Prime Minister Rishi Sunak has outlined plans to delay key climate targets on electric vehicles and household heating and insulation.  

Front and centre of the changes is a pushing back on the ban on the sale of cars with internal combustion engines from 2030 to 2035. The government is also softening the plan to phase out the installation of gas boilers by 2035, instead aiming for only an 80% phase-out. A 2026 ban on off-grid oil boilers will also be delayed to 2035, with only an 80% phase-out target at that date. Finally, the UK is scrapping plans to fine landlords who fail to upgrade their properties to a certain level of energy efficiency.

The Prime Minister will be hoping that a rollback of net-zero policies will be viewed as his support for families struggling with rising living costs. The government argue that pushing back the ICE ban to 2035 will save consumers money, although critics contend that longer exposure to volatile petrol/diesel prices could cost more. Meanwhile, the government hopes that the boiler rule changes will also be seen as saving households money (during a period of high energy prices) while the insulation policy changes will mean savings for landlords in the short term, although tenants may foot the bill for higher energy bills.

Opponents have been quick to point out the potential damage to businesses, arguing that the changes will undermine business and investor confidence in the UK’s green sector/agenda. In particular, there are concerns that car manufacturers will lose confidence in the UK in response to shifting targets and policies. It is interesting to note that the UK will likely have a general election next year, with the opposition party ahead in current polling and committed to maintaining (restating) the 2030 ban on ICE vehicle sales.

It is likely that the rolling back on these policies will do more harm than the policy changes themselves.  Many had anticipated the 2030 ban would need to be revised or refocused at some point, and the delay to 2035 brings the UK into line with the European Union, as well as places including Hong Kong, California and parts of Australia.  But while the UK is not falling behind, it is signalling indecision at a time when international OEMs are choosing where to build out critical energy transition infrastructure, plants and factories that could create jobs in the global green economy. The UK will already struggle to match the incentives on offer from countries like the US, so consistency of policy and appetite is all the more important. 

The delay also means the UK misses out on the chance to be a leader in terms of banning ICE vehicle sales. In part for this reason, Ford's UK chair Lisa Brankin was quick to criticise the move, noting that the original 2030 target was "…a vital catalyst to accelerate Ford into a cleaner future", adding the company had already invested £430m in upgrading its UK plants to produce electric cars.