Regen: Carbon tax required to decarbonise heat


A massive, sustained drive towards energy efficiency, plus a single, transparent carbon tax levied in proportion to fuels’ emissions, must be first steps in eliminating carbon from heating Britain’s homes and businesses, says energy think tank Regen.

In a paper issued today, the advisory group identifies heat decarbonisation as the biggest challenge to the UK’s goal of carbon neutrality by 2050. As much as 38 per cent of Britain’s total greenhouse emissions result from keeping homes and offices warm and factories running, states the report.

Domestic environmental levies now account for 21 per cent of home electricity bills. Key to heat decarbonisation, says Regen, is Whitehall consolidating these into a single levy, fairly applied to heat sources according to their emissions. Low-carbon gases like hydrogen must be encouraged to replace conventional gas, but not at cost to electrified heat, where power generation has already significantly decarbonised.

Some 85 per cent of homes rely on the gas grid. The 10 per cent of home heated by electricity are twice as likely to fall into fuel poverty, the report notes, adding weight to its call to rebalance levies.

Zero emissions building regulations must now replace Britain’s lax standards, said Regen, with UK stock ranking as Europe’s leakiest buildings.

Business and domestic consumers, tenants and premise owners must be incentivised to see value in shifting to low carbon heat, added Regen’s director Johnny Gowdy. Tax reforms would be a first step in establishing regional markets for low carbon heat, overseen by local and city authorities, and serve as a launchpad to spur heat-as-service innovations, he suggested.

“There are no easy or low cost pathways” said Gowdy. “It is vital that this coming decade is used to engage with consumers and build partnerships at a local and regional level.”

The report, the first in in Regen’s ’Decade to Make a Difference’ series also advocates:

  • Prioritising heat technology within the UK’s industrial strategy and enabling strategic infrastructure investment.
  • Expanding the low carbon supply chain, including a mass mobilisation and reskilling of heating engineers and service professionals
  • Continuing to prioritise consumer protection, and measures to eradicate fuel poverty.

More on the Regen report here.

Related stories:

Net Zero: How to decarbonise heat?

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