would cripple the hard-won economic growth that we have achieved over the past 30 years through our steady approach of growing the economy and reducing emissions at the same time. Even the GMB has said:
“Nobody thinks 2030 is a remotely achievable deadline.”
The CBI has said that there is no credible plan to achieving net zero by 2030. This Government have the right ambition. This is a transition, and it is full of opportunities for jobs and low and zero carbon growth across the UK. The right hon. Gentleman should be backing it in full in the lead-up to Glasgow.
John Redwood (Wokingham) (Con)
If heat pumps and electric cars are going to help, we will need to generate all our electricity from green sources, so when will the Government commission the very large amounts of new generating capacity we will need to make them work when the wind does not blow and the sun does not shine?
Greg Hands
I thank my right hon. Friend for, as always, putting his question very directly, which I have appreciated over many years in the House. I have mentioned our commitment to nuclear and our commitment to the gas sector as a transition fuel. Fortunately, at the moment, we are dependent largely on domestic gas production, in that 50% of our gas usage comes from the UK continental shelf while 30% comes from Norway. The point here is to ramp up our commitment to low and zero carbon fuels. That makes sense for the environment, for our economic security and for our diversification.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The key point in the announcement today is the fact that Peterhead has once again been betrayed. All along, warm words have been paid to the Scottish cluster, but we have been stabbed in the back again. Classing the Scottish cluster as a reserve is an even bigger insult. What representations has the Minister had from the Scottish Secretary of State about what is happening to Peterhead? Can he also confirm that this is a political decision rather than a technical one, given that the Scottish cluster ticks all the boxes and would have contributed to the hydrogen production target?
The Minister keeps going on about nuclear, but the reality is that, at £23 billion, Hinkley is the most expensive power station in the world. Its strike rate is £92.50 per megawatt-hour, compared with offshore wind at less than £40 per megawatt-hour. What is the capital cost in billions of pounds that the Government are willing to commit to, given that it could be better spent elsewhere? What funding is coming to Scotland on the back of the announcement of the social housing decarbonisation fund and the home upgrade grant schemes?
If we look at Scotland in the round, we see that it has contributed £350 billion in oil and gas revenues over the years. Where is the UK Government’s match funding for the £500 million just transition fund that the Scottish Government have committed to the north-east of Scotland? The Minister talks about levelling up, but his levelling up does not include Scotland. We have the highest electricity grid charges in Europe, which puts renewable energy in Scotland at risk, as it is 20% more expensive than in the south-east of England. That also affects the UK’s net zero trajectory. Scottish energy consumers are now made to pay for their nuclear, which we do not want, and Peterhead has been sacrificed for the red wall constituencies. When it comes to Scotland, the UK Government are not helping us tackle climate change but are instead adopting a scorched earth policy as we head towards independence.
Greg Hands
I spent significant time in Aberdeen last week, and I did not meet a lot of people who share the hon. Gentleman’s doom and gloom approach to all things when it comes to energy. I had meetings with Oil & Gas UK, Robert Gordon University, Harbour Energy, CHC Helicopter and Jim Milne of Balmoral Group, and I found a region and a city that are enthusiastic about the energy transition and our North sea transition deal.
I have already mentioned nuclear and the new funding that is available, and I am disappointed that the SNP remains resolutely anti-nuclear, which I think it will regret. I think the Scottish people do not agree with the SNP.
Today’s announcement on carbon clusters is for track 1, and it is not the end of the story—far from it. We have always been clear that we will have two industrial clusters by the mid-2020s, and four by 2030 at the latest. We have announced the Acorn cluster as a reserve. It met the eligibility criteria and performed to a good standard against the evaluation criteria, and we will continue to engage with it throughout phase 2 of the sequencing process to ensure it can continue its development and planning. We remain committed to track 2. This morning the Carbon Capture and Storage Association welcomed today’s announcement as “amazing news” for carbon capture and storage.
The hon. Gentleman asked about home grants. Of course, a lot of these policy areas are devolved. He might have a word with his SNP colleagues in Edinburgh and perhaps get them to participate, as they will get Barnett consequentials. Ironically, the heat pumps scheme for England and Wales will be administered by Ofgem out of its office in Glasgow. Those administering the scheme will not be eligible for it themselves unless the Scottish Government take action to match what the UK Government have said.
Finally, on the North sea transition, energy in Scotland and the move to net zero, I urge the hon. Gentleman for once to take a more positive approach and get with us, particularly as we prepare to host the world in Glasgow in just two weeks’ time.
Mr Mark Harper (Forest of Dean) (Con)
Levelling up is very important, and it means all parts of the country, including rural areas, having the ability to become net zero. In constituencies like mine, many homes are not capable of being brought up to very high levels of energy efficiency and are not on the gas grid. What is the solution to make sure owners of those homes, who are perhaps not on the highest of incomes, can decarbonise their heat at an affordable price?
Greg Hands
My right hon. Friend is right to highlight off-grid properties and the importance of making sure that the overall Government agenda, including levelling up, reaches those people. On top of my announcement, we have already committed £2.5 billion to off-grid properties through the home upgrade grant and will explore extending it to 2030.
Darren Jones (Bristol North West) (Lab)
I thank the Minister for giving me an advance copy of his statement this morning.
People across the country will want to know whether the promises made today will actually be delivered or whether they will, once again, result in failure. Will the Minister set out how the voucher schemes announced today will be delivered differently from the failed schemes of the past, such as the green homes grant?
Greg Hands
The hon. Gentleman asks a reasonable question with a rather unreasonable preamble, if he does not mind my saying so. I do not think there have been failures of Government policy in this area. Actually, our overall record—not just this Government’s record but the record of the country as a whole over the past 30 years in reducing emissions while achieving economic growth—is one of success.
Of course we are learning from previous schemes, and we are making sure that this new scheme goes with the flow and is simpler and easier to administer. We will also make sure that the parameters are set very clearly in the lead-up to the launch next April.
Andy Carter (Warrington South) (Con)
I welcome the Government’s support for the HyNet cluster, which is a huge vote of confidence in north-west businesses. Does my right hon. Friend agree that this announcement will put the north-west and the UK at the cutting edge of hydrogen technology and will help to secure thousands of jobs in the north-west, including in Warrington?
Greg Hands
I concur with my hon. Friend, who is a tireless champion for his Warrington constituents. We are delighted with today’s announcement. Carbon capture, utilisation and storage is a huge opportunity for the UK. When I talk to the industry, it makes strong points about how the UK is geologically, geographically and economically well suited to make sure that carbon capture, utilisation and storage is a big part of our low-carbon future, and I commend him for his support for the HyNet cluster in the north-west of England and across into north Wales.
Clive Lewis (Norwich South) (Lab)
There are two problems with the Government’s net zero strategy: “net” and “zero”. The latter because it is not zero—we know there are sectors, such as aviation, that will be pumping out millions of tonnes of emissions into the atmosphere beyond 2050—and the former because we know the Government are relying on negative emissions technologies that, frankly, are based on science fiction and for which there is no prospect of mass roll-out. We are banking on this to rescue us from the climate crisis, but it is a “burn now, pay later” strategy that is not fit for purpose.
Greg Hands
That is sort of a question, for which I thank the hon. Gentleman. He might be a proponent of the Labour party’s net zero by 2030 policy. I am not sure whether the shadow Secretary of State supports that policy, which I think was ratified at the Labour party conference.
We have already talked about carbon capture, utilisation and storage, which is a sound technology in which the UK will look to be a world leader. The Climate Change Committee itself has said that it will not be possible for every single part of the UK economy to be net zero. That is the importance of the word “net” in all of this. It is about making sure that we get to net zero by 2050, so it does not have to apply across all sectors. Of course we want it to apply across all sectors, and the North Sea transition deal for the oil and gas sector has a commitment to go to net zero, but overall it is about making sure the country gets to net zero by 2050.
Graham Stuart (Beverley and Holderness) (Con)
I congratulate the Minister on today’s announcement. We will be celebrating the decision to increase the home upgrade grant and, of course, the excellent decision to make the east coast cluster one of the two carbon capture projects in the initial stage. Does he agree that we must make sure that, following the success of our offshore wind deployment, we build industrial capability in carbon capture and storage and in hydrogen so that we can be an export superpower in these areas over the years ahead?
Greg Hands
My hon. Friend and I spent many happy, productive years working together in the Department for International Trade to market our technological breakthroughs in clean energy, particularly in offshore wind. He makes an extremely strong point about CCUS. When I talk to people in the sector, one of the points they make most frequently is about the UK’s ability to be an early mover, to get in quickly and to take advantage of export capabilities. I completely agree and commend my hon. Friend for the work he did over quite some time as our exports Minister.
Nick Smith (Blaenau Gwent) (Lab)
The steel industry’s transition to net zero requires £6 billion of investment, yet the clean steel fund provides only 4% of that. Does the Minister really think that is enough?
Greg Hands
We are in constant dialogue with the steel sector, and the hon. Gentleman and I both know that half of steel production and half the jobs in the sector were lost under the last Labour Government. Steel has been facing worldwide pressure for some years, but we are strongly supportive of the UK steel sector. The Secretary of State and the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for North East Derbyshire (Lee Rowley), who now has responsibility for steel, frequently engage with the sector. We continually speak to the sector and will keep the House informed. Personally, I think our £350 million industrial energy transformation fund is a considerable commitment to the sector.
Virginia Crosbie (Ynys Môn) (Con)
I welcome the steps set out by my right hon. Friend to unleash the potential of our whole country. Can he reassure my Ynys Môn constituents that they will benefit from the 440,000 net zero jobs being created by 2030 and the £90 billion of private investment? Will he accept my invitation to visit Wylfa Newydd and see at first hand why the Prime Minister is such a fervent supporter?
Greg Hands
I thank my hon. Friend, who is a tireless advocate for Ynys Môn, particularly on the economy and jobs. Of course, Ynys Môn, the whole of Wales and north Wales will benefit from the new green jobs that this net zero strategy will help to foster. The new money announced today for the future nuclear enabling fund is for optionality for the future, so that we can make future decisions based on good information on nuclear. Obviously, that includes potential for sites such as Wylfa.
Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)
The Minister talks, in effect, of crumbs for Scotland, the renewable energy capital of Europe, with a few jobs as technicians offshore, whereas my constituency is the fourth most impacted by the cuts to working tax credit and universal credit. We can couple that with the escalation of fuel prices, so I want to know: why do the UK Government insist on levying connection charges not to France or the Nordic countries, but uniquely to Scotland, driving away investment, jobs and ambitions for our green future and for an end to fuel poverty in Scotland?
Greg Hands
I did not quite understand the hon. Gentleman’s point about connectivity, but what I will say to him is this: Scotland is vital for the UK’s energy needs, both currently and in the future. On oil and gas, 50% of the gas currently consumed in this country comes from the UK continental shelf, and Scotland is vital for that. It is also vital for our future offshore wind capabilities, and other low-carbon and renewable energies. That is exactly the technology, capability and capacity that I saw last week in Aberdeen. Perhaps he might get a little more optimistic about Scotland’s future when it comes to energy, because I certainly am.
Jo Gideon (Stoke-on-Trent Central) (Con)
I welcome my right hon. Friend’s statement and the Government’s commitment to helping all industrial clusters to decarbonise as we transition to net zero by 2050. As an energy-intensive sector, the decarbonisation of the ceramics industry will play a crucial role in this transition, which is why I am delighted to back the British Ceramic Confederation’s plans for a virtual ceramics sustainability hub, based in Stoke-on-Trent, to develop new decarbonisation technology, including carbon capture and storage. Does the Minister agree that Government support is vital to help the ceramic industry decarbonise by 2050? Will he meet me and other Stoke colleagues to discuss these ambitious plans for the creation of a virtual ceramics sustainability hub?
Greg Hands
I am always ready to meet our three brilliant Conservative Members of Parliament for Stoke. I have met them over the years on a host of different topics, often in relation to ceramics and with the BCC. I remind my hon. Friend about the £350 million industry energy transformation fund and the fact that we will be in continuous dialogue with the three MPs and with the sector, and of course I would be very happy to meet her and her colleagues.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Once again, we hear warm words, big headlines and big figures from the Government, but too little detail, as the Public Accounts Committee has repeatedly highlighted. So I hope the Minister will make sure that there are repeated and meaningful reports to Parliament on these figures, good or bad, so that we can keep a track on this. Will he also look at the issue of people’s behaviour? As others have highlighted, there is a challenge on not just the money but the hassle factor, for example, in greening homes that are very challenging to insulate. How is the Department looking at that? Will he commit to do so?
Greg Hands
The hon. Lady asks a set of very reasonable questions. First, I commend her for saying that the Government have announced big figures, because her Front-Bench colleague, the right hon. Member for Doncaster North (Edward Miliband), seemed to think they were very small figures. I agree with her that these are very, very big figures of Government money being committed.
The hon. Lady asked a reasonable question on people’s behaviour. Of course we want to make things as straightforward, simple and transparent for consumers as possible. We want people to be making the change—to be incentivised—and the Government are putting in the financial incentives. We want people to feel incentivised to make the right choices. That can be something as simple as making the scheme straightforward and easy to understand. That is where we will be moving on the replacement boiler programme, making sure that it is as easy as possible for people to understand when it starts next April.
Mr Steve Baker (Wycombe) (Con)
The cost-effectiveness of heat pumps is critically dependent on the cost of electricity, and there is good reason to think that the overall of cost of renewables to the bill payer is still extremely high, including subsidies. So will the Minister subject his assumptions on his heat pump strategy to a comprehensive audit of the price of renewable electricity?
Greg Hands
My hon. Friend is tireless in his ability and desire to get to the bottom of what lies behind Government figures. Perhaps I might commit to meet him, as, having taken on this brief four weeks ago, I know he takes a strong interest in all aspects of energy and climate change. Perhaps I might agree to meet him to discuss his concerns first, before committing to a new, huge audit of anything.
Wera Hobhouse (Bath) (LD)
I welcome the Government’s setting an end date for the use of gas boilers, but of course switching to electricity for heating our homes makes sense only if the electricity used is not derived from fossil fuels. Because of the Lib Dems in government, the renewables sector has made big strides, but it is by no means accelerating in the way it should be. So will the Government take the opportunity before COP26 to announce an end date for using fossil fuels in the production of electricity?
Greg Hands
We already have, as I mentioned in the statement, our commitment to a decarbonisation of our electricity system by 2035. However, may I take issue with her about renewables because we have had a massive amount of success, particularly since 2015? The cost of offshore wind, for example, has been reduced by two thirds since 2015, when there was a sole Conservative Government. We also have the commitment to have a really big increase in renewables. We currently have the world’s largest installed offshore wind capacity, at about 10 GW. We are committed to not resting on our laurels and to quadrupling that capacity in the next 10 years, to 40 GW.
Duncan Baker (North Norfolk) (Con)
The UK Government should be roundly applauded: we continue to be one of the nations in the world that decarbonises at one of the fastest rates, as my right hon. Friend has said. Operational carbon is just one of the pieces of the jigsaw, as is embodied carbon. What assessment has he made of regulating embodied carbon in the construction sector?
Greg Hands
My hon. Friend makes a good point on the importance of the construction sector. Obviously, there has to be a read-across between Government policies, our commitment to infrastructure, our commitment to new homes and so on. So I will happily meet him to discuss the construction sector and its carbon footprint. On decarbonising the fastest in the G7, I thank him for his words of support. This has been a huge UK success story, particularly over the past 30 years. In the first half of my adult life, we have done really well as a country overall. I recall that in 1989 the Green party ran on a manifesto that said we could take action on global warming only if we either froze or reduced the size of the economy. This country, with its 78% increase in the size of the economy, while reducing emissions by 44% in the first half of my adult life, has shown the world the way forward to reaching net zero at the end of—well, I hope not at the end of the second half of my adult life, but in the second half of my adult life to come.
Hilary Benn (Leeds Central) (Lab)
There are about a quarter of a million homes in Leeds with gas boilers. I have many constituents, as all Members have, who are struggling to pay the gas bill at the moment, let alone face the prospect of paying between £6,000 and £15,000 for a new heat pump, notwithstanding the grants that the Minister has announced today or the hope, which we all share, that the cost of heat pumps will fall. What is the Government’s plan for ensuring that all households in our communities are able to make the transition to a zero-carbon future, which we know must happen?
Greg Hands
We remain absolutely committed to our existing target of 600,000 homes per annum having a heat pump by 2028, and the scheme announced today shows that direction of travel. We are not saying that the scheme will provide a heat pump for every house; it will kick-start the market. We have already seen really positive reactions. I mentioned the reaction of, among others in the sector, Octopus Energy, which said overnight that it thinks it can deliver an equivalent price—we will watch such commitments closely—by as early as April next year. That is where the opportunity lies for the right hon. Gentleman’s constituents and mine: not in the Government’s coming along and replacing everybody’s gas boiler, but by the Government’s sending a signal to kick-start the market and show that we want the private sector to respond positively.
Mark Pawsey (Rugby) (Con)
Rugby is at the heart of National Grid’s gas pipeline network, which runs across the country from one side to the other. In the summer, I visited National Grid’s Churchover site, which is a substantial national asset. We know that harmful emissions from gas can be reduced in the short term by putting hydrogen up to 20% in the existing natural gas network, and in the longer term we can move to 100% hydrogen. Will the Minister confirm that, although we hear about stopping the installation of gas boilers, a substantial future for gas in our energy supply remains?
Greg Hands
My hon. Friend makes a good point. Of course, gas has a substantial future in our energy supply, certainly in the short term. Currently, 50% of our gas comes from the UK continental shelf, so it is very important for us, notwithstanding high international wholesale gas prices. The Climate Change Committee has itself said that it is not inconsistent with net zero for there to be a contribution from the oil and gas sector, even in 2050. It is now a question of working with the sector, which is why we have done the North sea transition deal. We are working with the industry, in partnership with the Oil and Gas Authority, to make sure that we make the necessary transformation. A lot of the skills in the oil and gas sector are transferable to, for example, offshore wind.
Alex Cunningham (Stockton North) (Lab)
As chair of the all-party parliamentary group on CCUS, I am delighted by today’s announcement that the Tees, along with our Humber colleagues, will lead the way on CCUS and hydrogen production. In the past, we have had several false starts, with the Government withdrawing funding, so I hope we get it over the line this time. How will the Minister ensure that Teesside workers will get the jobs and skills to develop the new industries and that the people of Teesside get a real dividend?
Greg Hands
I welcome the hon. Gentleman’s warm congratulation on that decision. Perhaps he might have a word with some of his colleagues near him on the Opposition Benches. He makes a good point about Teesside. We will work closely with Teesside Members of Parliament and with the Tees Valley Mayor, Ben Houchen, with whom I had an excellent conversation on this subject just a couple of weeks ago, to make sure that the skills base in Teesside improves and continues to be trained to make sure that it can continue to meet the challenges of the low-carbon future. When I was up in Hartlepool in Teesside just a few weeks ago, I was incredibly impressed to see the new investment in, for example, cabling by an offshore wind company. That company was adamant that there were good skills there, but we must keep working to improve those skills as we go forward.
Derek Thomas
I welcome the Minister’s statement and the strategy itself, which says that 80% of fossil-fuel-heated off-grid homes could accommodate a low-temperature heating system. The potential to develop the most fuel-poor homes, many of which are in my constituency, is enormous. The Minister is right to mention the development and affordability of heating units themselves as things progress, but to fit such a unit, a person needs to insulate their home well and increase the size of their radiators. They may even need to increase the supply of energy to their home, as I found out in my own case. Will the Minister give careful thought to the up-front cost of fitting such a unit for a fuel-poor home, and all the other costs that make a home the home that people deserve?
Greg Hands
My hon. Friend makes some excellent points. I spent part of my childhood in Cornwall and I thought that where I lived then was pretty far from here, but his constituency is yet further, so I know some of the challenges that face his St Ives constituents. We want to keep the scheme as simple, straightforward, transparent and easy-to-understand as possible, but my hon. Friend’s points about insulation and energy efficiency in homes are well met. I will continue to talk with him and other Cornish MPs, and with MPs from other parts of the country, as we move forward.
Deidre Brock (Edinburgh North and Leith) (SNP)
The north-east of Scotland is the home of the offshore industry and the obvious location for a carbon-capture project. Years ago, the Tories pulled the plug on the carbon capture and storage competitions before Peterhead won through, and it is now clear that the UK Government have put the holding of seats in the red wall of northern England ahead of saving jobs in Aberdeen and the north-east. How can the Government say they are delivering a just transition if the Tories put pork barrel politics ahead of supporting the ideal location for CCUS at St Fergus?
Greg Hands
I get tired of the politics of division that we hear from the SNP all the time. It is the politics of pitting Scotland against, in this case, the north of England. We are a Government for the whole United Kingdom and I bitterly regret the hon. Lady’s language and her accusation that we have somehow put the north of England in a privileged position relative to other parts of the UK. We have been clear that in track 1 there will be at least two industrial clusters by the mid-2020s and four by 2030 at the latest. We have the Acorn cluster as a reserve. As I said earlier, it met the eligibility criteria and performed to a good standard. We will continue to engage with the sector so that it can continue its development and planning.
David Duguid
On behalf of Cornwall—no, I rise to speak on behalf of my constituency of Banff and Buchan, to which I shall turn in a moment. First, I thank my right hon. Friend the Minister for his visit last week to Aberdeen, where he expressed the Government’s ongoing and continuous support for the oil and gas sector and its valuable role in the energy transition to net zero. The North sea transition deal includes carbon capture and storage; far be it from me to correct the hon. Member for Kilmarnock and Loudoun (Alan Brown), but the hon. Member for Edinburgh North and Leith (Deidre Brock) got it right: it is St Fergus, not Peterhead. Is it not entirely predictable from SNP Members? They have been practising their script since before the bids even came in—they gleefully declare betrayal.
Given the fact that the Government have already expended £31 million in the Scottish cluster, will my right hon. Friend meet me to discuss the Government’s plans to help the Scottish cluster to develop and plan not only as a reserve but certainly for the next track of negotiations?
Greg Hands
I will of course meet my hon. Friend to discuss that. I thank him for taking a strong interest in my visit to Aberdeen last week. He is right that the oil and gas sector is in transition, welcomes the North sea transition deal and wants to work closely with the Government, the OGA, Oil & Gas UK and so on in continuing to make a massive contribution to Scotland and the whole of the United Kingdom.
On carbon capture, utilisation and storage, this is not the end of the story, as I said. We need to make a decision and make progress, but Acorn is the first reserve. If Members look at the rest of our policy, they will see that there is potential to expand our commitment yet further in advance of 2030.
Ruth Cadbury (Brentford and Isleworth) (Lab)
The delivery of a target of 600,000 new heat pumps by 2028 requires significant resource; otherwise, only the very well-off will be able to afford the cost of both the heat pump and the additional insulation that most homes would need to make the pumps cost-effective. As the hon. Member for St Ives (Derek Thomas) said, many homes will need additional power supplies. Will the Government therefore extend their ambition and link the programme for adequate insulation with adequate funding for heat pumps, such that more people than just the very well-off will be able to deliver the changes according to the Government’s strategy?
Greg Hands
The hon. Lady underestimates our commitment, because it is not 600,000 new heat pumps, but 600,000 new heat pumps per annum by 2028. This is a huge commitment, but it is a commitment that is best met largely by the private sector. That is why we strongly believe that the announcement that we made today on the grants of up to £5,000 will kickstart the private sector in providing these heat pumps. I have already pointed overnight to the welcome of this announcement by the energy companies, which think that they can get the price of those heat pumps down. That is the right strategy, rather than having the Government pay for everything to meet that commitment. I think it is about working with the private sector. The ball is now partly in the energy companies’ court to see whether they can get the price of those heat pumps down.
James Wild (North West Norfolk) (Con)
Many people in villages in North West Norfolk live in poorly insulated homes. Can my right hon. Friend ensure that the home upgrade scheme and other schemes in this strategy help my rural constituents to live in warmer, more efficient homes?
Greg Hands
The comments that I made in relation to Cornwall earlier probably also apply to parts of north Norfolk. Of course I will commit to making sure that households that are in fuel poverty and that have poor insulation, including those in remote areas, will get the support that they need and deserve.
Andy McDonald (Middlesbrough) (Lab)
Many of us on the Labour Benches, including my right hon. Friend the Member for Doncaster North (Edward Miliband) and my hon. Friend the Member for Stockton North (Alex Cunningham), have been articulating the case for carbon capture, usage and storage for many years. Despite the shortcomings of the statement, including any clarity on whether the net zero strategy will meet the 2035 sixth carbon budget, the east coast cluster announcement is most welcome. Will the Minister ensure that the collective voice of working people, through their trade unions, is heard, and that all stakeholders, including Ben Houchen, the mayor, part company with the anti-trade union rhetoric and work in an inclusive and co-operative manner to ensure that the economic and employment opportunities are fully delivered for working people in my Middlesbrough constituency and across Teesside?
Greg Hands
I absolutely agree with the hon. Gentleman on working with workforces. The commitment to net zero is a huge, country-wide endeavour and we must carry everybody with us. May I perhaps suggest that he has a word with the trade unions, because they have been extremely critical of Labour’s official policy, which is to get to net zero by 2030? As I have mentioned, the GMB has said that nobody thinks that 2030 is a “remotely achievable deadline”. Another said that it would be a huge upheaval, leading to job losses in the industry. I agree with what he has to say, but perhaps he might have a word with those on his Front Bench as well.
Richard Fuller (North East Bedfordshire) (Con)
The transition to net zero emboldens politicians to use ambitious rhetoric, but they cross their fingers that the reality of implementation will be as planned. That is because, as my right hon. Friend knows, he is dealing with tremendous amounts of uncertainty over the fact that chosen technologies may not work or may be superseded, that anticipated unit cost reductions may not be achieved and that the first-mover advantage may result in heavy costs but illusory or temporary sources of competitive advantage. Can he advise me on what his Department is doing to calibrate correctly the extent of the use of taxpayers’ money, the extent of additional levies on business and the extent of additional burdens on householders in the achievement of his strategy?
Greg Hands
Mr Speaker, as a former Chief Secretary to the Treasury, you can imagine that I take a strong and ongoing interest in exactly that sort of question. We at BEIS have those discussions with the Treasury and the whole of Government all of the time to make sure that the plan here is both achievable and affordable and that it will be realised to enable us to meet all of those targets that we have set ourselves. I am looking forward to interacting with my hon. Friend on any specific concerns that he may have going forward, but his question and his points are the sorts of things that are very much on our minds.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Obviously, £450 million for heat pumps across England and Wales is a good thing, but it is set to benefit only 0.3% of Welsh households, while the future generations commissioner calculates that the cost of decarbonising Wales’s housing stock stands at £14.75 billion. The Treasury has resisted every step on the road to COP26. Our economy, our environment and our communities need Treasury funding to step up to the mark to lead the transformational investment. That will give the private sector confidence. How confident is the Minister that this news will reach us within the next 10 days?
Greg Hands
A very substantial amount of Government money is going into the heat and building strategy—I think it is in the region of £4 billion. I will correct the right hon. Lady. On this heat pump scheme that we have introduced, the idea is that it kickstarts the market and gets the private sector providing solutions. We have already seen a really good response to our signals from the private sector. That is exactly right, because the solutions to issues such as home heating will lie principally with the private sector.
Jack Brereton (Stoke-on-Trent South) (Con)
Further to the points made by my hon. Friend the Member for Stoke-on-Trent Central (Jo Gideon) earlier, the ceramics sector in Stoke-on-Trent has faced significant energy price volatility recently. It does want to transition, but it cannot do so on its own while continuing to be competitive internationally. Will my right hon. Friend ensure that we have our fair share of the additional R&D money that this Government are committed to investing in the UK?
Greg Hands
I am absolutely committed to that. My BEIS colleagues who look after research and development are absolutely committed to making sure that British ceramics are not sold short when it comes to R&D. We have a huge commitment to the sector overall, which my hon. Friend will know from the many years that we have worked together, particularly on trade issues as they affect the ceramics sector, including trying to break down trade barriers to make sure not only that our industry flourishes here in the UK, but that our exports do as well. I commend the work that he and all of the Stoke Conservative MPs have been doing for the sector for some years now.
Rachael Maskell (York Central) (Lab/Co-op)
Missing from the plan is the retrofit skills strategy. The City of York Council has a backlog of more than 6,000 maintenance and retrofit jobs to do. How does the Minister expect those skills to come forward and how will people be trained? Why has he left it so late to upskill the workforce?
Greg Hands
I agree with some of the points that the hon. Lady makes about the importance of skills, but I do not think that it is about our delivering the message late. This Government’s commitment to skills and to reskilling if necessary has been absolutely clear. It can be seen right the way across Government in the very close work being done together by BEIS and the Department for Education. I see it in so many sectors. I will mention again my visit to Aberdeen last week. I appreciate that Aberdeen is some distance from her constituency, but the sector there has to be able to reskill a lot of people from offshore oil and gas to offshore wind. It is that kind of thing that we need to see on a transition and a long-term basis. It is exactly this idea of making sure that we can retrain and reclassify people from today’s skills to fit the skills for tomorrow. That is absolutely part of our commitment.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
The Minister talks about ending the sale of petrol and diesel cars by 2030. To do so, we will need drivers to switch to zero-emission vehicles over the next decade. Despite the upfront costs of electric cars still being significantly higher, the financial incentives to switch continue to be diluted. I welcome the shadow Secretary of State’s support for the SNP Scottish Government’s interest-free loan scheme for new and used zero-emission cars, but the Government’s zero-emission vehicle mandate will not even be legislated on until 2024. Nearly half the decade will be behind us when the mandate comes in. Why are the Government moving this policy forward in first gear?
Greg Hands
I disagree with the hon. Gentleman. The transport section in the net zero strategy is very comprehensive on this and very extensive on how we get more people to switch to electric vehicles. In terms of some of the details, I invite him to ask my right hon. Friend the Secretary of State for Transport who leads on this at the next Transport questions.
Mr Clive Betts (Sheffield South East) (Lab)
The other week, Lord Deben, the chair of the Climate Change Committee, speaking at the Housing, Communities and Local Government Committee, indicated that, if we are to hit the Committee’s targets, local government has an incredibly important role to play in the retrofitting of existing homes, the building of new homes, local planning policies and local transport policies. Is it therefore not disappointing that there is not one single mention of the role of local government in the Minister’s announcement today? What has the Minister to say about that?
Greg Hands
I refer the hon. Gentleman to the annex of the net zero strategy, which sets out in some detail our response to Lord Deben’s annual report earlier this year. I think he will find in the annex a lot of the good mentions of local government for which he has been looking.
Kerry McCarthy (Bristol East) (Lab)
The zero-emissions vehicle mandate is welcome, although, as the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) said, the Government do need to get a move on. They have been cutting plug-in grants year on year, and there are now reports that the Chancellor wants to axe them all together. What in this strategy will actually help to make the purchase of electric vehicles more affordable for the average consumer?
Greg Hands
Nobody should doubt the Government’s commitment to getting a switch to electric vehicles. I certainly hope that the shadow Secretary of State has been taking an interest in that in recent times—
Greg Hands
He is nodding in the affirmative, so that is one more.
Like the overall commitment, this commitment is very much on an ongoing basis. I refer the hon. Lady to the transport section of the net zero strategy and to the annex regarding the Climate Change Committee’s report.
Anna McMorrin (Cardiff North) (Lab)
The Minister says that he wants to work collaboratively, yet he did not reach out to the Welsh Labour Government or share plans, despite saying that he was going to. Of course, plans on net zero are welcome, but this is greenwash wrapped up with a great big green bow. Only the most well off will benefit from the heat pumps, and the Government have not made clear the new measures that householders will also need, including insulation, water storage and new radiators. The Government are also still building truly awful, inefficient homes. When are they going to step up and really take the action needed to meet the zero carbon commitment?
Greg Hands
The hon. Lady has packed a lot into that question, but let me come back to her with two points. First of all, we have shared an advance copy of the plans with the Welsh Government and I spoke to the Welsh Government Minister yesterday on this very topic.
Secondly, the hon. Lady says that only the well off will benefit. Our target is 600,000 homes per annum; that will reach down very far into the homes in this country. I am absolutely confident of that, particularly given the commitments being made by different energy companies to make heat pumps cheaper. I mentioned earlier the commitment from one company overnight to make a heat pump of equivalent price to a gas boiler. That gives rise to good optimism about the affordability of this new technology.
Jack Dromey (Birmingham, Erdington) (Lab)
That we move to warm homes fuelled by heat pumps is welcome, but warm words are not enough. What guarantee can the Minister provide that the Government will use taxpayers’ money to invest in heat pumps made in Britain, creating jobs here in Britain and supporting British business?
Greg Hands
Part of this announcement is of taxpayers’ money exactly for this sector. My understanding is that the UK is a real leader in heat pump technology, but if the hon. Gentleman wants me to commit to us becoming a sort of protectionist nirvana for the future of the UK in the sector—absolutely not. We need to ensure that we are an open market; we need to be exporting our technology. Earlier, a lot of my colleagues asked about export opportunities. It is difficult to have export opportunities if we are closing down imports at the same time. Yes, there is key British technology in the sector. We need to ensure that it is affordable for consumers, and that we take advantage of export opportunities for a lot of that key technology.
Clive Efford (Eltham) (Lab)
I expected to hear more in the Minister’s statement about partnership with local government. Local authorities up and down the country are trying to innovate and to pilot schemes to decarbonise homes. My own local authority is investigating the possibility of using green open space to have a district ground source heat pump scheme that would engage with private homes in the area; that is engaging with the private sector as well. Without local government, the Minister’s strategy is not going to work, so what is he going to do further to engage local government?
Greg Hands
I welcome the hon. Gentleman’s approach. As I said earlier, this strategy is going to need all of us—central Government, our key city and regional Mayors, the devolved Administrations, businesses, local government and others—to work together to get to net zero. I would be delighted to work with the local government sector. My right hon. Friend the Secretary of State for local government—the Secretary of State for Levelling Up, Housing and Communities—takes a keen interest in this agenda. I am sure that we will work together to ensure that local government plays an important and crucial role in getting to net zero by 2050.
Geraint Davies (Swansea West) (Lab/Co-op)
The Minister knows that steel made in Wales and the rest of the UK is half as carbon-intensive as undercutting steel from China. Moreover, our carbon footprint, although low on production at 4.8 tonnes per person is a much bigger 8 tonnes on consumption, because we now subcontract a lot of our manufacturing. Will he look carefully at pursuing a carbon border tax, so that we can play on an even playing field, support local jobs in manufacturing and steel, and help to tackle climate change? Will he announce and suggest that at COP26?
Greg Hands
The chair designate of COP26 says that carbon border adjustment mechanisms will not be part of the discussions at COP26, but the UK is closely watching that debate. We are looking at the European Union proposals. Of course, we need to ensure that they are World Trade Organisation-compatible and that they do not discriminate against the developing world, particularly much less developed countries. The CBAMs debate is very much alive and we continue to study it very closely indeed.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his announcement and his clear commitment to all regions of the United Kingdom, particularly to Northern Ireland. I welcome the strategy and the decision to end the sale of gas boilers by 2035. What incentives can the Minister offer to builders currently developing to make those changes to new builds now, not to wait until 2034 to change that skills base and ability? Is upskilling part of the Government’s agenda?
Greg Hands
Upskilling is very much part of the Government’s agenda. On how the heat pump ready programme will be operating, if I understand it correctly, that is a Northern Ireland-only scheme, but we have seen that scheme in operation and it will help to inform the England and Wales scheme. The scheme will also support the Government’s target of 600,000 installations a year by 2028, which also covers Northern Ireland.
Stephen Flynn (Aberdeen South) (SNP)
In 2015, the UK Government pulled the plug on £1 billion of carbon capture and storage investment in Peterhead. Today, they have repeated that same mistake—a betrayal of the north-east of Scotland—by pulling the rug out from underneath the Acorn Project. The Minister knows that Scotland cannot meet its net zero ambitions without carbon capture and underground storage, so why is he shafting Scotland?
Greg Hands
The hon. Gentleman might have been here at the beginning of the statement; if a Member wishes to participate in a statement, it is common practice to be here at the start. As he was not here at the beginning, he missed me explaining the basis behind the decision. Government policy has always been clear that there would be two industrial clusters by the mid-2020s, but four by 2030 at the latest. We have announced the Acorn cluster as a reserve. I praise the scheme for meeting the eligibility criteria. It also performed to a good standard against the evaluation criteria. We remain absolutely committed to track 2.
Investment in Green Projects
Greg Hands Excerpts(2 years, 6 months ago)
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The Minister of State, Department for Business, Energy and Industrial Strategy (Greg Hands)
A year on from the publication of the ten point plan the Government can confirm more than £5.8 billion of investment in green projects has been secured, along with at least 56,000 jobs in the UK’s clean industries.
This major green investment boost helps to drive forward the Government’s ambitions to make the UK a global leader in green technology and finance. It includes more than £650 million in advancing offshore wind this year alone, supporting almost 3,600 jobs across the Humber and North-East, and over £900 million in accelerating the shift to zero emissions vehicles. As part of this Envision AESC will invest over £400 million in battery manufacturing, for example, as part of a £1 billion project with Nissan and Sunderland Council to create a flagship electric vehicle hub. ENI Spa has invested more than £400 million in offshore wind.
This week’s global investment summit in London is expected to attract almost 200 leading industry figures from around the world to invest in the best of UK green business and innovation. Securing private investment for clean technology is a core part of the Government’s strategy to meet our world-leading emissions reductions targets over the next decade and achieve net zero by 2050. Our upcoming net zero strategy, to be published this week, builds on the Ten Point Plan, setting out how we will deliver on our net zero commitments, giving businesses the certainty they need to invest.
Further progress since the ten point plan includes:
Securing around £1.5 billion of investment into our offshore wind industry, supported by the Government’s £160 million scheme to upgrade ports and infrastructure. Renewables now represent almost 40% of the UK’s total electricity generation.
Kicking off the biggest-ever round of our flagship renewable energy scheme for low carbon electricity—contracts for difference—with £200 million for offshore wind projects and £24 million for floating offshore wind.
Publishing the hydrogen strategy to grow the UK hydrogen economy, consulting on design of the £240 million net zero hydrogen fund, and announcing funding of seven real-world hydrogen transport pilots.
Committing £20 million to increase on-street charge points for electric vehicles and providing £50 million to support charge point installations.
Publishing our transport decarbonisation plan and national bus strategy, as well as supporting Coventry to become UK’s first all-electric bus city and consulting on world-leading pledge to end the sale of all new, polluting road vehicles by 2040 and net zero aviation emissions by 2050. This is on top of more than 300 new walking and cycling schemes.
Providing £1 billion to upgrade schools, hospitals, and council buildings with energy efficiency measures and committing £222 million to upgrade socially rented homes. Local Authorities through the Green Homes Grant scheme have also started installing upgrades to around 50,000 low-income households.
Announcing £19.5 million of grant funding for UK projects developing novel carbon capture technology and we have kicked off the process to decide the first carbon capture cluster locations in our industrial heartlands.
Launching the floods investment programme that is on track to better protect 336,000 properties.
Awarding 90 projects under the second round of the Green Recovery Challenge Fund, totalling £80 million of investment, and launched several schemes under the Nature for Climate Fund to expand our pipeline of tree planting projects in England.
Launching the £1 billion Net Zero Innovation Portfolio, providing funding for low-carbon technologies and systems across the areas of the ten point plan.
Launching our landmark North sea transition deal and industrial decarbonisation strategy.
[HCWS321]
Oral Answers to Questions
Greg Hands Excerpts(2 years, 7 months ago)
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Robert Largan (High Peak) (Con)
The Minister of State, Department for Business, Energy and Industrial Strategy (Greg Hands)
Ahead of COP26, we will publish a net zero strategy. This will set out our vision for transitioning to a net zero economy and outline our path to meet net zero by 2050. Ahead of this, we have already published important sector strategies and made major green investments in key technologies, including a £240 million net zero hydrogen fund and a £1 billion fund for carbon capture.
Robert Largan
I am delighted to welcome my right hon. Friend to his new role, although he will be much missed from his previous role in the Department for International Trade where he played a crucial role in building the Department from scratch since 2016. Reducing emissions in the heat sector is vital to decarbonising our economy, and the Government have set an ambitious target of installing 600,000 heat pumps a year by 2028. Can the Minister tell the House whether the Government’s anticipated heat and building strategy will include a pathway for reaching that target, including measures to make heat pumps more affordable for working households?
Greg Hands
I thank my hon. Friend for his welcome. As he has pointed out, the Prime Minister’s 10-point plan for a green industrial revolution sets an ambition to grow the market to 600,000 heat pump installations per annum by 2028. The heat and building strategy, due soon, will set out the policies that will deliver this target in a fair and affordable way, including for his High Peak constituency.
Kerry McCarthy (Bristol East) (Lab)
Experts have concluded that to reach net zero by 2050, there should be no new oil and gas fields approved for development and no new coalmines or mine extensions from the end of this year. Does the Minister agree with that assessment by the experts, and if so, does he agree that the Cumbrian coalmine and the Cambo oilfield surely cannot go ahead?
Greg Hands
I thank the hon. Lady for her question. Of course, we look carefully at what the Climate Change Committee has recommended at all times, and we are in the process of meeting last year’s recommendations very well. I can tell her that the climate checkpoint will apply to all future licensing rounds. Cambo is of course already licensed, and projects that are already licensed are already accounted for in our projection of emissions from future oil and gas production. So those emissions are already accounted for in our plans.
Sir David Evennett (Bexleyheath and Crayford) (Con)
I would like to welcome my right hon. Friend to his new position, and I wish him well. May I also welcome the Government’s new target to cut our carbon emissions by 78% by 2035? Does he agree that this ambitious world-leading target puts us on track to get to net zero by 2050 and shows how we are leading the world in building back greener?
Greg Hands
I thank my right hon. Friend for his question. Referring back to the Climate Change Committee progress report, I read an interesting comment in it at the weekend while I was learning into my new brief. It states:
“The rate of reductions since 2012…is comparable to that needed in the future.”
That is not a reason for complacency, but I would point out, as my right hon. Friend has done, that the UK has an enviable record in this space. We have grown the economy by 78% since 1990 and reduced our emissions by 44%, showing that the right way forward is to grow our economy while simultaneously reducing emissions.
Sammy Wilson (East Antrim) (DUP)
Household energy bills are set to increase by £400 a year as green costs escalate and energy-intensive industries are leaving the UK, with the loss of thousands of jobs. We are becoming increasingly reliant on hostile and unstable states, as we refuse to give licences to exploit our own oil, coal and gas in the United Kingdom. This week we found out that emergency electricity supplies have had to be bought in because the wind did not blow. All that is a result of the policy of aiming for zero CO2 emissions by 2050. Does the Minister not have even the tiniest doubt that these policies are economic madness?
Greg Hands
I always enjoy my engagements with the right hon. Gentleman on a number of topics, whether in relation to Northern Ireland or to these kinds of issues more broadly. First, on jobs leaving the UK, overall we have fantastic economic growth at the moment, 4.8% in the last quarter.
We have also done an incredible job of making sure that we have diverse sources of supply that do not leave us vulnerable to the actions of hostile states. Actually, 48% of our gas is taken from the UK continental shelf and an additional 30% comes from Norway. Norway is one of our greatest friends and, as my right hon. Friend the Secretary of State announced yesterday, it is increasing its production.
On renewables, our ability to diversify shows the strength of the UK’s ability to generate energy and electricity that is both sustainable and diverse.
Dr Andrew Murrison (South West Wiltshire) (Con)
In addressing the energy trilemma of cost, security and decarbonisation, what account is my right hon. Friend taking of the 10,000 MW, 4,500 km power link between Australia and the Association of Southeast Asian Nations? Does he feel that there is any read across for what the UK might do to address the problems we will likely face, if not this winter, in the very near future?
Greg Hands
I take a keen interest in both Australia and ASEAN, having recently come from the Department for International Trade. There is a new Australia trade agreement and we have dialogue partner status at ASEAN. My right hon. Friend refers to an interesting project and, of course, the UK is always looking to make our energy supply more secure and to make our sources of energy more diverse. These are the sorts of things on which we are keeping a close eye as a potential model for the UK.
Jack Dromey (Birmingham, Erdington) (Lab)
If the closure of the GKN plant in Erdington goes ahead, it will be a blow to the automotive industry’s transition to an electric future and a betrayal of the British national interest, with 519 workers sacked in an area of high deprivation and with production exported to Poland and France. I welcome the statement made by Ministers as early as April 2021 on their preparedness to contemplate investment in both skills and plant as part of keeping the factory open. As talks reach a critical stage, will the Minister confirm that the Government stand ready to continue to play an active role in seeking a resolution?
Greg Hands
I recognise the hon. Gentleman’s engagement as the constituency’s Member of Parliament. I do not buy into his idea that we are neglecting the national interest. This Government and this Department have the national interest very much at our core, as he will have heard from my right hon. Friend the Secretary of State and the rest of the ministerial team. We are engaging with GKN—my right hon. Friend has met GKN—and we will continue to engage with it at this difficult time.
Gareth Davies (Grantham and Stamford) (Con)
Will my right hon. Friend join me in welcoming the issuance this morning of the UK’s first sovereign green gilt, which saw a record £90 billion of orders in the first hour? Does he agree that we should now seek to get more corporations to issue corporate green debt?
Greg Hands
My hon. Friend raises a good point. Having worked in futures markets, I think the first sovereign green gilt is a great step forward for this country. I am sure that Her Majesty’s Treasury will be working very closely with the market and will be advising issuers to make sure this important sector grows in the years ahead.
Anna McMorrin (Cardiff North) (Lab)
Soaring gas prices have plummeted the UK into an energy crisis, with fears for vulnerable households and for the wave of energy firms folding. We have relied far too heavily on gas most recently, and it did not have to be this way; the Government could have foreseen it. We see that countries that have prioritised low-carbon energy are far more insulated from shocks such as this, and protect those vulnerable families as we head into winter, and meet climate objectives, which we know the Government are failing on. So will the Secretary of State commit to demanding that the Chancellor this autumn delivers a Budget that can ensure that we in the UK deliver an efficient, diverse, secure green energy sector, at speed?
Greg Hands
As a former Treasury Minister, I have to advise the hon. Lady to wait and see on the Budget. We have set out clear actions in relation to the wholesale gas price problems, outlined by my right hon. Friend the Secretary of State yesterday, reassuring the public that the consumer always comes first. We have been absolutely clear that the energy price cap will remain—it protects 15 million households. On her accusation that we have done nothing for renewables, I can tell her that under this Government they are up sixfold and that since the right hon. Member for Doncaster North (Edward Miliband) was the Energy Secretary in 2010 they have quadrupled as a share of our energy generation.
Jonathan Gullis (Stoke-on-Trent North) (Con)
My right hon. Friend will be aware that ceramics is an energy-intensive industry, and companies such as Churchill China and Steelite are desperate to find a green solution that will enable them to fire the plates that we are lucky enough to dine on here in the House of Commons. So will he meet me and representatives of the ceramics industry to hear how we can help them to achieve net zero?
Greg Hands
We, of course, deliver relief schemes to reduce the cumulative impact of some energy and climate change policies on industrial electricity prices for eligible energy-intensive industries and sectors, such as steel, chemicals, cement, ceramics, paper and glass. I know the sector well from my previous role at the Department for International Trade, and of course I would be ready to meet my hon. Friend, the brilliant Stoke Conservative team of other MPs and the British Ceramic Confederation.
Stephen Flynn (Aberdeen South) (SNP)
Does the Minister intend to back the Acorn project as a track 1 cluster?
Greg Hands
We recognise that this project has good potential, but obviously we need to work through these kinds of projects in a proper and methodical way, to make sure that all of the questions people would expect the Government to look at—value for money, viability and so on—are properly met.
Stephen Flynn
We cannot understate the importance of the delivery of carbon capture and underground storage to the UK’s and Scotland’s journey to net zero. Let me be clear: the Acorn project should be in the vanguard of that process. I hear the warm words from the Minister, but warm words only go so far, particularly when we frame them within this Government’s record on sustainable projects in Scotland. If we look at the likes of offshore wind, we see that SSEN—Scottish and Southern Electricity Networks—has produced another report highlighting the fact that Scottish renewables projects continue to pay the highest grid charges in not only the UK, but the entirety of Europe. What is he going to do, as the new energy Minister, to end that renewables robbery?
Greg Hands
The hon. Gentleman’s talk of Scotland being short-changed on renewables is entirely wrong. Scotland is a massive part of our renewables offer, today and going forward. Secondly, this is a competitive process. Carbon capture, utilisation and storage is a key plank of the Prime Minister’s 10-point plan for a green industrial revolution. So of course we look at CCUS and the potential it offers, but this is a competitive process and it would not be right at this point to pass specific comment on the project.
Martin Vickers (Cleethorpes) (Con)
Northern Lincolnshire and the wider Humber region are playing a major part in our reaching zero emissions targets in the next few years. The Minister will have been made aware of a number of projects that the Department has supported. Will he assure us that that support will continue? May I urge him to build into his schedule a visit to the region as quickly as possible?
Greg Hands
I look forward to a visit to Yorkshire and the Humber region as quickly as possible. My hon. Friend will know how Yorkshire has delivered incredibly for the UK as a whole, particularly in respect of offshore wind. The world’s largest operational offshore wind farm, Hornsea One, spans 400 sq km off the Yorkshire coast and generates enough power for 1 million UK homes.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The Minister has talked a lot about what is going to happen ahead of COP in respect of net zero, but will he look back at the green homes grant voucher scheme that was delivered in September last year? It was set up in 12 weeks, from announcement to delivery, and was axed six months later without having delivered the jobs or the green homes measures. What is the Minister’s Department doing to reflect on that? Is he thinking about longer-term planning to the benefit of both the industry and our net zero targets?
Greg Hands
The hon. Lady will know the course of that scheme through her important work as Chair of the Public Accounts Committee. She will also know that we are committed to publishing a heat and buildings strategy in the run-up to COP, and she will just have to wait and see what is in it. It is incredibly important that we take strong action to make sure that our public and private building stock remains sustainable for the future and makes its contribution as we move forward to net zero and our chairing of COP in November.
David Duguid (Banff and Buchan) (Con)
I welcome my right hon. Friend and the other new BEIS Ministers to their places.
Perhaps uncharacteristically, I agree with the hon. Member for Aberdeen South (Stephen Flynn) in backing the Acorn project, which is in my constituency of Banff and Buchan. The hon. Gentleman and other SNP Members often like to talk about the Scottish Government’s recent commitment to £500 million of support for a so-called just transition in the north-east of Scotland, but as far as I can tell no actual plan of action is connected to that funding to deliver the energy transition that we need. Will my right hon. Friend the Minister inform the House of what this Government actually plan to do to deliver net zero and how much investment has been and will be available through, for example, the North sea transition deal?
Greg Hands
My hon. Friend will know about the North sea transition agreement, which we announced earlier this year. I share his concern about the Scottish Government’s approach to all these things. It is still very early days for that coalition, but we are watching carefully. I am sure my hon. Friend will agree that Scotland has benefited enormously from UK Government investment in renewables. On the contract for difference scheme, for example, 20 of the 58 projects that have been awarded CfDs to date are in Scotland. That represents 34% of all CfD projects and 21% of total CfD capacity. My hon. Friend is right that the UK Government are delivering for Scotland.
Jeff Smith (Manchester, Withington) (Lab)
The Minister of State, Department for Business, Energy and Industrial Strategy (Greg Hands)
The Government are carefully considering the Climate Change Committee’s progress report and will respond to it in full as part of our forthcoming net zero strategy ahead of COP26. That strategy, which will outline our path to meet net zero by 2050, will contain policies and proposals that will allow the Government to respond substantively to the report’s recommendations.
Jeff Smith
Well, it needs to, because the report was pretty damning. The Environmental Audit Committee recently made a number of recommendations to support community energy projects such as Greater Manchester Community Renewables in my constituency. Will the Minister emphasise the importance of community energy in the upcoming net zero strategy, as recommended specifically by the Committee, and put in place some practical measures to harness the potential of community energy, including support to enable groups to get investment for energy transition projects?
Greg Hands
Yes, of course we take community renewable initiatives very seriously indeed. We also take the Environmental Audit Committee very seriously indeed and I look forward to appearing before its Chair, my right hon. Friend the Member for Ludlow (Philip Dunne), in due course.
The hon. Gentleman is wrong to say that the CCC progress report was damning. For example, the report says:
“The UK has a leading record in reducing its own emissions”,
and:
“The UK has been a strong contributor to international climate finance”.
Recently, John Kerry himself, the President’s special envoy on climate, praised the UK approach.
Dr Alan Whitehead (Southampton, Test) (Lab)
I too welcome the Minister to his new post, my opposite number in the Department, and hope that he will last a little longer in the post than his immediate predecessor.
The Climate Change Committee’s report to Parliament highlights how little progress has been made with the upgrading of insulation in buildings and points out that
“insulation rates remain well below the delivery achieved in 2012 before key policies were scrapped.”
Does the Minister accept that, had those insulation policies been pursued, energy customers would have been in a much better position to cope with the energy prices rises and the cost of living crisis that we have currently. Does the Minister now take responsibility for the abject failure of the Government’s home insulation policies, and, most importantly, what will he now do about it?
Greg Hands
The hon. Gentleman has managed to pack a lot into that question. Let me try to answer it in three ways. First, when it comes to the heat and buildings strategy, he will just have to wait until we publish it. We are doing the right thing. Secondly, when it comes to energy price rises, my right hon. Friend the Secretary of State pointed out at great length the action we are taking to protect customers, including vulnerable customers, with the rest of the support that the Government provide. Thirdly, when it comes to the Climate Change Committee, we have done very well on achieving, for example, last year’s recommendations. Actually we have achieved in full or in part 40 of the Committee’s 92 recommendations last year; 32 are already on their way. We are looking forward to responding as well to this year’s recommendations.
Mr Philip Hollobone (Kettering) (Con)
The Kettering constituency generates enough wind power to power all local homes, but if we are to meet our net zero target by 2050, we need to develop more offshore wind power. Can the Energy Minister confirm that we are on track to increase the capacity of offshore wind from 30 GW to 40 GW by 2030?
Greg Hands
I always call my hon. Friend Mr Kettering, Mr Speaker, as he has been a councillor there for a long time and the Member of Parliament representing Kettering so diligently and astutely in this House. He is right: the UK currently has 10 GW of offshore wind capacity, which is around a third of the world’s total. We are looking to grow that to 40 GW by the year 2030.
Mike Kane (Wythenshawe and Sale East) (Lab)
Cherilyn Mackrory (Truro and Falmouth) (Con)
The Minister of State, Department for Business, Energy and Industrial Strategy (Greg Hands)
My hon. Friend is absolutely tireless in promoting Truro and Falmouth. The project she mentions is very interesting. Last year, the new Foreign Secretary, my right hon. Friend the Member for South West Norfolk (Elizabeth Truss), made a successful visit to the site. Subject to diary commitments, I or the Secretary of State would be delighted to visit to see the latest progress, which is supported, in part, by our Getting Building fund.
Navendu Mishra (Stockport) (Lab)
Stockport has a vibrant high street with excellent retailers and independent businesses, but in recent years, and particularly since the pandemic, many have had to shut up shop and, like lots of other high streets, we have lost beloved names such as BHS and Debenhams after they went into administration and moved online. What steps is the Minister therefore taking to ensure that large online retailers do not undercut our high street stores?
Marco Longhi (Dudley North) (Con)
The resilience of our energy sector and our journey towards net zero are key matters for the House. What steps is the Minister taking to ensure that nuclear power forms an important part of our future energy mix?
Greg Hands
My hon. Friend is right. Nuclear power is a vital part of our future energy mix. We have committed to trying to achieve at least one more gigawatt power plant during this Parliament and we have set out plans for small and advanced nuclear reactors.
Wera Hobhouse (Bath) (LD)
May I press the Secretary of State further on blue hydrogen? The source of blue hydrogen is natural gas, which is a fossil fuel, so how can a Government committed to net zero invest millions of pounds in new technologies based on fossil fuels? The Secretary of State has said several times that it is a “transition”, but since this is not a net zero technology, a transition to what?
Sally-Ann Hart (Hastings and Rye) (Con)
Renewable energy depends on increasing our grid capacity, so what steps is my right hon. Friend taking to do that?
Greg Hands
There are robust processes in place for bringing forward new grid upgrades to meet demand. Smart electric vehicle charging and other smart technologies of course reduce the need for new infrastructure, and the recent smart systems and flexibility plan sets out the actions the Government will take in an area in which I know my hon. Friend takes an ongoing interest.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
UK steel producers face dramatically higher electricity costs than our European competitors. How can the sector attract the investment needed to decarbonise when it faces a £50 million a year barrier to investment?