The review is made up of Skidmore’s findings from more than 50 roundtables with key stakeholders, and the 1,800 responses received following a call for evidence. It is split into two parts, one which emphasises the benefits of net zero for the economy, and the second setting out how to achieve the UK’s 2050 commitment.
1. Government must provide long-term certainty
According to the review, the absence of certainty has been “one of the most striking themes of the evidence provided”, with stakeholders reporting that the Net Zero Strategy and other government publications have “not provided adequate certainty to businesses and investors”. Skidmore also calls for a “long-term, stable investment plan” in the next Spending Review, adding that a reluctance to provide long-term funding beyond spending review cycles - while understandable - exacerbates this uncertainty.
2. Net Zero select committees should be created in both Houses of Parliament
The review states that while there is significant parliamentary scrutiny of the government’s work to deliver net zero, it is not clear that the current structure is sufficient.
It warns that this absence could lead to a lack of single parliamentary scrutiny function and a“missed opportunity” in developing widespread expertise of the government’s decarbonisation activity
The review states that among other functions, these committees could act as a “dedicated receiver” of the Climate Change Committee’s annual progress report.
3. A new Office for Net Zero Delivery should be established
The review states that this new body should:
Have joint ministerial oversight from BEIS and the Cabinet Office
Take overall ownership of the delivery of net zero
Manage the relationship between the UK government and devolved administrations
Own the delivery of priorities that sit outside of any individual government department
Advise the government on best delivery practice
Identify lessons learned
The review calls for this office to be established by Spring 2023.
4. Separate agencies should be created to deliver long-term decarbonisation programmes
The review recommends that these agencies should own the long-term delivery of policy ambitions set by departments, be accountable for delivery to their sponsoring departments, regularly publish data on progress and work closely with the devolved administrations.
The review also recommends a major expansion of the government’s public reporting on net- zero, it states this could potentially be through the Office for National Statistics’ climate change statistics portal or developed in partnership with the Climate Change Committee (CCC).
5. Government should work with OBR and CCC to set out a process for how it will ensure climate impacts of fiscal decision making are considered
The review recommends that the Treasury builds on the recent reporting of Spending Review carbon implications by working with the Office for Budget Responsibility (OBR) and CCC to set out a process for how it will ensure the climate impacts of fiscal decision making are considered.
The review states that the government should also commit to publishing the climate impacts of future spending reviews
6. To tackle greenwashing, the UK’s ‘green taxonomy’ should be established at the ‘earliest possibility’
In 2021, the UK government announced work to develop a UK Green Taxonomy, designed to identify economic activities that are environmentally sustainable. Skidmore’s review states it is important for the government to “provide clarity and implement a coherent green taxonomy at the earliest possibility”.
The review highlights that currently it can be hard to understand which financial products support the green transition and which ones are just labelled as such. It states that this lack of clarity can “undermine the integrity of capital markets and consumer markets.”
Seeking to address this issue, the Financial Conduct Authority (FCA) is currently consulting on aspects of the Sustainability Disclosure Requirement and investment labels to counter greenwashing. The review states that the government and FCA should build on this across a wider scope of sustainability labelled financial products, extending to overseas funds and pension products.
It adds that authorities should consider proactively how to align them internationally.
7. Government should consider a Net Zero Charter Mark to acknowledge the best in class among firms
The review recommends that in order to recognise company’s efforts to decarbonise, a Net Zero Charter Mark should be established. To be granted this, firms have to be compliant with or ahead of key standards, such as publishing their climate-related financial disclosures, publishing a transition plan with key milestones and progressing against those, and using reliable metrics and data - such as science-based targets - to ensure any disclosure is of high quality.
8. The UK must diversify supply chains for renewable technologies
The review highlights that the UK currently relies on just a handful of nations to deliver its net zero supply chains. For example, China accounts for 75% of manufacturing and assembly of solar PV modules and electric vehicle batteries and the Democratic Republic of Congo supplies more than 60% of Cobalt.
The review warns that this lack of diversity “creates risk and undermines the resilience of supply chains”.
The UK Critical Minerals Strategy, published in July 2022, aimed to outline steps to achieve more diversity, but respondents to the review’s call for evidence said that a more “holistic understanding of critical supply chains for net zero is lacking”.
The review states that the government should undertake a net zero infrastructure and technology critical supply chain analysis to inform decisions at the next Spending Review.
9. Wind and solar task forces should be established
The government has set many ambitious targets for renewable energy, however according to the review, many businesses made it clear that “more concrete steps are needed to outline how ambition will be met”.
Stakeholders were also reportedly clear that a stop-start policy needs to be “avoided at all cost”, with the Association for Renewable Energy and Clean Technology (REA) warning that “sudden policy changes, or reducing support for most affordable renewable technologies, including solar and onshore wind, reduces investor and developer confidence, increasing the cost of capital and overall cost of decarbonisation.”
10. The planning, environmental permitting and grid access processes should be streamlined
According to the review, current ambitions to reach a fully decarbonised power sector by 2035 are “at risk due to the time required for developers to go through securing planning permissions, environmental permitting and grid access”.
11. Planning permission should be axed for roof-top solar
The review states there should be no planning permission required to install domestic or commercial solar on the rooftops of buildings.
Separately, it states that solar farms in the countryside should be “planned piecemeal but in a coordinated fashion as part of a Land Use Strategy that the review encourages in its section on land and agriculture”.
12. ‘No reason’ why onshore wind should not be deployed at scale
The report also states that if local communities wish to have onshore wind, and can work with energy suppliers and distribution network operators to find an “agreeable mutually beneficial solution that delivers long-term benefits for local residents, then there is no reason why onshore wind should not be deployed at scale”.
13. Planning and consenting decisions should be streamlined for nuclear power
According to the review, the main barrier for new nuclear projects is the need for stable, long-term policy and funding commitments given the long timeframes involved in the building of nuclear plants.
Skidmore emphasises the reforms set out in the British Energy Security Strategy need to be implemented including speeding up the set-up of Great British Nuclear (GBN) in early 2023. His review suggests the government and GBN need to set out a clear roadmap in 2023 for reaching a final investment decision in the next Parliament and assess the possibility to increase the current ambitions. It also suggests clear pathways for different nuclear technologies, such as small modular reactors, need to be outlined which consider how to use programmatic approach to deliver further cost reductions in a competitive environment.
To ensure nuclear projects are not unnecessarily delayed, the review recommends that the government streamlines planning and consenting decisions, “whilst continuing to drive compliance with the highest security standards.”
14. UK risks falling behind it it doesn’t ‘move quickly’ on hydrogen
The report states that hydrogen will play a “vital role” in our future energy mix and adds that given the “nascency of the sector, the UK could be a global leader”.
However it warns that the UK “faces a real risk of losing out on the international stage if it does not move quickly”. The review recommends that by the end of 2023, the UK develops and implements an ambitious and pragmatic ’10 year’ delivery roadmap for scaling up production.
15. Sustainable biomass seen as an important role in the net zero transition
The review notes that sustainability criteria is needed to “guard against adverse impacts of a finite global supply”. It adds that it is critical that any biomass adheres to a stringent set of sustainability criteria, to guard against unintended adverse impacts like land use change leading to deforestation, particularly as part of global supply chains.
It recommends that the government publish its biomass strategy soon as possible.
16. Emissions should be reduced from current oil and gas production
To reduce emissions from existing oil and gas production, the review makes several recommendations. These include:
Accelerating the end of routine flaring from 2030 to 2025
Ensuring all new oil and gas fields have abatement built in now
Ensuring the Climate Compatibility Checkpoint is an effective tool now to shape policy making
Consider setting fossil fuel producers operating domestically a 10% storage obligation target to restore carbon dioxide to the geosphere by at least 2035, separate to any investment on nature based solutions.
Ensuring greater transparency and data from industry on the carbon intensity of oil & gas (O&G) imports, and also from the North Sea Transition Authority (NSTA) and industry on O&G that is produced.
Publish an offshore industries integrated strategy by the end of 2024.
However, the review states that “we need to reduce our reliance on hydrocarbons as quickly as possible”.
17. UK has the potential to provide carbon storage solutions to other countries
The review says that the carbon capture, utilisation and storage (CCUS) industry represents a unique opportunity for the UK, given the geological storage opportunities under the North and Celtic Sea, which according to the review total an estimated 78 gigatonnes, enough to support the UK’s demand for hundreds of years.
It states that with limited EU storage capacity, the UK could provide storage services for other countries, if regulatory barriers can be addressed.
The review states the UK must act quickly to “foster certainty and attract the investment that we need.”
In 2023, the review says, the government “must act quickly to re-envisage and implement” a clear carbon capture and storage plan beyond 2030.
As soon as legislation allows, the review also calls on the government to finalise the business models and regulatory frameworks across the value chain, including for industrial CCS, Energy from Waste with CCS and CO2 transport and storage.
18. Clarity, coordination, and stability is needed for investors and investments
Skidmore’s review suggests that through the Green Finance Strategy, a “clear, robust and ambitious approach to disclosure, standard setting, and scaling up green finance” needs to be set out. It also suggests a review is carried out into how the UK can become the most competitive financial centre for green and transition listings, capital raising and project financing.
Skidmore suggests a review should be carried out into how to change regulation for emerging net zero technologies to enable their rapid and safe introduction, which are currently uncertain. He says this should be published by this autumn.
Skidmore’s review also suggests that the Treasury review by the end of this year how policy incentivises investment in decarbonisation, including via the tax system and capital allowances.
These developments aim to provide a more stable environment for businesses to invest in new technologies. Among suggestions under this remit, Skidmore also proposes a new forum for all regulators to coordinate on their messaging about the net zero transition and an overarching financing strategy to be introduced to cover how government actions will scale up private finance to deliver the UK’s net zero.
19. The construction industry needs support with decarbonisation
With buildings and construction responsible for an estimated 43% of UK emissions, Skidmore recommends that the government develop a public procurement plan for low-carbon construction and the use of low-carbon materials, by the end of 2023.
In terms of machinery, Skidmore also recommends developing a strategy on the decarbonisation of non-road mobile machinery by the end of 2023 as a plan for this is currently absent according to the review.
He also proposes more support is given to retrofitting, where existing houses are made more energy efficient through a variety of measures.
20. The UK needs to move rapidly to a more circular economy
The review calls for a “more ambitious approach to managing waste and encouraging re-use and recycling” which it says could decrease emissions as well as providing a significant economic opportunity. Skidmore suggests policy on this so far has been “too slow and is failing to grasp these opportunities”.
Evidence provided to the review suggested that maximising resource efficiency and improving waste measures would increase GDP by 0.9% by 2035, creating more than 200,000 gross jobs in the UK by 2030.
He also notes that the UK currently exports a significant amount of its waste to be processed overseas, but responses to the call for evidence suggested there is an economic opportunity for the UK to process more of its waste here.
The government has made a number of commitments in recent years via the Resources and Waste Strategy for England 2018, and the Net Zero Strategy 2021, however the review heard “very clearly” that the UK is not delivering on many of its existing commitments.
The review states “a clear national mission focused on the circular economy will overcome the uncertainty of the current policy environment and ensure the long-term commitment that
stakeholders are asking for”. It recommends: delivering urgently on commitments that the UK has already made on collection and packaging reforms; launching a task force to work jointly with industry to identify barriers and enablers and develop sector-specific circular economy business models for priority sectors; ending export of UK plastic waste by 2027; and delivering UK recycling infrastructure capacity in key areas.
21. Bring the gas free homes target forward
To provide certainty on the gas boiler phase out, which is currently proposed for 2035, Skidmore recommends legislating for 2033 instead. He also suggests setting a legislative target for gas free homes and appliances by the same date.
22. Improve energy efficiency standards
Skidmore’s review also suggests that the government legislate for all homes sold by 2033 to have an EPC rating of C or above, with some exceptions. He also recommends legislating to require that by 2025 the minimum energy efficiency rating should be EPC B for all non-domestic buildings, both rented and owned, by 2030, and an EPC B rating for all new non-domestic buildings from 2025.
He suggests that all consultations and work to mandate the Future Homes Standard should be brought forward to 2025 to prevent further delays and should include a consultation on delivering a Net Zero Homes Standard.
Skidmore also says that putting commercial minimum energy efficiency product standards in place by 2028 could ensure that our market is seen as serious about energy efficiency, attracting more investment.
23. Need to meet deadlines on food, agriculture, nature, and land use targets
Skidmore emphasises in the review that net zero and nature are “inextricably linked”. He argues that a land use framework should be published as soon as possible, and at least by mid-2023. He also calls for the government to publish full details of all Environmental Land Management Schemes and future plans by the end of 2023 - with a particular focus on how participants can take advantage of both public and private finance.
In terms of reducing emissions, he also calls for the government to ensure that 50% of UK-based food and drink businesses measure and report their scope 3 emissions against a government- and industry-agreed standard.
24. Business encouragement and tax policy to incentivise growth and decarbonisation is needed
Skidmore argues that the government should use a balanced approach of tax incentives and disincentives to encourage economic activity that meets the dual objective of growth and decarbonisation.
The review found that although there are already some tax benefit schemes in place to support decarbonisation, a net zero tax audit would help to ensure that the taxes not defined as ‘environmental’ also support the transition.
Skidmore also suggests that by autumn 2023 the Treasury should review how policy incentivises investment in decarbonisation, including via the tax system and capital allowances.
Furthermore, he makes the case that the government should keep tabs on the current business rates incentives to make sure that investing in net zero technologies is not discouraged.
25. Small and Medium Enterprises (SMEs) need more support to reach net zero
SMEs account for almost one third of all UK emissions and around half of total UK business emissions, according to analysis by the British Business Bank. However, bigger businesses are able to participate in net zero more easily according to the review. Skidmore outlined a number of measures to encourage and “empower” SMEs to take a more active role in the transition, including tax incentives and working with subcontractors and landlords.
He recommended that the government develop an SME role models programme, which provides mentoring for micro businesses and the self-employed by 2023 and setting up a taskforce of suppliers, small business landlords and business groups to agree on how to cut energy use in rented premises by 2023.
26. Work with local authorities and up public engagement
The Climate Change Committee (CCC) has noted that: “There is considerable momentum at local government level. However, there is currently a lack of shared understanding of where these good intentions would be most effectively directed.”
Skidmore highlights that the government’s current approach to net zero delivery is “creating inefficiencies at a local level”, due to a lack of support and a disjointed and short-term approach to funding. For the next Spending Review, Skidmore suggests that government departments work closely together to deliver local net zero funding reform.
Skidmore also suggests that the government improve relationships with local authorities and fully support “at least one” net zero city, local authority and community, to reach net zero by 2030. He also suggests the local planning system and the National Planning Policy Framework is reformed to improve clarity and consistency in terms of net zero.
The review also looked at whether a statutory duty should be introduced for local authorities to take account of the UK’s net zero targets, and said it would be useful and needs to be carefully designed.
Skidmore calls for more guidance on Local Area Energy Plans and for more Net Zero Neighbourhood plans, as well as setting out a framework for community benefits, emphasising that: “a locally-led, place-based approach to net zero delivery will not just deliver a better tailored, more supported transition, but it can also deliver greater economic and social benefits”.
The review also suggests that the government works with local authorities to improve monitoring, reporting and accountability for local net zero delivery as this was a key issue raised in the consultation
In terms of energy, Skidmore encourages the government to commit to the Local Electricity Bill to see community projects provide energy directly to local households and businesses, and work with the sector to create a Community Energy Strategy.
In terms of increasing public engagement, Skidmore calls for a public engagement plan on net zero for England to be published by 2023.
27. A carbon calculator
Skidmore suggested that in 2023 the government run a competition to create a Carbon Calculator to inform consumers of the carbon intensity of different choices.
28. Net zero can permanently reduce energy bills and see money saved in indirect ways
Skidmore’s review found that the average household will make a cumulative saving of between £400 and £6,000 by 2050, under planned net zero measures. He also argues that bills will be permanently reduced under the new strategy, homes will go up in value and savings will even be made by the NHS when less illness is caused by cold homes.
29. Net zero could see job creation
Throughout the review, Skidmore highlighted the jobs creation element of net zero. He claims that the government’s planned pathway to net zero carbon emissions by 2050 could support 1.18 million direct jobs by 2050.
30. Push is needed for decarbonising the transport sector
The transport sector is the largest source of greenhouse gas emissions in the UK, with greenhouse gas emissions remaining stable according to the review. To increase investment, and as part of reducing delays to wider regulatory reform, the review suggests the government bring forward the delayed Future of Transport Bill this Parliament.
Key points from this huge section of the review include a recommendation for the government to “swiftly” deliver the Zero Emission Vehicle mandate, to apply from 2024, while continuing to support the uptake of electric and other zero emission vehicles, with improvements to infrastructure and consistency for smart charging.
The Review also considered it important that the government maintains support for building domestic supply chains and manufacturing for electric vehicles as part of the Automotive Transformation Fund, and the Faraday Battery Challenge. Responses to the review highlighted that high levels of energy and carbon costs to manufacturing may act as a deterrent in the UK.
It also calls for the government to publish the Low Carbon Fuels Strategy in 2023 and the necessary legislation for the sustainable aviation fuels (SAF) mandate to apply from 2025, and for government to set out options for further legislative steps by 2024 and take a leading role in International Maritime Organization (IMO) negotiations to decarbonise the maritime sector.
It further sets out that the government should continue to work with industry to set out a clear programme by 2024 to accelerate decarbonisation of the wider freight sector through modal shift and deployment of new technologies, building on the Future of Freight Plan.
31. Government should create a roadmap for deploying research and development (R&D)
According to the review, stakeholders across industry and academia were clear that for the UK to have technology which meet net zero ambitions, there must be a clear understanding of the R&D and technological developments that must occur between now and 2050.
Stakeholders recommended the government publish a roadmap working backwards from 2050 to determine the critical points at which decisions must be made for the development and deployment of these technologies. The review has called for this to be published by Autumn 2023.
32. Consultation on carbon leakage measures should be sped up
The review warns that UK efforts to reach its net zero carbon targets could be “undermined” by carbon leakage. Carbon leakage is the displacement of production and associated emissions from one jurisdiction to another, due to different levels of climate action across jurisdictions including through carbon pricing and climate regulation.
The review calls on the government to progress with the consultation on carbon leakage measures and speed up decision-making to enable effective carbon leakage mitigations to be implemented from 2026.
It also adds that carbon leakage should be considered within the UK Emissions Trading Scheme.
33. Regulator for carbon offsets should be established
The review states that the government should endorse international Voluntary Carbon Markets (VCM) standards “as soon as possible” and consult on formally adopting regulated standards for VCMs and setting up a regulator for carbon credits and offsets by 2024.
The review highlights that high-integrity offsets bought by businesses can “play an important role in the transition to net zero”. However, it warns that before voluntary carbon markets can grow responsibly, businesses need assurance of the integrity of any offsets and greenhouse gas removal (GGR) investments.
As such, it states that government action can play a key role in setting standards for carbon offsets, providing reassurance to businesses and ensuring that investments lead to credible emissions reductions.
The full Net Zero review can be found here.