What does the UK Government reshuffle mean for climate change and low carbon industry?

Posted in: nnfcc

The new Prime Minister Theresa May has been busy reorganising departments and top positions in Government. How will this affect policy and impact on the renewables industry?

One of the biggest changes in the reshuffle was the merger of the Department for Energy and Climate Change (DECC) with the Department for Business, Innovation and Skills (BIS). This new Department for Business, Energy and Industrial Strategy (BEIS) will bring together responsibility for:


·         Climate Change
·         Ensuring security of energy supply
·          Energy Bills
·         Science and Innovation
·         UK energy legacy
·         Business and enterprise
·         Competitiveness
·         Labour Markets


At first the abolition of “Climate Change” from the title of the merged department raised major concerns about focus on climate change in the new Government. However, a Cabinet Office paper provided greater clarity on the merger, explaining “This merger will enable a whole economy approach to delivering our climate change ambitions, effectively balancing the priorities of growth and carbon reduction. Bringing together energy policy with industrial strategy will be beneficial to shaping a competitive business environment for energy intensive industries, including the UK steel sector.” This larger department has the potential to be a heavyweight with climate change reduction central to economic recovery.

To reassure the public, stakeholders and investors, the 5th Carbon budget was announced recently to reduce carbon emissions 57% by 2030, alongside the 2008 Climate Change Act’s requirement by law to reduce UK carbon emissions 80% by 2050, relative to 1990 levels. The methods of meeting this target are reiterated in the Cabinet Office paper and include the ‘efficient procurement of low carbon generation and otherwise in ways that keep cost of action as low as possible’. However, it is questionable whether continuing the priority to keep the cost of energy as low as possible can deliver the carbon savings required to make real reductions to meet our climate change targets, particularly for securing investor confidence.

However, the replacement of George Osborne as Chancellor could give a chance to reverse the trajectory of tight fiscal measures, towards investment. The new Chancellor Phillip Hammond could help finance green initiatives, if he reinforces his statement made last year to the American Enterprise Institute that “unchecked climate change, even under the most likely scenario, could have catastrophic consequences - a rise in global temperatures ...leading in turn, to rising sea levels, huge movements of people fuelling conflict and instability, pressure on resources, and a multitude of new risks to global public health”.


Another glimmer of hope is leadership of BEIS by green-minded MP’s Greg Clark, Nick Hurd, Margot James and Jesse Norman. Greg Clark, leading the department has made previousstatements highlighting the dangers of climate change and promoting green economy stating, “Policies to decarbonise the UK economy should never be treated as some sort of sideshow or distraction. “Green” policies do a lot more than protect our environment; they create immediate new jobs in construction, manufacturing and services, they reduce energy bills through greater efficiency and they will help reduce our balance of payments deficit in the longer term by reducing our dependence on imported fossil fuels. We should be using the downturn to make this conversion to a more resilient economy, not putting the problem off again until the next unsustainable boom turns to bust.”

Greg Clark also promoted Britain’s role in CCS in 2009 “The country that leads the development of CCS will unlock the potential for many thousands of jobs and investments around the world during the decades ahead.”

In addition to climate change and energy, responsibilities ‘Science and Innovation’ are included in BEIS. The new department states its responsibility for ensuring that the UK is in the best place in Europe to continue to innovate and maintain world-class research. This has been deep concern amongst the UK research community since the vote to leave the EU, where worries have arisen as to whether researchers and innovators in the UK will lose out on future access to EU funding for projects. A petition has already been created which calls for the preservation of UK access to EU collaborative R&D programmes in the eventually of Brexit.

The Government’s statement on the role of BEIS for Science and Innovation also makes reference to “reforming the system to maximise value from our investments”. What this reform will look like is still unclear, and the science community awaits further announcements.
All in all, the new department has potential to drive climate change and innovation throughout industry and energy, whether and how it can deliver these ambitious goals is yet to be seen and we will be keeping a close eye on all new developments.

NNFCC response

Adrian Higson, Lead Consultant - Biobased Products at NNFCC commented, “This new Government department creates the ability to truly embed low carbon energy deployment within strategies for industrial growth and could significantly invigorate the development of a circulate economy and promotion of the bioeconomy.”

Article written by Dr Caitlin Burns, NNFCC Consultant