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


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.


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.


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.