Rishi Sunak’s Budget is roads-heavy, while the government says it is ramping up spending on getting the UK to net zero carbon emissions by 2050 and cutting air pollution. Alongside the £27bn roads plan, the green Budget content is more about funding technology and helping companies cut their own emissions.
The new spending outlined by the chancellor includes an £800m carbon capture and storage (CCS) infrastructure fund, which will aim to get two CCS plants established by 2030.
“Exciting” CCS technology, as per Mr Sunak’s speech to parliament, is not new to the UK. Tata Chemicals and Drax (DRX) have built or are building plants. Tata’s £16.7m demonstration facility (including £4.2m of government money) will be ready next year and Drax’s plant is already in operation, although it only captures 1 tonne of CO2 a day, compared with Tata’s 100-plus tonnes. The oil and gas supermajors have also expressed support for CCS as a route to net zero carbon.
The government will also fund development of biomethane technology through a ‘green gas levy’ on gas retailers.
The more drastic changes that will up costs for construction and haulage companies is the 2022 removal of a tax break for red diesel, which currently has a duty of 11p per litre instead of the 58p duty on regular diesel. Agriculture, rail and fishing all get to keep the cheaper fuel.
Mr Sunak also set 2022 as the start point for a £200-per-tonne tax on packaging that is made of less than 30 per cent recycled plastic. The government forecasts this will bring in £240m in its first year.
More eye-opening for those in the energy industry will be the Treasury’s support for nuclear fusion technology – using the same reaction at the centre of the sun, as opposed to fission – as a way forward. While there are two UK companies working on this technology, it is still seen by many as a pigs-may-fly option.
