The CCC’s Sixth Carbon Budget - Overarching and Electricity Generation Recommendations

On 9 December 2020 the Climate Change Committee (“CCC”) released its Sixth Carbon Budget (the “Budget”) and accompanying policy report which aims to map out the UK’s path to ‘Net Zero’. The Budget represents the legal limit for UK net emissions of greenhouse gases between 2033-37. The CCC has set an ambitious target of a 78% reduction in emissions relative to 1990, which is a 63% reduction from 2019. This would represent a world-leading commitment and bring the UK onto a trajectory which is consistent with the Paris Agreement.

Overarching Recommendations

The CCC’s overarching recommendations to meet their target are:

• Building climate policy into the recovery from the COVID-19 pandemic – the CCC recommends a comprehensive scale-up of low carbon investment over the next decade, suggesting that the Government should use the pandemic to “accelerate a shift towards low carbon behaviours” and support the economic recovery and jobs. The CCC also suggest that fairness should be a core principle of Government policy – the benefits and burdens of this transition will need to be shared and the Government need to be mindful of the fact that it is young people who will face the largest long-term impacts of climate change.

• Mainstreaming ‘Net Zero’ solutions – the CCC recommends a “scale up” from 2020 to 2030, building supply chains and new markets for low carbon consumers alongside new options for industrial decarbonisation such as carbon capture and storage (CCS) and low carbon hydrogen. From 2030 to 2050 the CCS recommends that, having scaled up low carbon solutions, the Government should drive the implementation of these technologies throughout industry and into homes nationwide.

• Prioritising climate policy across the economy – the CCC have acknowledged that delivery of this pathway will be complex and require positive policy implementation at all levels. The CCC have identified a number of “shifts” and “kicks” which could produce the profound impact demanded. These include: increased public and business engagement, accelerating technology and harnessing legal avenues to legislate all regulators to incorporate climate targets and policy into their duties, penalise emissions and align metric reporting and carbon pricing.

The CCC also states that the success of the UK’s transition to ‘Net Zero’ is contingent on everyone playing a role: people, consumers, businesses, suppliers, financiers, workers, local and regional government.

Electricity Generation Recommendations

In relation to electricity generation, the CCC has made the following key recommendations:

•  Electricity generation should be fully decarbonised by 2035 – this will need to be met under the burden of delivering a 50% increase in demand. The CCC has suggested this will require:
  • Delivering 485TWh of electricity generation by 2035, which should all be low carbon. That will require 400TWh of new low carbon electricity generation.
  • Deploying a range renewable technologies at scale, including 40GW of installed offshore wind capacity by 2030 and 140GW by 2050.
  • Deploying at least 50TWh of dispatchable and flexible generation (such as gas CCS and hydrogen) by 2035, capable of balancing a system driven by renewables at low emissions.
  • Delivery of an increasingly flexible system, calling on demand-side response (with 20% of demand being flexible in 2035), storage, hydrogen production and interconnection.
• Phasing-out unabated gas by 2035 – no new unabated gas plant (not fitted with CCS technology) should be built from 2030, and those built prior should suitable for retrofit.
• Market design for ‘Net Zero’ – the Government should develop a clear, long-term strategy before 2025 for a fully decarbonised electricity system.

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Energy, Waste and Sustainability