Question

4th Mar 2021

Did the 2021 Budget Meet your Green Expectations?

Started by Martin White

UK Government – 2021 Budget Green Initiatives Summary

According to the Chancellor in his budget speech on Wednesday 3rd March, ‘our future economy needs investment in green industries across the United Kingdom’. But did the measures outlined meet, exceed or fall short of your expectations?

UK Infrastructure Bank
In his budget speech this week the Chancellor launched the first ever UK Infrastructure Bank…

Located in Leeds, the Bank will invest across the United Kingdom in public and private projects to finance the green industrial revolution.

The Bank will be a long-lasting institution with a high degree of operational independence. From its inception, its core objectives will be to:

1. Help tackle climate change, particularly meeting our net zero emissions target by 2050;
2. Support regional and local economic growth through better connectedness, opportunities for new jobs and higher levels of productivity

Beginning this spring, it will have an initial capitalisation of £12 billion and we expect it to support at least £40 billion of total investment in infrastructure.

Green Gilt
Green Gilt – The government will issue its first sovereign green bond – or green gilt – this summer, with a further issuance to follow later in 2021 as the UK looks to build out a ‘green curve’.Green gilt issuance for the financial year will total a minimum of £15 billion.

The green gilt framework, to be published in June, will detail the types of expenditures that will be financed to help meet the government’s green objectives. The government also commits to reporting the contributions of green gilt spending towards social benefits such as job creation and levelling up.

Green Retail National Savings and Investment (NS&I) Product
The government will offer a green retail savings product through NS&I in the summer of 2021. This product will be closely linked to the UK’s sovereign green bond framework.

It will will give all UK savers the opportunity to take part in the collective effort to tackle climate change, benefiting from the innovative reporting standards planned for the green gilt programme.

Carbon Markets Working Group
Dame Clara Furse will establish a new group with the aim of positioning the UK and the City of London as the leading global market for high quality voluntary carbon offsets, which can play an important role in addition to international efforts to reduce carbon emissions.

The working group will draw on the UK’s financial expertise and entrepreneurship and build on the work of crossing-cutting initiatives such as the Taskforce for Scaling Voluntary Carbon Markets.

Energy Innovation
In line with the commitment to double spending on energy innovation, the government announced support for the development of new solutions to cut carbon emissions and accelerate near-to-market low-carbon energy innovations;

-the launch of a £20 million programme to support the development of floating offshore wind technology across the UK
-the launch of a new £68 million UK-wide competition to implement several first-of-a-kind energy storage prototypes or technology demonstrators
-a £4 million UK-wide competition for the first phase of a biomass feedstocks programme, to support the rural economy in making improvements to the production of green energy crops and forestry products.

Energy and Environment Tax
Aggregates Levy – The government will freeze the Aggregates Levy rate for 2021-22 but intends to return to index-linking in future.

Carbon Price Support – The government will maintain the freeze on Carbon Price Support rates at £18 per tonne of carbon dioxide in 2022-23.

The government is committed to carbon pricing as a tool to drive decarbonisation and intends to set out additional proposals for expanding the UK Emissions Trading Scheme over the course of 2021.

You can read the whole 2021 budget summary by clicking the link here;
www.gov.uk/government/publications/budget-2021-documents/budget-2021-html

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