UK at the forefront of a worldwide low-carbon recovery

A strategic and long-term approach to the problem of climate change

Budget 2009 provided over £1.4 billion of extra targeted support in the low-carbon sector. Together with announcements made since last autumn, the measures announced will enable an additional £10.4 billion of low-carbon sector and energy investment over three years.

Carbon budgets were set as required by the new Climate Change Act. These set a legally binding 34 per cent reduction in emissions by 2020, a new level of ambition for UK climate policy.

An additional £375 million was announced to support energy and resource efficiency in businesses, public buildings and households over the next two years, and £70 million for decentralised small-scale and community low-carbon energy. Together, these measures will support employment, and aim to save 380,000 tCO2 and around £60 million in energy bills each year.

The government’s existing framework will enable a ten-fold increase in renewable investment by 2020. To protect investment and jobs in low-carbon energy, and to strengthen the long-term framework for a low-carbon energy future, Budget 2009 announced:

£405 million to support low-carbon industries and advanced green manufacturing, to help make the UK a worldwide leader;

UK renewable and energy projects stand to benefit from up to £4 billion of new capital from the European Investment Bank, removing blockages in project financing;

an uplift in support for offshore wind investments that reach financial close between now and 2011 through the Renewables Obligation. This is expected to support £9 billion of investment and power up to 2.8 million homes;

extending support for combined heat and power through climate change levy exemptions, helping bring forward £2.5 billion of investment and 3 GW of capacity by 2015, and supporting employment;

a new funding mechanism to support up to four carbon capture and storage demonstration projects, and £90 million to fund detailed preparatory studies;

support extending for combined heat and power through climate change levy exemptions, helping bring forward £2.5 billion of investment and 3 GW of capacity by 2015, and supporting employment; and

a new funding mechanism to support up to four carbon capture and storage demonstration projects, and £90 million to fund detailed preparatory studies.