Yes. The UK is a signatory. In its NDC, the UK has committed to reducing economy-wide greenhouse gas emissions by at least 68% by 2030, compared to 1990 levels.

The Climate Change Act (2008) sets the framework for UK efforts to reduce emissions. Written into the Act is a limit for UK emissions in 2050: they should be at least 80% below the level in 1990. This target was made more ambitious however in 2019 when the UK became the first major economy to commit to a ‘Net Zero’ target, bringing all greenhouse gas emissions to net-zero by 2050.

This limit was designed as a contribution to halving global greenhouse gas emissions by 2050, broadly consistent with keeping global average temperature rise close to 2°C above pre-industrial levels and keeping the chance of an extreme 4°C warming to very low levels.

The Climate Change Act requires the UK Government to set legally binding 'carbon budgets’ to act as a stepping stone towards the 2050 targets. A carbon budget is designed as a cap on the number of greenhouse gases emitted in the UK over a 5 year period, and budgets must be set 12 years in advance to allow policymakers, businesses and individuals time to prepare. The budgets are deemed to be a cost-reflective way of achieving the UK’s long-term climate change objectives, and once a budget has been set, the Climate Change Act places an obligation on the UK Government to prepare policies to ensure the budget is met.

The UK has not yet adopted any policies or legislation to limit or prohibit the use of certain fossil fuels. Coal, natural gas and nuclear are a significant part of the UK energy mix and have not been removed as yet. There are however policies restricting the development of fracking, which remains under consideration by the UK and Scottish governments.

In his opening remarks at the Climate Ambition Summit held on 12th December 2020, UK Prime Minister Boris Johnson committed to ending taxpayer support for fossil fuel projects overseas as soon as possible, pledging £11.6 billion of overseas aid to the support of green technology and decarbonization.

The Climate Change Act 2008 sets the framework for UK efforts to reduce emissions (as detailed above).

Following the end of the Brexit transition period on 1 January 2021, the UK left the European Union Greenhouse Gas Emissions Trading System (EU ETS), replacing it with the UK Emissions Trading Scheme (UK ETS). The UK ETS sees the UK depart from the established EU wide ‘cap and trade' scheme, replacing this with a standalone version of the scheme applicable to the UK, with the aim of reducing greenhouse gases (GHGs) by requiring operators in energy-intensive sectors to net off emissions allowances against actual CO2 emissions from the installation for the year, and is broadly similar to the EU ETS.

Prior to 1 January 2021, the UK Government explored a number of options for carbon pricing post-Brexit, including continued participation in the EU ETS and a carbon emissions tax, but chose to adopt the UK ETS which mirrors the EU ETS in almost every way. The UK Government was keen to provide certainty and consistency to businesses and as such, adopted the same principle of a cap on emissions (reducing over time), together with freely tradeable emission allowances that companies and sectors are familiar with. The UK also ensured consistency with the industries that fall within the scope of the EU ETS and UK ETS, covering electricity and heat generation, heavy industry and aviation.

The UK Government has sought to be clear in its approach and to ensure that there is no carbon leakage from manufacturers moving carbon-intensive industries overseas. However, although the UK ETS does seek continuity with the outgoing EU ETS regime, the UK Government is in the process of actively exploring ways to evolve the scheme in order to make the most of opportunities that a standalone system presents, whilst at the same time considering the linkage of the UK ETS and EU ETS, as is being encouraged by business groups and sectors.

No decisions have yet been made on this, but 2021 is likely to be a transitional year for the UK ETS scheme as it is established.

UK Revenue and Customs and the UK Treasury published a consultation on 21 July 2020 that proposed a new tax on CO2 emissions in the event a UK ETS closely following the EU ETS was not put in place post-Brexit. Following the introduction of the UK ETS, the proposal would appear to have lost traction, but more recently has been raised by UK Government as a potential solution on delivering on Net Zero targets and pricing of greenhouse gas emissions (in addition to the UK ETS). The consultation outlined the following proposals:

• Emissions from stationary installations above the agreed allowance would be liable to the tax
• A payments system would reward installations that reduced their emissions beneath their emission allowance as a result of genuine steps to decarbonize (not through reduction inactivity).
• The scope of the tax would be broadened to cover multiple other industries.

Whilst no longer an imminent introduction on the basis that the UK ETS has been introduced, the UK Government is still actively exploring the potential for a carbon tax, and various consultations are ongoing in respect of such measures.

As highlighted above, the UK is in a period of transition following Brexit and is actively assessing its own powers in this sector, with regards to implementing suitable policies that are not constrained by the wider EU position. The consultation, previously instigated on a potential carbon tax, provides valuable insight as to how a tax on CO2 would look and operate if it were to be introduced.

Most of the activities involved in CCS are industrial processes that can be regulated by existing legislation (such as the licensing of a power station with CCS equipment under the Electricity Act 1989 and the licensing of pipelines for the transportation of CO2 to an offshore storage facility). However, until the adoption of the Energy Act 2008, the storage of CO2 offshore was prohibited unless it formed part of an enhanced oil recovery (EOR) process licensed under the Petroleum Act 1998.

The CCS Directive 2009 provides a framework for the regulation of CCS across the EU as a whole (Directive 2009/31/EC of the European Parliament and of the Council of 23 April 2009 on the geological storage of CO2 and amending Council Directive 85/337/EEC, European Parliament and Council Directives 2000/60/EC, 2001/80/EC, 2004/35/EC, 2006/12/EC, 2008/1/EC and Regulation (EC) No 1013/2006) and has been retained as law in the UK following Brexit via the  Storage of Carbon Dioxide (Amendment and Power to Modify) (EU Exit) Regulations 2019 (SI 2019/544).

The Storage of Carbon Dioxide (Licensing etc.) Regulations 2010 (SI 2010/2221) (the 2010 Licensing Regulations) (as amended) implement the requirements of the CCS Directive 2009 that relate to licensing and an operator's storage and post-closure obligations. The 2010 Licensing Regulations were made under the Energy Act 2008 and came into force on 1 October 2010. Similar regulations have been made for Scotland (Storage of Carbon Dioxide (Licensing etc) (Scotland) Regulations 2011 (SI 2011/24) and Environmental Liability (Scotland) Amendment Regulations 2011 (SSI 2011/116). Between 2011 and 2015 the UK Government ran two competitions to develop a full-scale demonstration CCS plant in the UK. Neither competition resulted in a CCS project being successfully developed. In November 2015, it was confirmed that the £1 billion ring-fenced capital budget for the CCS competition was no longer available.

Since 2015, the UK Government and industry have consulted on the inclusion of CCS in the CfD allocation, and other models for the development of commercial-scale CCS projects. In July 2019, BEIS announced consultations on (1) potential business models for CCS in industry and power, and for carbon dioxide transport and storage; and (2) the identification and re-use of oil and gas assets for CCS projects - the consultations being part of a government package of announcements to drive investment in low carbon energy.

Yes. Renewable energy has been supported in the UK through the use of various government incentives over the last 20 years. These include the Renewables Obligation, the Feed-in Tariff and more recently, the Contract for Difference.

The Contract for Difference regime has recently been revised to permit traditional and mature energy technologies, such as onshore wind and solar, to participate in the auction process and regain eligibility for Government support.

The UK Government has targeted 40 GW of offshore wind by 2030, including 1 GW of floating offshore wind, alongside the expansion of other low-cost renewable energy technologies.

The UK published its Energy White Paper in December 2020, containing details of plans to decarbonize buildings, which account for the second-largest source of emissions in the UK.

The UK Government had already set out a high level of ambition on energy efficiency and is seeking to ensure as many UK homes as possible are rated EPC band C by 2035. In addition, the UK Government's strategy to reduce emissions from heating UK buildings is increasingly focused on heat pumps and low-carbon heat networks. Research is underway to consider the potential for hydrogen (instead of natural gas) to heat the UK’s buildings.

The White Paper built upon this, confirming the UK Government’s intention to establish the future home's standard that ensures that all new-build homes are zero carbon ready (consulting upon this in 2019), and consulting on regulatory measures to improve the energy performance of homes, including how mortgage lenders could support homeowners to make such improvements.

The Smart Export Guarantee (SEG) was introduced in January 2020, replacing the Feed-in Tariff, and looks to support household renewable power and heat. The SEG tariff enables households with small-scale low carbon generators, for example, solar panels or wind turbines, to receive payments for the electricity they export to the National Grid.

The continued growth in the sale and use of electric vehicles (EVs) is a key part of the transition to the low-carbon economy and reducing GHG emissions.

The UK Government has announced that sales of new conventional cars will be phased out by 2040, the Scottish Government setting a target for this  8 years earlier in 2032, and have provided upfront subsidies in order to reduce the cost of purchasing EVs and support for the roll-out of improved vehicle charging infrastructure.

As part of the Energy White Paper, the UK Government have committed to a number of actions in the transport sector – these include the publication of a National Bus Strategy, aimed at reforming the sector to deliver higher frequency of service, ‘green buses’, simpler fares and improved routes, together with the publication of a Transport Decarbonisation Plan that aims to decarbonize the entire transport system.

In 2021, the UK Government is expected to publish its proposed delivery plan in meeting such objectives and the key milestones to be achieved.

In relation to other forms of transport, the UK Government is launching a £20m Clean Maritime Demonstration Competition, which will support UK design and development of clean maritime technology, including hydrogen.

The Committee on Climate Change (CCC) developed a detailed and robust evidence base with buy-in from industrial stakeholders which demonstrates a credible pathway to significant decarbonization of the UK industry. This evidence was accepted by the UK Government with the fourth and fifth carbon budgets being set at levels that imply clear ambition for industrial decarbonization.

CCC recommended that the Government should undertake a set of decarbonization roadmaps, working with the energy-intensive sectors. In 2013, the Government established a £1m research program on these lines, the Industrial Decarbonisation and Energy Efficiency Roadmaps to 2050. CCC subsequently recommended that these should be turned into detailed action plans – which were taken forward by UK Government in the Industrial decarbonization and energy efficiency action plans.

In addition, the UK Government in its 2017 Clean Growth Strategy, has set out its ambition to deliver a 20% improvement in energy efficiency. As detailed above, the implementation of the UK ETS also seeks to reduce GHG emissions in industry, and the Energy White Paper published in 2020 contains a broad list of initiatives and consultations that will take place from 2021 onwards with the intention of driving forward such goals.

The UK Government is planning to meet around 10% of the UK’s energy needs with bioenergy in 2050 and has tightened the sustainability limits for use of to 200gCO2/kWh in 2020, moving towards 180gCO2/kWh in 2025. This means that bioenergy (produced by burning wood, plants, food waste and other biological matter) will become an increasingly clean source of fuel.

CCC's 2011 Bioenergy Review set out a hierarchy of best use for bioenergy feedstocks, which showed that using wood in construction to displace cement and steel is the best use, followed by BECCS and use in hard to abate sectors such as aviation. This hierarchy of best use has been reflected in UK Government policy, with the increased use of wood in construction now a policy commitment in the Government’s 2017 Clean Growth Strategy.

More recently, however, in January 2020, the Climate Change Committee published its advice and recommendations for UK Government in relation to land use and the need for reform if the 2050 Net Zero targets are to be achieved. The report sets out a series of potential options for emissions reduction in land use, including an increase in tree planting by around 30,000 hectares of broadleaf and conifer per year, encouraging low-carbon farming practices (such as ‘controlled-release' fertilizers, restoration of peatlands in terms of at least 50% of upload peat and 25% of lowland peat, and encouragement of bioenergy crops.

The recommendations of the Climate Change Committee are being taken forward by UK Government as part of its wider engagement on the drive towards Net-Zero.

Fundamental reform of the electricity market has taken place since the Climate Change Act was passed in 2008. This includes the introduction of long-term contracts for the generation of low-carbon electricity and a shift to competitive approaches when allocating contracts i.e. Contract for Difference regime and the implementation of Electricity Market Reform. The outcome of such developments has supported dramatic reductions in the cost of renewable energy and led to the proportion of electricity generated from renewables increasing from 12% in 2012 to 33% in 2018. In 2020, 42% of electricity was generated from renewables compared to 41% from fossil fuels.

Funding for offshore wind and other emerging technologies has been extended to the mid-2020s helping to support investors in developing projects and cutting costs. This has also been bolstered by the Offshore Wind Sector Deal, setting out a strategic approach to deliver increased offshore wind capacity of 30GW by 2030, while boosting the UK economy, and is a key pillar in the UK Government’s energy strategy and White Paper.

The introduction of a UK ‘carbon price floor’ has put a minimum price on emissions from the power sector. This has helped to drive the transition away from coal to lower-carbon sources of energy.

No new coal-fired power stations have been built since the Climate Change Act was passed. The UK Government has however supported the conversion of existing coal plants to use biomass (burning wood, plants, food waste and other biological matter), instead of investments in new dedicated biomass plants.

In April 2019 the Bank of England issued a policy statement requesting all UK banks and insurers to address their financial risks from climate change and to evidence how they will mitigate these financial risks. It is anticipated that the policy will lead to new liability risks for banks and insurers who do not comply with these new rules, and expected that banks and insurers will be less inclined to finance or insure businesses that actively contribute to or are affected by climate change.

In July 2019, the UK Government launched its Green Finance Strategy, setting out the actions that the Government proposed to make. This included ensuring that current and future financial risks and opportunities from climate and environmental factors are integrated into mainstream financial decision-making, together with the acceleration of finance to support the UK’s carbon targets and clean growth agenda. In addition, the UK Government is seeking to ensure that UK financial services capture the domestic and international opportunities arising from “greening finance”, such as climate-related data and analytics and new green financial products and services.

The UK Government is due to formally review progress against objectives in 2022, but it was announced in November 2020 (in an update against the UK’s sustainable finance initiatives) that the UK Government intends to mandate climate disclosures by large companies and financial institutions by 2025, and implement a new ‘green taxonomy’, intended to provide a classification as to what is meant by ‘green’ in order to assist firms and investors of understanding the impact of their investments on the environment.

The UK Government also intends to issue its first-ever Sovereign Green Bond in 2021, subject to market conditions.

More recently, large financial institutions (including Barclays) have been urged by pension and investment funds to cease offering loans to fossil fuel companies and to set clear targets to phase out services to energy companies that fail to align with the Paris climate goals. This is a trend that continuing, as well as banks and pension funds setting out their own methods of ensuring compliance with Paris climate goals through the introduction of energy efficiency and carbon reduction measures in their own businesses e.g. RBS have a detailed overview on the website of its commitment and compliance to date.

The growth of the ESG agenda has also contributed significantly in this area, with many large companies, financial institutions, pension and investment funds all developing ESG strategies with regards to not only their own operations but also in the investment decisions that are being made.

Climate change-related litigation is on the increase, both globally and in the UK. According to the London School of Economics, the number of actions issued globally almost doubled between 2017 and 2020, with approximately 1,587 cases brought globally by May 2020. The majority of these cases (around 75%) were brought in the United States, but a large proportion of the remainder was brought within the EU, Australia and the UK.

Climate change litigation has typically included claims brought by action groups but in its broadest sense has also included more mainstream disputes. In recent years, there have been a number of claims brought against companies involved in the extraction, refinement and sale of fossil fuels (particularly in the US), relating to issues of nuisance, negligence, fraud and non-disclosure, and emissions associated with climate change. It is likely that such companies will remain the target of litigation, including in the UK with one case already being brought. In the UK, some of the main areas of litigation have focused on carbon saving initiatives and the implementation of UK Government policy. Two prominent cases include Tempus Energy challenging the implementation of the Capacity Market and Banks Renewables challenging the omission of onshore wind from the Contract for Difference auction.

A significant case did arise in the UK in 2020 in respect of the decision on the Heathrow Airport Expansion, where the Court of Appeal initially held that the UK Government had acted unlawfully in failing to consider the UK’s commitments under the Paris Agreement when making a decision on the development of Heathrow airport, and the impact that such decision would have in terms of GHG emissions. In December 2020, this decision was overturned by the UK Supreme Court, but the debate on UK Government decisions on infrastructure and transport in light of binding Net Zero commitments is one that we expect to see again in the future.

Aligned to this type of challenge, from an environmental perspective, ClientEarth has won three cases against the UK government with regard to illegal and harmful levels of air pollution. In a ruling handed down at the High Court in London, it was declared that the UK Government's failure to require action from 45 local authorities with illegal levels of air pollution in their area, was unlawful. Ministers were ordered to require local authorities to investigate and identify measures to tackle illegal levels of pollution in 33 towns and cities as soon as possible – as 12 of the 45 were projected to have legal levels by the end of 2018.

The diverse nature of the cases highlights the potential for litigation to grow in the UK in respect of climate change matters, not only from an environmental perspective, but being brought by large utilities and businesses, action groups and individuals targeting publicity and policy change.

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