Existing policy is insufficient to deliver on the target and falls short by close to 50%. The gap is even larger to the @theCCCuk trajectory required for net zero. 2/7
We will need a policy package consisting of 4 elements:
1) financial support especially for low-income households
2 structural reform of bills and stamp duty 3) regulatory backstop in early 2030s 4) all of this underpinned by robust governance framework
3/7
A modest carbon tax of £50/t CO2 on heating fuels would be sufficient to fund the required heat pump uptake with subsidies tapering off over time as equipment costs fall. 4/7
Levies and taxes on electricity versus gas need structural reform. The current set-up disincentives switching to heat pumps. 5/7
Shifting taxes and levies, a carbon tax and reduced equipment cost reduce the need for subsidy. 6/7
Finally, a regulatory backstop in the early 2030s similar to petrol and diesel cars will provide the market with certainty and ensure we meet net zero. 7/7
Should have been “off the press” not “of”. Clearly need a second coffee!
The EU’s hydrogen strategy is out laying out a European vision for hydrogen. THREAD euractiv.com/section/energy…
1/ Key sectors for using hydrogen identified in the strategy include industry (e.g. steel, chemicals), shipping and aviation. This is sensible as few alternatives exist for decarbonising these sectors.
2/ The Hydrogen Strategy assumes a lot of hydrogen from gas reforming with CCS will be needed as hydrogen from renewable electricity won’t be available fast enough to meet demand. Risk here is lock in as so-called blue hydrogen is not zero carbon.