Policy Brief
Carbon Neutral Roadmap
Introduction
The consequences of climate change are generally recognised, and measures have been agreed at the international level to tackle the issue. The Kyoto Protocol, which has been extended to Jersey, requires a reduction in carbon emissions by 80% by 2050, relative to 1990 levels. Currently, 44% of Jersey’s emissions come from transport, 21% from residential buildings, 14% from business and 12% from energy production and distribution. In May 2019 the States Assembly voted to declare a climate emergency and in February 2020 it agreed a Carbon Neutral Strategy. The agreed objective is to reduce emissions from the 1990 baseline level by 68% by 2030 and by 78% by 2035 with net zero emissions being achieved in 2050. In April 2022 the States Assembly agreed the Carbon Neutral Roadmap, including a delivery plan for 2022-2025.
Priorities
The Chief Minister’s Ministerial letters, published on 10 August 2022, included a letter to the Minister for the Environment the key part of which said –
I look forward to progress being made on improving water, air and soil quality, and the drive to reduce carbon emissions in line with our Carbon Neutral Roadmap and our obligations under the Paris Agreement. As you know, I am particularly keen on renewable energy as a power source, and getting homes insulated. The move to carbon free transport will also need to be accelerated. I look forward to you collaborating with the Minister for Infrastructure on this issue.
The Ministerial plans for 2024, published on 19 September 2023, included a chapter for the Minister for the Environment which set out as one of his priorities –
Tackling the climate emergency by reducing Jersey’s carbon emissions in line with our net-zero target and improve our resilience to the impacts of climate change by:
- delivering the first phase of the carbon neutral roadmap including a focus on the decarbonisation of heating buildings and road transport through a just transition
- reviewing the operation and governance of the Island’s energy market to ensure a safe and just transition from a reliance on hydrocarbons; and working with Jersey Electricity to ensure the readiness of the grid for accelerated electrification
- continuing to develop the necessary consenting regimes and frameworks to enable utility-scale offshore renewable energy generation
The Carbon Neutral Strategy and Carbon Neutral Roadmap
The Carbon Neutral Strategy, agreed in February 2020, set out the context for the strategy and five guiding principles to Jersey’s approach to carbon neutrality -
1 A strategic focus on all emissions
2 Work within a definition of carbon neutrality
3 High standards in the use of carbon offsetting
4 Making sure that everyone can play their part
5 Carbon neutrality policies do not overall increase income inequality
In April 2022 the States Assembly agreed the Carbon Neutral Roadmap. This sets out five strategic policies –
1. Jersey’s net-zero emissions pathway. It is stated that this will –
- At a minimum reduce emissions by 68% compared to the 1990 baseline by 2030, and reduce them to 78% from baseline by 2035.
- Deliver zero net emissions by 2050.
- Stay in line with and respond to further evidenced changes in science-based Island energy market global emissions reductions targets that are needed to limit global warming to 1.5%c
2. Island energy market. The summary states –
There are a number of available and emerging non-fossil hydrocarbon products and new energy sources that are entering the marketplace in all sectors. They will reach maturity and commercial availability over the next three decades and have the potential to contribute to Jersey’s decarbonisation journey. Some new products, particularly biofuels, are direct substitutes for existing fossil-hydrocarbons making transition simpler assuming supply and demand align, and prices are competitive enough to encourage uptake.
There will be a need to accommodate changes to our energy system in the future, as products change and with increased potential to democratise power generation, distribution, and storage.
There are challenges to bring new energy sources to the Island where they require new infrastructure and supply lines (for example, hydrogen).
We expect to see a decentralisation of electricity generation in the forthcoming decades, and we will need to consider the impact of this on our current electricity market and infrastructure.
As the cost of generating utility scale (offshore) renewable energy falls, we might want to consider investment to provide the Island with energy sovereignty and resilience. Jersey participates in the British Irish Council energy work stream where it is represented alongside England, Ireland, Scotland, Wales and the other Crown Dependencies. Jersey is represented on a number of French working groups e.g., Ille et Vilaine, La Manche, where renewable energy is a key topic due to the development of the St Brieuc windfarm in French territorial waters. There will be increased coordination across the Channel Islands with recent discussions seeking to re-establish a Ministerial working group that will identify opportunities to work across the Islands to explore the opportunities for marine renewable projects.
Responding to these related challenges requires a clear and long-term government led energy strategy with clear and accountable political leadership. A new ministerial portfolio for energy and climate change is recommended to oversee the planned energy market review, which will need to ensure our statutory and regulatory framework remains fit-for-purpose in a new energy future to balance energy affordability, sustainability, and security of supply issues.
3. A financing strategy which sets out a timetable for bringing forward proposals with principles including that policies do not increase income inequality and proper processes.
4. Policy programme and development which is about the mechanisms to deliver the roadmap.
5. Becoming carbon neutral, which repeats the principles in the Carbon Neutral Strategy.
Delivery 2022-2025
The Roadmap includes a Delivery Plan 2022-25, which is a mixture of -
- new policy interventions, including new incentive schemes to support Islanders to transition to lower carbon technologies
- commitments to introduce or amend regulations, such as to require greater energy efficiency in buildings and heating systems
- new targets, to focus action across the Island, such as the ambition to make Jersey a centre of excellence for Blue Carbon research and industries
- confirmation of future milestones, such as the requirement to decide, by 2028, if – having made substantial reductions in its emissions - Jersey needs to purchase offsets to reach a carbon neutral position
The following specific points were listed for 2022 –
- Bring forward a proposal to subsidise the rate of fuel duty charged on second generation renewable diesel by approximately 32 PPL
- Second generation renewal diesel phased into government of Jersey fleet
- Publish a sustainable transport road map
- Implement further active travel initiatives
- Provide a subsidy to households and businesses to transition to low-carbon heating systems
- Implement a new net zero rural economy strategy and marine economy strategy
- Explore opportunities for carbon capture from the existing electricity from waste plant
- Establishing a decarbonization unit in government
For 2023 the following points were listed –
- Vehicle emissions duty optimisation
- From 1 January 2023 owners of electric vehicles will have the option of displaying a number plate with a green marker
- Speeding up the adoption of electric vehicles
- A grant scheme supporting low carbon heating systems and home insulation
- A financing strategy to be included in the 2024 Government Plan
- Publication of a review of the Island energy market
- Publication of a marine spatial plan
- The decarbonization unit will set quantified emissions reductions targets in departmental operational business plans
On 18 July 2023 the Government published Carbon Neutral Roadmap Progress Report. This does not report progress against the specific targets in the Roadmap but rather reports progress generally. The accompanying press release reported that “among the many milestones, outlined in the report, are:
- The launch of the low carbon heating incentive in May 2023 which supports Islanders with funding to help make the switch from oil or gas heating systems to low carbon alternatives and helps make buildings more energy efficient. It includes a new Contractor Quality Scheme for heat pump and other low carbon heating system installers to build on green skills and market capacity.
- The e-bike incentive scheme was launched in January 2023. More than £32,000 worth of vouchers have so far been redeemed.
- The establishment of the Decarbonising Government Unit, with more than 250 of the Government of Jersey’s diesel vehicles now converted to Second Generation Renewable Diesel. The Government’s fleet also now features more than 70 electric vehicles.
- Active travel initiatives to date have included School Streets(at St Luke’s School) and the Love to Ridecampaign, which has achieved some of the highest take-up figures in the British Isles.
- Continued close working with industry through the eco active business network and new initiatives such as the Sustainable Construction Summit.
- Progress on delivering the COP26 Education Pledge to improve education on climate change, and the successful delivery of low carbon lifestyles campaigns, with an initial focus on waste reduction.”
The Progress Report did not state explicitly whether the 17 targets for 2022 and the first half of 2023 had been achieved. A Freedom of Information request resulted in a schedule being provided showing the status of each of the targets. This showed that nine had not been met. These include updating building by-laws, sustainable transport roadmap, active travel, use of renewable content petrol and diesel, creating a carbon neutral network and speeding up adoption of electric vehicles. Only one had been explicitly paused – supporting transition fuels. The targets that had been achieved were largely administrative, such as ratification of a treaty and green number plates for electric vehicles. The sustainable transport policy is the most important of the issues; it was eventually published in December 2023.
Of the other major initiatives scheduled for 2023 –
- A consultation on the Marine Spatial Plan was commenced in August 2023; the final plan is scheduled for March 2024.
- The review of the Island energy market has not yet been published.
- The Proposed Government Plan 2024-2027 includes a section on financing strategy, although not a strategy.
- A subsidy scheme for the purchase of electric vehicles and installation of charging points has been introduced.
Sustainable transport policy
The Roadmap included: “bring forward the Sustainable Transport Roadmap to the States assembly by the Q4 of 2022”. This did not happen. The progress report stated that this has now been renamed “Sustainable Transport Policy” and would be published by 24 July – six days later. This did not happen. On 6 December 2023 the Government published Sustainable Transport Policy: Next Steps.
The Policy does not have a summary; it is best summarised in the press release accompanying the report, which stated that the document prioritises six areas -
- making the roads safer for all of us
- reallocating road space to prioritise cycling and walking
- raising the profile of public transport
- managing vehicle movement through parking measures
- supporting the Island’s economy
- enabling future transport mobility and legislative change.
Some of the key commitments include -
- The creation of a Strategic Road Safety Unit and the publication of a road safety strategy.
- Creating more accessible, safer, covered waiting areas for bus users.
- Identifying opportunities to bring low carbon vehicles into the bus fleet.
- Reviewing charges and charging time periods for parking in public car parks.
- Working with key stakeholders to support shared mobility transport solutions.
The report includes ten decision making principles, originally published in 2020, for transport that will be “built into and applied in public decision-making in a range of ways” -
- Recognise that fewer motor vehicle journeys will be good for Jersey.
- Conform with the Jersey mobility hierarchy (which begins with children, elderly people and people with disabilities and ends with single occupancy cars).
- Improve transport options, including parking, for people with mobility impairments.
- Make walking and cycling routes more attractive, especially for school and commuting, by providing safer routes.
- Invest in a better bus system that more people want to use and that is accessible to all, [and present a Bus Service Development Plan to the States for debate during the spring session 2021].
- Recognise, and price fairly, the social and environmental costs of private vehicle use [and present a Parking Plan for debate during the Spring session 2021].
- Reduce the impact of vehicles on our landscape and create more space for people in St Helier.
- Create public service and planning systems that reduce the need to travel.
- Discourage the use of petrol and diesel vehicles and encourage the use of zero emission vehicles to reduce pollution.
- Work with businesses that rely on road transport to support their efficient and safe use of the road network, their delivery and servicing needs and their uptake of alternative low carbon fuels.
Financing strategy and the Climate Emergency Fund
The Climate Emergency Fund is the mechanism for funding the various Carbon Neutral Roadmap initiatives. However, how the fund operates is not clear. The Roadmap has a section headed “Financing Strategy – Carbon Neutral Roadmap – strategic policy 3”. This states that the Fund “will maintain a hypothecated revenue stream to fund Jersey’s decarbonisation”. Three stages are proposed to identify the funding –
Short-term, using resources already in the fund to support policies in the first stage (2022-2026).
Medium-term: government will bring forward in 2022, in time for potential inclusion in the Government Plan 2023, proposals for new economic instruments that generate income ring-fenced to the Climate Emergency Fund (in whole or in part) in the following areas:
a. Road user charges
b. Reinvestigation of commercial solid waste charges
c. Car parking charges
d. Travel duty, and
Longer-term: bring forward in 2023, in time for potential inclusion in the Government Plan 2024, a long-term financing strategy that considers all available options to continue to fund the decarbonisation of the economy at the pace required to achieve the emissions trajectory established in Carbon Neutral Roadmap.
The Roadmap made a number of further references to the Fund –
- Excess revenue from VED increases will be deposited in the Fund.
- The Environment Minister has policy responsibility for administering the fund.
- High level spend is agreed by the Assembly via the Government Plan or the “carbon neutral delivery fund”.
- The Treasury Minister is responsible for the investment strategy of the fund.
The CNR set out how the initial funding would be used –
Speeding up adoption of electric vehicles £4,855,000
Supporting transition fuels £3,189,000
Bus service development trials £1,500,000
Active Travel £1,700,000
Supporting low carbon heating and insulation £5,706,000
Energy performance certificates £355,000
Promoting low-carbon lifestyles £200,000
Delivering a sustainable finance framework £60,000
Decarbonising Government of Jersey £1,260,000
Create a carbon neutral network £500,000
Delivering the COP26 education pledge £200,000
Blue carbon biodiversity and sequestration £1,325,000
Policy development £1,200,000
Regulatory, enabling and programme £950,000
Total £23,000,000
However, no proposals for new economic instruments were brought forward in 2022 to be included in the Government Plan 2023.
The Roadmap refers to a “long-term financing strategy” (LTFS) to be brought forward in 2023 for inclusion in the Government Plan 2024. The Government Plan does have a section under this heading. However, it is not a strategy but rather “the principles under which detailed proposals for financing will be developed”. In summary these are -
1. The LTFS will work fairly for all Islanders - just transition, polluter pays and intergenerational equity.
2. The LTFS will target the best value approach for Islanders – value for money, minimising costs funded through taxation, fast follower and international alignment, the role for Jersey’s sustainable finance industry and the role of government funds in derisking investment.
3. Financing will be made available when it is needed.
The Plan continues –
Ensuring that the burden of paying for the move to carbon neutrality doesn’t fall on future generations means that it will be necessary to raise funding. Based on previous estimates of a c.£300 million requirement, this would equate to approximately £10 million a year over the next 30 years, some of which will be delivered by the existing revenue ring-fenced to the Climate Emergency Fund each year.
Further policy work will also take place in 2024 to establish a suitable set of polluter-pays measures that could deliver the additional funding required.
This will include investigation of the introduction of an appropriate carbon tax or charge relating to the operation of private aircraft.
Polluter pays measures are designed to encourage changes to behaviour, therefore any future decreases in revenues will need to be understood as part of the development of new measures. The impact of any measures on Islanders will also need to be carefully assessed and understood to ensure that the principle of a fair transition is upheld. Any new form of taxation will involve associated administrative and compliance costs, which must also be factored into the viability of introducing any tax.
Successive Government Plans give further details about the operation of the Climate Emergency Fund. The Government Plan 2023-2026 stated that –
The Fund was created with £5 million transferred from the Consolidated Fund in 2020 and receives annual income from an above RPI increase in fuel duty. At its current value, it is accepted that the Fund is insufficient to fund all the necessary policies to achieve our carbon neutral targets and it is expected that further income streams will need to be added to the Fund.
The Government Plan 2024-2027 has rather different wording -
The Fund was created with £5 million transferred from the Consolidated Fund in 2020 and receives annual income from previously agreed increases in fuel duty.
This change was needed because the decision was taken in 2022 to freeze fuel duty in 2023 as an exceptional measure in recognition of the significant increase in the cost of living. The proposed 2024 Government plan included: “Ministers are proposing to return to the policy of holding the rate of duty constant, in real terms, by indexing it to the growth of RPI (10.9%). The uprating of fuel duty signals Ministers’ commitment to the agreed Carbon Neutral Roadmap.” In the event, the Government accepted a recommendation from the Scrutiny Panel to freeze the duty for a second year.
The following table shows the figures from the two plans for 2023 and 2024. There is no reconciliation between the plans so it is not clear how the closing balance at the end of 2023 as envisaged in the 2023 plan of £2,486,000 was transformed into an opening balance of £8,194,000 in the 2024 plan. Generally it seems that the fund is no longer a fund in the normal sense of the word but rather expenditure on carbon neutral initiatives is now simply financed out of taxation in the normal way.
Assessment of progress
The objective in the CNR is “at a minimum reduce emissions by 68% compared to the 1990 baseline by 2030, and reduce them to 78% from baseline by 2035”. In fact, Jersey has made considerable progress in reducing emissions – a 46% reduction between 1990 and 2021, an annual rate of about 2%. There is no detailed analysis of this reduction, but it is clear that a significant proportion of it was accounted for by electricity supply being switched from an oil-fired power station to nuclear and hydro-electricity from France. Between 1994 and 2022 imports of oil to generate electricity fell from 82,000 tonnes to 0, while imports of road fuel fell by about 1% a year from 43,000 tonnes to 31,000 tonnes. Nuclear and hydro-electric are not entirely carbon-free. The construction of the facilities results in emissions – although the electricity that Jersey is importing is from facilities that had already been constructed. Distributing the electricity in Jersey also results in some emissions. However, compared with using fossil fuels to generate electricity the emissions are tiny. A report for the Government of Jersey by the consultancy Aether estimated that 0.81% of Jersey’s emissions in 2020 came from imported electricity compared with 36% from transport and 26% from residential property.
To achieve the 2030 target requires a 30% reduction from the 2021 figure, an annual rate of about 5%. It is difficult to see how this can possibly be achieved, given that there is no further scope to reduce emissions caused by electricity generation.
The CNR sets out specific sub-targets to be met by 2030 –
- End registration of new petrol and diesel cars and small vans.
- 67% of vehicle decarbonised.
- 75% of domestic and 50% of commercial fossil fuel boilers decarbonised.
The CNR does not include any analysis of the effect of each of the specific measures on emissions, nor of what incentives/penalties would be required to achieve them.
The CNR implies that a third of all households will decarbonise their domestic heating by 2030, at an average cost of around £10,000. The target will not be achieved in the absence of a combination of a significant increase in the tax on oil and a generous incentive scheme, which in turn would have to be financed by taxation.
The UK industry body, the Society of Motor Manufacturers and Traders, estimates that by mid-2035 46% of cars on the roads could be zero emission under a central scenario. A report by PwC on the Distributional Impacts of the Carbon Neutral Strategy suggested that with no incentives electric vehicles would account for 13% of the Jersey fleet by 2030, and with support 23%. Clearly, shifting the Jersey 2030 proportion from 13% to 67% is not attainable.
The general conclusion is that the target of reducing emissions by 68% compared to the 1990 baseline by 2030 cannot be achieved in the absence of significant policy measures necessary to cause a massive reduction in the use of oil products for road transport and heating, and that there is no evidence that such policies exist or are being planned.
Further information
The government website has a page The Journey to Carbon Neutral