London Daily

Focus on the big picture.
Wednesday, Oct 22, 2025

UK government need more than just patriotism to keep up with US and EU in global net-zero race

UK government need more than just patriotism to keep up with US and EU in global net-zero race

As two industrial giants - the US and the EU - are engaged in a transatlantic arm-wrestle over the technology, investment and skills needed for net zero, the UK has effectively said it cannot compete.
Faced with a generational triple challenge of delivering a carbon-neutral economy, energy security, and the multi-trillion-pound investments required to make it happen, the government has draped its green ambitions in red, white and blue.

The energy security plan (official title "Powering Up Britain') is awash with Union flags. From the agency that will develop atomic energy, Great British Nuclear, to the programme to improve domestic energy efficiency, Great British Insulation, it feels like a patriotic rebranding of existing plans and consultations, with very little new money.

It may be a matter of presentation, but it's a mistake to view the race to net zero as a parochial issue. This is a global competition for technology, innovation, skills and investment. When it comes to money, Britain already finds itself outmuscled by global competitors.

Last August, US President Joe Biden announced the Inflation Reduction Act (IRA) - a $369bn subsidy plan to secure green industrial investment.

The financial incentives to move factories and development to the US are already turning heads in Britain, with the domestic car industry particularly vulnerable as it transitions to an all-electric future.

The European Union has responded to this huge protectionist move with one of its own. A response that could be worth €250bn in subsidies is being finalised in Brussels.

The UK of course would once have benefitted from collective European muscle flexing, but now it poses yet more competition, and much closer to home.

Faced with two industrial giants engaged in a transatlantic arm-wrestle, the UK has effectively said it cannot compete.

Can being smart make up for being small?

Instead of trying to keep up in a subsidy race, Chancellor Jeremy Hunt is hoping being smarter will make up for being smaller, helped by the financial clout of the City of London.

Writing for The Times today, he is explicit: "Our approach will be different - and better. We are not going toe-to-toe with our friends and allies in some distortive global subsidy race."

Rather than fight a subsidy battle he thinks he is destined to lose, the chancellor hopes the City, and UK innovation, can deliver the investment, skills and jobs required to transform energy supply and the economy.

He cites planned reforms of insurance regulation as allowing investors to free up some of an estimated £100bn in capital for green industries.

To put that in perspective, the Treasury's own estimate is that the UK requires £60bn a year to hit domestic net-zero targets, and the chancellor has already cited the same reforms as the resource for science and tech investment.

There is some state funding for green technologies in this announcement, though very little we did not already know about. Some £20bn will go towards Carbon Capture, Utilisation and Storage (CCUS) projects, a nascent technology still unproven at scale.

Much smaller pots will be aimed at green hydrogen, which has industrial applications that might in time help decarbonise the energy transition's huge demand for steel, as well as for insulation and setting up Great British Nuclear.

A generous direct subsidy is hard to beat

Yet even with a little state help and a favourable private sector investment environment, a generous direct subsidy is hard to beat. Volkswagen, for example, has already paused its European battery plant plans until it hears whether the EU can match a $10bn subsidy from the US.

The green transition is an opportunity for growth as well as a challenge. As every developed economy turns its attention to the energy transition the Treasury estimates it could be worth £1trn to UK business by 2030.

And there are huge investments required at home, starting with the expansion of the electricity grid to distribute huge volumes of new renewable energy, all of which will require cables to go under or over communities, and through the labyrinthine planning system.

The UK is already importing the green transition

The UK does have advantages in fundamental green industries. Geography has bestowed extensive coastal waters where wind power and expertise flourishes, with floating wind farms the next frontier. Yet the Crown Estate benefits from the licences (through ownership of the seabed) and many of the companies delivering the infrastructure are Scandinavian, demonstrating that the UK is already importing the green transition.

Unless flag-waving becomes a renewable energy source it will take more than patriotism to keep up in this global race.
Newsletter

Related Articles

0:00
0:00
Close
‘Frightening’ First Night in Prison for Sarkozy: Inmates Riot and Shout ‘Little Nicolas’
White House Announces No Imminent Summit Between Trump and Putin
US and Qatar Warn EU of Trade and Energy Risks from Tough Climate Regulation
Apple Challenges EU Digital Markets Act Crackdown in Landmark Court Battle
Nicolas Sarkozy begins five-year prison term at La Santé in Paris
Japan stocks surge to record as Sanae Takaichi becomes Prime Minister
This Is How the 'Heist of the Century' Was Carried Out at the Louvre in Seven Minutes: France Humiliated as Crown with 2,000 Diamonds Vanishes
China Warns UK of ‘Consequences’ After Delay to London Embassy Approval
France’s Wealthy Shift Billions to Luxembourg and Switzerland Amid Tax and Political Turmoil
"Sniper Position": Observation Post Targeting 'Air Force One' Found Before Trump’s Arrival in Florida
Shouting Match at the White House: 'Trump Cursed, Threw Maps, and Told Zelensky – "Putin Will Destroy You"'
Windows’ Own ‘Siri’ Has Arrived: You Can Now Talk to Your Computer
Thailand and Singapore Investigate Cambodian-Based Prince Group as U.S. and U.K. Sanctions Unfold
‘No Kings’ Protests Inflate Numbers — But History Shows Nations Collapse Without Strong Executive Power
Chinese Tech Giants Halt Stablecoin Launches After Beijing’s Regulatory Intervention
Manhattan Jury Holds BNP Paribas Liable for Enabling Sudanese Government Abuses
Trump Orders Immediate Release of Former Congressman George Santos After Commuting Prison Sentence
S&P Downgrades France’s Credit Rating, Citing Soaring Debt and Political Instability
Ofcom Rules BBC’s Gaza Documentary ‘Materially Misleading’ Over Narrator’s Hamas Ties
Diane Keaton’s Cause of Death Revealed as Pneumonia, Family Confirms
Former Lostprophets Frontman Ian Watkins Stabbed to Death in British Prison
"The Tsunami Is Coming, and It’s Massive": The World’s Richest Man Unveils a New AI Vision
Outsider, Heroine, Trailblazer: Diane Keaton Was Always a Little Strange — and Forever One of a Kind
Dramatic Development in the Death of 'Mango' Founder: Billionaire's Son Suspected of Murder
Two Years of Darkness: The Harrowing Testimonies of Israeli Hostages Emerging From Gaza Captivity
EU Moves to Use Frozen Russian Assets to Buy U.S. Weapons for Ukraine
Europe Emerges as the Biggest Casualty in U.S.-China Rare Earth Rivalry
HSBC Confronts Strategic Crossroads as NAB Seeks Only Retail Arm in Australia Exit
U.S. Chamber Sues Trump Over $100,000 H-1B Visa Fee
Shenzhen Expo Spotlights China’s Quantum Step in Semiconductor Self-Reliance
China Accelerates to the Forefront in Global Nuclear Fusion Race
Yachts, Private Jets, and a Picasso Painting: Exposed as 'One of the Largest Frauds in History'
Australia’s Wedgetail Spies Aid NATO Response as Russian MiGs Breach Estonian Airspace
McGowan Urges Chalmers to Cut Spending Over Tax Hike to Close $20 Billion Budget Gap
Victoria Orders Review of Transgender Prison Placement Amid Safety Concerns for Female Inmates
U.S. Treasury Mobilises New $20 Billion Debt Facility to Stabilise Argentina
French Business Leaders Decry Budget as Macron’s Pro-Enterprise Promise Undermined
Trump Claims Modi Pledged India Would End Russian Oil Imports Amid U.S. Tariff Pressure
Surging AI Startup Valuations Fuel Bubble Concerns Among Top Investors
Australian Punter Archie Wilson Tears Up During Nebraska Press Conference, Sparking Conversation on Male Vulnerability
Australia Confirms U.S. Access to Upgraded Submarine Shipyard Under AUKUS Deal
“Firepower” Promised for Ukraine as NATO Ministers Meet — But U.S. Tomahawks Remain Undecided
Brands Confront New Dilemma as Extremists Adopt Fashion Labels
The Sydney Sweeney and Jeans Storm: “The Outcome Surpassed Our Wildest Dreams”
Erika Kirk Delivers Moving Tribute at White House as Trump Awards Charlie Presidential Medal of Freedom
British Food Influencer ‘Big John’ Detained in Australia After Visa Dispute
ScamBodia: The Chinese Fraud Empire Shielded by Cambodia’s Ruling Elite
French PM Suspends Macron’s Pension Reform Until After 2027 in Bid to Stabilize Government
Orange, Bouygues and Free Make €17 Billion Bid for Drahi’s Altice France Telecom Assets
Dutch Government Seizes Chipmaker After U.S. Presses for Removal of Chinese CEO
×