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Sunak’s net zero revisions “significant setback”, say manufacturing leaders

28 September 2023

Manufacturing associations have voiced their disapproval of the UK Government’s decision to scale back certain net zero emission targets, characterising the move as a "significant setback" for the sector.

(Image: Shutterstock)
(Image: Shutterstock)

Leaders representing 15 trade bodies for manufacturers, including organisations such as Make UK, the Construction Equipment Association, and the Chemical Industries Association, expressed their concerns in a letter to the Financial Times. They argued that Sunak's decision sent a troubling message, implying a regression rather than progress in addressing climate change.

Sunak's announcement, which included postponing the ban on the sale of new petrol and diesel cars from 2030 to 2035 and weakening the phaseout of fossil fuel boilers, sparked backlash from various quarters, including factions within his own Conservative party and environmental advocates.

Sunak justified these changes as part of a "pragmatic" approach to ensure that Britain meets its 2050 target for net zero greenhouse gas emissions without burdening households with significant expenses. 

However, industry groups argued that the U-turn indicates a backward slide in the nation's commitment to tackling climate change.

They stressed that these policy changes represent a “significant setback for manufacturers who have prioritised the transition to net zero in their business agendas". 

A survey conducted by Make UK following Sunak's announcement revealed that 68 percent of manufacturing companies had already made investments to move towards net zero emissions, with an additional 22 percent planning to do so within the coming year. 

A striking 92 percent of respondents considered the transition to net zero crucial for their business, and more than two-thirds saw it as a commercial opportunity.

Among those expected to be hit hardest by these changes are the small- and medium-sized enterprises (SMEs) in the automotive supply chain, which will need to contend with the changing goalposts of legislation relating to electric vehicles.

The decision was met with mixed reactions from leaders in the sector, with Ford and Nissan expressing their belief that delaying the ban on new petrol and diesel car sales could undermine the nation's shift to electric vehicles.

Meanwhile, Toyota, a carmaker that has historically been slower to embrace fully electric vehicles, welcomed the changes. Jaguar Land Rover, whose parent company Tata Group recently announced plans to invest £4 billion in a new UK battery gigafactory, also deemed the delay as "pragmatic".

The International Energy Agency (IEA) is another group that has criticised the Government's decision to dilute its net zero targets. It recently published a report indicating that to achieve global net zero emissions by 2050, annual investments in clean energy needed to increase from $1.8 trillion this year to $4.5 trillion by the early 2030s.

Fatih Birol, the IEA's Executive Director, urged advanced economies to lead the way in climate action, highlighting the need to take advantage of job creation and economic opportunities tied to clean energy industries, sooner rather than later.

“If the world is serious about addressing climate change, there is a special role for the advanced economies to take the lead here, and in my view, it is time to increase the ambition rather than reducing it,” Birol said. 

In their letter to FT, the manufacturing groups also voiced concerns about the uncertainty created by the Government's change in direction, warning that it could harm the UK's global competitiveness. 

“We now run the risk of falling behind our international counterparts as a home for green technologies if we persist in frequently altering policies that impact businesses directly,” the letter said. 

The manufacturing groups emphasised the need for a long-term industrial strategy, fostering innovation in areas like net zero and artificial intelligence, one that could endure beyond short-term political cycles.

“This announcement sends entirely the wrong signal and suggests if we aren’t looking forward, we are simply going backwards,” the letter concluded.

The signatories are as follows: Stephen Phipson, CEO of Make UK; Suneeta Johal, CEO of Construction Equipment Association; Michaela Kendall, CEO of Adelan; Pim van Baarsen, CEO of Silverstone Technology Cluster; Geraldine Bolton; CEO of the Confederation of British Metalforming; Tim Puttick, Chairman of North Devon Manufacturers Association; Philip Law, Director General of British Plastics Federation; Tom Bowtell, CEO of British Coatings Federation; Ayça Donaghy, CEO of the Lighting Industry Association; Tony Smith, Chairman of the British Measurement and Testing Association; David Stockdale, CEO of British Healthcare Trades Association; Steve Brambley, CEO of GAMBICA; Charles Jarrold, CEO of British Printing Industries Federation; Steve Elliott, CEO of Chemical Industries Association; Carl Leaver, Chair of Make UK Modular.

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