The Association for Renewable Energy and Clean Technology (REA) has responded to Chancellor Rachel Reeves’ Budget, highlighting the critical role the renewable energy and clean tech sector can play in achieving the Chancellor’s goals for economic growth and a sustainable future. Key measures in the Budget, including funding for the Warm Homes Plan, GB Energy, and restating the 2030 phase-out target for internal combustion engines, while welcome, primarily reaffirm previous commitments. Nonetheless, the REA recognises the essential groundwork these policies establish and the ambition and boldness they reflect.
The Chancellor’s shift of the fiscal rules will unlock investment into green energy projects across multiple technologies, and marks a decisive departure away from the previous government’s approach to public infrastructure spending.
New announcements include the confirmation of a UK carbon border tax, intentions to increase funding for the Boiler Upgrade Scheme and continuation of company car tax incentives for electric vehicles (EVs) from 2028.
However, the decision not to increase fuel duty and the continued freeze of the Carbon Price Floor are short-sighted measures that undermine the Government’s ambition to decarbonise across multiple sectors. Maintaining the status quo on fuel duties will hinder progress toward the UK’s climate goals and the wider adoption of cleaner technologies.
Trevor Hutchings, Chief Executive of the REA (Association for Renewable Energy and Clean Technology), said, “We welcome the Chancellor’s Budget as a significant step forward, underpinned by ambition and a commitment to strengthen the UK’s green economy. The shift in fiscal rules to unlock investment signals a bold departure from previous approaches, opening pathways for new infrastructure and sustainable growth.
The confirmation of policies like the Carbon Border Adjustment Mechanism, the Warm Homes Plan, and GB Energy funding, along with continued support for electric vehicles and increased funding for the Boiler Upgrade Scheme, all represent positive leaps forward. Yet, there are missed opportunities to drive more ambitious outcomes, such as increasing the Fuel Duty rate and Carbon Floor Price, which could accelerate our transition to net zero.
The renewable energy and clean tech sector is a driver of sustainable growth, international competitiveness and prosperity. We stand ready to work with the Government to build on today’s announcements.”