Breakdown of Green Spending Review

The Treasury's spending review seems to have confounded the more pessimistic voices within the green movement, with billions of pounds promised for a Green Investment Bank, carbon capture and storage and developing ports to support offshore wind.

Feed-in tariffs also dodged the axe and will be complemented by a fully funded renewable heat incentive (RHI) from April.

But businesses may feel a sting in the tail now that CRC revenues no longer go to participants in the scheme and the fate of numerous other green initiatives remains unresolved.

Here, we highlight the main points to have come out of the review:

Green taxes

* A carbon tax by proxy has been introduced through the CRC. Revenue raised through the scheme will now be hoovered up by the government rather than recycled to participants. The Treasury reckons it will raise £1bn a year by 2014/15.

Carbon Capture and Storage (CCS)

* CCS competition gets £1bn from public spending, so does not require the introduction of a levy on electricity supplies at this stage.

* Government will decide if a levy or public money should back future demonstrations once work to reform of the Climate Change Levy to provide support to the carbon price has been completed next spring. It will publish the consultation on changes to the levy in November.

Green Energy

* £200 million for low-carbon technologies including offshore wind technology and manufacturing infrastructure at port sites. The announcement on whether the full £60m originally promised for port upgrades will be delivered will come next week.

* Feed-in tariffs will not be altered until the planned 2013 review, unless deployment exceeds expectations. 2013 review will also see tariffs "refocused on the most cost-effective technologies".

* £860 million funding will be made available for the Renewable Heat Incentive, which means it will launch next April. Decision means there will not be a separate renewable heat levy.

Green Investment Bank

* Only £1bn for green investment bank initially, leaving it well short of the £4bn to £6bn businesses had called for. But more could be forthcoming from private sector and future government asset sales.

* Looks as if bank will be allowed to raise money through green bonds and other private sector instruments.

Energy efficiency

* Green Deal for energy efficiency and a new obligation on energy companies will replace Warm Front scheme from 2013.

Waste and recycling

* Funding cut from seven waste PFI projects, as government predicts they will not be needed to meet landfill diversion.

DECC and Defra

* Overall DECC budget to fall by 5 per cent, Defra by 8 per cent - contrary to rumours, DECC will not be moving in with the Treasury.

* DECC and Defra will join all departments in submitting business plans setting out their priorities for next four years.

* Work of Carbon Trust, Energy Saving Trust, the Coal Authority and the delivery arm of Ofgem is still being reviewed.


* Incentive scheme offering up to £5,000 towards the cost of a new ultra-low emission vehicle from January 2011 remains as does support for electric car charging infrastructure.

* Of £30bn for transport, £14bn is set aside for railways to fund major electrification projects around the country, although rail fares are set to rise from 2012.

* Government will proceed with its plans to deliver a new high speed rail network, and will bring forward legislation during this Parliament to allow construction to proceed.

* Final decisions will be made by DfT after the Spending Review on the replacement of the UK's inter-city high speed trains.


* New money raising powers for councils increases hopes they could become major investors in renewable energy projects.

* Regional Growth funds get £1bn to bring in private investment to neglected areas.

* Science budget remains at £4.6bn.

* Increase in overseas aid to 0.7 per cent of Gross National Income (GNI) from 2013, includes £2.9bn for International Climate Finance over the Spending Review period, funded by DfID, DECC, and Defra.

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