Energy and Industrial Strategy Homes, heat and buildings Carbon dioxide To phase out the installation of high carbon fossil fuel heating systems in homes off the gas grid in England Proposed regulation to phase out the installation of high carbon fossil fuel heating systems in homes off the gas grid in England, bringing forward low carbon heat at the point of boiler replacement. 2026 proposed Department for Business, Homes, heat and buildings Carbon dioxide To phase out the installation of high carbon fossil fuel heating systems in non- Proposed regulation to phase out the installation of high carbon fossil fuel heating systems (e.g. oil, liquefied petroleum gas (LPG), coal) in buildings off the gas grid in England, bringing forward low carbon heat at the point of boiler replacement. 102 8th National Communication Chapter 3 Policies and Measures 103 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) NDRHI scheme – industrial, commercial, public sector, agricultural and not-for- profit organisations – e.g. businesses, hospitals, and district heating schemes. DRHI – Domestic properties, primarily To decarbonise the generation of heat in both industrial/commercial and domestic sectors. To develop a high quality supply chain that is able to carry out the mass deployment of low carbon heating systems in the 2020s and beyond. To contribute towards the UK's renewable The Non-Domestic Renewable Heat Incentive (RHI) provides financial incentives to increase the uptake of renewable heat by businesses, the public sector and non-profit organisations. Eligible installations receive quarterly payments for 20 years based on the amount The Domestic RHI is a government financial incentive to promote the use of renewable heat. Eligible installations receive quarterly payments for 7 years for the amount of renewable heat it is estimated Legislation is set by BEIS. Both Homes, heat and buildings Carbon dioxide Reducing domestic gas lowering consumer bills and carbon emissions, and improving our energy security, by ensuring new boilers meet the highest standards of efficiency. Preparing for the energy Ensuring new boiler installations prepare the ground for the future transition of homes to low carbon heating, including for a potential hydrogen conversion and exploring the role of This consultation sets out proposals aimed at improving the efficiency of newly installed gas boiler systems, through product standards and improved installation practices. The consultation will also test the case for requiring that all newly installed gas boilers are hydrogen-ready, to support any future Finally, the consultation also explores the role of hybrid heat pumps as a transitional technology on the journey to Net Zero. Homes, heat and buildings Carbon dioxide This £30m competition aims to bring forward private sector investment in the UK heat pump industry, building up product diversity and supply chain resilience, and efficiency gains and cost reductions from innovation and This scheme will provide up to £30m worth of grants to bring forward/attract additional heat pump manufacturing capacity to the UK. Funding will be provided to companies for eligible capital costs, driven by additionality and VfM. At least two major investments that would otherwise not be made in the UK within this Spending Review period should be This will encourage meeting UK heat pump demand and targets, and also creating export opportunities. There is potential to attract more than £250m of private investment, create new, commercially sustainable jobs, reduce unit costs for UK consumers, and cut heat pump delivery times from up to six months to one month. Homes, heat and buildings Carbon dioxide Expand deployment of low-carbon heat pumps in order to reduce direct carbon dioxide emissions from gas and oil boilers, and indirect emissions from the use of electric heating appliances that are less energy-efficient than heat pumps. Plan to introduce an obligation on the manufacturers of fossil fuel boilers sold in the UK to meet targets for a rising standard for low-carbon heat pumps as a proportion of their overall sales mix, either directly or through acquiring credits from other heat pump manufacturers. This will stimulate investment throughout the heat pump supply chain, and help to make a heat pump a more attractive, affordable and simpler choice for more consumers. Homes, heat and buildings Carbon dioxide To provide businesses with information on the in-use energy usage of their buidlings and promote action through Regulatory Planned An operational energy rating would fill a gap in information on how a building performs once it is operational. In large and complex buildings, information failure is a critical barrier to ensuring businesses are aware of and accountable for their carbon emissions. Homes, heat and buildings Carbon dioxide To support industry to deliver a neighbourhood trial by 2023, a village scale trial by 2025 in order to enable strategic decisions in 2026 on the role of Trials of hydrogen heating will be key to evaluating the practicalities of converting to hydrogen. They will provide a wide range of evidence on costs, feasibility and the way in which consumers experience the conversion process and hydrogen for heating in their Hydrogen appliance testing Homes, heat and buildings Carbon dioxide To determine the feasibility of hydrogen as a heating solution for various pruposes, specifically domestic heating and distribution appliances such as boilers Numerous hydrogen devices developed and undergoing testing, with proposals from manufacturers regarding costs, production, and 2021 UK Government, regulators, Homes, heat and buildings Carbon dioxide The Social Housing Decarbonisation Fund will upgrade a significant amount of the social housing stock currently below EPC C up to that standard, delivering warm, energy-efficient homes, reducing carbon emissions and fuel bills, tackling fuel poverty, and supporting green jobs. Delivery in progress, expected to be completed by December 2022. The 2020 Summer Economic Update announced awarded £61m of funding to social landlords across England test innovative approaches to retrofitting up to 2000 social homes improved to at least EPC band C and supporting up to 1,200 local jobs.
104 8th National Communication Chapter 3 Policies and Measures 105 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) Homes, heat and buildings Carbon dioxide The Social Housing Decarbonisation Fund will upgrade a significant amount of the social housing stock currently below EPC C up to that standard, delivering warm, energy-efficient homes, reducing carbon emissions and fuel bills, tackling fuel poverty, and supporting green jobs. The first wave of the Social Housing Decarbonisation Fund (SHDF) was launched in August 2021. It is providing around £179m of BEIS funding and around £187m of co-funding from Registered Providers, equalling a total investment size of around £366m in financial year 21/22. A further £800 million funding was announced in the Net Zero Strategy for Wave 2, the competition launch for Wave 2 is scheduled 2021 UK Government (BEIS), Local Homes, heat and buildings Carbon dioxide The aim of the proposals is to incentivise mortgage lenders to develop new low cost green products aimed at improving energy performance and to raise awareness among their customers. The policy would function as an enabler to achieving our wider net zero targets, such as getting as many homes as possible to be upgraded to Energy Performance Certificate (EPC) Band C by 2035. We have consulted on the role that mortgage lenders in England and Wales can play in helping homeowners to improve the energy performance of their homes. The consultation proposed that lenders disclose information related to the energy performance of their portfolios and sign up to meet an improvement target. The target could be achieved by lenders offering low cost green finance products to customers (e.g. green mortgages, further advances), offering incentives (e.g. cashbacks), and providing information and advice to customers on the changes they can make. Homes- heat and buildings Carbon dioxide All homes to EPC by 2035 Regulatory Proposed. The Introduce standards to improve the energy efficiency of Homes, heat and buildings Carbon dioxide All homes to EPC C by 2035 Regulatory We commited in Introduce minimum energy performance standards to improve the energy performance of owner-occupied homes linked to behaviour points where building upgrades are most likely Homes, heat and buildings Carbon dioxide Amend PRS Regulations to require privately rented homes in England and Regulatory We consulted in the We committed in the Clean Growth Strategy to improve as many private rental homes as possible to EPC band C by 2030 where practical, affordable and cost effective. In the Net Zero strategy we committed to setting long-term regulatory standards to upgrade privately rented homes to EPC band C by 2028. The consultation proposed to apply to new tenancies from 1 April 2025 and to all Homes, heat and buildings Carbon dioxide Improve the fabric energy efficiency of Buyers of non-domestic buildings will need to upgrade the property's energy efficiency to EPC B within 24 months of purchase, Homes, heat and buildings Carbon dioxide Amend PRS Regulations to require privately rented non-domestic in England and Wales to reach EPC B by 2030 Rented non-domestic buildings will need to reach EPC B, with Homes, heat and buildings Carbon dioxide The GHFIF competition was designed to encourage domestic energy efficiency retrofit amongst homeowners by promoting the establishment of green lending products and supporting lenders to overcome the barriers to innovation posed by high initial development costs in an untapped green finance market. Funded through the Energy Innovation Programme, the £1.8m GHFIF competition launched in September 2019, and awarded three organisations grant funding to support the initial development and piloting of green home finance products that aim to incentivise energy efficiency retrofit in homes. The funded projects were led by two retail lenders and one fintech company. 106 8th National Communication Chapter 3 Policies and Measures 107 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) Homes, heat and buildings Carbon dioxide programme is to drive innovation and diversification in the green lending market and support the establishment of a wide range of green finance products and services which incentivise domestic energy efficiency and low carbon heating retrofit amongst both owner occupiers and private landlords. A second objective is to support lenders to develop expertise in energy efficiency and low carbon heating, and build relationships with the energy efficiency installer supply chain, and with advice provision services to streamline and improve Economic Due to launch in 2022 Up to £20m of innovation grant funding will be made available to support UK lenders to design, develop and pilot a range of innovative finance propositions, with a particular focus on non-mortgage related products. Through the GHFA competition, the range and depth of retrofit enabling green finance products and services available in the green finance market will be explored and developed to encourage and enable domestic energy retrofit and help a wide range of consumer segments meet future regulatory standards. Energy consumption (comprising consumption of fuels and electricity by end users such as households, services, Efficiency improvements of buildings (Energy consumption), Efficiency An interim uplift to the 2013 building regulations will come into force in June 2022, when new homes and buildings constructed to this standard will be expected to produce significantly less 2, compared to those constructed to the 2013 standard. This 2021 Department for Levelling Up, Future Homes Standard Energy consumption (comprising consumption of fuels and electricity by end users such as households, services, Efficiency improvements of domestic buildings (Energy consumption), Efficiency improvement of appliances Regulatory Planned When it is implemented in 2025, we expect the Future Homes Standard will ensure new homes are built not with fossil fuel technologies, but with heat pumps or heat networks.
The technical specifications of the FHS will be subject to further consultation in 2023. This will apply to England. 2025 Department for Levelling Up, Future Buildings Standard Non domestic buildings (excluding Efficiency improvements of non-domestic buildings (Energy consumption), Efficiency improvement of appliances Regulatory Planned When it is implemented in 2025, the Future Buildings Standard will deliver highly efficient non-domestic buildings which use low-carbon heat, ensuring they are better for the environment and fit for the future. The technical specifications of the FHS will be subject to further consultation in 2023. This will apply to England. 2025 Department for Levelling Up, Decent Homes Standard Homes, heat and buildings Carbon dioxide All homes to EPC C by 2035, Fuel Poor Homes to Band C by 2030 (Fuel Poverty) Regulatory Setting goal stage Social Housing White Paper committed to review the Decent Home Standard (DHS) to consider how it can better support the decarbonisation and energy efficiency of social Hosing. Initially based on EER C by 2035 (modelled subject to a £10k cost cap) but we will update the figures based on the final level of ambition once the Energy and Industrial Strategy Warm Home Discount Homes, heat and buildings Carbon dioxide through requiring energy suppliers to provide rebates to low-income Regulatory Planned The scheme obligates participating energy suppliers to provide rebates to low-income and vulnerable households. The scheme is being expanded to £475 milion per year from 2022/23 until 2025/26 least, providing £150 rebates to around 3 million households each winter, the majority automatically. Under the scheme, energy suppliers can also fund other measures such as energy advice, energy efficiency measures, and debt write-off. There will be separate WHD schemes in England and Wales and in Scotland. Government will shortly lay the regulations for England and Wales and publish a consultation for Scotland, which will be subject Boiler Upgrade Scheme Homes, heat and buildings Carbon dioxide Incentivise property owners to replace existing fossil fuel heating systems with low carbon heat alternatives, primarily heat pumps, to help grow demand for low carbon heat and build supply chains ahead of the introduction of regulations • The Boiler Upgrade Scheme will provide capital grants for the installation of low carbon heat technologies in domestic and small non-domestic properties. The grant model will help customers overcome the high upfront cost of low carbon technologies when replacing existing fossil fuel systems. BUS applies to • The BUS will provide grants of £5000 towards the installation and ce heat pumps and biomass boilers, and grants of £6,000 for ground source heat pumps. homes, heat and buildings, industrial, The Green Gas Support Scheme is a tariff support scheme for biomethane (AD) injection to the gas grid (following closure of the Non Domestic RHI in March 2021). The length of the tariff will be 15 years, with applications starting Autumn Tariff support scheme for supporting new AD biomethane injection Energy and Industrial Strategy

108 8th National Communication Chapter 3 Policies and Measures 109 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) Green Gas Levy Homes, heat and buildings, industrial, The Green Gas Levy is the funding mechanism for the Green Gas Support Scheme. The levy charges fossil fuel gas suppliers to raise funding for the tariff support payments to The Green Gas Levy operates as a fixed charge levied against every gas meter that supplies fossily fuel gas for the purposes of heat. The levy is reviewed annually to match the forecast expenditure of the Energy and Industrial Strategy Homes- heat and buildings Enabler – no direct impact The Simple Energy Advice service homeowners with impartial and tailored advice on how to cut their energy bills and make their homes greener. This service has been accessed by over Implemented Online advice service for homeowners to access corr information for energy efficiency measures which would suit their Energy and Industrial Strategy homes Enabler – no direct impact Drive forward industry led activity to stregthen and embed standards for retrofit, ensuring necessary protection is provided for consumers that have energy efficiency or heat measures installed, in accordance with the recommendations of PAS 2035/PAS 2030:2019 came into force in November 2021. Installers must be certified to those standards and registered with TrustMark to particpate in government schemes. An small update to the standard was published in January 2022, taking into account lessons learned from implementation on the ground. A more substantial update is being considered for 2022/23. 2019 Industry activity with leadership Business Energy and Industrial homes, heat and buildings Enabler – no direct impact To reduce supply chain risk to our current delivery schemes and understand and plan for future strategic supply chain needs, supporting the supply chain to grow and upskill in the key trades needed An ongoing programme of work including skills funding, working with industry to help them make better use of existing avenues for capacity building/understand the issues with those (non fiscal measures), and improving our knowledge and understanding via research to inform future interventions. Energy and Industrial Strategy Domestic and non-domestic buildings; 2 Sets minimum energy performance standards and implements energy labels for a range of energy-related products to increase the uptake of the most energy efficient products on the market, reduce energy bills and remove the least energy efficient products from the market.
Since 2019, this has - introducing ecodesign requirements for servers, power transformers and - updating ecodesign requirements for welding equipment, electric motors and variable speed drives, washing machines, dishwashers, refrigeration, commercial refrigeration, lighting products - rescaling the energy label for lighting products, electronic displays, washing machines, refrigeration and dishwashers to aid consumer understanding and reflect technological progress - introducing circular economy requirements for a range of products In force These measures help save consumers money on their energy bills by incentivising them to purchase the most energy efficient products on the market and removing the least energy efficient products from the market. This in turn spurs innovation within the market. More recently, circular economy principles have been introduced to reduce material waste by supporting consumers to repair products, keeping Energy and Industrial Strategy Domestic and non-domestic buildings; 2) Deveop a regulatory framework for heat networks to protect consumers and support growth of the wider market Measures are intended to protect consumers by ensuring fair pricing and deliver growth in the sector. Examples of measures establishing a framework for consumer protections similar to those for gas and electricity customers, proposals for more transparent pricing and proposals for giving heat networks equivalent rights and Energy and Industrial Strategy Heat Network Zoning Domestic and non-domestic buildings; 2) Introduction of heat network zoning in England, to help overcome barriers to deployment by identifying and designating areas where heat networks are the lowest cost solution for decarbonising heat. Our proposals for heat network zoning involve central and local government working together with industry and local stakeholders to identify and designate areas within which heat networks are the lowest cost solution for decarbonising heat. Certain buildings within zones would be required to connect to the heat network. This will help accelerate the deployment of heat networks where they are most appropriate and help heat networks increase their contribution towards our net zero commitments. Energy and Industrial Strategy

110 8th National Communication Chapter 3 Policies and Measures 111 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) Domestic and non-domestic buildings; Grow and decarbonise the UK heat network market, helping to overcome barriers to heat network market entry. £338M invested over 2022/23-2024/25. The Green Heat Network Fund has £328m invested (including £40m tail Green Heat Network Fund is the largest element, providing grants for large district heat networks for low carbon heat sources (e.g. heat pumps and waste-heat recovery). It replaces the Heat Networks Energy and Industrial Strategy Domestic and non-domestic buildings; Implemented Aims to encourage manufacturers to increase the energy and resource efficiency of games consoles and provide consumers and repairers information on repair and spare parts. Energy and Industrial Strategy Transition to zero emission road vehicles. Regulatory, Adopted Invest £3 billion in the National Bus Strategy, creating integrated networks, more frequent services, and bus lanes to speed journeys, and support delivery of 4,000 new zero emission buses and the infrastructure needed to support them. This will represent the replacement of nearly 12% of England’s local operator bus fleet. This included £71m in 2021 to support 335 new zero emission buses in 5 areas and £198.3m in 2022 to provide 943 buses. Changes to the RTFO Transport Carbon dioxide Low carbon fuels. Regulatory Adopted Maximise carbon savings from the use of low carbon fuels, including by increasing the main Renewable Transport Fuel Obligation (RTFO) target. We have increased the RTFO main obligation (the percentage of transport fuel in the UK that suppliers must show comes from renewable or sustainable sources) from 9.6% in 2021 to Transition to zero emission road vehicles. Regulatory Planned End the sale of new petrol and diesel cars and vans from 2030; from 2035, all new cars and vans must be zero emission at the tailpipe. Introduce a zero emission vehicle mandate setting targets for a percentage of manufacturers’ new car and van sales to be zero Transition to zero emission road vehicles. Regulatory, Planned Take forward our pledge to end the sale of all new, non-zero emission road vehicles by 2040, from motorcycles to buses and HGVs, subject to consultation. At COP26, we announced that following consultation we will end the sale of new, non-zero emission HGVs less than or equal to 26 tonnes by 2035, and that from 2040, all new HGVs must be fully zero Transition to zero emission road vehicles. Regulatory, Planned Ensure the UK’s charging infrastructure network is reliable, accessible, and meets the demands of all motorists. We have published an EV infrastructure strategy, setting out our vision for infrastructure rollout, and roles for the public and private sectors in achieving it. Building on the £1.9 billion from Spending Review 2020, the Government has committed an additional £620 million to support the transition to electric vehicles. The funding will support the rollout of charging infrastructure, with a particular focus on local on-street residential charging, and targeted plug-in vehicle grants. Further rail electrification Transport Carbon dioxide Improved transport infrastructure Fiscal Planned Electrify more railway lines as part of plans to deliver a net zero rail network by 2050, with the ambition to remove all diesel-only Increase the share of journeys taken by public transport, cycling and walking. Planned Invest £2 billion in cycling and walking, building first hundreds, then thousands of miles of segregated cycle lane and more low-traffic neighbourhoods with the aim that half of all journeys in towns and cities will be cycled or walked by 2030. As announced in the Transport Decarbonisation Plan, we will create at least one zero Launch of UK SHORE Transport Carbon dioxide Adopted New unit, UK SHORE, to tackle shipping emissions and advance the UK towards a sustainable shipping future. £206 million new funding to accelerate research into and development of clean maritime technologies and create skilled jobs across the country.
Maritime decarbonisation Regulatory, Planned Plot a course to net zero for the UK domestic maritime sector, phase out the sale of new non-zero emission domestic shipping vessels and accelerate the development of zero emission technology and infrastructure in the UK. We will engage with industry to explore establishing a UK Shipping Office for Reducing Emissions (UKSHORE) to transform the UK into a global leader in the design and manufacturing of clean maritime technology. Aviation decarbonisation Regulatory, Planned Become a leader in zero-emission flight, kick-starting commercialisation of UK sustainable aviation fuels (SAF), and developing a UK SAF mandate, to enable the delivery of 10% SAF by 2030, and we will be supporting UK industry with a £180m funding to support the development of SAF plants. 112 8th National Communication Chapter 3 Policies and Measures 113 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) HS2 Woodland Fund Land use, land-use change and forestry Carbon dioxide Afforestation and reforestation (LULUCF) Economic Implemented Grant to support woodlands to create a green corridor of connected wildlife habitats alongside the railway and restore Nature for Climate Fund Land use, land-use change and forestry Carbon dioxide (CO Economic Adopted 2020 Spending review announced the Nature for Cliamte Fund which provides Grants to support woodland creation and peatland restoration over a 5 year period. Reduction of particular fuels for domestic burning (Residential) Regulation Implemented This regulation aims to regulate the sales, distribution and marketing of we wood (>20% moisture), Bituminous house coal and manufactured solid fuels with sulphur content over 2% Cross-cutting (removals) Carbon dioxide (CO In the first phase of the competition, to produce designs for GGR Projects which are of high quality and represent proposals which, if implemented, would advance the development of GGRs In the second phase of the competition, to apply the best of these designs to successfully construct, operate, Fiscal Adopted In the first phase of the competition, to produce designs for GGR Projects which are of high quality and represent proposals which, if implemented, would advance the development of GGRs in the UK. In the second phase of the competition, to apply the best of these designs to successfully construct, operate, test, r processes and technologies which can be used to remove GHGs Energy and Industrial Strategy Cross-cutting (removals) All UK government has an ambition of at (announced in Net Zero Strategy). To support this ambition, government will consult on policy measures to incentivise investment in GGRs in spring 2022. BEIS launched a £70m innovation competition in 2021 for Direct Air Capture 2e removals per annum by engineered GGRs by 2030 (announced in Net Zero Strategy) To support this ambition, government will consult on policy measures to incentivise investment in GGRs in spring 2022. BEIS launched a £70m innovation competition in 2021. In Phase 1 23 projects were supported up to £250,000 each and around 15 of these will be going forward to Phase 2 of the competition. Phase 2 applicants can recieve up to £5million each to build their demonstration project based on the feasibility and design from Phase 1. Phase 2 demonstration projects will need to demonstrate a removal rate of up to 1000t CO 2e/yr and indicate how costs of CO2 removal can be reduced through scaling up to 50,000t CO2e/yr Accelerate the commercialisation of low carbon technologies, systems and business models across the economy. Economic Implemented Funding BEIS-led programmes on power, buildings and industry; DFT-led programmes across transport; and DEFRA-led programmes on natural resources, waste, and F_gases. Energy, and Industrial Strategy All All Sets out key research and innovation challenges for the next 5-10 years Information Implemented Sets out critical net zero research and innovation challenges across the UK that require development over the next 5-10 years, and presents timelines of short, medium and longer-term priorities. Will help align current and future government funding around agreed priorities and to crowd-in effort and investment from the private sector and research communities by providing a clear signal on our 2021 Led by BEIS; contributions 2 A capital funding scheme for heat decarbonisation and energy The Public Sector Decarbonisation Scheme of fers grants to public sector bodies to fund energy efficiency and low carbon heat measures. The scheme has already made available over £1bn during 2020/21 and 2021/2, and will invest a further £1.425bn over 2022/23 to 2024/45. The scheme aims to support the decarbonisation of public sector buildings by 75% (against a 2017 basline) by the end of Carbon Budget 6. The quantitative impacts on emissions have been estimated using BEIS's non-domestic buildings model. It models the deployment of low carbon heat and energy efficiency measurest in the UK's non- 2020 Overseen by BEIS and deliverd 2 The Public Sector Low Carbon Skills Fund provides grants for public sector bodies to access skills and expertise to unlock heat decarbonisation Launched alongside the Public Sector Decarbonisation Scheme, providing funding to public sector organisations lacking the skills to develop and deliver decarbonisation projects. Investment of up to £32m for Phase 1 (2020/21); investment of up to £15m for Phase 2 (2021/2022); investment of up to £14m for

114 8th National Communication Chapter 3 Policies and Measures 115 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) Local Net Zero Programme Local delivery of net zero Carbon dioxide Support local authorities and local actors across England to build capability and Fiscal Delivery ongoing The Local Net Zero Programme supports local authorities and communities across England in build capability and capacity to meet net zero, and ensure they play a leading role in decarbonisation.
The Local Net Zero Hubs to support all areas of England to reach net zero, including those lacking capacity and capability, or those facing unique challenges. The Hubs promote best practice and support local authorities to develop net zero projects that can attract commercial investment. Promoting best practice and support local authorities to develop net zero projects that can attract commercial investment. Increasing knowledge sharing to demonstrate and share successful Delivery of the Rural Community Energy Fund. This is a £10 million scheme which supports rural communities in England to develop Energy and Industrial Strategy Legislation will underpin all Northern Ireland Executive climate change Climate change legislation for Northern Ireland which includes a 2050 Net Zero target for Northern Ireland. Energy, agriculture, transport, economy, industry, forestry, waste, land use, cross This Green Growth Strategy will set out a framework for a future where Northern Ireland transitions from being a high to a low emissions society; where NI can enjoy the longer term economic, social, health and environmental benefits The Green Growth Strategy is the Northern Ireland Executive’s multi- decade strategy, balancing climate, environment and the economy in Northern Ireland. It sets out the long-term vision and a solid framework for tackling the climate crisis in the right way. Cross Cutting Multiple, including To provide key guiding principles for planning in Northern Ireland and both recognise the need to mitigate and adapt to climate change. To ensure existing planning strategy, policy and legislation continue to address the Implemented The overall objective of the planning system is to further sustainable development. The Regional Development Strategy 2035 (RDS) and the Strategic Planning Policy Statement for Northern Ireland (SPPS) provide the key guiding principles for planning in Northern Ireland and both recognise the need to mitigate and adapt to climate change. Engaging with a range of stakeholders; and applying best practice will ensure that the planning system is fit for purpose; evolves to reflect key developments in respect of sustainable development and climate change and that existing planning strategy, policy and legislation continue to address the climate change challenge. Cross Cutting Carbon Dioxide (CO 2) To lower the net energy consumption by 30% by 2030 (with 2016/17 as the baseline) and to establish effective energy management processes that unlock value Implemented Central government is the largest aggregated energy consumer in Northern Ireland. The EMS offers the opportunity 1. provide leadership on energy efficiency; 3. improve decarbonisation efforts In a context of rising energy prices – in which maintaining the status eases – embracing energy management is an imperative to ensure Government achieves value for taxpayers. benefits, energy management also contributes to the draft Programme for Government (PfG) through of greenhouse gas emissions and enhancing security of energy supply. In addition, it directly supports wider UK Government objectives on energy and climate action. 2019-2030 Northern Ireland Executive 2, (CH4, N2O) To increase renewable electricity generation and to reduce reliance on fossil fuel generation in Northern Ireland in the transition towards Net Zero carbon energy by 2050 (aim of the Energy Strategy for Northern Ireland). A revised renewable electricity consumption target for Northern Ireland of 80% by 2030, as defined by the Climate Change Act (Northern Ireland) 2022, soon to become legislation. The Article in relation to the target The Department for the Economy must electricity consumption from renewable 2022 Northern Ireland Executive

116 8th National Communication Chapter 3 Policies and Measures 117 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) Energy CO2, (CH4, N2O) Until it's closure in March 2017, policy instrument for incentivising renewable electricity generation. The Northern Ireland Renewables Obligation (NIRO) has been the main support mechanism for encouraging increased renewable electricity generation in Northern Ireland. It operates in tandem with the Renewables Obligations in Great Britain – the 'ROS' in Scotland and the 'RO' in England & Wales – in a UK-wide market for Renewables Obligation Certificates (ROCs) issued to generators 2005 Northern Ireland Executive Energy/heat, transport, industrial processing, agriculture, waste/waste Methane (CH4) To replace a significant proportion of natural gas used in the gas distribution network in Northern Ireland with locally produced biomethane to reduce emissions and dependence on The aim of the policy is to utilise excess agricultural and other waste in Northern Ireland to produce biomethane for injection into the natural gas grid to support, primarily, the decarbonisation of heating 2022 Northern Ireland Executive Energy, Power, Heat and Buildings CO2 To reduce or eliminate the risk of low- income households lagging behind in A joint initiative between the Northern Ireland Housing Executive and Ulster University and an EU Funded project. Its focus is considering combining domestic electrical heating systems with energy storage, and determining if this could be delivered and operated at scale. Also considering combining high levels of wind penetration into the electric network. Northern Ireland is renowned for its wind energy, and when dispatched down, i.e, when generation exceeds demand, has the potential to benefit low income householders. In 2020 15% of available wind energy with a retail value of over £80m. 2021 Northern Ireland Executive Energy, other sectors and cross cutting CO2, CH3 and NOx Phased plan of uplifts with a view to reducing operational emissions from newly erected buildings by 75-80% by 2026/27. At this point new buildings should be 'net zero ready' with net zero operational emissions achieved over time, as the electrical grid decarbonises. Regulatory Phase 1 implemented As an interim step to move towards net zero for 2050, phase 1 provides an uplift to new build standards to take effect A phase 2 discussion exercise will gather evidence, including whether an early introduction of requirements based on low carbon heating could be feasible for a phase 3 uplift in 2023.
Full implementation of ‘net zero ready’ is anticipated no later These later phases will also take into account developments in other administrations to address standards for work to existing buildings and in related areas, such as ventilation, overheating and, potentially, in collaboration with the Department for Infrastructure, electric vehicle charge-point provisions. We will, meanwhile, continue to remain alert to emerging developments in areas such as embodied carbon, fuel price assumptions and grid impacts. 2022 Northern Ireland Executive Those most at risk of fuel poverty in the owner occupied and private rented CO2 emissions Primarily a fuel poverty scheme which offers energy efficiency measures to improve the thermal comfort Implemented The Affordable Warmth Scheme is the NI Executive’s main fuel poverty scheme. It is a grant based scheme delivered in partnership between the Department for Communites, local Councils and the Northern Ireland Housing Executive. It has a targeted approach, aimed at private sector households most at risk of fuel poverty with an annual household income of less than £23,000. It provides a range of energy efficiency measures to improve thermal comfort. 2015 Northern Ireland Executive

118 8th National Communication Chapter 3 Policies and Measures 119 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) Those with old and inefficient boilers in CO2 emissions Primarily a scheme which offers an energy efficiency measure to improve the Implemented The Boiler Replacement Scheme is a grant based scheme funded by the Department for Communities and administered by the Northern Ireland Housing Executive. It assists privately owned households who meet the eligibility criteria to replace old and inefficient boilers that are 2012 Northern Ireland Executive Residential CO2, (CH4, N2O) To improve the energy efficiency of building fabric across the Northern Improving the energy efficiency of the Northern Ireland housing stock will seek to provide energy savings for households and support the reduction of carbon emissions. 2022 Northern Ireland Executive Other sectors (Housing – residential and CO2 The Strategy will provide a framework that can create better places to live and stronger communities through a housing system that can deliver up to 150,000 homes over its 15 year The overarching vision for the Strategy is that “Everybody has access to a good quality, affordable and sustainable home that is appropriate for their needs and is located within a thriving and inclusive community”. The vision is supported by 5 key objectives and 16 long Housing, energy, power CO2 To deliver a thermal improvement and decarbonised heating programme. The Housing Executive will collaborate with its sponsoring department Department for Communities, industry, academia, other government bodies, the regulator and householders to deliver a thermal improvement programme focused on improved energy efficiency measures, low carbon heating, electric tariff changes and improved householder education to effect behaviour change. 2022/23 Northern Ireland Executive Housing, Public, Local CO2 The scheme will explore if a building can produce net zero greenhouse gas emissions in use, known as 'zero carbon in use'. The standards explored in the pilot will far exceed current building regulations. The objective is that building to high energy standards now will Adopted The Housing Executive is undertaking the construction of a small development of new social housing units in North Belfast. This scheme will provide 6 semi-detached dwellings (2 bed, 3 person) and will incorporate Modern Methods of Construction (MMC), ultra- low energy building techniques and mechanical ventilation and heat recovery system with integral heat pump. Transport Carbon dioxide (CO2) and To enable departments to achieve their carbon reduction objectives with the associated environmental benefits. The contributing factors are expected to be reduced daily commuting and The COVID-19 response has demonstrated Northern Ireland Civil Service ’ ability to successfully adapt and innovate and effective new ways of working and communicating have emerged.This will facilitate the majority of employees (c.75%) to adopt a mix of workplace- based and remote/home working. The Service is also proposing to launch in April 2022 a number of Connect2 hubs that will provide drop-in facilities in key locations for staff right across the Northern Ireland Civil Service. One of the many advantages of these new ways of working is that it enables departments to achieve their carbon reduction objectives with the associated environmental benefits. The contributing factors are expected to be reduced daily commuting Transport and Energy Carbon dioxide (CO2) and Reducing the carbon impact of Transport Implemented Hierarchical approach to achieving modal switch to walking, wheeling and cycling, investment in clean public transport, park and ride sites and the provision of infrastructure to support the ongoing Northern Ireland Executive Waste Methane, Carbon Introduction of new recycling targets Legislation Ongoing Incrementally increasing recycling targets (65% for municipal waste by 2035 with interim targets of 55% by 2025 and 60% by 2030). A target of a maximum of 10% of municipal waste going to landfill by 2035; and minimum requirements for extended producer responsibility schemes including shifting collection, recycling and disposal costs from the end user or councils to manufacturers 2020 Northern Ireland Executive Waste Methane, Carbon To improve the quality and quantity it provides assistance to Councils to transform kerbside recycling and Household Waste Recycling Centres infrastructure and services 2019 Northern Ireland Executive

120 8th National Communication Chapter 3 Policies and Measures 121 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) Waste Methane, Carbon To increase awareness Implemented Key waste prevention measures that have been undertaken include; the carrier bag levy and Prosperity Agreements as well as the extensive waste prevention initiatives undertaken by the third sector through Department of Agriculture, Environment and Rural 2020 Northern Ireland Executive Waste Methane, Carbon To increase recycling Legislation Implemented.
Climate change legislation for Northern Ireland which includes a 2050 Net Zero target for Northern Ireland. Agriculture and Forestry/LULUCF CO Develop an afforestation programme to take forward Forests for Our Future commitments for 9,000 hectares of new woodland by 2030 contributing to forest strategy aim to achieve 12% forest Establishment of new woodland on land controlled by private individuals, businesses, charities and Councils 2020 Northern Ireland Executive Agriculture, Forestry/LULUCF CO 2 The Vision of the Strategy is that our peatland habitats in Northern Ireland are protected, enhanced and managed sustainably, are recognised for their intrinsic value and for the benefits they provide – for wildlife, people and climate. Framework for conservation and restoration of peatlands 2022 Northern Ireland Executive 2, N2O, CH4. To provide verifiable Northern Ireland baselines 1. Soil nutrient levels at field scale; 2. Estimates of carbon stored in soils & above ground biomass in the farmed landscape; 3. LiDAR based field & catchment level mapping of run- A new initiative aimed at verifiably baselining soil nutrient levels and estimating farm carbon stocks, right across Northern Ireland (NI). Farmers will have all their fields soil sampled and analysed by contractors. Results will be provided along with training, enabling farmers to match nutrient applications to crop need, thereby increasing efficiency, reducing excess nutrient run-off to watercourses and improving farm economic and environmental sustainability. Baseline carbon stocks in Northern Ireland's soils and above ground biomass (AGB) will be estimated at farm level for farmers and catchment/Northern Ireland scale for government. A full LiDAR scan of Northern Ireland will be carried out to assist in estimating AGB carbon stocks and field scale mapping of surface run-off risk areas. Additionally, baselines established through the Soil Nutrient Health Scheme will facilitate future monitoring and measurement of progress in managing nutrients and carbon, by farmers (at farm level) and government (at catchment / Northern 2022 Northern Ireland Executive To bring into Northern Ireland law the requirements of European Union laws on F-gases, to limit Northern Ireland emissions of greenhouse gases which Northern Ireland is required to continue adhering to the requirements of future European Union laws on both F-gases and ODS because of the terms of the Northern Ireland Protocol. 2009 Northern Ireland Executive F Gases and ODS chlorofluorocarbons To bring into Northern Ireland law the requirements of European Union laws on Ozone Depleting Substances, to help limit Northern Ireland's emissions of ODS, which can deplete the ozone layer. Northern Ireland is required to continue adhering to the requirements of future European Union laws on both F-gases and ODS because of the terms of the Northern Ireland Protocol. 2003 Northern Ireland Executive Education, Local Action Carbon Dioxide (CO The Carbon Literacy Project aims to raise awareness of climate change and the impacts of everyday actions on an individual, community and organisational basis to encourage action Education Implemented In December 2020, the Department of Agriculture Environment and Rural Affairs (DAERA) initiated a project with Keep Northern Ireland Beautiful (KNIB) to develop and deliver carbon literacy training specific to Northern Ireland. building upon the pre-existing Carbon Literacy Project ran in other parts of the UK. Accredited carbon literacy courses are being delivered to teachers across Northern Ireland utilising the existing eco-schools network. It is also being made available to youth and community leaders via a train the trainer approach. Work has also been undertaken to develop a new Open College Network (OCN) Award in reducing carbon footprints through environmental action. Northern Ireland Housing Executive have also joined the partnership to provide awareness of the 2020/21 Schools' Energy Awareness Programme (SEEAP), including a 'Design 2021 Northern Ireland Executive

122 8th National Communication Chapter 3 Policies and Measures 123 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) Implemented CO2 Aims to help participating businesses build capacity, assist with net-zero planning and progress reporting to enable delivery of immediate and long- Policy Implemented The programme will involve 15 larger established businesses (Champions) engaging with SMEs (businesses employing less than 500) in their value chain and supporting them on a journey to net zero, with funding obtained from UK Community Renewal Fund by It will also support increasing the number of businesses that have signed Climate Action pledges and is due for completion It is based on an initial micro pilot, co-developed by Business in the Community and Danske Bank, which was the first initiative of its kind in the UK or Ireland, and was designed to help companies understand their environmental impact and work towards implementing sustainable business strategies. 2021 Northern Ireland Executive Cross-cutting : Travel & Transport, Energy and Carbon emissions, Water 2 To ensure that the Department is suffiently addressing it's role within the Sustainability strategy Travel & Transport, Energy & Carbon Emisssions(non-travel), Water Management, Waste Management, Procurement, Biodiversity & Ecosystem, Corporate Social Responsibility. 2022 Northern Ireland Executive Energy – Renewable Energy Sector, 2 The current contract is sourced from 100% renewable electricity. This contract commenced on 1 April 2020 and expires The replacement collaborative contract commences on 1 April 2022, thr 2025. It will continue to be sourced from This is curently being implemented as best practice but becomes regulatory under the terms of the Climate Change (Northern Ireland) Act 2022, which received Royal Assent on 6 June 2022 Apr-20 Northern Ireland Executive Supply chain sectors involved in delivering government construction projects and outsourced services. 2 The Executive has implemented a policy to enhance the delivery of social value from public procurement. The Policy includes themes and outcomes to target zero carbon in supply chains. From 1 June 2022 all public sector tenders for works and services must include a minimum weight of 10% for social value in assessing and awarding contracts. This 10% minimum will apply to contracts for services and works above the threshold where the Procurement Regulations apply.
Measures, impacts and outcomes will be reported annually. The first report will be published in June 2023. Policy Implemented The social value policy targets procurement strategies - Deliver additional environmental benefits in the performance of the contract including working towar - contract specifications that support environmental - supply chains that minimise carbon footprint and emissions. - companies employ low or zero-carbon practices and/or materials. - assessing and minimising embodied carbon. Jun-22 Northern Ireland Executive 2 Invest to save schemes to upgrade heating and lighting sytems, including Electric Vehicle charging points to deliver carbon emissions savings across the Health Estate, especially in Health trusts. Economic Implemented Upgrade heating and lighting systems, including Electric Vehicle charging points to deliver carbon emissions savings across the Health Estate, especially in Health trusts. 2020 Northern Ireland Executive 2 Promoting energy efficiency across the Health estate which will make a contribution to the delivery of the central government emissions reduction Economic Implemented Energy efficiency schemes being carried out to deliver carbon emissions savings across public services including the Health Estate, 2021 Northern Ireland Executive 2 Cross-Departmental strategy contains a long-term vision to manage flood risk and drainage in a sustainable manner, which will help to address the future risks Implemented Development of future policy on the introduction of more sustainable, environmentally friendly and green solutions to managing our water. Northern Ireland Water is undertaking an innovative Oxygen and Hydrogen Demonstrator Project that will deploy a state-of-the-art one megawatt electrolyser at wastewater treatment works; use of this technology can assist in addressing the climate emergency by 2016 Northern Ireland Executive

124 8th National Communication Chapter 3 Policies and Measures 125 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) Energy, waste/waste management CO2 To contribute to economic regeneration through supporting private sector led development in key sectors of the The Fund exists to provide debt or equity support to provide sector led developments in a number of key economic sectors within the Northern Ireland economy. The overarching Investment Strategy identifies the sectors which are eligible for support and includes energy efficiency, energy storage and generation projects, including heat networks, non-domestic and domestic energy efficiency, photovoltaic, wind and hydro energy generation and waste 2017 Northern Ireland Executive 2 The Energy Efficiency Social housing project is a multi-million pound investment programme to improve the energy performance of almost 2700 of its homes This investment programme was to improve the energy performance of almost 1,900 homes. €23 million has been secured from the European Regional Development Fund (ERDF) through its Investment for Growth and Jobs Programme for NI 2014-2020, and a further €22 million invested by the NI Housing Executive. Several schemes have already been completed or are currently underway. The schemes no fines properties improving thermal efficiency in aluminium bungalows through the provision of external wall cladding, new double glazing and improved insulation measures. Housing, transport and energy CO 2 To secure a sustainable future, as a Strategic Housing Authority and as Northern Ireland's largest landlord. Policy in development to support a Vision of Green Growth and Healthier Households. It provides a framework for tackling environmental and social challenges over the next five years, including the climate emergency. This Strategy was approved by the Housing Executive’s Board in March 2022 and will be launched publicly later in 2022 with a long term end-state to retrofit Housing Executive stock, and to support the social housing development programme to support sustainable communities. The social and economic effects of this investment will be long-lasting, create jobs and support innovation across the industry. Most importantly, it will reduce fuel poverty, improve energy resilience, and help tackle climate change. 2 Carry out a cost benefit analysis of electricity and gas smart meters and other technologies in order to access half- hourly and daily consumption information Planned Data is at the heart of our future energy system. Gathering better quality data, and enabling appropriate access to it, will provide important benefits for consumers, network operation and market participants. It will also enable greater participation in the electricity system. Safely accessing this data will require the introduction of a range of technologies, regulation and consumer protection. Our approach to a digitised system will focus on consumer data, system data and accessibility and smart technologies. TBD Department for Economy and 2 Adopt policies that facilitate active consumers and energy communities If individuals and communities have an active stake in the energy transition they can also access more of the value generated within the energy system and be rewarded for the services that they may provide such as demand flexibility or data. We will develop enabling frameworks for both active consumers and Citizen Energy Communities. These frameworks will enable them to engage in a range of energy services including generation, supply, consumption and aggregation and consider what financial support or access to new revenue streams can be provided. TBD Department for Economy and 2 Net zero carbon and affordable energy. - Placing the consumer at the heart - Grow the green economy through innovation, support and focusing - Set clear targets, standards and regulations that drive improvements in energy efficiency including consumer behaviour, supporting investment - Replace fossil fuels with renewable energy supported by sustainable renewable imports and using these to decarbonise heat, power and transport. - Create a flexible, resilient and integrated energy system that integrates renewables across heat, power and transport, creating value for consumers and Net zero carbon energy means that overall greenhouse gas emissions from energy are zero. It means reducing emissions from the energy we use for transport, electricity generation, industry and our build environment, as well as removing any remaining emissions with schemes that offset an equivalent amount from the atmosphere. We will improve our evidence base from all energy sectors to support monitoring of our policy impact.
- Affordable energy – Energy provides value in enabling our comfort, e and basic needs. However, affordable energy can mean different things to different groups of consumers, for example energy bills can be a major concern for households on lower incomes, or help to ensure that businesses can be competitive in changing markets. We will review the drivers and definitions of energy affordability. This will include the balance of upfront investment and long-term energy bills as well as data development. Throuhg sustained engagement we will assess their impacts on our identified consumer 'Cross-Cutting Measures' 2022 This is a wide ranging strategy Civil Service, local government, 2, CH4, N2O The electricity system will be powered by a high penetration of renewables, aided by a range of flexible Research Implemented. The Scottish Governnment continues to maintain its focus on tackling barriers to development of renewables, such as aircraft and seismological radar issues, working in partnership with the industry

126 8th National Communication Chapter 3 Policies and Measures 127 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) 2, CH4, N2O The electricity system will be powered by a high penetration of renewables, aided by a range of flexible Other Implemented. The Scottish Government supports the development of technologies which can deliver sustainable security of supply to the electricity sector in Scotland and ensure that Scottish generators and flexibility providers can access revenue streams to support investments 2, CH4, N2O Scotland secures maximum economic continued investment and growth in electricity generation capacity innovative technologies which will deliver decarbonisation goals. own Estate Scotland announced the outcome of its application process for ScotWind Leasing, the first Scottish offshore wind leasing round in over a decade, in January 2022. As part of the bidding process, all applications had to submit a Supply Chain Development Statement outlining how they will deliver benefits to Scotland. The commitment made by developers secured investment in the Scottish supply chain of at least £1 billion for every gigawatt generated 2, CH4, N2O The electricity system will be powered by a high penetration of renewables, aided by a range of flexible Other Implemented The Scottish Government's Hydrogen Policy Statement (December 2020) sets out Scotland's support for a strategic approach to the development of the hydrogen economy in Scotland, setting a 2030 5GW production capacity ambition, while the draft Hydrogen Action Plan (November 2021) articulates the actions that will be taken over 2, CH4, N2O As above. Economic Implemented. Will provide support for a sustainable, secure and inclusive energy transition in the North East of Scotland. It is planned to invest £75m over a five year period to 2024/5. 2, CH4, N2O As above. Economic Implemented The SIETF provides grant funding to reduce energy costs and emissions through increased energy efficiency. Decisions on funding awards are weighted towards energy and/or carbon savings, therefore it is primarily aimed at businesses with high energy use. Industry CO2 Technologies critical to further industrial emissions reduction (such as carbon capture and storage and production and injection of hydrogen into the gas grid) will be operating at commercial 2 Utilisation Challenge Fund will help businesses and organisations develop and commercialise the technology, which involves harnessing and converting CO products such as synthetic fuels and proteins for use in aquaculture. The Fund will be administered by Scottish Enterprise and match- funded by industry, meaning over £10 million could be invested in the initiative over its two-year lifetime. 2, CH4, N2O The heat supply to Scotland's buildings will be very substantially decarbonised, with high penetration Scotland's homes and buildings will be highly energy efficient, with all buildings upgraded where it is appropriate to do so, and new buildings achieving ultra-high Economic Implemented Area Based Schemes provide funding for whole house retrofits, zero/ low carbon heating and microgeneration. Through Warmer Homes Scotland, the Scottish Government has made available renewable and micro generation heat measures and new insulation measures. Grant funding has also been increased to incentivise uptake on more expensive low carbon and renewable measures 2, CH4, N2O As above. Economic Implemented The LCITP supports investment in decarbonisation of business and the public sector. Launched in September 2020 the Green Low Carbon Energy Project Capital Funding Invitation targeted £50 million of support for projects that demonstrate innovative low carbon 2, CH4, N2O To phase out the need for new petrol and Implemented Phase out petrol and diesel cars and vans by encouraging electric vehicle uptake and actions such as switching the public sector fleet. Draft vision on Scotland public charging network presented to Scottish Parliament, funding announced 2, CH4, N2O To reduce emissions from buses Implemented Established a Bus Decarbonisation Taskforce to co-design a pathway to zero emission buses, and developed Scotland's subsidy model to phase out as the market for zero emission buses becomes self-sustaining. Several large operators have committed to transition by particular dates, range of guides published, £113 million Scottish 2020 Scottish Government, local 2, CH4, N2O To make Scotland's rail passenger services carbon free by 2035 through increased electrification of the network and through alternative traction Adopted Removal of diesel passenger trains and replacement with electric, battery or hydrogen trains by 2035. Development and delivery of rolling programme of electrification ongoing, with construction on some rail r others in latter stages of business case development. International rail cluster has been established, with 900 members. 2020 Scottish Government, Network

128 8th National Communication Chapter 3 Policies and Measures 129 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.)
Transport CO2, CH4, N2O To reduce emissions in the freight sector, and remove the need for new petrol and Other Planned Phase out petrol and diesel heavy vehicles by encouraging uptake of zero emission vehicles, including public sector fleet Reduce emissions from HGVs and HDVs by transitioning to Project group established to connect activity with energy suppliers, ers, finance etc. to incentivise/facilitate transition authorities, logistics sector, 2, CH4, N2O To decarbonise scheduled passenger flights within Scotland by 2040 Other Implemented Highlands and Islands Airports Limited, in partnership with a number of other organisations, have created a sustainable aviation test environment at Kirkwall Airport on Orkney. Ampaire successfully demonstrated their hybrid-electric aircraft there in August 2021, flying between W 2, CH4, N2O To increase proportion of low emission ferries in Scottish Government ownership Other Implemented Continue to examine the scope for utilising hybrid and low carbon energy sources in the public sector marine fleet as part of Scottish Government's vessel replacement programme. 2, CH4, N2O A more productive, sustainable agriculture sector that significantly contributes towards delivering Scotland’s climate change, and wider environmental, outcomes through an increased uptake of climate mitigation measures by farmers, crofters, land managers and other Regulatory Planned A new Scottish Agriculture Bill will be brought forward in 2023 to provide a replacement for the Common Agricultural Policy (CAP). 2O Nitrogen emissions, including from nitrogen fertiliser, will have fallen through a combination of improved understanding, efficiencies and improved soil condition Regulatory Implemented The Climate Change (Nitrogen Balance Sheet) (Scotland) Regulations 2022 came into force on 11 March 2022. The Scottish Nitrogen Balance Sheet will be reviewed and updated on an annual basis 2, CH4, N2O Emissions from red meat and Other Implemented As part of the National Test Programme (announced October 2021), Scotland has put in place livestock data and performance systems to support collation of data and performance information for 4, N2O Emissions will be reduced from the use and storage of manure and slurry Regulatory Implemented Amendments have been made to the Water Environment (Controlled Activities) (Scotland) Regulations 2011 which include improving controls on the storage of slurry and digestate to reduce leakage, and more targeted spreading to maximise the nutrient benefit and reduce emissions.The Water Environment (Controlled Activities) (Scotland) Amendment Regulations 2021 came into force from 2 Carbon sequestration and existing carbon stores on agricultural land will help to increase and maintain Implemented The Scottish Government and Scottish Forestry launched the Integrating Trees Network to raise awareness of the multiple benefits that planting trees can bring to agricultural businesses. The Scottish Government also committed (July 2020) an additional £1.5 million to further support the integration of small woodlands on farmers and 2, CH4, N2O To enhance the contribution of peatland to carbon storage with an increase in the annual rate of peatland restoration Economic Implemented Scottish Government will provide grant funding to support eligible land managers to deliver peatland restoration. The Scottish Government will undertake research to inform where restoration can deliver the greatest emission savings per hectare. 130 8th National Communication Chapter 3 Policies and Measures 131 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) LULUCF CO2, CH4, N2O To maximise the potential of land to help Research Implemented The pilots will begin development of their Regional Land Use Frameworks, which will be finalised by end-2023. 4 A reduction in waste sent to landfill Economic Implemented Route Map to reduce waste, and meet 2025 targets and beyond, has been under development, and a formal consultation will be published in May 2022. £70m Recycling Improvement Fund was Regulatory Planned Scottish Government will work with SEPA and key industry partners to scale up the existing landfill gas capture programme to mitigate effects of landfill and environmental impact of closed landfill sites 4, N2O A reduction in food waste Economic. Implemented Scottish Government provided £200,000 of funding in 21/22 for FareShare’s Surplus with Purpose scheme to support food redistribution. The programme works with farmers, growers and manufacturers to cover the additional costs involved with getting To reduce waste and establish a more circular economy, where goods and materials are kept in use for longer Regulatory Implemented Regulations to increase carrier bag charge passed by Parliament and came into force on 1 April 2021. Further work is underway to consult on a minimum charge on single-use disposable beverage containers. Energy transition (including oil and gas, on and offshore wind, hydrogen, electricity, carbon capture and storage), Construction (including the retrofitting of housing and non-residential properties), Transport (including road transport, railways, domestic aviation, shipping and aircraft support vehicles), Manufacturing (with a focus on engineering), Agriculture and land use management (including forestry). To create a future workforce that can support a Just Transition to a The Climate Emergency Skills Action Plan sets out the government’s plan to maximise the transition to net-zero for Scotland, ensuring that Scotland’s workforce has the skills required to make the transition to net-zero a just transition, fair and inclusive to all. It focuses on both immediate action as well as the longer-term systemic change that will It sets out a clear direction for the changes needed in the skills system, and signals the role that industry, communities and individuals across Scotland will play in achieving this.
2020 Scottish Government, Skills Local Authorities, Private and Construction and built environment, Transport, Nature, Energy, Engineering, To help people take a greener approach to their careers, from accessing training and learning new skills, to finding a The new Green Jobs Workforce Academy, delivered by Skills Development Scotland, will provide green Integrated Careers and Skills Assessments enabling individuals to draw on digital and appropriate face-to-face support; access to short, sharp industry certified course provision aligned to economic investment; development of a Skills Wallet providing access to targeted funding to individuals not in employment, those in low paid or insecure jobs and those in higher level jobs with the potential to progress; targeted and co-designed upskilling and reskilling measures and commitment to engagement with individuals, employers and skills providers 2021 Scottish Government, Skills Local Authorities, Private and There are 5 main energy, transport, manufacturing, construction, To secure and create jobs by supporting businesses and their supply chains to The Green Jobs Fund will invest £50 million through Scottish Enterprise, Highlands and Islands Enterprise, and South of Scotland Enterprise to help businesses which provide sustainable and/or low carbon products and services to develop, grow and create jobs. A further £50 million will be invested to support businesses and supply chains across a range of sectors – such as manufacturing, tech, and land based organisations – to take advantage of public and private investment in low carbon infrastructure, and the transition to a low carbon economy in Scotland and beyond, 2021 Scottish Government, Scottish Just Transition All Information Over the period of Carbon Budget 2 we will work closely with our key partners such as the Well-being of Future Generations Office and Wales TUC to develop our evidence base and further improve our understanding Research Implemented We need to ensure the transition to a cleaner, fairer future in Wales is carefully managed. The changes driven by the need to decarbonise our economy will have impacts on industries, sectors of socio-economic groups in different ways, depending on the pathways, policies and actions we choose. It could help to r existing inequalities, but there is a risk it could also exacerbate them. Nature Emergency All Information • Act to tackle the drivers of biodiversity loss, including pollution, climate change and unsustainable consumption. • Restore the damage done to our protected sites, habitats and species, and future proof them against further decline. • Change behaviour at all levels to support more sustainable management of natural resources (e.g. Circular Economy). Implemented This policy drives action across Welsh Government and also through Natural Resources Wales’ area statements, which delivers the policy in a local context. Action to tackle biodiversity loss is taken across the Welsh Government, but rooted in the actions set out in the Nature Recovery Action Plan (NRAP), its National

132 8th National Communication Chapter 3 Policies and Measures 133 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) The Clean Air Plan All Information We will ensure air quality, decarbonisation and natural resources policies are closely integrated to achieve complementary outcomes, consistent with our well-being goals and our Sustainable Development Research Implemented Significant and irreversible changes to our climate and weather patterns are predicted to continue to develop over the next few decades, even as we reduce greenhouse gas emissions. Welsh overnment recognises and will proactively manage the nterdependency between decarbonisation and A Circular Economy All Information Our ambition is to implement systemic change in consumption emissions and to make the circular economy a reality. This is set out Beyond Recycling (2021), which states we will increase resource efficiency across all sectors, moving away from high carbon, non-recyclable materials and continuing to reduce waste. By 2050, we aim to use only our fair share of the planet’s resources and have 100% recycling (zero waste). The global biodiversity and climate systems will be the key beneficiaries, but the environment of Wales itself will also benefit, for example, from reductions in Regulatory Implemented We must address the unsustainable consumption of resources as a root cause. Given 45% of global emissions come from the goods and products made and used every day, we need an approach which keeps resources in use and avoids all a circular economy. This means accelerating actions to increase resource efficiency, re-use, repair and re-manufacture across all sectors of the economy, seeking to retain and increase good quality jobs across Wales, and where appropriate, substitute high carbon, energy intensive materials with sustainable ones, including natural materials. During Carbon Budget 2 Planning Policy Wales (PPW) will continue to facilitate decarbonisation through the planning system by providing an ambitious and comprehensive policy framework to address the causes and effects of climate change. It will help to shape development Strategic Development Plans and Local Development Plans, to ensure they are maximising the opportunities to decarbonise through a place based approach to sustainable development. Implemented Welsh Governments national planning policy is set out in Planning Policy Wales (PPW). It puts emphasis on people and places and ensures developments built today leave a legacy of well-designed, sustainable places which improve lives. PPW has a firm focus on ‘placemaking’ – an approach to development which ensures communities have all the services they need within easy reach and development is of high quality. This includes planning policies, which are designed to help Wales lower its carbon emissions at the same time as creating places where people can live well. By 2025 all new City and Growth Deals will have carbon eduction at their core and will contain carbon reduction outputs as key metrics for Implemented Regional Economic Frameworks (REFs) are a key component of Welsh Governments approach to regional economic development and are being developed in partnership with key regional stakeholders, including local authorities.
REFs are intended as a vehicle to help promote collaborative regional planning and delivery amongst public, private and third sector partners, setting a shared vision and a set of common economic development objectives in relation to their areas. Tackling climate change and decarbonisation is central to the ambitions of the REFs. Welsh Governments new infrastructure investment strategy will be the successor to the current Wales Infrastructure Investment Plan, and will be published alongside our 2022-23 Draft Budget. fiscal Planned The infrastructure investment strategy will set the framework for Welsh Government investment in infrastructure and will be designed around the four well being themes of economic, nvironmental, social and cultural well-being. At its heart will be the Welsh Government’s response to the climate emergency, including the commitment to net zero and tackling the decline in biodiversity, and the strategy has been designed specifically to support the delivery of a net Skills Action Plan All Information Welsh Government will develop a Net Zero Wales Skills Action Plan, which it intends to publish in spring 2022. Planned Government have an important part to play in ensuring that skills are a key enabler for net zero, promoting fair work alongside good and safe employment in social partnership with trade Welsh Government will put the net zero challenge at the heart of a new Welsh Government Innovation Strategy, which it Planned This will sit alongside and complement the UK Government’s innovation strategy launched in July 2021, which focuses on prosperity through innovation. Digital All Information The Digital Strategy for Wales can support our journey to net zero. Implemented The Digital Strategy for Wales › Support remote working, reducing the need for travel › Support public sector organisations in delivering efficient services › Promoting the use of modern and efficient › Promoting the effective use of data

134 8th National Communication Chapter 3 Policies and Measures 135 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) Over the course of Carbon Budget 2 › Deliver Priority Regional Relationships › Share experience and learnings › Demonstrate and promote how a well- being of future generations approach can help drive positive action on the › Deliver the Wales/Ireland action plan, with climate change and sustainability › Continue to look at innovative ways Implemented Aligned with its International Strategy, Welsh Government have developed a series of action plans to set out how we will establish Wales as a globally responsible nation, which is making a fair contribution to tackling climate change. Electricity & Heat generation & Industry Welsh Government aims to reduce carbon emissions from the power sector in Wales whilst maintaining security of supply in a high renewables system. regulatory Implemented Later this year Welsh Government will publish its strategic policy position on combustion of fuels for electricity generation. It will set out a strong presumption against new fossil fuelled power plant, nor replacing current fleet of plant with alternatives which may themselves be the source of greenhouse gas emissions. Electricity & Heat generation, Industry & Wherever possible we must prevent further extraction of fossil fuels. Welsh Government have placed all forms of fossil fuels at the bottom of the energy hierarchy within our strategic planning document, Planning Policy Wales (PPW). regulatory Implemented In December 2018, Welsh Government committed to not issuing any new petroleum licensing in Wales, or support applications for hydraulic fracturing petroleum licence consents. The continued extraction of all fossil fuels, including coal and petroleum, is not compatible with our challenging targets for decarbonisation. Electricity & Heat generation, Industry & Business, Cross cutting, waste, Public Sector, transport, Residential Buildings An updated strategic assessment shows, apart from a modest potential need for smaller scale energy from waste capacity for non-recyclable waste and to properly dispose of dangerous wastes such as clinical waste, the success of our recycling and the decrease in waste generated in Wales means no further large scale energy from waste regulatory Implemented Following the publication of Beyond Recycling in March 2021, Welsh Government have brought forward an immediate moratorium on any future large scale energy from waste developments, as laid out in the Written Statement from March 2021, together with the accompanying updated Strategic Assessment on the need for new energy from waste capacity across the three economic regions in Wales. As laid out in our Written Statement, small scale energy from waste plants (of less than 10MW) must also supply heat, and where feasible, be carbon capture and storage enabled or ready Electricity & Heat generation, Industry & Business, Cross cutting, waste, Public The only way to deliver an affordable net zero energy system is by pursuing a joined-up whole-systems approach – and by ensuring full public engagement across the whole spectrum of actions needed. Implemented Welsh Government have initiated, funded, resourced and supported our Regional Energy Strategies, which start to identify the scale of change needed to reach a low carbon energy system and establish regional priorities for a low carbon energy system. This work models future demand for power, heat and transport and contains an economic assessment of the impact of delivering Electricity & Heat generation, Industry & Business, Cross cutting, Public Sector, transport, Residential Buildings The focus of this policy will be to achieve a joint view across all participants of the likely future energy needs in Wales to 2050, building on existing modelling. Bringing together thinking across the gas and electricity networks and across the transmission and distribution networks in this way, we aim to be the first country to have a joined-up approach to developing gas and electricity networks, enabling opportunities for additional Research Implemented Welsh Government have established a project with all the energy network operators in Wales, and Ofgem, to develop a long term plan for the energy networks in Wales.
It will look out to 2050 to understand what networks we need to support a net zero energy system and best serve the communities and places they support. The work will help to inform Future Wales, Wales’ National Plan. Electricity & Heat generation, transport, residential buildings, industry & Our aim is to provide better certainty of outcomes for renewable energy developers in Wales, while also enabling decisions to be made within a statutory timeframe, and the potential to include other ancillary authorisations as part of a single consent. Our process will complement the BEIS Offshore Implemented Welsh Government will improve and unify the consenting of energy generation projects in Wales to provide a quicker and more roportionate consenting regime for energy infrastructure. It intends to introduce legislation that explores providing an integrated system for consenting devolved infrastructure projects, including low carbon and enewable energy projects, on land and offshore. Electricity & Heat generation, transport, residential buildings, industry & consenting of energy storage in Wales to provide a quicker and more proportionate consenting regime. Welsh Government have delegated all planning applications for the consenting of storage (with the exception of pumped hydroelectric schemes) to Welsh regulatory Implemented The UK Government has made changes in relation to previously non-devolved projects, which have resulted in the full devolution of storage consenting (with the exception of pumped hydroelectric schemes) to Welsh Local Planning Authorities. These changes took effect in April 2019 and will impact on consenting during Carbon

136 8th National Communication Chapter 3 Policies and Measures 137 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) Electricity & Heat generation, transport, residential buildings, industry & By November 2022, Welsh Government will report on the effectiveness of the Welsh National Marine Plan, including progress being made towards securing plan objectives and the effects of the policies in the plan with respect to our support for marine renewable energy. Planned Natural Resources Wales (NRW) has a key role to play in advising on future opportunities for marine renewable energy and Welsh overnment are working with NRW to continue the Offshore Renewable Energy Programme (OREP). Its policy will be to streamline consenting herever possible, joining up regulatory processes and seeking win-win outcomes. Electricity & Heat generation, transport, residential buildings, industry & In Wales, the Whole system Business Research Innovation for Decarbonisation (WBRID) scheme challenges businesses to help communities and the public sector adapt to the challenge of net zero Implemented The Welsh Government PfG includes a commitment to further support innovation in new renewable energy technology, which will support the transformation of the energy system. Welsh Government have already supported Welsh businesses and academia to work together to build capability and develop solutions to drive forward net zero solutions. The increasing availability of “smart” data and use of data driven innovation techniques can ensure we better understand energy use and balance supply and demand on the local and national scale and we will pursue Electricity & Heat generation, cross Welsh Government is on its our way to meetings its target for 1 GW of renewable energy generation capacity to be locally owned by 2030. By 2019, 825 MW of renewable energy generation capacity was locally owned. It also have a target to expand renewable energy generation by public bodies and community groups in Wales by over 100MW between 2021 and 2026. Together with its commitment to review the target for renewable generation in Wales Welsh Government will review its 1 GW target to ensure this still meets the scale of our ambition. Implemented Welsh Government will develop new approaches to support new › Review the Welsh Government Energy Service, to consider the evolving needs of places, as we shape service pr › Explore new models connecting people and developments, so communities have a stronger relationship with them and › Support communities to explore partnerships › Assess options for other innovative ways of funding locally owned low carbon generation, building on the strong track record of community share offers in Wales. Electricity & Heat generation, cross cutting, public sector, industry & Welsh Government’s aim is to ensure maximum possible benefit is retained in Wales from new energy generators. Implemented It will look for opportunities to work with the private sector to deliver local priorities in support of net zero, and support Welsh businesses to take up supply chain opportunities and build the necessary skills in Wales to generate local social and economic benefits. Electricity & Heat generation, Residential Buildings, Industry & Business, Public › Consolidate these evidence bases commission work where necessary to fill Reseach Implemented Welsh Government will explore heat networks in the most appropriate areas within Future Wales. It has also worked with regions to develop ambition in relation to low carbon heat through energy strategies and heat will be a key consideration for local Electricity & Heat generation, Cross cutting, Residential Buildings, Industry Welsh Government will update the current national heat map for Wales to identify heat consumption and generation at sites across Wales. This will build on the work commissioned by the UK Government to update the National Comprehensive Assessment of heating and cooling published in September. In 2022, Welsh Government will also incorporate evidence from its work on Reseach Implemented Welsh Government need to identify sources of waste heat, which could be used to heat buildings. Welsh Government have supported the development of low carbon heat network projects in Cardiff and Bridgend, which have then secured UK Government funding. Industry & Business, cross cutting, electirity & Heat generation, Residential In 2021, Welsh Government published a new Manufacturing Action Plan. Through the plan it will futureproof manufacturing in Wales, make use of new technologies and importantly, drive down emissions. Supporting manufacturers to export is an important part of Plan, and the Export Action Plan sets out how it will be chieved.
Export Clusters will on sales to fossil fuel sectors overseas. Implemented Welsh Government will work with its manufacturing companies to develop a true circular economy within Wales through support provided by Business Wales and Food & Drink Wales. Industrial decarbonisation clusters will play a key role in this effort. Industry & Business, electricity & Heat greater recycling in businesses through the introduction of the new Business Recycling Regulations in 2023 and the introduction of extended producer responsibility for packaging in 2024 (which will also secure an increase in the recycling of business-to-business packaging). Planned Remaining competitive, resource efficient and energy efficient are a key component of Welsh Governments business support programmes, including Business Wales, and Food and Drink Wales. Businesses will also be able to more closely monitor their wastes, helping them to reduce and recycle more, through the introduction of a mandatory waste tracking system, including the specific reporting of food waste by food businesses. 138 8th National Communication Chapter 3 Policies and Measures 139 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) Industry & Business, electricity & Heat entrepreneurs, micro-businesses and SMEs to embed sustainable development elsh businesses exploit new opportunities and take proactive steps to realise the business benefits of resource and energy efficiency, as well as joining a growing community of forward- thinking organisations working towards a zero carbon uture. Industry & Business, Electricity & Heat Welsh Government will seek to prioritise the decarbonisation all to action, where Welsh Government are looking for applications that enable more of the business base to become carbon Implemented The Economy Futures Fund (EFF), which is discretionary and demand led, was established in May 2018 by consolidating a number of existing funding streams into one fund. As part of the EFF application process, businesses that wish to apply for support must set out how their investment proposal addresses one of the five Calls to Action outlined in the Economic Action Plan. Residential Buildings, cross cutting, The ORP underpins Welsh Governments ongoing development of retrofit policy and practice across all sectors. fiscal Implemented The ORP seeks to understand the best value combination of fabric, space and water heating improvements for individual properties and set out a route to net zero for each home. This draws on the principles set out in the Better Homes, Better Wales, efficiency for existing social Residential Buildings, cross cutting, Welsh Government will continue to invest £108m per annum as a minimum, to support social landlords in meeting the new WHQS standard. Drawing on evidence from ORP the new WHQS 2022 standard will focus on Fabric First principles and seek to bring all social housing as close as feasible to EPC A or fiscal Implemented The new standard will require the achievement of both affordable warmth and decarbonisation of homes, with a target date of 2033. It will also andate a process and route map for each social landlord to achieve the standard. By 2023 a PAS 2035 survey (the Publicly Available pecification that lays out a consistent assessment for energy retrofit measures) and a clear plan for individual homes Residential Buildings, cross cutting, Part L of the Building Regulations provides guidance on the conservation of fuel and power. It is Welsh Governments primary tool for raising minimum standards for new build regulatory Implemented Welsh Government have published its response to the 2020 review of Part L for new homes setting out our decision to introduce a 37% reduction (compared with current standards) in carbon emissions for new dwellings from 2022. On 20th May Welsh Government implemented changes to Part L of the Building Regulations, which will come into force in November 2022 and will deliver a significant reduction in carbon emissions. Welsh Government will make further changes to energy efficiency in Building Regulations in 2025 raising the bar to require new homes to produce a minimum of 75% less CO Residential Buildings, cross cutting, commitment in its Programnme for Government (PfG) and it will build 20,000 low carbon, social homes during fiscal Implemented Welsh Government consulted on new, higher DQR standards in 2020 and published the outcome of that consultation in July 2021. The revised standards will be effective from 1st October 2021 and will drive change beyond the social housing sector. Residential Buildings, cross cutting, electricity & heat generation, industry & While Part L sets the standard for what needs to be achieved in the construction of new build homes, Welsh Government have also invested £145m in the Innovative Housing Programme (IHP) over the last four years to work out how to fiscal Implemented Welsh Government are now mainstreaming the lessons learned in our affordable housing capital programmes to ensure the best practices identified becomes the default way we build future Residential Buildings, cross cutting, Homes purchased using a Help to Buy Wales (HtBW) loan are market homes; they are not specifically developed for the scheme. this means builders will need market homes meet new standards. fiscal Implemented HtBW allows eligible pur chasers to buy new-build homes with assistance from Welsh Government in the form of a shared equity loan. These homes must meet any terms and conditions set Government and so offer an opportunity to drive up standards and omote best practice in the wider housing market. Residential Buildings, cross cutting, electricity & heat generation, industry & The Welsh Government’s Smart Living (SL) initiative provides early support to develop place-based and innovative solutions to supply flexible, digital development pathways across Wales. Implemented The SL inititaive aims to make life more efficient, more controllable, economically productive, integrated and sustainable by using smart technologies to reduce demand for energy and associated greenhouse gas emissions for low carbon heat.
Welsh Government will continue to invest in specific behaviour change research Implemented Welsh Government will invest £350,000 with University College London over the next 2 years to understand pull and push factors to win hearts and minds about having low carbon measures installed in homes. It will look to secure a further £600,000 to examine how residents with heat pumps can benefit from low carbon energy. Transport, Cross Cutting, Industry & Welsh Government has stated its long- term ambition to enable around 30% of Welsh workers to work remotely, at or near to home, on a regular Implemented This will be achieved by helping to give more people the choice to work in a way that helps their productivity as well as As fewer car miles are driven in peak periods, it is likely that there will be additional benefits in terms of reduced noise, air

140 8th National Communication Chapter 3 Policies and Measures 141 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) Transport, Cross Cutting, Public Sector Information Welsh Government are continuing to invest more than ever in active travel routes and facilities to help local authorities create a comprehensive network of routes. It has an ambition to invest significantly in active travel between Fiscal Implemented This funding will deliver very significant increases in the quantity and quality of cycling and walking routes and infrastructure by investment in area-wide networks of better, safer cycling tracks – physically separated from traffic, including hub-and-spoke networks linking villages to towns in rural areas. For example, this could include support for workplace travel schemes that incentivise cycling and walking, funding to secure all weather cycle parking at railway stations, investment in public bike hire and e-bike hire schemes and campaigns to encourage more people to walk and to cycle. Transport, Cross Cutting Information Welsh Government are prepared to take significant action in both bus and rail as the core network of services, as well as embracing technology and emerging modes of shared transport to make public transport a more attractive, practical and affordable alternative to car travel. Fiscal Implemented Enabling people to switch from private cars to lower carbon modes of travel will be important to meet near term carbon budgets. This will be enabled by developing an integrated, multi-modal public transport system, which results in a seamless and effortless Transport, Cross Cutting Information The Welsh Governments Electric Vehicle charging strategy was published in March 2021. Its approach to EV charging will ensure that the charging infrastructure in Wales is on a par with the best in fiscal Implemented Improvements in this area will not be driven by government alone and we will need to work closely with partners across the public, private and third sectors in developing the infrastructure needed to give people confidence in using electric vehicles. Transport, Cross Cutting Information In addition to the actions to reform bus governance, we are committed to deliver on our targets to decarbonise the bus fleet. We will also reform the Bus Services Support Grant (BSSG) to encourage the decarbonisation of the bus fleet and continue to allocate funds, which enable our ambition. In addition, legislative provisions which support the decarbonisation of the bus fleet Implemented We estimate that delivery of the 2028 zero emission bus target will result in cumulative carbon savings of 1.32 MtCO2e between now and 2040. This assumes increased bus miles associated with improved service and additional bus mode share, which will be achieved through actions outlined in the above section on demand Transport, Cross Cutting Information Welsh Government have committed to deliver a zero tailpipe emission taxi and fiscal Implemented Reducing emissions from taxi and private hire vehicles will contribute to improving air quality in our towns and cities as well as contributing Transport, Cross Cutting Information In line with rail industry recommendations, a rolling programme of OLE electrification in Wales is recommended to form the backbone of the rail network, supported using alternative technologies fiscal Implemented A comprehensive programme to introduce new train fleets across the Wales and Borders routes is underway. This will include electric/ battery Stadler fleets for the core valley lines services and new diesel fleet which is expected to be in the region of 20% more efficient than Land Use and waste Information Whilst the Water Resources (Control of Agricultural Pollution) (Wales) Regulations 2021 have been developed primarily to prevent the pollution of watercourses, the Regulations are also a key part of reducing atmospheric Regulatory Implemented The Water Resources (Control of Agricultural Pollution) (Wales) Regulations 2021 came into force on 1 April 2021. The Regulations include transitional periods and will be fully implemented by 1 August 2024 and apply across the whole of Wales. Glastir Agriculture Information Glastir is the current five year whole- farm sustainable land management scheme, offering payment for the delivery of specific environmental goods and services and contributes towards tackling Fiscal Implemented The main aims of the Glastir scheme are to reduce the impacts of climate change within agriculture and reverse biodiversity loss, whilst improving water, air and soil quality. Whilst the majority of Glastir Advanced contracts expire in December 2021, any remaining contracts will come to an end by 2023. Land use, waste, Electicity and Heat A total of £40m was made available under the FBG through the EU Rural Development Programme to help farmers invest in new equipment and machinery.
Fiscal Implemented Grants of up to £12,000 were available to buy equipment to support farm efficiencies such as animal handling, energy efficiency, storage and management of nutrients – all of which contribute to lowering The scheme offered a maximum 40% grant contribution (from £12,000 to £50,000) towards capital investments in equipment and machinery which have been pre-identified to specifically support famers to address and safeguard nutrient management and improve water, soil and air quality by reducing the impacts Fiscal Implemented A total of £22m was made available through the last three rounds of the SPG, with the last funding window having closed in March 2021. 142 8th National Communication Chapter 3 Policies and Measures 143 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) Land Use and waste Information The WAHWF sets out our plan for continuing and lasting improvements in standards of animal health and welfare for kept animals, whilst also helping to protect public health and contributing to tackling the climate emergency.Our goal is for all livestock farms in Wales to use Animal Health Planning as an integral part Implemented Improving the health status of farmed animals can significantly reduce their carbon footprint, particularly when managed alongside actions to optimise feeding and breeding of animals for longevity – health benefits accrue most if animals are correctly fed, Land Use and waste Information The Red Meat Development programme has three strands crucial to the red meat sector’s future competitiveness, success and sustainability. From farm to fork, the projects contribute to an efficient red meat industry, leading to less wastage and therefore a reduction in greenhouse gases emitted from the supply chain. Implemented Hybu Cig Cymru are delivering the five year, £9.2m Red Meat Development Programme funded by the EU Rural Development Programme, which comes to an end in 2023. Identifying optimal genetics is crucial for the long term sustainable objective for improving the overall performance of any farming business, and offers both economic and environmental benefits enabling lambs to reach market specification sooner and with less inputs, thus improving a farm business's carbon footprint. Land Use, waste and Cross Cutting Information Development Programme is a £6.5m, five year programme (2014-2020) delivered by the Agricultural and Horticultural Development Board (AHDB). It delivers two distinct projects, Herd Advance and Strategic Dairy Farms which aim to increase the performance, health and resilience of the Welsh dairy sector. Implemented Healthy animals help protect the productivity and production levels of farmers, reduce capital losses, minimise negative trade impacts as well as reducing pollution and CO2 emissions.With funding available until 2023, AHDB Dairy will embark on several additional work Farming Connect Land Use, waste and Cross Cutting Information Contracted from October 2015 until August 2022, Farming Connect is a £28m programme, providing subsidised independent, tailored business support and technical advice. The Advisory Service, an element of the wider Farming Connect Programme, provides advice on how to achieve optimum results from livestock, which in turn helps Implemented Outcomes from projects and trials are shared widely to raise awareness amongst famers of the importance of emission reduction activities, changing behaviours and improving farming practices. Also available through Farming Connect is the Greenhouse Gas Emissions Interactive Farm – a tool developed to demonstrate different examples of how a typical Welsh farm could reduce its greenhouse gas emissions (demonstrated as carbon dioxide equivalents, CO2e) while also increasing profitability (either through saving money Agriculture Bill Agriculture Information Welsh Government will introduce the Agriculture Bill to create a new system of farm support that will maximise the protective power of Regulatory Implemented It is proposed that this new system will reward farmers who take action to meet the challenges of responding to the climate and nature emergencies, supporting them to produce food in We will also seek to replace the time limited powers in the Agriculture Act 2020 which we took to provide continuity and some much needed stability for our farmers as we left the EU. Land Use, waste and Cross Cutting Information The proposed SFS will provide support to farmers – both financial and advisory – which will be targeted at outcomes not currently rewarded by the market. It is proposed the fundamental change to the current Basic Payment Scheme will be the level of payment being linked to the outcomes delivered by a farmer through undertaking a range of management Planned The proposal is to go beyond an income foregone/costs incurred model and reflect the value of environmental goods provided through future payments. It is also proposed outcomes from existing good practice requiring continued maintenance should be recognised and rewarded as well as creation of new outcomes. This will ensure active farmers who are working to benefit the environment are supported. transition schemes Agriculture Information announced a package of support for farmers, foresters, land managers and food businesses worth over £227 million over the next three financial years to support the resilience of the rural economy and our natural environment. Funding will be made available for a transitional scheme to provide financial support to farmers who are converting their operations to organic farming. The Horticulture Development Scheme (the indicative budget allocation for this application window, between 4 April and 27 May, is £1.5m) and Horticulture Start Up Schemes (an Expression of interest window for the new Horticulture Start Up scheme will open on 23 May 2022 and close on 25 June 2022) are part of the transition scheme package. Additional investment in the rural economy will be announced over the next three years, as we continue the transition to the Sustainable Farming Scheme, promoting the sustainable production of food, and support the rural economy on the path to a net zero, nature positive Wales.
Land Use, Cross cutting Information Over the next five years we plan to create 30 new woodlands and 100 Tiny Forests to form part of the National Forest. This year we will consult on the long term strategy, organisational principles, delivery and funding models Implemented The National Forest will be made up both of woodlands on Welsh Government land and those planted by others, and will require a range of interventions and actions to create. In part it will be funded through existing woodland support schemes, and the woodland creation scheme. However, it will also require standalone delivery and funding mechanisms to enhance and deliver areas of woodland that would otherwise not be supported. 144 8th National Communication Chapter 3 Policies and Measures 145 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) Land Use, Cross cutting, Agriculture Information The scheme will provide payments to landowners to plant trees in Wales over the next two years. We opened a new window in September 2021 to allow more applications for this funding and ensure Fiscal Implemented The Welsh Government currently funds woodland creation through the Glastir Woodland Creation scheme, which provides grants to farmers and land managers to support planting of woodlands. In 2020 the Welsh Government allocated £17m to woodland creation through the Glastir Woodland Creation scheme – the largest Land Use, Cross cutting, Agriculture Information Wales’ first national peatland action progamme (NPAP) outlines a plan of action to be taken over the next five years with six priority themes. The programme will target those peatland bodies most in need of restoration with the aim of delivering 600-800 hectares of Implemented Welsh Government has allocated £1.5m for year 1, with a further £1m per annum for the remaining 4 years. Works began in September 2020. In addition, from July 2021 Welsh Government funded NRW to establish a National Peatland Team in NRW to Land Use, Cross cutting, Agriculture Information Welsh Government intends for the new sustainable farming scheme to provide payments to farmers who choose to deliver positive benefits from planting and managing woodland on their farms. Fiscal Planned This support will build upon the progress which will be made under the new woodland creation funding scheme over the next four years. Welsh Government also want to support farmers in planting ‘hedges and edges’. It will develop and implement mechanisms to improve support for this ahead of the Sustainable Farming Land Use, Cross cutting, Industry & The Timber Industrial Strategy will seek to identify priority interventions across the timber supply chain to develop a wood economy and encourage greater use of Planned We will take action to increase the supply of timber available for long-life uses, including graded structural timber. We will publish the Waste, Public Sector, Cross Cutting Information For Carbon Budget 2, as part of our action to reduce landfill overall we will halve the amount of avoidable food waste and reduce the landfilling of biodegradable waste in Wales to Implemented We have been on a trajectory of reducing landfill in Wales and this will continue. We are now targeting wastes which contribute the most emissions, such as food. By significantly reducing food waste and increasing the recycling of any biodegradable waste generated (for example through anaerobic digestion), we can reduce the damaging methane emissions caused by burying it in landfill. Anaerobic digestion also has the added benefit of generating renewable energy, thus contributing to renewable energy generation targets and Waste, Public Sector, Cross Cutting Information Welsh Governments Beyond Recycling Strategy highlights how it will strive to achieve the highest rates of recycling in the world. For Carbon Budget 2, this means it will achieve at least a 70% recycling rate for all major waste streams (household, industrial, Implemented Actions will link with specific action in other emission sectors, such as the new recycling regulations for non-domestic premises, Extended Producer Responsibility (EPR) scheme for packaging and Waste, Public Sector, Cross Cutting Information In 2020, Welsh Government launched the Be Mighty Campaign which asked everyone to make small but important changes in how they recycle with the aim of becoming number one in Implemented The campaign was co-developed and delivered in conjunction with local authorities as a coordinated national and local campaign, receiving significant traditional and social media coverage. Waste, Public Sector, Cross Cutting Information All operational landfills in Wales have been required to capture and utilise landfill gas since 1999. In Wales, this is implemented through the Environmental Permitting (England and Wales) Regulations 2016. Planned These regulations mean that landfill sites need to control the gas generated on their sites and must collect, treat it and use it in a way that minimises environmental damage. This includes the requirement to flare gas which cannot be used to produce energy. As current methane capture and reporting systems are variable in their effectiveness, we will work with NRW within this budget period to improve the controls and reporting around the release of landfill gas Public Sector, Cross cutting Information All public sector organisations should use the Routemap and Reporting Guide to develop and publish plans by March 2023 to achieve a collective Net Zero public Implemented All public sector organisations should use the Routemap and Reporting Guide to develop and publish plans by March 2023 to achieve a collective Net Zero public sector by 2030. Public Sector, Cross cutting Information The Welsh Government’s plan to achieve net zero as an organisation by 2030 will be published before March 2023. Implemented The Welsh Government’s plan to achieve net zero as an organisation by 2030 will be published before March 2023.
Public Sector, Cross cutting Information The Welsh Government to include Net Zero Wales commitments in our remit letters and sponsor arrangements with Implemented The Welsh Government to include Net Zero Wales commitments in our remit letters and sponsor arrangements with public

146 8th National Communication Chapter 3 Policies and Measures 147 Name of Mitigation Action Sectors affected GHG affected Objective and or activity affected Type of Brief Description Start Year of Implementing Entity or Entities Estimate of mitigation impact by gas (for a particular year, not cumulative in ktCO2 eq.) Public Sector, Industry & Business and mandatory part of tenders for appropriate public procurement contracts and prioritise products which are fully recyclable, multi-use or able to be re-purposed as part of a more circular Planned Make Carbon Reduction Plans a mandatory part of tenders for appropriate public procurement contracts and prioritise products which are fully recyclable, multi-use or able to be re-purposed as part of a more circular approach to waste. Public Sector & Transport Information All new public sector cars and light goods vehicles should be zero/ultra- low emission by 2025 and heavy Implemented All new public sector cars and light goods vehicles should be zero/ ultra-low emission by 2025 and heavy goods by 2030 Public Sector & Land Use Information All public sector organisations should understand the sequestration potential of land in their ownership by March 2023 and commit to taking action to realise this Implemented All public sector organisations should understand the sequestration potential of land in their ownership by March 2023 and commit to taking action to realise this potential by March 2030 Public Sector, Land Use, Transport, NHS Wales is committed to the collective net zero ambition by 2030 delivering through the NHS Decarbonisation Implemented NHS Wales is committed to the collective net zero ambition by 2030 delivering through the NHS Decarbonisation Strategic Delivery Plan Public Sector, Land Use, Transport, Electricity & Heat generation & Waste A joint NHS Wales and LG Social Care Decarbonisation Plan should be created to support the achievement of a collective Implemented A joint NHS Wales and LG Social Care Decarbonisation Plan should be created to support the achievement of a collective net Public Sector, Land Use, Transport, Electricity & Heat generation & Waste The Local Government Decarbonisation Strategy Panel and WLGA will support Government organisations to meet the collective net zero ambition by 2030 Implemented The Local Government Decarbonisation Strategy Panel and WLGA will support the commitments made by Local Government organisations to meet the collective net zero ambition by 2030

148 8th National Communication 3.7.1 UK Emissions Trading Scheme The UK Government in partnership with the Scottish Government, Welsh Government and the Northern Ireland Executive have established the UK ETS and now we are consulting on With a consultation published in March 202224, we are fulfilling our commitment to align the scheme with net zero and consulting on options to introduce the necessary changes to the cap predictably and smoothly over the coming decade. This consultation will ensure that we can develop the UK ETS so that it drives emission reductions, helps us deliver our ambitious targets, and continues to demonstrate the UK’s leadership on carbon pricing while supporting British industry. In line with commitments in the UK Government’s Net Zero Strategy, this consultation sends a clear signal to businesses to give them the confidence to invest in the transition to cheap, clean homegrown energy. In long term, the UK ETS will help reduce our reliance on fossil fuels, and exposure to volatile oil and gas prices on global markets. The consultation also looks at expansion of the scheme to more sectors of the economy, so it covers a greater share of emissions, with proposals to bring emissions from the domestic maritime sector within scope of the UK ETS. Expanding the UK ETS to additional sectors will ensure decarbonisation happens where it is most cost effective to do so, across sectors which are covered by the scheme. Included in the consultation is also a Call for Evidence to explore waste incineration and energy from waste potentially being brought within scope of the UK ETS, and the benefits of including Greenhouse Gas Removal technologies within the UK Emissions Trading Scheme. To mitigate the risk of carbon leakage, in which production and associated greenhouse gas emissions are offshored in ways that would not have happened if the pricing of emissions across jurisdictions was implemented in an equivalent way, we currently give at risk sectors a proportion of their allowances for free to reduce their exposure to the carbon price. The consultation to develop the UK ETS continues the review of free allocation policy we started with a call for evidence in 2021. The free allocation review will be conducted in two phases. The first phase is looking at aligning the share of free allocation under the cap, the industry cap, with proposed changes to the overall UK ETS cap. These top-down changes will be implemented to take effect in 2024, alongside changes to the UK ETS cap. The second phase of the review will focus on the methodology for distributing free allocation to participants. These bottom-up changes will be implemented to take effect by 2026 to align with the second allocation period of the UK ETS. Recognising the need for certainty in the near term, we are guaranteeing current levels of free allocation until 2026, subject to activity level changes. This will support industry in the transition to net zero in the context of high global energy prices while incentivising long term 3.7.2 Northern Ireland Executive The Green Growth Strategy is the Northern Ireland Executive’s multi-decade strategy, balancing climate, environment and the economy. It sets out the long-term vision for tackling 24

Chapter 3 Policies and Measures 149 the climate crisis in the right way and will be underpinned by the provisions of the Climate Change Act (Northern Ireland) 2022. This longer-term Strategy will be delivered through a series of Climate Action Plans aligned to carbon budget periods.
Each one will be comprised of a number of sectoral plans setting out the actions required to meet sector-specific greenhouse gas emission and other targets. The draft Green Growth Strategy was published for an eight-week public consultation which ended on 21 December 2021.
Development of the draft Strategy included extensive external stakeholder engagement including with the Green Growth Forum which was established to support the Strategy’s development. This Forum comprises key external representative bodies from local government, voluntary/community sector, private sector, academia, science/innovation, green industry, environmental organisations and public groups At the core of the draft Green Growth Strategy are ten commitments from the Executive. They represent the Executive’s aspirations and ambition for the future of Northern Ireland and the impetus they are placing on immediate action, in recognition of the urgency of mitigating the worst impacts of climate change. The responses to the consultation have been analysed and, alongside the legislative requirements of the Climate Change Act (Northern Ireland) 2022, used to inform the redrafting More recently, the Northern Ireland Executive’s Department for the Economy published the Energy Strategy – Path to Net Zero Energy on 16 December 2021. The strategy sets out Northern Ireland’s pathway for energy to 2030. This Strategy was followed in January 2022 by publication of ‘Path to Net Zero’ Energy Action Plan for 2022. The transformation of the power sector over the last 30 years provides a strong basis on which to move forward, on our way to reaching net zero emissions by 2050 across the UK economy. Decarbonising the power sector has led the UK’s efforts to reduce GHG emissions overall. This has largely been achieved through natural gas generation and renewables displacing coal, and more energy efficient appliances contributing to the reduction of electricity demand. Today, the country gets over half of its power from low In 2020, we published the Ten Point Plan for a Green Industrial Revolution and the Energy White Paper, which set out a clear vision for how we will transform the production and use of energy, in a decisive shift away from fossil fuels with a goal of a fully decarbonised, reliable, and low-cost power system by 2050. Since then, we have published the Net Zero Strategy, which committed to a power system where all our electricity will need to come from low carbon sources, subject to security of supply, bringing forward the government’s commitment to a fully decarbonised power system by 15 years. The dramatic rise in global energy prices following the Coronavirus (Covid-19) pandemic and Russia’s invasion of Ukraine has highlighted the importance of reducing our reliance on fossil fuels. The British Energy Security Strategy accelerates the plans set out in these publication in a series of bold commitments which put Great Britain at the leading edge of the global energy revolution. It will deliver a more independent, more secure energy system and support consumers to manage their energy bills. 150 8th National Communication ake action so that by 2035, all our electricity will come from low carbon sources, subject to security of supply, bringing forward the government’s commitment to a fully decarbonised power system by 15 years. By 2030, 95% of British electricity could be low-carbon, and we will increase our renewable energy capacity by a enewable generation, such as wind and solar through the Contracts for Difference (CfD) scheme by undertaking a review of the frequency 25 In February 2022 we announced auctions for funding through the CfD scheme would be annual rather than every two years, with the next round a year earlier in March 2023, helping to keep costs down through competition o deliver up to 50GW of offshore wind by 2030, including up to 5GW of • Implement the Dispatchable Power Agr eement (DPA) to support the deployment of first of a kind power CCUS plant(s). o secure a final investment decision on a large-scale nuclear plant by the end of this Parliament whilst taking measures to inform investment decisions during the next Parliament on two further nuclear projects with plans for up to 24GW by 2050. oach to onshore and offshore electricity networks to incorporate new low carbon generation and demand in the most efficient manner, taking account of the environment and local communities. ecent Smart Systems and Flexibility Plan and Energy Digitalisation Strategy to maximise system flexibility.26 • Pr ovide £380m for our world-leading offshore wind sector, investing in supply chains, infrastructure and early-coordination of offshore transmission networks, securing jobs and benefitting communities across the UK. nance so that the whole system can achieve our net zero ambitions and meet consumers’ needs. ollout of smart meters with a new four-year policy framework that introduces fixed minimum annual installation targets for energy suppliers from oader reforms to our market frameworks are needed to unlock the full potential of low carbon technologies to take us all the way to net zero. e that consumers pay a fair, affordable price for their energy, and can engage with a retail energy market that offers the products and services required to make choices that support net zero. 25 26

Chapter 3 Policies and Measures 151 rioritising critical system enablers Crucially, a whole system approach puts more emphasis on addressing critical system enablers. These measures will integrate different low carbon technologies into a coherent, single entity and optimise the system most efficiently and cost-effectively, in the Accelerating our domestic supply of clean and affordable electricity also requires accelerating the connecting network infrastructure to support it. Within this decade, our modern system will prioritise two key anticipating need, because planning ahead minimises cost and public disruption; and hyper-flexibility in matching supply and demand, so that minimal energy is wasted. This more efficient, locally-responsive system could bring down costs by up to In 2021, the onshore electricity network had approximately 18,000 km of high voltage transmission cables, and approximately 800,000 km of lower voltage distribution lines, enough to stretch around the world 20 times. Networks are a complex system that have been slow in their transformation. We aim to halve the time it takes to get this infrastructure built so we can double the pace.
This means adopting a new approach to developing and delivering electricity networks, both onshore and offshore, to ensure that new low carbon generation can be connected to The Offshore Transmission Network Review (OTNR) is transforming how the connections for offshore wind and other offshore transmission infrastructure is planned, designed, and delivered with coordination potentially saving consumers between £3-6 billion by 2050 and reducing the number of assets and onshore landing points by up to 50%. Ofgem has consulted upon regulatory changes to enable offshore coordination for in-flight projects, including potentially allowing anticipatory investment. BEIS is currently consulting on a new long-term policy regime for offshore networks. Onshore, we welcome electricity networks’ efforts to invest strategically ahead of need in new capacity, where it is efficient to do so, as well as Ofgem’s work to create a price control framework which allows and encourages this. We will publish, jointly with Ofgem, an Electricity Network Strategic Framework, which will set out how we will facilitate an agile, flexible onshore network that allows the rapid, transformational change required while responding to consumer and energy system needs. This will include our plans to introduce competition in the building, ownership, and operation of onshore network assets, on which we published a consultation in August 2021. We will ensure lower total costs by offering clear signals on future • establishing the Future System Operator as soon as practicable to oversee the UK energy system and to drive its contribution to the overall transition to net zero publishing a strategic framework this year with Ofgem for how networks will 27

152 8th National Communication • appointing an Electricity Networks Commissioner to advise government on policies egulatory changes to accelerate progress on network infrastructure • setting out a blueprint for the whole system by the end of 2022 in the Holistic Network Design (HND) and Centralised Strategic Network Plan (CSNP). updating the National Policy Statements to recognise these blueprints in the planning system, increasing certainty for the planning inspectorate, developers and other stakeholders, and speeding up delivery ensuring Ofgem expedites its appr ovals process to build networks in anticipation of major new sources of generation and demand. Government will set out the importance of strategic network investment in its forthcoming Strategy and Policy working with developers and the supply chain, we will increase pipeline visibility and certainty to help accelerate pr ocurement timelines. And we will work with Ofgem to speed up connections to the local distribution networks educe timelines for delivering strategic onshore transmission network infrastructure by around three years. Overall, we aspire to halve the end-to-end ensuring that local communities can benefit fr infrastructure in their area, we will consult on community benefit options. We will launch an Offshore Coordination Support Scheme which will de-risk delivery of well- advanced offshore wind projects The deployment of smart technologies and flexibility will underpin our energy security and the transition to net zero. Flexibility from technologies such as energy storage, smart and bidirectional charging of electric vehicles, flexible heating systems, and interconnection could save up to £10 billion per year by 2050 by reducing the amount of generation and network needed to decarbonise. A key enabler for demand side flexibility will be smart meters, which enable innovative products and services such as smart time-of-use tariffs. At the end of March 2022, there were 28.8 million smart and advanced meters in homes and small businesses across Great Britain, representing 51% smart coverage. The Smart Systems and Flexibility Plan sets out a vision, analysis, and actions for delivering a smart and flexible energy system. We will facilitate flexibility from consumers and remove barriers to flexibility on the grid, both for small-scale and large-scale long-duration electricity storage, as well as driving policy to increase interconnector capacity. The Plan also sets out actions to improve market design and coordination so that flexibility providers can secure revenues across multiple markets. Data and digitalisation are a core aspect of the future system; we have set out a strategic approach to digitalisation and opening data across the energy sector through the Energy Digitalisation Strategy. Significant progress towards net zero can happen, and is already happening, within our existing market framework. This combines markets for wholesale power, balancing, and system services with a CfD scheme for low carbon generation and a capacity market to ensure security of supply. In 2021, we published a Call for Evidence on actions to better align

Chapter 3 Policies and Measures 153 the capacity market with net zero,28 including potential actions to encourage the participation of more low carbon capacity. However, it will be necessary to consider whether broader reforms to our market frameworks are needed to unlock the full potential of low carbon technologies, including flexibility, to take us to net zero. Throughout the transition, consumers should pay a fair, affordable price for their electricity, and be able to engage with a retail energy market that offers the products and services that allow them to make choices that support net zero. To support these aims, the Government is considering what reforms to the retail energy market are needed to support progress to net zero through the 2020s, including the role of suppliers and how they are regulated. To support these choices, consumers should receive accurate information about the carbon content of their energy products, and we will consider the case for reforming the framework which underpins green electricity tariffs and wider environmental carbon accounting schemes. We will cut the cost for consumers who want to make improvements by ‘rebalancing’ the costs placed on energy bills away from electricity to incentivise electrification across the economy. This will also ensure heat pumps are comparatively cheap to run over time. We will publish our proposals in 2022, considering overall system impacts and limiting the impact on bills, particularly for low-income consumers.
The British Energy Security Strategy set out how we will ensure a more flexible, efficient system for both generators and encouraging all forms of flexibility with sufficient large-scale, long-duration electricity storage to balance the overall system by developing appropriate policy to e designed so that smart meters can be fitted from the outset, in advance of the Future Homes and Building Standards by 2024 • smartening up the system with mor e flexible pricing, through Time of Use tariffs and battery storage through electric vehicles • ensuring consideration is given to the siting of hydr ogen electrolysers to best use surplus low carbon electricity and reduce network constraints • undertaking a comprehensive Review of Electricity Market Arrangements (REMA) in eat Britain, with high-level options for reform set out this summer etail market fit for purpose. We will join REMA up with our ongoing retail review to ensure that consumers fully benefit from the next phase of our energy revolution, setting out plans before the next price cap period This transformation of the energy system means our approach to system governance needs to evolve. The Government has committed to delivering a new public body to strengthen the resilience of Great Britain’s energy system. The Future System Operator (FSO) will look at Great Britain’s energy system as a whole, integrating existing networks with emerging technologies such as hydrogen. The FSO will be a new public body founded on the existing capabilities of the Electricity System Operator, and, where appropriate, National Grid Gas. 28

154 8th National Communication We will also need to address crosscutting enablers such as ensuring the planning system has the capacity to support the deployment of low carbon energy infrastructure (generation and networks), while also representing the interests of the environment and of the communities which host this infrastructure. We will do this by updating our energy National Policy Statements to provide greater clarity on the need and urgency for low carbon infrastructure, exploring ways of streamlining processes through our Nationally Significant Infrastructure Projects reform programme and addressing issues at a strategic level, for example through our Offshore Wind Enabling Actions Programme. In addition, we will need to grow our supply of skilled workers and further strengthen the UK supply chain to service the demands of energy infrastructure, creating economic opportunity for citizens and communities across the UK. 3.8.3.6 Supporting sustained deployment of low carbon generation In order to decarbonise we will need to build low carbon electricity generation infrastructure at an unprecedented scale and pace. We have an ambition to deliver up to 50GW of offshore wind by 2030, including up to 5GW of innovative floating wind. This will also develop jobs and opportunities in the associated industrial supply chain putting us at the forefront of this new technology. Already, just off the coast of Aberdeenshire, we have built the world’s first floating offshore wind farms. There will be huge benefits in the Irish and Celtic Sea. And by 2030 we will have more than enough wind capacity to power every home in Britain. In the British Energy Security Strategy, we set out how with smarter planning we can maintain high environmental standards while increasing the pace of deployment of offshore wind by 25%. To do this, we have committed to establishing a fast track consenting route for priority cases where quality standards are met; introducing strategic compensation environmental measures including for projects already in the system; reviewing the way in which the Habitats Regulations Assessments are carried out for all projects making applications from late 2023; and implementing a new Offshore Wind Environmental Improvement Package including a Marine Recovery Fund and nature-based design standards. We also need a sustained increase in the deployment of land-based renewables such as locally supported onshore wind and solar in the 2020s and beyond. For ground-mounted solar, we will consult on amending planning rules to strengthen policy in favour of development on non-protected land, while ensuring communities continue to have a say and environmental protections remain in place. We will continue supporting the effective use of land by encouraging large scale projects to locate on previously developed, or lower value land, where possible, and ensure projects are designed to avoid, mitigate, and where necessary, compensate for the impacts of using greenfield sites. We will seek to ensure a facilitative environment for the deployment of unsubsidised rooftop solar to complement our market-based approach of ensuring exporters receive a fair price through the Smart Export Guarantee. We will bring down bills and increase jobs by radically simplifying planning processes with a consultation on relevant permitted development rights and will consider the best way to make use of the public sector rooftops. We are looking at facilitating low-cost finance from retail lenders to drive rooftop deployment and energy efficiency measures. We will design performance standards to make installation of renewables, including solar PV, the presumption in new homes and buildings. We have already removed VAT on solar panels installed in residential accommodation in Great Britain. Chapter 3 Policies and Measures 155 For onshore wind, we will consult on developing local partnerships for a limited number of supportive communities who wish to host new onshore wind infrastructure in return for guaranteed lower energy bills. The consultation will consider how clear support can be demonstrated by local communities, local authorities and MPs. We included onshore wind in the latest CfD auction round and will include it in future rounds. In Wales, the UK Government will support the work underway by the Welsh Government, Ofgem, and networks to improve grid connections. We will also look at arrangements to support the repowering of existing onshore wind sites when they require updating or replacement. With advances in technology this process can enhance capacity and provide new opportunities for communities to benefit.
We have also included solar and onshore wind in the latest CfD auction round and will include We also have one of the best ocean energy resources in the world, so as an island nation, we will also aggressively explore renewable opportunities afforded by our geography and geology, including tidal and geothermal. And we are actively exploring the potential for international projects to provide clean, affordable and secure power, for example by This step change in renewable deployment will be achieved primarily by providing ongoing support through the CfD scheme. Allocation round 4 last December was the biggest-ever round of our flagship renewable energy scheme open to an expanded number of renewable energy technologies, with offshore wind, onshore wind, solar, tidal and floating offshore wind projects, amongst others, all eligible. The CfD will be key to delivering the levels of generation required by 2030. We will ensure the UK remains a world leader by offering clear investable signals through annual auctions, with the next round a year earlier in March 2023, helping to keep costs down through competition, and by consulting on changes to the 2024 CfD auction, Allocation Round 6, that incentivise renewables to locate and operate in a way that minimises overall system costs. Looking beyond this, ensuring we retain effective means to provide long-term stability will be crucial throughout the 2030s to achieve affordable, We also need to increase our nuclear capacity, which is why we have a commitment to take one project to final investment decision this Parliament and two projects to final investment decision in the next Parliament, including Small Modular Reactors, subject to project readiness, value for money and relevant approvals. Depending on the pipeline of projects, this could see our nuclear sector progressing up to eight more reactors across the next series of projects, so we improve our track record to deliver an equivalent of one reactor a year, rather than one a decade. We will increase our plans for deployment of civil nuclear to up to 24GW by 2050 – representing up to 25% of our projected electricity demand. Any projects would be subject to a value for money assessment, all relevant approvals and future spending reviews. This will include small modular reactor deployment. In December 2020 we announced the start of formal negotiations on the construction of the Sizewell C project and those negotiations are ongoing. To facilitate a decision this Parliament, we plan to establish a Regulated Asset Base model to fund new nuclear projects at a low cost of capital, saving consumers money. We will also collaborate with other countries to accelerate work on advanced nuclear technologies, including both small modular reactors and advanced modular reactors. We expect to initiate a competitive selection process next year for the next new nuclear projects

156 8th National Communication to be considered for deployment in the UK. As part of this, we will consider the role UK Government financing can play in supporting new projects. We will radically change how we deliver new nuclear projects, setting up the Great British Nuclear Vehicle this year, tasked with helping projects through every stage of the development process and developing a resilient pipeline of new builds. We will work with industry to scope the functions of this entity starting straightaway – building on UK industrial strengths and expertise. Great British Nuclear will be backed to support projects to get investment ready and through the construction phase. In May this year, we launched the £120m Future Nuclear Enabling Fund competitive process.29 We expect to initiate the selection process in 2023 for further UK projects, with the intention that Government will enter negotiations with the most credible projects to enable a potential Government award of support in the first half of the next Parliament. Final contracts and construction will commence when any outstanding conditions are satisfied and projects are sufficiently mature. The UK has eight designated nuclear Hinkley, Sizewell, Heysham, Hartlepool, Bradwell, Wylfa, Oldbury and Moorside. To facilitate our ambitious deployment plans we will also develop an overall siting strategy for the long term Without impacting the robust safety, security and environmental protections offered by the UK regulatory regime, Government will work with the nuclear and environmental regulators to understand the potential for any streamlining or removing of duplication from the consenting and licensing of new nuclear power stations, including possibly new harmonisation on We are also providing funding for a small modular reactor design through our £385m Advanced Nuclear Fund and are progressing plans for an advanced modular reactor demonstrator in the early 2030s. Whether large- or small-scale projects, there remain several possible sites available for these options, including Wylfa in North Wales. In addition to nuclear and renewables we are also supporting power carbon capture usage and storage (CCUS) and will implement the Dispatchable Power Agreement, with the aim of bringing forward at least one power CCUS plant in the mid 2020s. We will also aim to begin competitive allocation in the 2020s to support a future pipeline of projects and cost reduction via increased deployment and competitive tension. Finally, we will continue to review and evolve the policy framework to stimulate the delivery of future power CCUS projects and in April we published a CCUS Investor Roadmap.30 Bioenergy has already played a significant role in decarbonising the electricity system, accounting for 12.6% of total renewables generation in 2019.31 Technological changes mean that biomass usage can now go beyond carbon-neutral and deliver negative emissions by combining it with carbon capture and storage (BECCS). We will publish a Biomass Strategy in 2022 that will set out how BECCS could be deployed.
As is the case with all UK biomass use, any future BECCS projects will need to meet stringent sustainability and air quality requirements for the production and use of biomass, as will be set out in the 29 30 roadmap#:~:text=The%20CCUS%20roadmap%20outlines%20joint,UK’s%202050%20net%20zero%20 31 Net Zero Strategy, p.104, para 42

Chapter 3 Policies and Measures 157 Our drive on low carbon generation makes electrolytic hydrogen especially valuable for flexibility and as a storage solution. Excess electricity used to produce hydrogen can be stored over time and used to power the grid when needed. Our ambition is for up to 10GW of low carbon hydrogen production capacity by 2030, with at least half of this from The electricity grid intensity of Scotland has decreased from 320gCO2e/kWh in 2010 to below 50gCO2e/kWh for the years 2017-2019. This is largely due to the closure of two coal fired power stations in 2013 and 2016, as well as reduced reliance on gas for power generation. There is a renewable, all energy consumption target of 50% by 2030, covering electricity, heat and transport. The Scottish Government is seeking to achieve this by expanding onshore and offshore wind, solar, bioenergy and hydro power. The recent ScotWind Offshore Wind Leasing Round saw offshore wind farms totalling 24.8GW selected, with the original aim having been 10GW. This is by far the world’s largest commercial round for floating offshore wind and breaks new ground in putting large-scale floating wind technology on the map at GW scale, and will deliver around £700m in revenues to the public purse for these initial awards alone. The Scottish Government is also committed to reviewing its energy consenting processes and to continuing efforts to ensure a sustainable security of electricity supply. The Welsh Government’s vision is for a decarbonised energy system which provides wider economic and social benefits for Wales than the system we see today. In Wales’s current carbon budget the Welsh Government will focus on significantly reducing emissions from Much of the change will be driven by greater electrification of heat and transportation and the flexible use of generating technologies, energy demand, storage and low carbon fuels, enabling the transformation of Wales’s industrial base. Technological changes will need to be married to behavioural and regulatory change. Market distortions which today mean low carbon, electrical heating is currently more expensive than fossil-fuelled alternatives need to be resolved, new technologies and the business models that support them need to be rapidly deployed and complexities in how power and gas networks work together need Wales’s Carbon Budget 2 will also be the period to plan and innovate for the future energy system for Wales. Delivering the smart energy system using a regionally planned approach, rather than a top down, market driven approach, is more likely to enable delivery at the speed demanded by the climate emergency, at optimal cost to the system, and in a way that delivers a more socially just system with no people or places left behind. The Welsh Government has committed to expand renewable energy generation by public bodies and community enterprises in Wales by over 100 MW between 2021 and 2026. This will put Wales on the path to meet the longer-term target of 1 GW of renewable energy generation capacity to be locally owned by 2030. As part of its forthcoming consultation on renewable energy targets, the Welsh Government will also review its target for The policies and proposals for this sector have been set out under two broad mitigation areas of Decarbonising electricity production from fossil fuels and increasing electricity from low carbon and variable renewables. Below are the key policies areas for Wales. 158 8th National Communication • Reducing emissions from the combustion of fuels for electricity generation elsh Government aims to reduce carbon emissions from the power sector in Wales whilst maintaining security of supply in a high renewables system. • Planning frameworks to restrict fossil fuel extraction ever possible we must prevent further extraction of fossil fuels. Welsh Government have placed all forms of fossil fuels at the bottom of the energy hierarchy within our strategic planning document, Planning Policy Wales. Reducing emission growth from new energy from waste plants in Wales An updated strategic assessment shows, apart from a modest potential need for om waste capacity for non-recyclable waste and to properly dispose of dangerous wastes such as clinical waste, the success of recycling and the decrease in waste generated in Wales means no further large-scale energy from De-risking and integrating investment in Wales through energy planning fordable net zero energy system is by pursuing a joined-up whole-systems approach – and by ensuring full public engagement across the whole spectrum of actions needed. Planning the delivery of the electricity and gas grid we need for Wales The focus of this policy will be to achieve a joint view across all participants of e energy needs in Wales to 2050, building on existing modelling. Bringing together thinking across the gas and electricity networks and across the transmission and distribution networks in this way, the Welsh Government aims for Wales to be the first country to have a joined-up approach to developing gas and electricity networks, enabling opportunities for additional prosperity. Increasing renewable energy developments on land through our elsh Government’s aim is to provide better certainty of outcomes for renewable energy developers in Wales, while also enabling decisions to be made within a statutory timeframe, and the potential to include other ancillary authorisations as part of a single consent. Consenting storage projects to support a flexible and Changes have been made to the consenting of energy storage in W a quicker and more proportionate consenting regime. Welsh Government have delegated all planning applications for the consenting of storage (with the exception of pumped hydroelectric schemes) to Welsh Local Planning Authorities.
Marine evidence, planning and supporting offshore and marine elsh Government will report on the effectiveness of the Welsh National Marine Plan, including progress being made towards securing plan objectives and the effects of the policies in the plan with respect to our support for Innovation in new renewable energy technology to drive faster and deeper decarbonisation and support the green economy ales, the Whole system Business Research Innovation for Decarbonisation scheme challenges businesses to help communities and the public sector adapt to the challenge of net zero on a whole system basis. Chapter 3 Policies and Measures 159 • Locally owned energy developments to secure an economic elsh Government is on track to meetings its target for 1GW of renewable energy generation capacity to be locally owned by 2030. By 2019, 825MW of renewable energy generation capacity was locally owned. The Welsh Government also has a target to expand renewable energy generation by public bodies and community groups in Wales by over 100MW between 2021 and 2026. As part of our commitment to review targets for renewable generation we will review the 1GW target to ensure this still meets the scale of our ambition. Maximising Welsh benefit from commercially operated infrastructure elsh Government’s aim is to ensure maximum possible benefit is retained in Wales • Scope out the challenges and opportunities around low-carbon heat • consolidate these evidence bases with UK Government, identify any gaps, and e necessary to fill these evidence gaps. • Publish a heat strategy for W • Increase the use of waste heat and low carbon heat sources elsh Government will update the current national heat map for Wales to identify heat consumption and generation at sites across Wales. This will build on the work commissioned by the UK Government to update the National Comprehensive Assessment of heating and cooling published in September 2021. In 2022, Welsh Government will also incorporate evidence from its work on local area The ‘Path to Net Zero Energy’ is Northern Ireland’s Energy Strategy, published in December 2021. The Strategy sets a long-term vision of net zero carbon and affordable energy for Northern Ireland through energy efficiency measures and renewables. There are two interim om buildings and industry by 2030; ovide 80% of electricity consumption from renewable sources by 2030; In January 2022, the NI Executive launched the ‘Path to Net Zero Energy’ Action Plan. The 22-point action plan outlines some of the main areas of delivery to be taken forward during 2022 by central government and partners. It also includes a suite of new initiatives, such as • One-stop shop for energy advice Renewable electricity policies, published within the 32

160 8th National Communication • A renewable electricity consumption target of 70% by 2030 (since raised to 80% by 2030, as per the Climate Change Act (Norther • A Support mechanism to incentivise investment in renewable generation, with a view to consult on potential options in 2022 for delivery in 2023. DfE are working nment to explore whether the Contracts for Difference scheme, currently operating in Great Britain, can be extended to Northern Ireland. If not, it will seek to put in place an alternative support mechanism for investors. fshore Renewable Energy Strategic Action Plan (OREAP) to deliver 1GW of offshore wind from 2030. DfE are leading the development of the new OREAP working with other Northern Ireland Executive Departments, the Utility Regulator (NI), the transmission and distribution network operators, The Crown Estate and the renewables industry. The OREAP will address any barriers to the practicable and sustainable deployment of renewable generation projects in Northern Ireland waters with the aim of delivering an action plan by the end of 2023. It will also focus on maximising the potential integration of offshore wind and hydrogen electrolysis; offshore wind sectoral growth (infrastructure, skills and jobs, and supply chain); and the potential of innovation in offshore renewable energy technologies. Currently, emissions from fuel supply mainly derive from fossil fuels and can be attributed to stages of the supply journey. This chapter covers all aspects of fuel supply eam’) – exploration and production of oil and gas including drilling, surfacing resources and onshore processing at gas plants; ransportation (‘midstream’) – transportation and storage of oil and gas including pipelines, pumping stations, trucks, and transcontinental tankers; eam’) – refining oil into products including transport fuels, bitumen, lubricating oils, liquid petroleum gasses, heating oils, marine fuels, polymers, solvents, and alcohols. Refining emissions are counted as part of the industry sector but are discussed in this chapter to take a holistic view of supply. Overall, between 1990 and 2019, net UK GHG emissions from fuel supply have decreased 33. North Sea production has fallen; older, more polluting installations have been decommissioned whilst cleaner ones have been brought online; regulatory frameworks have supported efficiency gains; coal mines have closed; and iron pipes have been replaced with plastic to reduce methane leakage across the gas network. We have also made progress in low carbon fuel production. In 2019, renewable fuels supplied under the Renewable Transport Fuel Obligation accounted for 5% of total road and non-road mobile machinery fuel. This mainly consisted of biodiesel and bioethanol but also included biomethane and renewable hydrogen 33 34 DfT (2020), ‘Renewable Fuel Statistics 2019 Final Report’, government/uploads/system/uploads/attachment_data/file/932933/renewable-fuel-statistics-2019-

Chapter 3 Policies and Measures 161 Building on the Ten Point Plan and the UK Hydrogen Strategy, the British Energy Security Strategy doubled the UK’s hydrogen production ambition to up to 10GW of capacity by 2030, with at least half of this from electrolytic production. Alongside this, the Hydrogen 35 provided details on the hydrogen business model, the recently launched Net Zero Hydrogen Fund and the low carbon hydrogen standard. This package of measures aims to kickstart the production of low carbon hydrogen and showcase the exciting investment opportunities across the hydrogen value chain. • An ambition for up to 10GW UK low carbon hydr ogen production capacity by 2030, with at least half from electrolytic production.
• Aim to have up to 2GW electr olytic hydrogen and CCUS-enabled hydrogen production capacity operational or in construction by 2025. • Designing, by 2025, new business models for hydrogen transport and storage e, which will be essential to grow the hydrogen economy. • Levelling the playing field by setting up a hydrogen certification scheme by 2025, to demonstrate high-grade British hydr ogen for export and ensure any imported hydrogen meets the same high standards that UK companies expect. • Work with the sector to help develop a low carbon fuel strategy for transport for publication in 2022, as announced in the r ecent Transport Decarbonisation Plan, and deliver commitments on sustainable aviation fuels. ork with stakeholders to address barriers to electrification of oil and gas production by Q4 2022 and continue to drive down routine flaring and venting. • Regulate the oil and gas sector in a way that minimises GHG emissions, notably ough the revised Oil and Gas Authority (now renamed the North Sea Transition Authority-‘NSTA’) strategy, which empowers the NSTA/OGA to assess operators’ plans to reduce their emissions levels against effectively a net zero test, and establish a climate compatibility checkpoint for future licensing on the UK We have always been clear that as we reduce our dependence on fossil fuels, the North Sea basin has a key role to play. Our approach will ensure that it does contribute to the transition, driving investment in transition technologies and providing the skills needed for net zero. However, we are clear that we do need to reduce our reliance on hydrocarbons as swiftly as possible. The best way to protect British businesses and consumers from volatile international fossil fuel markets is to get our economy off hydrocarbons. Upstream, the North Sea Transition Deal (NSTD) has set us on a transformational path to deliver the long-term skills, innovation, infrastructure, and investment required to decarbonise oil and gas production and industry more widely. The deal will hold the industry to account on commitments it has made to halve its operational emissions by 2030, while supporting up to 40,000 high quality direct and indirect supply chain jobs in Scotland and our industrial heartlands in the North East, North West and East of England. It also emphasises our shared 35

162 8th National Communication commitment to achieving 10 MtCO2/year of CCUS capacity, with industry leveraging existing infrastructure to provide key transport and storage capability; and positions the sector to help deliver our 10 GW hydrogen ambition. One year after the publication of the NSTD in March 2021, Government and industry published the One Year On report. This shows our continuing resolve to work together to deliver significant progress in implementing the commitments that were made. This report highlights the progress made to date across several areas in the Deal, supply decarbonisation, developing CCUS and hydrogen, transforming the supply chain, and aligning cross-sector energy training and standards to facilitate workforce mobility. The NSTA published its revised strategy in February 2021, enshrining a range of new net zero obligations for the UK oil and gas industry. This is reflected through the suite of levers available to the NSTA, making net zero a key factor in its decisions, including to grant consent for projects. It empowers the NSTA to assess operators’ plans to reduce their emissions levels against effectively a net zero test, in accordance with its revised strategy, the NSTA can now encourage operators to invest in transition technologies such as CCUS and hydrogen – seizing the economic opportunities available to the sector in a net zero future and living up to the commitments of the Transition Deal. The Strategy also introduces full societal carbon cost assessments into the approvals process. Step-change abatement will be delivered by the electrification of existing and new offshore assets, through connections to onshore networks or offshore renewables. We will work with regulators to review supporting infrastructure in the Offshore Transmission Network Review and to address regulatory barriers. We have supported removing further barriers through £1 million of additional funding from 2021 to 2022. Beyond power generation, flaring and venting account for most remaining upstream emissions and we will need to be ambitious to allow us to stay on track for our Sixth Carbon Budget target. We have endorsed industry’s commitment in the NSTD to accelerate reductions beyond the World Bank’s ‘Zero Routine Flaring by 2030’ initiative and new NSTA guidance sets out the expectation that all facilities should have zero routine flaring and venting by 2030 or sooner. Industry is taking steps through its Methane Action Plan for continuous emissions reductions with specific methane emissions reduction targets, whilst setting the expectation that assets will have individual action plans by 2022. Additional work is being carried out by the Government and regulators to review what action can be taken to further reduce emissions. Improved measurement, reporting and verification will play a critical role in this. The Government, including the Offshore Petroleum Regulator for Environment and Decommissioning, is working closely with the NSTA to collect robust industry data which will enable effective implementation of their strategy. The NSTA’s tracking of overall emissions reductions and benchmarking of flaring and venting data will also improve performance across industry. Government and regulators will continue to work with industry to drive emissions reductions, including through improved process efficiency, to stay on track In terms of future licensing rounds for exploration activity on the UK Continental Shelf, we will introduce a climate compatibility checkpoint for any new licences, which will be used to assess whether any future licensing rounds remain in keeping with our climate goals. We invited contributions on the design of this checkpoint with a public consultation which closed at the end of February. We are carefully considering the responses to the consultation and will announce the outcome in due course.
Chapter 3 Policies and Measures 163 Midstream, the gas network must be effective at minimising gas leakage and associated emissions by replacing iron pipes with plastic, even with gas demand decreasing leading to 2050. Through network price controls, Ofgem has set gas distribution companies a target to replace 15,500km of iron mains and associated services in five years, from April 2021. This will reduce leakage by 17% and emissions by 0.5MtCO 2e. Additional financial incentives will encourage further action through pressure management and gas conditioning. We continue to work with Ofgem and Health and Safety Executive to review how best to continue to reduce methane leakage to zero in all future decarbonisation scenarios. Blending hydrogen into the gas grid could also support initial steps to decarbonise heating. Government is working closely with key delivery partners to explore whether to blend hydrogen up to 20% by volume into gas networks, along with biomethane and natural gas. This will consider the air quality impacts of hydrogen combustion in domestic settings. Subject to both the economic and safety case for blending being demonstrated, we are aiming to make a final decision on blending by the end of 2023. We recognise that industry will need early sight of decisions should blending proceed, and we propose five principles for . Blending must remain within safe limits set by the Health and Safety Executive and changes to gas quality and infrastructure must meet all . Changes to gas quality and infrastructure must maintain existing system, pipeline, and consumer appliance operability; . Blending must not prevent consumers’ secure gas supply; fordability. Costs to consumers should be affordable and value for money; and emporary. Blending could support initial development of the hydrogen economy but is not a preferred long-term solution. Whilst there may be significant value in having blending available to support the early development of the hydrogen economy, the Government currently views blending as a transitional option only. If enabled, it will likely have a limited role in heat decarbonisation as we move away from use of natural gas for heat. Hydrogen is expected to play a more valuable role in other parts of the economy, such as industry, heavy transport, or Downstream, UK refineries already underpin major CCUS and hydrogen projects in key industrial clusters. These include Gigastack (Phillips 66), Humber Zero (Phillips 66) and HyNet (Essar Oil UK). The Industrial Energy Transformation Fund recently awarded £7 million and £800,000 to Essar Stanlow and Phillips 66 respectively, in support of hydrogen focussed net zero projects. We are also encouraged to see operators investing in the production of low carbon fuels and will continue to work with the sector to encourage innovation, maximise economic opportunities from net zero, and remove regulatory barriers which hinder the transition away from fossil fuels. In addition to this, the UK ETS can support business models to encourage uptake of an innovation in such projects, providing routes to market. We have also published the draft Downstream Oil Resilience Bill government the powers it needs to ensure secure fuel supplies are maintained during the 36

164 8th National Communication The UK has a unique opportunity to be a leader in low carbon fuel production and we plan to publish key strategies in 2022. We intend to publish a Biomass Strategy that will set out in detail the Government’s view on how biomass can best contribute to a net zero economy, including to produce low carbon fuels. It will also assess our existing sustainability standards, already some of the world’s most stringent, and set out where and how we can improve them further. When coupled with carbon capture and storage, it is possible that sustainable biomass can not only enable production of low carbon fuels but could also deliver vital negative emissions. Any future BECCS project will need to meet stringent sustainability requirements for the production and This will be complemented by a long-term strategy for low carbon fuels as announced in our Transport Decarbonisation Plan, published in July 202137. The strategy will consider how to maximise emissions savings from low carbon fuels used across different transport modes in The latter of the two strategies will build on the success of the Renewable Transport Fuel Obligation (RTFO), which has supported the market for low carbon fuel supply since 2008. Fuels supported under the RTFO need to comply with sustainability criteria such as minimum GHG thresholds, and by incentivising fuels produced from wastes, it saved 5.37MtCO2e in 2019 alone. Further to sub-targets for so-called development fuels of strategic importance, we have recently widened support to more diverse fuels and implemented more ambitious targets for the RTFO to 2032 set at 21.1% of total liquid fuel supply. To accelerate the development of UK plants to produce advanced fuels we have provided grant funding through schemes including the Future Fuels for Flight and Freight Competition and Advanced Biofuels Demonstration Competition. Delivering on the Ten Point Plan, in December 2021 we announced the winners of the £15 million Green Fuels, Green Skies Competition supporting eight companies pioneering new Sustainable Aviation Fuels (SAF) technologies. We have published a consultation on proposals for a new UK SAF blending mandate38 aiming for introduction in 2025. It included design questions on which feedstocks and technologies should be eligible and welcomed views on what our SAF ambition and targets should be. We are currently reviewing the responses to the SAF mandate consultation, but our ambition is for a comprehensive policy framework, including the mandate, to enable the delivery of 10% SAF by 2030. Further detail can be found in the We have virtually no low-carbon hydrogen in our system today – but technology is making this a near-term reality with vast potential applications. By investing in the North Sea, renewables and nuclear, as set out in the British Energy Security Strategy, the UK is well- placed to exploit all forms of low carbon hydrogen production. Our drive on renewables makes electrolytic hydrogen especially valuable for flexibility and as a storage solution.
Excess renewable electricity used to produce hydrogen can be stored over time and used to power 37 38

Chapter 3 Policies and Measures 165 Our approach to scaling up the UK hydrogen economy in the 2020s was set out in the UK Hydrogen Strategy as well as under the Net Zero Strategy and British Energy Security Strategy. The UK has been clear that our skills, capabilities, assets, and infrastructure mean that we have the potential to excel in a range of low carbon hydrogen production technologies. This includes electrolytic production, CCUS-enabled methane reformation as well as less developed production technologies using new nuclear technologies and biomass. Supporting a variety of different production methods will enable us to develop low carbon hydrogen rapidly at scale during the 2020s to deliver our ambition for up to 10GW low carbon hydrogen production capacity by 2030, ensuring the UK is ready for the expected ramp up in demand needed to reach the Sixth Carbon Budget and net zero. The UK is already at the forefront of innovation across the hydrogen value chain, reducing technological barriers to production and end use cases. We recently launched a new £60 million Low Carbon Hydrogen Supply 2 Competition to develop novel hydrogen supply solutions for a growing hydrogen economy – winners were announced in May 2022. Low carbon hydrogen is not yet competitive with traditional fuels because production projects face additional costs compared to existing energy sources. Investors cannot currently justify upfront capital investments without visibility or predictability of revenue and returns. The recent Hydrogen Investor Roadmap provided more detail on the Government’s key policies to address these issues, informed by consultations undertaken alongside the UK low carbon hydrogen business model will provide revenue support to hydrogen producers to overcome the operating cost gap between low carbon hydrogen and high carbon counterfactual fuels and bring forward investment in new low carbon hydrogen projects. The Government response to the consultation on the 40 confirmed the design of the business model, alongside high level, erms for the Low Carbon Hydrogen Agreement (the business model contract). We aim to finalise the business model in 2022, and to allocate the first support contracts for projects reaching final investment decisions from 2023. Net Zero Hydrogen Fund (NZHF) will provide up to £240 million of Government co investment to support the commercial deployment of new low carbon hydrogen production projects out to 2025. The Government response to the consultation on the design of the NZHF 41 included details of the proposed split of grant allocation across four strands, supporting both development expenditure and capital expenditure. The first wave of funding under the NZHF launched UK low carbon hydrogen standard defines what is meant by low carbon hydrogen, allowing the Government to support production that can deliver emission reductions in line with the UK Climate Change Act. Hydrogen producers applying for NZHF and Low Carbon Hydrogen Business Model funding will need to ensure their hydrogen production pathway complies with the standard in order to be eligible for support. The Government response to the consultation on the standard and associated guidance on the standard 42 outlines the methodology underpinning the 39 as-the-superfuel-of-the-future-unveiled 40 41 42

166 8th National Communication standard and the greenhouse gas emissions threshold against which low carbon hydrogen production pathways will be measured. The British Energy Security Strategy also committed to further policy development to enable the growth of the UK hydrogen Designing, by 2025, new business models for hydrogen transport and storage e, which will be essential to grow the hydrogen economy. d into a hydrogen certification scheme by 2025, to demonstrate high-grade British hydrogen for export and ensure any imported hydrogen meets the same high standards that UK companies expect. In addition, we will publish a Hydrogen Sector Development Action plan. The UK is already at the forefront of innovation across the hydrogen value chain, reducing technological barriers to production and end use cases. The £60 million Low Carbon Hydrogen Supply 2 Competition is supporting novel hydrogen supply solutions for a growing The RTFO has supported the supply of renewable hydrogen into transport since 2018 and has been successful in launching small-scale renewable hydrogen supply. In July, the Department for Transport announced changes to the RTFO which could further encourage the uptake of renewable hydrogen in transport, including in rail and shipping. The original consultation, published in March, also proposed to make evidencing the provision of renewable electricity for hydrogen production easier through power purchase agreements and recognising the importance of regional grids. The final decision on these changes will be The Scottish Government has taken steps to help enable the decarbonisation of offshore oil and gas production through the creation of the Innovation and Targeted Oil and Gas 43 planning and leasing round. INTOG will help to progress decarbonisation of the oil and gas sector, and open the door for smaller, innovative offshore renewables projects to demonstrate their technology, such as green hydrogen, in Scottish waters, and offer the potential for clean energy from offshore wind. In addition, Marine Scotland has a well- established and proactive planning and consenting process encouraging confidence in the The Scottish Government published a draft Hydrogen Action Plan in November 2021, which articulates the actions that will be taken over the next five years to support the development of a hydrogen economy to further its efforts to reduce emissions from Scotland’s energy system while ensuring a just transition. Later in 2022 an Energy Strategy and Just Transition Plan will be published, which will review future energy demand and lay out a plan for The Welsh Government published its Hydrogen in Wales report44 in January 2021 for consultation, setting out pathways for developing the Welsh hydrogen sector.
43 intog-public-summary (crownestatescotland.com) 44

Chapter 3 Policies and Measures 167 3.9.6 Northern Ireland Executive In line with the rest of the UK thinking on low carbon hydrogen standards, the Northern Ireland Executive is focused on the production of green hydrogen – the NI Energy Strategy (published December 2021) sets out how constrained wind will be used to power electrolysis of fresh water to create hydrogen and oxygen. Wind is an important asset as it generates low carbon electricity and meets 48% of Northern Ireland base load with an additional 15% constrained/curtailed – a tremendous unused reserve that will be used for The 10x Economy Vision Paper45 (published mid 2021) focuses on the local economic, export and employment opportunities in the advanced engineering related supply chains of Northern Ireland and underpins our levelling up agenda. The Northern Ireland Executive, in conjunction with the academic and private sectors, is supporting many hydrogen research and innovation projects across public transport, aviation, energy matrices, longer duration energy storage, remote design and testing, agri-food circular economy, waste water treatment, bio-methane and hydrogen gas network injection, maritime transportation and advanced manufacturing. Following the launch of the Hydrogen Training Academy in early 2022, discussions have been ongoing with University of Ulster, Queen’s University and Belfast Metropolitan College to deliver third level qualifications in hydrogen development, operation, design and maintenance, Our advanced engineering base will also allow the export of skills and expertise in the hydrogen services sector beyond Northern Ireland. The UK’s manufacturing and refining sector plays an essential role in society. It contributes £180 billion to the overall economy46, directly accounting for 8% of GDP47 and provides two and a half million direct jobs across the country48 as well as over five million across Around half of industrial emissions are concentrated in specific clusters – geographical areas with large concentrations of industry. Industry emissions have reduced by more than half since 1990, due mainly to the changing structure of the UK’s manufacturing sector, improved energy efficiency, and a shift to low carbon fuels. Despite this progress, the overall pace of reductions is slowing, and more action is needed to achieve our net zero commitments. The Industrial Decarbonisation Strategy50 (IDS), published in March 2021, was the first of its kind in a major economy. It sets out how industry can decarbonise in line with net zero while 45 46 ONS (2021), ‘Annual Business Survey’, businessservices/datasets/uknonfinancialbusinesseconomyannualbusinesssurveysectionsas 47 ONS , ‘Gross Domestic Product (GDP), 48 ONS (2021), ‘Annual Business Survey’, businessservices/datasets/uknonfinancialbusinesseconomyannualbusinesssurveysectionsas 49 UK in a Changing Europe (2020), ‘Manufacturing and Brexit’, 50

168 8th National Communication transforming industrial regions by attracting inward investment, future-proofing businesses, and securing the long-term viability of jobs. This followed previous work including the landmark Industrial Decarbonisation and Energy Efficiency Roadmaps to 205051, published in 2015, which set out a series of pathways for emissions reductions for energy intensive sectors. We plan to have the world’s first net zero industrial cluster by 2040, and have awarded grants from the £315 million Industrial Energy Transformation Fund (IETF), announced a £1 billion Carbon Capture and Storage Infrastructure Fund, and a £240 million Net Zero Hydrogen Fund. Additionally, as part of the Industrial Decarbonisation Challenge announced £171 million of funding, matched by over £200 million industry investment, for nine projects within five clusters. Growing new industries in low carbon hydrogen alongside CCUS and renewable energy will put our industrial ‘SuperPlaces’ at the forefront of technological development. Together this will develop resilient supply chains, support jobs, and position UK companies at the forefront of an exciting growing global market, as well supporting industrial processes, industrial heat, power, shipping and trucking to make the shift to net zero. Energy intensive industry in the UK has been covered by a cap-and-trade policy since 2005. The UK Government and Devolved Administrations – collectively making up the UK ETS Authority – successfully launched the UK Emissions Trading Scheme (UK ETS) on 1 January 2021. The UK ETS Authority published a consultation 53 in March 2022, including proposals to align the UK ETS Cap with a net zero consistent trajectory, as committed to when the We recognise the importance of addressing the risk of carbon leakage, so policy interventions do not lead to increased emissions elsewhere, and to ensure that UK industry has the confidence needed to fully decarbonise. The IDS and the Net Zero Review potential options available to address this, including regulatory standards and carbon border adjustment mechanisms (CBAMs), as well as the ongoing review of our current carbon leakage mitigation policy of free allowances under the UK ETS. Government will continue to explore options to mitigate carbon leakage, with emphasis on an international, multilateral effort to tackle carbon leakage at source through global action on industrial decarbonisation and climate regulation, with continued monitoring of related global policy developments • Ambition to deliver 6MtCO2 per year of industrial CCUS by 2030, and 9MtCO2 • Set up the Industrial Decarbonisation and Hydrogen Revenue Support scheme to fund our new industrial carbon captur e and hydrogen business models. • Support the deployment of CCUS thr ough the £1 billion CCS Infrastructure Fund. 51 52 industrial-decarbonisation-challenge/ 53 54

Chapter 3 Policies and Measures 169 • Following Phase 1 of the Cluster Sequencing process, the HyNet and East Coast Clusters have been confirmed as T • Support the installation of energy ef ficiency and on-site decarbonisation measures through the £315 million Industrial Energy Transformation Fund (IETF). eased requirement for fuel switching to low carbon alternatives, with an ambition to replace around 50TWh of fossil fuels per year by 2035. • In collaboration with the Steel Council we will consider the implications of the ecommendation of the Climate Change Committee to set targets for ore-based steelmaking to reach near-zero emissions by 2035, and the business environment necessary to support the transition. ce and Energy Efficiency (REEE) measures with ambition of achieving the anticipated requirement of 11MtCO2e worth of savings by 2035, including up to 3MtCO2e of potential abatement in the Iron and Steel sector.
• Developing the UK ETS to ensur e emissions reductions from industry, power and aviation in line with our net zero target. Aligning the UK ETS with net zero sends a clear signal for investment and promotes market-based, cost-effective Explore opportunities for faster decarbonisation of dispersed sites in the 2020s. uel switching and carbon capture Fuel switching to hydrogen is likely to be technically feasible for most industrial processes and our modelling indicates it is the least-cost option to decarbonise harder to electrify sites, The IDS sets out that a low regret level of deep decarbonisation infrastructure should be installed in industrial clusters this decade. This will give industry the confidence to invest in switching to low carbon fuels, such as hydrogen. Industrial users located in clusters are therefore expected to provide the most significant new demand for hydrogen by 2030, with the greatest potential from chemicals and iron and steel sectors. A significant proportion of this demand could arise from a small number of sites acting as ‘pathfinders’, proving the viability of hydrogen at a commercial scale and fostering the initial market for low 55 indicated that in 2030 consumption of low carbon hydrogen as an industry fuel could range from around 10TWh per year if supply is limited to clusters, and up to around 20TWh per year if pipelines are connected to some dispersed sites. While supply is likely to come mostly from large scale cluster-based CCUS-enabled hydrogen production sites, there could also be industrial demand for low carbon hydrogen from electrolysis, which can be produced at a smaller scale on a more localised level. To stay on track for our Sixth Carbon Budget delivery pathway, hydrogen demand from industry may need to increase up to 50TWh by 2035. This increase would be driven by a growing number of sites having access to low carbon hydrogen, further technology development to enable an expanding range of processes to switch to hydrogen, and a shift in the associated costs, 55

170 8th National Communication such as the price of carbon, to make hydrogen an increasingly competitive fuel option. In particular, the British Energy Security Strategy sets out an ambition to run annual allocation rounds for electrolytic hydrogen, moving to price competitive allocation by 2025 as soon as legislation and market conditions allow, so that up to 1GW of electrolytic hydrogen is in construction or operational by 2025. The UK Hydrogen Strategy also set out the actions we are taking to support industry to realise the potential of this new technology. It is critical that we demonstrate fuel switching to low carbon hydrogen on industrial sites during the 2020s so we will provide further support for research and innovation through the Net Zero Innovation Portfolio and initiatives led by the Industrial Decarbonisation Research and Innovation Centre. Demand-side measures and carbon trading markets will help to drive demand for hydrogen and will be supported by grant funding, such as the £55 million Industrial Fuel Switching Competition under our Net Zero Innovation Portfolio and the Phase 2 of the IETF, which supports on-site fuel switches. Regulatory measures can also support industry to switch to low carbon hydrogen, with the UK Hydrogen Strategy announcing calls for evidence on hydrogen-ready industrial equipment and decarbonising existing high carbon hydrogen production. Alongside this, hydrogen production measures in the fuel supply chapter of this strategy will bring forward low carbon hydrogen supply for use across the economy and help make hydrogen a price competitive decarbonisation option to encourage end users to switch. Carbon capture, usage and storage (CCUS) Carbon Capture, Usage and Storage (CCUS) will be an exciting new industry to capture the carbon we continue to emit and revitalise the birthplaces of the first Industrial Revolution. The Prime Minister’s Ten Point Plan for a Green Industrial Revolution established a commitment to deploy CCUS in a minimum of two industrial clusters by the mid-2020s, and four by 2030 at the latest. Our aim is to use CCUS technology to capture and store 20-30MtCO2 per year by 2030, forming the foundations for future investment and potential export opportunities. Developed alongside hydrogen, we can create these transformative ‘SuperPlaces’ in areas such as the Humber, North East, North West and southern England, as well as in Our £1 billion CCS Infrastructure Fund will provide industry with the certainty required to deploy CCUS at pace and at scale and will form part of a package of government support, which will also include the Industrial Decarbonisation and Hydrogen Revenue Support (IDHRS) scheme and the £240 million Net Zero Hydrogen Fund supporting both CCS- enabled ‘blue’ and electrolytic ‘green’ hydrogen. Following the completion of Phase 1 of the Cluster Sequencing process, the HyNet and East Coast Clusters have been sequenced as track 1 clusters for the mid-2020s and will be taken forward into Track-1 negotiations. If the clusters represent value for money for the consumer and the taxpayer then subject to final decisions of Ministers, they will receive support under the government’s CCUS Programme. We remain committed to helping all industrial clusters to decarbonise as we work to reach net zero emissions by 2050, and we are clear that CCUS will continue to play a key role CCUS will be critical to achieving net zero, alongside low carbon alternatives such as low carbon hydrogen and electricity. These technologies offer a renewed era for our industrial heartlands. Connecting locally, for instance positioning hydrogen train trials near blue hydrogen clusters means we start to bring higher skilled, higher paid jobs and expertise to cluster in these areas. The engineers, fabricators and geologists currently working in

Chapter 3 Policies and Measures 171 industrial clusters and the oil and gas sector will be able to make use of skills programmes such as Skills Bootcamps and Free Courses for Jobs to support new emerging industries in renewables, CCUS and low carbon hydrogen to help build SuperPlaces. As the demand pulls through these lower carbon technologies, the costs fall.
And these industrial clusters, our potential SuperPlaces, foster and lead internationally on the development and roll out of Industrial CCUS is fundamental to decarbonising of industries such as chemicals, oil refining, and cement. This is because options for decarbonising industry are limited, and fuel switching is sometimes only a partial solution. CCUS is not currently investable for most industrial sectors as deployment costs are higher than the current carbon price can support, and businesses are unable to pass these through to consumers. Additionally, businesses may face challenges raising capital finance to invest in CCUS until it has been more widely deployed in the UK. The IETF aims to reduce this risk for first movers by providing grant funding towards the capital costs of CCUS projects, but the Fund alone will not help industry to overcome this barrier. Therefore, an investable business model is needed, alongside clear commitments to provide certainty to industry. The IDS set out the ambition to capture 3MtCO2 per year by 2030. Our delivery pathway for Carbon Budget 6 requires an increased ambition of 6MtCO2 per year by 2030 and 9MtCO2 per year by 2035. We envisage these emissions to be captured from industries in clusters as well as from more dispersed sites, where non-pipeline transport solutions such as the shipping of CO2 may be required. Revenue support for industrial carbon capture and hydrogen production CCUS and hydrogen deployment will play a central role in our green industrial revolution and ensuring that the UK’s businesses are competitive in a net zero future. We have been working with industry to develop business models for industrial carbon capture and hydrogen production to give investors the long-term revenue certainty they require. We are now setting up the IDHRS scheme to fund these business models and enable the first commercial scale deployment of low carbon hydrogen and industrial carbon capture. This will unlock by 2030 up to £6bn private sector capital, create thousands of jobs in key levelling up regions, grow the UK supply chain and achieve cost reductions, and deliver carbon savings to allow us to stay on track for our carbon budgets. The IDHRS scheme will initially commit to providing up to £100 million to support initial electrolytic hydrogen projects. We will also be announcing a funding envelope in 2022 that will enable us to award the first contacts to industrial carbon capture facilities and CCUS- enabled hydrogen production projects from 2023 through the Cluster Sequencing process, to deliver up to 3MtCO2/yr of industrial carbon capture and up to 1GW of CCUS-enabled Subject to costs falling, we are also committing to further allocation rounds for all types of eligible low carbon hydrogen production and industrial carbon capture from 2025. We will announce further allocation rounds in due course which will enable us to meet our 2030 deployment ambitions of 6MtCO2/year of industrial carbon capture, 10GW hydrogen production capacity, and four CCUS clusters, while continuing to grow the UK supply chain and achieve cost reductions. Once established, this framework could also be used in the future for other critical decarbonisation technologies. Moreover, the British Energy Security Strategy sets out an ambition to run annual allocation rounds for electrolytic hydrogen, moving to price competitive allocation by 2025 as soon as legislation and market conditions allow, so that up to 1GW of electrolytic hydrogen is in construction or operational by 2025. 172 8th National Communication From 2025 at the latest, all revenue support for hydrogen production will be levy funded, subject to consultation and legislation being in place. Further details on this can be found in the Government’s response to the Hydrogen Business Model consultation56. This includes parallel work to ensure fairness and affordability, such as exemptions for energy intensive industries at risk of carbon leakage. Electrification has the potential to abate between 5 MtCO2e and 12MtCO2e of industry emissions per year by 2050. Electrification will play a more significant role (12MtCO2e) if hydrogen is unavailable in dispersed sites. This equates to an increase demand of electricity by 15-44TWh. Additional electricity demand is consistent under our delivery pathway for the Sixth Carbon Budget, albeit the demand comes at a faster pace due to the possible adoption of electrification in the iron and steel sector. Electrification technologies for low temperature processes are technologically mature and could be applied to less energy intensive sites today. However, industry faces barriers to adoption such as high electricity costs. We have seen the impact of overreliance on gas pushing up prices for hardworking people but our plan to expand our domestic renewables will push down electricity prices. Applications for higher temperature processes are currently limited due to the low maturity of technologies. Some initial grant funding support will be available via Phase 2 of the IETF. Application rounds will run from Autumn 2021 to January 2023. We are also working with Ofgem, network operators, and stakeholders on the approach to delivering low carbon electricity networks with the capacity to meet increased demand from industry. Initial support for sustainable use of biomass fuel switching and BECCS is available via Phase 2 of IETF. As set out in the IDS, current evidence strongly suggests that given limited sustainable biomass supply, we may need to prioritise the use of biomass where it can be combined with carbon capture and storage (BECCS), resulting in negative emissions. The Biomass Strategy, due to be published in 2022 will review the amount of sustainable biomass available to the UK, how this could be best used across the economy, and establish a role for BECCS in reducing carbon emissions across the economy. Industrial non-road mobile machinery (NRMM) NRMM covers a wide variety of machinery across the economy (e.g. diggers, combine harvesters, generators, cranes), with total emissions of around 12 MtCO2e per year. Industrial NRMM accounts for around 6 MtCO2e,57 coming from construction, mining, and manufacturing, with the remaining emissions largely attributed to agriculture , and some to buildings and transport.