Set out below are the main points affecting the Climate Change & Energy sector as announced in the Budget of 22 April 2009.

CARBON BUDGETS

Budget 2009 sets the world’s first carbon budgets, 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.

SUPPORT

Budget 2009 announces over £1.4bn additional targeted support for the low-carbon sector over the forecast period (2009-2011). This comprises:

  • £525m support to offshore wind through reform of the Renewables Obligation;
  • £375m for energy and resource efficiency in business, public buildings and households, including £10m for waste infrastructure;
  • £405m to support the development of a world-leading low-carbon and advanced green manufacturing sector in the UK;
  • £60m to fund engineering and design studies for carbon capture and storage; and
  • £70m to support decentralised small-scale and community low-carbon energy.

INVESTMENT

The measures announced by the Government since September 2008, including in the Pre-Budget Report and this Budget will enable a further £10.4bn of low-carbon and energy investment over the next three years. In addition to the measures outlined above, and taking into account the impact of the Renewables Obligation reform only in 2011-12, this comprises:

  • up to £2.3bn of lending which could be enabled, including from the European Investment Bank (EIB), to support investment in the automotive sector which contributes towards meeting environmental and energy efficiency targets;
  • up to £4bn from the European Investment Bank for UK renewable and energy projects;
  • £1.1bn in additional Warm Front funding, and increased energy efficiency obligations on energy suppliers, as announced in September 2008;
  • £1bn of investment in combined heat and power facilities supported by the extension of the climate change levy exemption post 2013;
  • £535m in green stimulus measures announced in the 2008 Pre-Budget Report;
  • £250m to bring forward ultra-low carbon vehicles announced in January 2009, with
  • further details set out in April 2009; and
  • £120m to ensure delivery of the Greater Manchester waste PFI project.