Sunak set the scene by stating that the UK had set the world’s most ambitious target to reduce carbon emissions by 68% by 2030 compared to 1990 levels – and was the only major economy to have set a target of 77% for 2035. He added that this followed progress over the past decades to cut emissions faster than any other G7 country, with the UK having already slashed emissions by 48%, compared to 41% in Germany, 23% in France, and no change at all in the US. He also pointed out that the UK had even surpassed the targets most countries had set for 2030, such as Australia, Canada, Japan and the US, overdelivering on all its previous targets to date.

He suggested that, thanks to this progress already made, reaching the UK’s 2030 and 2035 targets does not have to come at the expense of British citizens who are continuing to face higher costs of living – particularly as the UK’s share of global emissions is less than 1%.

Under the revised plans, the ban on the sale of new petrol and diesel cars is to be moved back by five years, so all sales of new cars will be zero emission from 2035, not 2030. This will enable families to wait to take advantage of falling prices over the coming decade if they wish to, according to Sunak. However, many industry observers maintained that this move will have only a limited impact on UK households, as the majority of people in the UK buy second-hand cars, while undermining business confidence and putting future investment and economic recovery at risk.

Although Toyota and Jaguar Land Rover were reported to have said the delay was ‘pragmatic’, Ford said it would undermine the move to electric cars. Others in the automotive industry had concerns that the government was sending ‘mixed messages’ – appearing to tell consumers that they could slow down the switch to electric vehicles (EVs), while still setting car manufacturers strict EV sales quotas and fines, with just over a fifth of vehicles being sold in the UK in 2024 having to be electric, rising to 80% by 2030.

Sunak also announced that the ban on installing oil and LPG boilers, and new coal heating, for off-gas-grid homes is also to be delayed to 2035, instead of phasing them out from 2026. Many of these homes are not suitable for heat pumps, so this ensures homeowners are not having to spend around £10,000–15,000 on upgrading their homes in just three years’ time, he said.

Furthermore, an exemption to the phase out of fossil fuel boilers, including gas, in 2035, has been set so that households who would most struggle to make the switch to heat pumps or other low-carbon alternatives won’t have to do so. This is expected to cover about a fifth of homes, including off-gas-grid homes – those that will need expensive retrofitting or a very large electricity connection.

Meanwhile, policies to force landlords to upgrade the energy efficiency of their properties have been scrapped. The old policy specified that from 2025, new tenancies would only be possible on properties with an Energy Performance Certificate (EPC) of C or higher. From 2028, this would have applied to existing tenancies as well. Instead, households are ‘to be encouraged’ to undertake energy efficiency improvements where they can.

However, Sunak stressed that the government will ‘continue to subsidise energy efficiency’. He also announced that the Boiler Upgrade Grant is to be raised by 50% to £7,500 to help households who want to replace their gas boilers with a low-carbon alternative like a heat pump. It was later announced that the UK government’s Energy Efficiency Taskforce, which aimed to speed up boiler upgrades and home insulation, was to be disbanded and its work streamlined into ongoing government activity.

The Prime Minister emphasised that the energy policy changes outlined above would not require the UK to change or abandon its upcoming emissions targets, and he remained unequivocal that the UK will meet its international agreements including the critical promises in Paris and Glasgow to limit global warming to 1.5°C.

However, following the announcement, the Climate Change Committee (CCC) tweeted: ‘The government not only has a legal obligation to meet its net zero 2050 target; it also has a commitment to hit the interim emission reduction targets it has put into law’. Stating that its latest progress report to government outlined increasing concerns that the UK was in danger of missing its 2030 and 2035 targets, the CCC warned that the latest announcement was ‘likely to take the UK further away from being able to meet its legal commitments’.

Meanwhile, responding to Sunak’s changes to green policies, Nick Wayth CEng FEI, CEO, Energy Institute, said: ‘Shifting policy goals designed to provide long-term certainty and stability for investors and drive down costs for British consumers risks doing the opposite. It’s also going to be hard to reconcile these delays with credible paths to the UK’s net zero target and, having just witnessed the impassioned debates at Climate Week NYC, the UK’s international leadership on climate change. These are issues that span Parliaments and generations and, as we head towards the next election, I hope both main parties can help rebuild the broad consensus that’s served us well so far.’

RenewableUK’s Chief Executive Dan McGrail added: ‘Today’s announcements will undoubtedly knock investor confidence, as many green technology leaders are now nervous about the increasing uncertainty around net zero policies in the UK. The government is going to have to outline clear measures to restore market confidence in the Autumn Statement, not least to ensure that we can compete against the US, Europe and China for investment at a time when the global race to build new renewable energy projects has never been more intense. The financial incentives being offered elsewhere risk draining private investment from the UK, so we need to see capital allowances which will bring developers back to the table here and stop vital energy infrastructure projects being put on hold. We also need to see new incentives focused on investment in manufacturing.’