Mission Zero Review: How Does Construction fit in?

Introduction

Net Zero has been placed at the forefront of UK policy over the last few years in light of the growing awareness of the impacts of climate change. The UK Government has committed to reach net zero greenhouse gas emissions by 2050 and its Net Zero Strategy was published in 2021.

However, amidst an everchanging economic landscape, the Department for Business, Energy and Industrial Strategy, Secretary of State appointed Chris Skidmore MP to chair a review (“the Mission Zero Review”) of the UK’s Net Zero strategy to ensure that reaching the target by 2050 is still obtainable and does not place unreasonable stress upon UK businesses and consumers.

On 13 January 2023, the Mission Zero Review was finalised and published. The report focuses on 129 proposals, put forward by Chris Skidmore MP, which aim to capitalise on potential opportunities from creating a green economy.

Mission Zero Review

The Mission Zero Review sets out 129 proposals, a selection of the key proposals for the construction and engineering industry are set out below:

1. Tax incentives: companies involved with building sustainably, in-line with decarbonisation plans, will be offered tax credits.
2. Environmental and climate protections: it is proposed for environmental and climate safeguarding measures to be introduced into future free trade agreements in the hope of removing trade barriers to environmental goods and services.
3. Trailblazer Net Zero City: it is suggested for at least one UK city to become the hub for net zero and to achieve the measure by 2030.
4. Reforms of the planning system: the Mission Zero Review outlines the need to reform the planning system at its heart by increasing the importance of the carbon footprint of a project at the outset.
5. A Net Zero Charter Mark: it is proposed that a prospective charter is set up which acknowledges companies which are best achieving targets in comparison to their competitors.
6. The implementation of cross-sectoral infrastructure to be implemented by 2025: it is proposed that this infrastructure is set up to support the building and adaptation of new energy sources such as hydrogen

Comment

With regards to planning reform, although changes have yet to be made, construction companies should be mindful of their carbon footprint within tender processes and planning proposals in order to effectively place themselves ahead of future planning guidelines which now seem inevitable given Chris Skidmore MP’s comments. Considering such protocols now may place companies in a stronger position during the tender process for public projects.

Similarly, the introduction of a charter to measure a company’s efforts towards reaching net zero has been suggested, however, there are no clear plans to introduce this yet. Nonetheless, this proposal shows the Government’s willingness to use net zero to reward companies that make the necessary adjustments. It reflects policy reform which appears to be focusing on empowering firms to actively consider their carbon footprint.

The proposal for a trailblazer net zero city certainly opens the door of opportunity for those in the construction industry. It is inevitable that significant works would have to be undertaken in terms of public projects for any UK city to be fast-tracked to net zero by 2030, therefore it is important for companies to keep an eye out for the chosen trailblazer city (or cities) to capitalise on public tenders to aid the de-carbonisation process in the next 7 years.

Although it is unclear which tax credits will be offered by the Government to encourage companies to reduce their carbon emissions, it is noted by the Mission Zero Review that the US and Canada have benefitted from similar fiscal measures and therefore the UK should implement the same. The tax credits offered in the US and Canada predominantly focus on hydrogen-related projects and endeavours. Therefore, it is likely the credits in the UK will focus on the same.

It remains clear that political pressure will continue to mount for net zero to be a serious objective of the UK Government. The Government in turn recognises that in order to hit the 2050 deadline it must incentivise cooperation and the construction industry will therefore have many opportunities to capitalise. It is worth noting the review consists of proposals rather than definitive policy and we therefore look forward to seeing which proposals will be implemented.

To view our previous updates on Net Zero, please follow the link here.