Prioritising net-zero or ignoring non-energy emissions? UK’s green economy reacts to Sunak’s department shake-up

Ahead of a reported Cabinet Reshuffle later this week, the Prime Minister moved this morning (7 February) to create four new Government departments, splitting the Department of Business, Energy and Industrial Strategy (BEIS) up and creating a dedicated energy security and net-zero function.

Sunak had promised to do this during his Conservative Party leadership bid last summer.

Grant Shapps has been handed the top job at the new Department for Energy Security and Net-Zero. The Department is being tasked with feeding into the Prime Minister’s commitments to “securing our long-term energy supply, bringing down bills and halving inflation”.

The creation of the department also “recognises”, Downing Street said in a statement, “the need to secure more energy from domestic nuclear and renewable sources as we seize the opportunities of net zero”.

The ‘Business’ part of BEIS, meanwhile, has partly been merged with the Department for International Trade, creating a new Department for Business and Trade headed up by staunch net-zero detractor Kemi Badenoch.

Other parts of BEIS’s business function and industrial strategy function will be rolled into a new Department for Science, Innovation and Technology.

As expected, opinion is divided on whether giving net-zero its own dedicated Cabinet Office seat will give the issue a higher profit – or whether, in having BEIS in the first instance, the Government was better able to give businesses more of a say in low-carbon transition planning and to encourage the private sector to play its part. There are also questions about whether the new Department for Energy Security and Net-Zero will focus solely on emissions from energy, ignoring the changes that the Government has been told to make in agriculture, transport and other sectors.

Here, edie rounds up all the latest reaction from key figures across the UK’s green economy.

IEMA’s chief executive Sarah Mukherjee said:

“We welcome a department responsible for energy security and net-zero. We hope this reshuffle heralds the Government’s intention to respond with all possible speed to the Skidmore Review and the publication of the UK’s updated net-zero strategy.

“Emphasis should be on enabling faster progress to be made on the transition to a sustainable future. The Government must make sure we have a workforce equipped with the necessary green skills to build and adapt to a greener economy.”

The Aldersgate Group’s executive director Nick Molho said:

“As the Skidmore Review recently pointed out, the transition to net-zero emissions is the biggest economic opportunity facing the UK economy in the 21st century. Building a competitive net-zero economy and putting the UK on track for its climate targets requires mainstreaming the net-zero target across all areas of government policy and a clear strategy to help industry get there. It is therefore essential that the transformation of the Department for BEIS into several separate departments does not come at the expense of cross-governmental collaboration.

“Whilst the decarbonisation of our energy supplies is essential to getting to net-zero emissions, reaching net-zero is an economy-wide transition. It is important that the creation of the Department for Energy Security and Net Zero does not obscure the fact that achieving net zero will require business model and infrastructure changes across the whole economy – this must be reflected in how responsibilities are split across government departments and how they interact with one another.

“The creation of an arms’ length Net Zero Delivery Body to support cross-government co-ordination, as recommended by the Skidmore Review, will become essential in an environment where responsibilities to hit the net zero target are split across a growing number of departments.”

Dustin Benton, policy director at Green Alliance, supported Molho’s point. He added in a Tweet:

“Electricity no longer needs the really big policy shift – we made renewables cheap last decade, making further deployment a no-brainer. More to do but no heroics. Industry, heating, transport (esp air), and agriculture/land are where the biggest challenges are now.”

Chris Skidmore MP, author of the Net-Zero Review said:

“[It is] very welcome news to see the creation of a new Energy and Net-Zero Department – something I called for last August.

“[This is] a clear sign that the Government is aware of the increasing importance of coordinated net-zero delivery as a priority.”

The Association for Renewable Energy and Clean Technology’s (REA) chief executive Dr Nina Skorupska said:

“An energy department with a focus on net-zero is welcome, as long as the Government now hits the ground running and avoids the usual delays while new Departments are established.

“Decision-making in the sector has already been woefully delayed over the last few years, and a joined-up approach across these new departments is essential, as well as implementing the recommendations from Chris Skidmore’s [Review], which clearly stated that net-zero is the largest growth opportunity of the 21st century.

“The REA looks forward to working closely with the new departments to accelerate the deployment of renewable energy and clean technology, tackling the joint energy and climate crises.”

The UK Corporate Leaders Group’s programme director Beverley Cornaby said:

“The devil will be in the detail with the newly formed government Department for Energy Security and Net-Zero. A key question is whether a relatively small, more narrowly focused department will have the clout it needs to drive climate, nature and net-zero perspectives through all government activity.

“Businesses will also be wondering who will be leading the green growth agenda at a time when industry is crying out for investment in line with recently announced US and EU plans, and if this split will divide attention and risk slowing progress further.

“With both the response to the New Zero Review and the refreshed Net Zero Strategy due out shortly, there is a huge opportunity for Grant Shapps to use this new framing to have the weight to influence change at the rate needed and to drive that action across government. Taking a quick lead on developing a strong implementation plan, would also go some way towards the consistent, clear and cross-cutting approach needed. Anything less is just a seat at the table and isn’t enough to be meaningful.”

Shadow Secretary for Climate and Net-Zero Ed Miliband said:

“So, seven years after the disastrous decision to abolish [DECC], the Conservatives now admit they got it wrong, but a rearranging of deckchairs on the sinking Titanic of failed Conservative energy policy will not rescue the country.

“Britain’s energy bills are too high and our system too weak because of years of disastrous decisions: the ongoing onshore wind ban, blocking of solar, slashing of energy efficiency, disastrous regulation of the retail market and an unlawful net-zero plan. All this must change.

“Worst of all, just as other countries push ahead on green investment, the Conservatives squander opportunities and leave Britain losing in the global race for green jobs.”

UK Sustainable Investment & Finance Association chief executive James Alexander said:

“While there is merit in the decision to create a dedicated department focused on the UK’s energy security and net-zero, a more pressing priority for our members continues to be a clearer delivery plan for the transition of the real economy and financial services in the coming years.

“Many investors stand ready to help provide the capital necessary for the clean energy transition and to bolster the UK’s energy security, but to do this require a consistent policy environment with implementation following this – a core theme highlighted in the recent Skidmore Review. We recommend that government considers credible decarbonisation roadmaps for key economic sectors, underpinned by near-term actions to shift financial flows towards net-zero, while exploring a positive UK response to the United States’ Inflation Reduction Act (IRA).”

Matthew Paterson, Professor of International Politics at The University of Manchester, said:

“While it might now look like climate change has a higher profile in government, with net-zero in the title, it does not guarantee that it will be an immediate priority. For a start, the reorganisation itself will take several months to achieve, distracting officials from the pursuit of net-zero. And it’s worth bearing in mind that Grant Shapps has a somewhat mixed record when it comes to climate action.

“Many of the initiatives contained in the ‘Green Industrial Revolution’ that Boris Johnson’s government announced were part of the industrial strategy under BEIS – while that was always stronger on rhetoric than concrete achievements, it nevertheless had a focus on the industrial transformation necessary for pursuing aggressive climate action.

“Reverting to a simpler ‘energy and net-zero’ focus could imply significant capture by oil and gas interests in shaping the government’s approach, which we have seen strongly in other contexts in the last year or more.”

The Energy Networks Association’s interim chief executive Ross Easton said:

“The creation of a dedicated department focused on energy security and net-zero is very welcome. These are substantial topics and it’s correct that the Prime Minister recognises this.

“That said, the proof is not in the name or the Whitehall machinery, but in the delivery of high-quality policy which supports safe, secure, sustainable and reliable energy supplies for customers – now and in the future. That is the real test. We are looking forward to working with the Secretary of State and his team to deliver this.”

Alexander Stafford MP, chair of the All-Party Parliamentary Group on ESG, said:

“I welcome the Government’s move to split BEIS into four separate departments, however, this must lead to a scaling up of the UK’s net zero ambitions, with ESG considerations positioned at the core of the Department for Energy Security and Net-Zero’s strategy. This newly created department must grasp the clear opportunities provided by ESG frameworks for the race to net zero.”

Green Alliance UK’s senior political advisor Joe Tetlow said:

“This makes a lot of sense. Energy security and net-zero go hand-in-hand, and it will help drive progress with the right ministers and support from the centre.

“[With the] Budget coming down the track next month, the Energy Security Bill in Parliament and the Net Zero Strategy update by the end of March, Grant Shapps and the Department for Energy Security and Net-Zero has a big task, but can hopefully be more focussed on delivery with less on the plate.”

Green Alliance UK’s head of politics Chris Venables said:

“You can read the runes either way on [the] reshuffle’s impact on climate policy, but my hunch says clearer focus on energy security, with link to [a] net-zero-specific role at Cabinet, is positive. Grant Shapps [is] respected and knows way around Government too, so could be powerful advocate for the Department.”

Conservative Environment Network director Sam Hall said:

“Scaling up home-grown clean energy rapidly is a hugely complex and important task for the UK, and it makes sense to have a department focused on this priority. Good policy and buy-in from the centre of Government are critical too.”

npower Business Solutions’ chief operating officer Anthony Ainsworth said:

“The past two years in particular have highlighted the need for specific governmental focus on both energy and net zero, so a secure and sustainable policy framework can be built that supports both businesses and consumers.

“Last year, our Business Energy Tracker report revealed that 82% of businesses felt that the government could be doing more to protect them against energy market volatility. While measures such as the Energy Bill Relief Scheme and the new Energy Bills Discount Scheme were welcome interventions, it became more apparent that a focussed and long-term approach was needed to enable the UK to become more energy resilient.

“Similarly, the launch of the government’s Net Zero Review earlier this year clearly demonstrated that urgent action needs to be taken now if the UK is to hit its 2050 target. With this in mind, we welcome the move to create a dedicated Department for Energy Security and Net Zero.”

Zenobē’s co-founder and director James Basden said: 

“The formation of a standalone Department for Energy Security and Net Zero is welcome news, demonstrating that the net- zero transition is moving up the political agenda. However, separating out energy from BEIS is just the first step. Crucially, we need to see climate, energy and transport brought under one roof, as they are all part of the same solution. As the electricity and transport systems merge, so must the departments that govern them – or we risk them working against each other.

“The UK has made rapid progress in decarbonising power generation, but policy on transport, as well as other sectors such as heat and manufacturing, is less cohesive and decisions are made by different departments in siloes..The inconsistency of the UK’s policy in this area is driving talent and money overseas, and with the Inflation Reduction Act, the UK needs to facilitate innovation now more than ever.

“Once a leader, the UK is falling behind. To encourage green investment for decades to come and stay relevant in an increasingly competitive international market, the government needs a longer-term strategy and bold policy decisions.”

EY UK&I’s managing partner for sustainability Rob Doepel said: 

“The newly announced Department for Energy Security and Net Zero should bring some welcome alignment to UK sustainability policy, which has historically been developed across Whitehall departments. The hope is that this central office will have the authority to remove some of those bottlenecks that have slowed our progress towards Net Zero, such as changes required to planning and consenting, and galvanise policymakers, investment, and the broader national decarbonisation conversation.

“Decarbonisation can certainly offer solutions to the energy crisis, but both are enormous challenges in their own right that warrant their own careful, considered approaches. From a Net Zero perspective, the key priority must be rapidly aligning Whitehall policy and unlocking many of the Skidmore Review’s more significant recommendations, from developing a new, comprehensive framework for infrastructure delivery and incentivising business to develop new green technology, to working with local communities to deploy solar and onshore wind facilities.

“‘Green superpower’ status is only achievable with green infrastructure, and this won’t come for free. This centralised office provides an opportunity to mobilise private sector capital to finance these projects ensure the taxpayer isn’t left to fit the bill, particularly during a cost-of-living crisis.”