Wednesday, 22 April 2009

2009 Budget - what's in it for cleantech?

Alastair Darling's 2009 budget had some bright spots for cleantech developers and investors, but was far short of the brave green budget that many wanted.

Most of the goodies came some 40 minutes into the 50 minute speech, under the theme of 'building a low-carbon recovery'. Darling acknowledged green technology as one of the great growth sectors for the world, and emphasised the legally-binding target (as required by the Carbon Change Act) to cut emissions by 34% by 2020. For more information, see HM Treasury's new Building a low carbon economy page.

The key points and initiatives from the budget:
• Saving energy is the easiest and most cost-effective way to cut emissions, Darling said - there's £435m extra support for energy efficiency measures for homes and public and commercial buildings. There's also £100m for local authorities to build energy efficient social housing, as part of a £600m support for housebuilders.
• Darling also promised £405m to support low-carbon industries and advanced green manufacturing, deliverred through existing schemes such as the Environmental Transformation Fund.
• Offshore wind generation can build on the success of North Sea oil-gas industry. £525m new support over two years for offshore wind (and as much as £3.5bn over the project lifetimes), funded through the Renewables Obligation. Darling says he's confident that will lead to £9bn worth of major projects going ahead, providing energy for 2.8m households. However, the government's also bringing forward incentives for the oil industry which could unlock an extra two billion barrels.
• New funding mechanisms will be put into place for two to four carbon capture and storage projects, with £90m for preparatory studies.
• Access to £4bn new project finance from the European Investment Bank.
• Combined heat and power (CHP) plants will be exempt from the Climate Change Levy from 2013 to 2023. That could bring forward some £2.5bn investment.
• A new £750 Strategic Investment Fund to support 'advanced industrial projects of strategic importance', with £250m earmarked for low carbon investments.
• No more info on the electric car initiative, but the wider car scrappage programme was confirmed - £2000 for cars over 10 years old, to run from next month to March 2010, supported by £300m from government and match funding from participating manufacturers. Full details to be announced soon - it'd be good if the subsidy was dependent on the fuel efficiency of the new car.
• Of general tech industry interest, there'll be a review of taxation as it relates to innovative R&D and IP.
• And for the waste treatment people, landfill tax will be up £8/t each year from 2011-13.

Not too bad. But not that good, either. Thoughts?

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