Introduction
Government policy on sustainability and decarbonisation will increasingly affect all UK businesses over the next five-year parliament, with enormous significance for the energy sector in particular. The UK’s commitment to reaching net-zero by 2050 has been embedded in legislation since 2019, and both the Labour and Conservative manifestos endorse this target. But for affected businesses, the bigger questions are around the pathway to 2050, which will vary widely depending on who is elected into power next week. Or will it?
In this blog, we’ve pulled out the top 10 sustainability topics addressed in the two major parties’ manifestos, and compared them against each other and against current policy. This provides a distilled view of those sustainability-related topics where the parties propose genuine change or meaningfully different approaches.
Clean energy transition
Compared to his predecessors like Boris Johnson, who pushed for a relatively ambitious climate policy agenda, Prime Minister Rishi Sunak has scaled back the Conservatives’ climate and energy transition proposals in the Tory manifesto. The party remains committed to net-zero by 2050 – just like Labour – whilst other parties push for a more ambitious timeline, such as the Liberal Democrats calling for 2045 net-zero target. Despite the Labour Party u-turning on its commitment to spend £28 billion a year on green investment (the figure has dropped to around £5bn), Keir Starmer’s party emphasises the climate transition in the Labour manifesto. There are of course a few climate-sceptic parties too, with Reform promising to scrap the net-zero target altogether and get rid of renewable subsidies.
The Tories focus on expanding offshore wind, nuclear and clean gas, and include a plan to invest in new fossil fuel infrastructure – including building new gas power stations. For renewables, only offshore wind is prioritised: the party pledges to treble the UK’s offshore wind capacity, from 14GW to 42GW. However, given that the current Government target for offshore wind capacity is 50GW by 2030, the manifesto seems to actually be suggesting a reduced commitment to offshore wind. The Tories are much more cautious when it comes to expanding onshore wind and solar farms, arguing that new projects must have the consent of local people and adhere to updated planning laws.
Labour’s headline target is to ensure all electricity generated in the UK is from clean energy by 2030 (bringing forward the current Government’s 2035 target by 5 years). Aside from the commitment to create a publicly-owned clean power investment company (Great British Energy) – read more in our Labour’s plan for UK infrastructure blogpost – the party aims to double onshore wind (35 GW), triple solar power (50 GW), and quadruple offshore wind capacity (55 GW) by 2030. They commit to investing £6.6 billion over the next Parliament in energy efficiency measures in homes in the form of grants and low interest loans for the purchase of solar panels and batteries, which they claim is more than double the Conservatives’ current investment plans. The party’s manifesto acknowledges that it will still rely on a strategic reserve of gas power stations to guarantee security of supply. However, when it comes to new licences to explore North Sea oil and gas fields, Labour promises not to issue any new licences, which contrasts with the Conservatives’ proposed continuation of annual licensing rounds.
The framework for a future Labour Government achieving these targets is proposed to be laid down in a new Energy Independence Act. It’s unclear how new clean energy proposals will be funded, and if £5bn a year will be enough, with the manifesto’s accounting addressing only the figures for Great British Energy (whose funding would be raised from windfall taxes on oil and gas companies). The manifesto acknowledged that most of the money will have to be funded from responsible borrowing.
Network Infrastructure and reforms to the approvals system for major projects
Both parties recognise that the queue for new plants to connect to the electricity grid is a major barrier to electricity decarbonisation, with waiting times now into the late 2030s. The Conservatives propose to build on the work of the UK’s first Electricity Networks Commissioner, Nick Winsor, and promise to implement his report’s findings and cut grid connection waiting times. Labour pledge that their Energy Independence Act initiative will involve work with industry to upgrade national transmission infrastructure and ‘rewire Britain’, but the manifesto does not detail concrete proposals.
Despite some easing of planning laws last year, both parties recognise current planning restrictions are hampering infrastructure projects and suggest reform. Labour say they will make the changes needed to make major projects faster and cheaper, including updating national planning policy, fostering innovation and technology specifically, but don’t go into the specifics. The Conservatives pledge to speed up the average time it takes to sign off major infrastructure projects from four years to one, and halve the approval period for new nuclear – see below.
Hydrogen and carbon capture and storage (CCS)
Labour promises to invest more in CCS and hydrogen, particularly offshore projects, earmarking £1 billion for CCS and £500 million for green hydrogen production, money for which will come from the £7.3bn National Wealth Fund.
The Conservatives reaffirm their commitment to existing CCUS policies, promising to build the already-announced two CCUS clusters in North Wales and the North West of England (Teesside and the Humber). The Conservatives promise £1.1 billion will be invested into the Green Industries Growth Accelerator to support British manufacturing capabilities to ensure clean energy is produced in Britain including hydrogen, but it’s unclear how much of this will be new money: £960 million was already promised by the current government last November.
Nuclear power
The Conservatives’ Civil Nuclear Roadmap, published January 2024, has already promised to facilitate the development necessary to achieve 24GW of nuclear power generation capacity on the grid by 2050 (3 – 7GW every 5 years from 2030 – 2044), which includes delivery of Sizewell C and Hinkley Point C, a technology selection process for Small Modular Reactors (SMRs) and updates to national planning policy statements to better support new nuclear projects. through changes for Nationally Significant Infrastructure Projects.
The Conservative manifesto steps this up with pledges to approve two fleets of SMRs within 100 days of the start of the next Parliament and halve the time it takes for new reactors to be approved. Labour’s plan also appears to be generally in line with the Civil Nuclear Roadmap (although detailed capacity targets aren’t specified), and adds commitments to extend the lifetime of existing plants (though how this differs from current policy is unclear) and set up a National Infrastructure and Service Transformation Authority to set strategic infrastructure policies and update planning policy.
Carbon Border Adjustment Mechanism (CBAM)
Following the EU’s lead (read more about EU CBAM, which kicks in fully from 2026), the current Government has been consulting on a proposed policy to introduce a UK CBAM from January 2027. This would apply a carbon price to imported goods from the aluminium, cement, ceramics, fertiliser, glass, hydrogen, iron and steel sectors.
The Conservative manifesto seems to suggest a narrowing of their existing proposal, by omitting fertiliser and hydrogen from the sector list (perhaps a precursor to the results of their recent CBAM consultation, which closed on 13 June). Labour supports the introduction of a UK CBAM (with no dates specified) to ‘prevent countries from dumping lower-quality goods into British markets’. Outside the manifestos, the FT reports that Labour is keen to align more closely with the EU on both the carbon border mechanism and emissions trading, with UK carbon market prices falling last week amidst this speculation.
Electric cars and charging infrastructure
In September 2023, Rishi Sunak pushed back the ban on the sale of new petrol and diesel cars and vans from 2030 to 2035. Labour and the Liberal Democrats pledge to reverse this, with the Greens going further with a ban on sales from 2027 and an end to all use of petrol and diesel vehicles by 2035. Pledges on charging infrastructure are vaguer with promises to accelerate roll-out of the required charging points but little detail on how the Government will facilitate this. The Liberal Democrats mention reinstating the plug-in car grant, but there’s no mention of the called-for VAT reduction for on-street charging from 20% to 5% to match the home charging rate.
Sustainability reporting – transition plans
Labour plans to boost the net zero transition by mandating FTSE-100 companies and UK-regulated financial institutions, including banks, asset managers, pension funds, and insurers, to develop and implement transition plans that align with the 1.5°C goal of the Paris Agreement. The Conservatives don’t mention this, but have progressed with transition planning during their tenure with the publication of the Transition Plan Taskforce gold standard disclosure framework and recent plans (now on hold due to the election) for consultation and implementation of mandatory transition planning. The Liberal Democrats have taken a different stance, pledging to require large businesses to publish transition plans to become nature-positive.
Chemicals and Product Regulation
When it comes to waste, product and chemicals legislation, very little information is included in either parties’ manifesto. Labour is committed to reducing waste by moving to a circular economy (following a statement in March 2024, saying they would aim for a zero-waste economy by 2050) and Shadow Chancellor Rachel Reeves has also stated that Labour would seek closer alignment with EU chemicals rules (ie, REACH), potentially scrapping the UK’s own REACH chemicals regulatory scheme. The Conservatives promise to crack down on organised waste crime – especially fly tipping – and prevent new waste incinerators from being built including revoking recently-approved permits. They also pledge to continue with current commitments to reduce avoidable waste by 2050, continuing to develop the UK-wide Deposit Return Scheme and increase recycling rates.
See our 2024 election supercycle pages for more strategic insights on global elections in 2024 and at the top of the page is a graphic summary of the key points above.