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Budget 2021: Fuel tax and carbon pricing remain frozen

In today’s budget announcement, Chancellor Rishi Sunak has put emphasis on the importance of green jobs and also announced plans to create a green-bond framework, however yet again, campaigners have criticised the government for not going far enough.

With the focus of today’s budget being on the recovery from Covid-19, the Chancellor has announced various plans to accelerate and boost green jobs.

Notably, the government will provide £4.8m to support the development of a hydrogen hub in Holyhead, which will pilot the creation of hydrogen from renewable energy and create up to 500 green jobs.

The government will also launch a £20m programme to support the development of floating offshore wind technology across the UK.

However, alongside this, the Chancellor has also announced that the government plan to continue to freeze fuel duty.

Fuel Duty is included in the price you pay for petrol, diesel and other fuels and despite promising that fuel duty will be considered in the context of the UK’s commitment to net-zero, the amount will remain frozen for the eleventh consecutive year.

Friends of the Earth’s head of policy Mike Childs said: ‘It’s astonishing that a government pledging to confront the climate emergency has frozen fuel duty yet again.

‘No wonder passenger cars’ contribution to the climate crisis has barely fallen in the past decade. The sale of gas-guzzling SUVs are a particular concern, as they have helped drive a rise in average emissions from new cars in the last five years. Rishi Sunak should be doing more to discourage the purchase of these polluting vehicles – such as slapping a significant increase in road tax on them.

‘It’s time for a green transport revolution, with cleaner cars and better alternatives to driving such as efficient and affordable public transport and safer cycling facilities.’

The government will also maintain the freeze on the price of carbon- the government has previously said that they’re committed to carbon pricing as a tool to drive decarbonisation, however, a plan on how this will be achieved remains unknown.

In more positive news, the government will also issue its first green bond – or green gilt framework.

The framework, which is set to be published in June, will detail the types of expenditures that will be financed to help meet the government’s green objectives. Funds raised will be earmarked for projects such as renewable energy and clean transportation that will assist the UK in meeting its target to cut greenhouse gas emissions to net-zero by 2050.

John Kitchingman, managing director of EuroNorth, Dassault Systèmes, said: ‘It is great news to see the Chancellor today announce a ‘green bond’ and further green investment projects, as the UK continues to strive towards its net-zero target.

‘Just yesterday, a report from the International Energy Agency found that polluting activity has rebounded from coronavirus lockdowns to pre-pandemic levels. This must act as a wakeup call for both governments and businesses.

‘The faster that industries adopt these innovations for improving current existing business models, the more sustainable and resilient their business will be. It is the job of the government to encourage the use of these technologies, with today’s ‘green bond’ a great start.’

Photo Credit – Pixabay


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Andrew Lohmann
7 months ago

Unfortunately in the UK much more than anywhere else military spending remains high whilst all other services have to operate efficiently and be cut back. Green wash rather than green see;

Malik Lighting
Malik Lighting
5 months ago

Informative post! This is a great share thank you