Renewable Energy Association: Green business rate win for REA, but Budget a ‘missed opportunity’ ahead of COP26

• REA’s calls for green business rate relief heeded in Chancellor’s Budget;
• Disappointment as other major measures, such as cutting VAT for domestic renewables, aren’t included;
• Government’s green credentials are undermined as domestic aviation duty is cut while long-term support to aid Net Zero transition goes missing.

The Association for Renewable Energy and Clean Technology (REA) has welcomed the Green Business Rate Relief announced in today’s budget, but says that the absence of other major measures was a ‘missed opportunity’ ahead of COP26.

REA has long called for a green investment business rate relief, and say that the Government’s adoption of this measure will support businesses to install onsite generation like solar panels, heat pumps and biomass boilers, helping to reduce their carbon footprint in a challenging economic climate, and support the UK’s wider Net Zero ambitions in doing so.

However, disappointment was also expressed that there was an absence of other major measures ahead of COP26, missing the opportunity to introduce some of the measures that would help deliver the ambitions laid out in last week Net Zero Strategy.  For example, Industry calls for VAT cuts for domestic renewables and clean technologies have gone unanswered. REA says that, although the Government’s Net Zero and Heat and Buildings Strategies included £26bn in spending commitments, just £14bn was new money. The Association said, in what should have been a watershed year for the energy transition, the scope and breadth of support for a range of technologies has fallen well short of what is required.

In addition, there was concern about the fuel duty freeze and the domestic aviation duty cut. While recognising the extraordinary challenges faced by consumers, any fuel duty freeze should have been accompanied by a new support package to make electric vehicles more affordable. Similarly, a fuel duty cut for domestic aviation duty - without a major investment in alternative renewable transport or the ‘Jet Zero’ transition - undermined the Government’s green credentials ahead of COP26.

REA has also added that, if no new domestic policy announcements are forthcoming at COP26, the Government must urgently reveal more detail to support their existing strategies.

Dr Nina Skorupska CBE, Chief Executive of the Association for Renewable Energy and Clean Technology (REA), said: “The Government’s heeding of our calls for a green business rate relief is certainly welcome and will support businesses in taking necessary steps to reduce their carbon footprint in a challenging economic climate.

“However, we can’t hide our disappointment that this Budget did not go much further by providing some of the fiscal measures needed to deliver the ambitions laid out in last week’s Net Zero Strategy, especially given that COP26 starts in just a few days’ time. Straightforward measures such as removing VAT on domestic renewables and clean technologies would have provided a catalyst for businesses and the economy, offered households long-term protections against volatile energy bills, and signalled a real statement of intent.

“In addition, while recognising the financial challenges faced by many motorists, any fuel duty freeze should have been accompanied by extra support to make electric vehicles more affordable and accessible. Similarly, although it was accompanied by investment last week in the ‘Jet Zero’ transition, a fuel duty cut for domestic aviation duty undermines the Government’s green credentials ahead of COP26.

“In short, while we welcome the progress that has been made, this Budget was a missed opportunity. We are in little doubt - unless decisive and substantial action is taken soon, the Government runs the risk of failing to meet its Net Zero targets.”