Kerry McCarthy is the Labour MP for Bristol East.
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I hereby give notice of the Department for Energy Security and Net Zero’s intention to seek an advance from the Contingencies Fund of £55,000,000 for the UK Atomic Energy Authority pension schemes. This is a cash request to enable pension payments to be made as they fall due.
Full debate: Contingency Fund Advance: UKAEA Pension Scheme
Last week, the UK formally submitted its NDC to the United Nations framework convention on climate change. It is a world-leading, ambitious target that we hope will demonstrate ambition to other countries. In that NDC, we have a youth clause for the first time, and I am very keen to talk to Members across the House about how we can better engage with schools, communities and young people to bring them on board with us as we seek to achieve our ambitions.
Full debate: Topical Questions
That the Committee has considered the draft Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2025.
The draft order was laid before Parliament on 3 December 2024. I will set out some of the background. The UK emissions trading scheme was established under the Climate Change Act 2008 and the Greenhouse Gas Emissions Trading Scheme Order 2020 as a UK-wide greenhouse gas emissions trading scheme, to contribute to the UK’s emissions reduction targets and net zero goal. The scheme is run by the UK ETS Authority, a joint body comprising the UK and devolved Governments. Our aim is to be predictable and responsible guardians of the scheme and its markets.
Under the UK ETS, operators are required to monitor, report on and surrender allowances in respect of their greenhouse gas emissions. Most allowances are purchased at regularly held auctions, but operators in certain sectors at risk of carbon leakage are given a number of allowances free, to manage their exposure to the carbon price and the risk that business decarbonisation efforts could be undermined by higher carbon imports. Under the UK ETS, an “operator” is the person who has control over an installation. An “installation” is a stationary unit at which regulated activities take place, and sub-installations represent operations carried out at an installation in respect of which free allocation operators are required to report activity levels for ETS purposes.
There is an exception to the final year rule in circumstances where the permanent cessation of operations at a sub-installation is part of a series of changes that has resulted in a material reduction in the specified emissions per unit of production of those pre-cessation products which continue to be produced at the installation. The exception will incentivise decarbonisation, as operators that can demonstrate that the relevant requirements are met will continue to be entitled to the free allocation calculated in accordance with existing UK ETS rules, which is calculated in advance on the basis of historical activity levels.
Full debate: Draft Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2025
I suppose I should welcome the shadow Minister to his place, but it is a bit depressing to hear him outline the Opposition’s position. In the last year or two that the Conservatives were in government, we saw them U-turn and row back on getting to net zero. We recognise that it is an integral part of our growth and industrial strategy, which will protect jobs and investment in this country, so to hear the Opposition’s position spelled out in such stark terms is disappointing.
Net zero is part of our growth strategy, and energy security is very much at the heart of what we do in the wake of Putin’s illegal invasion of Ukraine and other global factors. The shift away from volatile fossil fuel markets is not just about a desire to reach net zero, although of course that is really important—we see evidence of what happens if we do not tackle climate change around us every day. It is about protecting our security. The UK emissions trading scheme is a key pillar of the climate and net zero policy regime and our industrial strategy. It sets a cap on emissions in the sectors covered, which currently represent about a quarter of the UK’s emissions, and guarantees that those sectors will reduce their emissions in line with our world-leading net zero target.
Only fossil fuel electricity generation will be captured by the UK ETS, so the increasing uptake of renewables and nuclear power will reduce the costs for consumers. By driving green investment as part of our industrial strategy, the UK ETS will also help to deliver a just transition, growing the UK’s economy and securing good jobs for people across the country.
I think the shadow Minister is arguing that decarbonisation is coming too fast, but we are absolutely at the forefront of the new technologies and industries. My hon. Friend the Member for Redcar could wax lyrical about what that means for a constituency such as hers. Redcar has a strong industrial base but its future will be built on decarbonisation technology and the accompanying jobs.
Delivering an industrial strategy is the centrepiece of the Government’s growth mission. It will make us energy independent while creating jobs and providing investment in communities across the UK. A key part of that will be investing and creating the right conditions so that the green industries of the future can flourish, and the UK ETS is a vital element of that approach. It sets out a clear trajectory for emissions from the sectors covered and drives investment in decarbonisation.
To ensure the scheme continues to remain a key driver of decarbonisation, our intention is to expand its scope further. We have recently consulted on proposals to expand it to energy from waste and waste incineration, and we have recently consulted on expansion to maritime operators and on a regulatory framework for integrating non-pipeline transport for carbon capture, usage and storage. Beyond those new sectors, we are exploring options to build the UK ETS into the world’s first integrated market for carbon emissions and carbon removal. Subject to consultation, our intention is to include engineered greenhouse gas removals. That would support the new technologies we need to reach net zero while providing a sustainable path for industry to decarbonise and flourish.
We recognise the importance of long-term certainty to decarbonisation planning. The authority’s intention is to run the scheme until at least 2050. The authority published a long-term pathway for the UK ETS in December 2023, outlining our intention to consult on extending the scheme beyond its current date of 2030. We will consult on that and on any cap for future scheme phases in due course.
We are committed to being attentive to views and to bringing forward changes as required to ensure the scheme operates efficiently and achieves emissions reductions. It is an integral part of our journey on our path to decarbonisation coupled with industrial growth. I commend the order to the Committee.
Full debate: Draft Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2025
We know that nature-based solutions have a key role to play in climate mitigation and keeping to 1.5°C at home and abroad. I have met the Minister for Nature, my hon. Friend the Member for Coventry East (Mary Creagh), and the Government have appointed two special representatives for climate and for nature, who will be working closely together too.
Full debate: Climate Change: Nature-based Solutions
We are not convinced that the Bill is necessary as a well-developed legislative framework with legally binding targets is already in place, including, of course, the Climate Change Act 2008 and the carbon budgets. However, I appreciate the action on both climate and nature and the hon. Member’s commitment to both. I believe that our offices are already trying to find a date for us to meet.
Full debate: Climate Change: Nature-based Solutions
I am aware of the excellent work being carried out at Lochwinnoch. We know that protecting and restoring our peatlands is essential for tackling the climate crisis. We are committed to restoring approximately 280,000 hectares of peatland. We are also looking at innovative ways of getting funding into those nature-based solutions so that they can thrive.
Full debate: Climate Change: Nature-based Solutions
Although the development consent order for Cleve Hill solar park was granted by the previous Government in 2020, as she said, the Department for Energy Security and Net Zero may still be involved in any proceedings relating to the implementation of that order. As a result, I cannot comment today on the details of that project. The reasons for the decision and details of supporting plans are available on the Planning Inspectorate’s website, as the hon. Lady knows. I am afraid I cannot elaborate or speculate on that published material.
The hon. Member spoke eloquently about the importance of the site to her constituents—the views, the biodiversity and the birds, and the importance of wetlands. My colleagues in the Department for Environment, Food and Rural Affairs and I are working closely on nature-based solutions to climate change, and wetlands play an important role. I am also glad that the hon. Member acknowledged the importance of reaching our net zero objectives, with that mission for clean power, by 2030.
As I said, I cannot speak specifically about Cleve Hill, but I hope I can reassure her by speaking in general terms about Government policy. First, it ensures that all local impacts are considered in the planning process. Secondly, it makes a steadfast commitment that those who host clean-energy infrastructure should benefit from it. In order to achieve our goal of clean power by 2030, we will need to deploy various renewable energy sources. According to the recent National Energy System Operator clean power pathway report, we need to increase solar deployment from 15 GW to 47 GW. Along with onshore wind, solar is the cheapest clean power option available to us right now, making it an essential part of the UK’s energy mix. Without a substantial increase in solar deployment, the clean power mission becomes very difficult.
That is why my right hon. Friend the Secretary of State relaunched the solar taskforce earlier this year. It is also the reason that the Under-Secretary of State for Energy Security and Net Zero, my hon. Friend the Member for Rutherglen (Michael Shanks), who has this portfolio, cannot reply to the debate, because he is at a meeting of the solar taskforce. The taskforce brings together the industry and Government to discuss the actions needed to rapidly increase the deployment of solar panels on rooftops and in solar farms, and it will publish its recommendations in a solar road map very soon.
We should never lose sight of the core motivation behind our clean energy mission. Clean power generated here in Britain will reduce our dependence on volatile imported fossil fuels. It will provide lower bills in the long term and create thousands of highly skilled future-proofed jobs across the country. Delivering those benefits for the British people requires the development of new infrastructure. We accept that a top priority should be the deployment of solar on rooftops. That is why we are bringing forward new standards to ensure that all newly built houses and commercial buildings are fit for a net zero future. We will encourage the installation of solar panels on those buildings where appropriate.
All proposed solar projects are subject to a robust planning process. Most projects are assessed by local planning authorities themselves, and those assessments are governed by the national planning policy framework, which encourages developers to engage with local communities before submitting an application. Local planning authorities will continue to seek representations from local communities and will continue to weigh local considerations against the need for renewable energy.
A wide variety of community benefits can be delivered, including funding for local projects, investment in the local area, direct benefits to individuals and, as I said, opportunities for community ownership. Great British Energy will build on existing community energy schemes, helping communities to unlock opportunities through the local power plan. In the hon. Lady’s constituency, up to 1,400 homes are powered by Orchard Community Energy, which is a community-owned solar farm near Sittingbourne that provides power to Swale and Medway. That puts communities at the heart of the energy transition and gives them a stake in the transition to net zero as owners and partners in clean energy projects.
As I said, the Secretary of State for Energy Security and Net Zero, my right hon. Friend the Member for Doncaster North, is today at the meeting of the solar taskforce, which brings together industry and Government. It is considering the question of how a community can benefit from the infrastructure that is hosted on their patch, and its recommendations will be published in the solar road map.
To conclude, the Government are committed to considering the interests of local communities affected by proposed energy infrastructure. I thank the hon. Member for Faversham and Mid Kent for securing the debate and for giving me the opportunity to set out the Government’s vision. We will work to balance the local impact of new projects with the delivery of our clean power mission. The renewable energy transition will always be done through co-operation rather than coercion, ensuring that all parties benefit on our journey to net zero.
Full debate: Cleve Hill Solar Park