In this newsletter:
1) Boris backtracks on Net Zero plans amid concerns over soaring fuel and heating bills
The Daily Telegraph, 25 November 2021
2) Soaring energy bills will plunge 150,000 more people into fuel poverty, warns Age UK
iNews, 26 November 2021
5) Ben Marlow: The energy price cap was a catastrophic Tory error
The Daily Telegraph, 26 November 2021
6) Oh dear: Top-selling climate funds fail to deliver on CO2 emissions
Bloomberg, 24 November 2021
7) Government has ‘fundamentally got it wrong’ on hydrogen, Teesside mayor says
Building, 26 November 2021
The Daily Telegraph, 25 November 2021
2) Soaring energy bills will plunge 150,000 more people into fuel poverty, warns Age UK
iNews, 26 November 2021
3) Energy costs could delay revival, hospitality sector warns
The Times, 26 November 2021
The Times, 26 November 2021
4) EV charging firms raise prices as energy crisis bites
Autocar, 25 November 2021
Autocar, 25 November 2021
5) Ben Marlow: The energy price cap was a catastrophic Tory error
The Daily Telegraph, 26 November 2021
6) Oh dear: Top-selling climate funds fail to deliver on CO2 emissions
Bloomberg, 24 November 2021
7) Government has ‘fundamentally got it wrong’ on hydrogen, Teesside mayor says
Building, 26 November 2021
8) An energy crisis looms for Germany’s new chancellor
The Daily Telegraph, 25 November 2021
The Daily Telegraph, 25 November 2021
9) Green NGOs disappointed about German government's natural gas policy
European Environmental Bureau, 25 November 2021
Full details:
1) Boris backtracks on Net Zero plans amid concerns over soaring fuel and heating bills
The Daily Telegraph, 25 November 2021
Plans to expand the UK Emissions Trading Scheme have been watered down after a backlash from senior government ministers
A key part of the Government's net zero strategy that would have forced up petrol and heating bills has been scaled back amid concerns of a cost of living crunch.
The Telegraph has learned that proposals to expand the UK Emissions Trading Scheme in a bid to reduce carbon emissions have been significantly watered down after a backlash from senior government ministers.
A consultation about what areas the scheme, which caps carbon emissions in certain sectors, should be applied to had included fuel used for vehicles and heating in the UK.
But both of those elements have now been removed after fears that it could trigger a political storm, given that petrol and energy bills have seen marked increases in recent months.
The Whitehall battle has been playing out in private, with repeated redrafts of the consultation being made before it is released to the public.
The document outlining the approach was due to be published in the summer, before the Cop26 UN climate change summit in November.
Now it is expected in the spring of 2022. Early drafts said that the emissions trading scheme would be “radically” expanded, but that word is understood to have been dropped from the latest version of the document.
The scaling back of the plans reflects pressure from Tory MPs over how Boris Johnson will deliver his pledge to make the UK a “net zero” carbon emitter by the year 2050.
Opinion polling suggests broad support for tackling climate change but backing drops when voters are confronted with personal costs that could be associated with making the economy greener.
The plans will still seek to bring in emissions trading for the marine sector and waste incineration, which could ultimately force up costs for shippers and councils.
The door will also be opened to one day creating a trading emissions scheme for the agricultural industry by announcing a new push to measure carbon emissions there. However, government figures continue to argue publicly and privately that no decision has been taken on capping emissions in agriculture, given the political sensitivity of adopting what critics dub a “meat tax”.
The UK Emissions Trading Scheme sees carbon emissions capped in certain sectors, putting a price on each tonne of carbon dioxide or its equivalent. The cap is then lowered over time, increasing the price and encouraging businesses - and consumers, who can see the price rise passed onto them - to use cleaner energy sources.
The scheme, which came into place this January and replaced a European Union version, is seen as a critical way of the UK hitting its net zero ambition by encouraging change.
It currently applies to energy intensive industries, the power generation sector and aviation, but the Government is looking to expand its scope.
Plans that the scheme would apply to vehicles and heating leaked in July to The Times, with suggestions that average car and energy bills could each increase by £100 a year or more. But both elements have now been removed from the consultation, The Telegraph understands, despite the sectors contributing a major proportion of overall UK emissions.
A version of the consultation circulating in September accepted that bringing in a carbon trading scheme for heating fuel would have seen costs passed onto consumers.
It also contained a warning that three million “fuel poor” families in England would be among the worst impacted by such price increases.
The so-called “Fossil Fuel Emissions Trading Scheme” had been due to come into effect in 2023 but has now been dropped.
A call for evidence about “how emissions can be suitably measured, reported and verified” when it comes to agriculture and land use continues to be in the plan.
The move will be seen as a step towards a cap and trade scheme for the sector, with better information needed before any decision on implementation is taken.
Government figures are insistent, however, that the formal position for now remains that there are no plans to bring in emissions trading for the sector.
One government source stressed that the whole policy area continued to be under discussion, with the final approach not set to be signed off and announced until next spring.
2) Soaring energy bills will plunge 150,000 more people into fuel poverty, warns Age UK
iNews, 26 November 2021
Around 150,000 households with older people could plunge into fuel poverty this winter, taking the total to more than 1.1 million, Age UK has warned.
The Daily Telegraph, 25 November 2021
Plans to expand the UK Emissions Trading Scheme have been watered down after a backlash from senior government ministers
A key part of the Government's net zero strategy that would have forced up petrol and heating bills has been scaled back amid concerns of a cost of living crunch.
The Telegraph has learned that proposals to expand the UK Emissions Trading Scheme in a bid to reduce carbon emissions have been significantly watered down after a backlash from senior government ministers.
A consultation about what areas the scheme, which caps carbon emissions in certain sectors, should be applied to had included fuel used for vehicles and heating in the UK.
But both of those elements have now been removed after fears that it could trigger a political storm, given that petrol and energy bills have seen marked increases in recent months.
The Whitehall battle has been playing out in private, with repeated redrafts of the consultation being made before it is released to the public.
The document outlining the approach was due to be published in the summer, before the Cop26 UN climate change summit in November.
Now it is expected in the spring of 2022. Early drafts said that the emissions trading scheme would be “radically” expanded, but that word is understood to have been dropped from the latest version of the document.
The scaling back of the plans reflects pressure from Tory MPs over how Boris Johnson will deliver his pledge to make the UK a “net zero” carbon emitter by the year 2050.
Opinion polling suggests broad support for tackling climate change but backing drops when voters are confronted with personal costs that could be associated with making the economy greener.
The plans will still seek to bring in emissions trading for the marine sector and waste incineration, which could ultimately force up costs for shippers and councils.
The door will also be opened to one day creating a trading emissions scheme for the agricultural industry by announcing a new push to measure carbon emissions there. However, government figures continue to argue publicly and privately that no decision has been taken on capping emissions in agriculture, given the political sensitivity of adopting what critics dub a “meat tax”.
The UK Emissions Trading Scheme sees carbon emissions capped in certain sectors, putting a price on each tonne of carbon dioxide or its equivalent. The cap is then lowered over time, increasing the price and encouraging businesses - and consumers, who can see the price rise passed onto them - to use cleaner energy sources.
The scheme, which came into place this January and replaced a European Union version, is seen as a critical way of the UK hitting its net zero ambition by encouraging change.
It currently applies to energy intensive industries, the power generation sector and aviation, but the Government is looking to expand its scope.
Plans that the scheme would apply to vehicles and heating leaked in July to The Times, with suggestions that average car and energy bills could each increase by £100 a year or more. But both elements have now been removed from the consultation, The Telegraph understands, despite the sectors contributing a major proportion of overall UK emissions.
A version of the consultation circulating in September accepted that bringing in a carbon trading scheme for heating fuel would have seen costs passed onto consumers.
It also contained a warning that three million “fuel poor” families in England would be among the worst impacted by such price increases.
The so-called “Fossil Fuel Emissions Trading Scheme” had been due to come into effect in 2023 but has now been dropped.
A call for evidence about “how emissions can be suitably measured, reported and verified” when it comes to agriculture and land use continues to be in the plan.
The move will be seen as a step towards a cap and trade scheme for the sector, with better information needed before any decision on implementation is taken.
Government figures are insistent, however, that the formal position for now remains that there are no plans to bring in emissions trading for the sector.
One government source stressed that the whole policy area continued to be under discussion, with the final approach not set to be signed off and announced until next spring.
2) Soaring energy bills will plunge 150,000 more people into fuel poverty, warns Age UK
iNews, 26 November 2021
Around 150,000 households with older people could plunge into fuel poverty this winter, taking the total to more than 1.1 million, Age UK has warned.
Soaring energy prices coupled with increasing living costs is likely to force even more older people to prioritise heating their homes or feeding themselves.
In a stark warning, Age UK said the risk of people “freezing to death in their own homes… cannot be completely discounted this year”.
Analysis by the charity found “150,000 older households could be dragged into fuel poverty by the spring, unless the Government acts now to provide those at greatest risk with more financial support”.
Age UK raised concerns that pensioners would ration their heating this winter after learning many are already staying in bed for longer and worried about their bills.
It called on the Government to provide older people eligible for means-tested cold weather payments with an additional one-off £50 payment and to double the Household Support Fund to £1bn to help safeguard all those on low incomes this winter.
Full story
3) Energy costs could delay revival, hospitality sector warns
The Times, 26 November 2021
One of Britain’s biggest pub companies has reported a return to profitability since Covid restrictions were lifted but warned that cost pressures now posed huge challenges to the sector.
5) Ben Marlow: The energy price cap was a catastrophic Tory error
The Daily Telegraph, 26 November 2021
The price cap has massacred the energy market to such an extent it risks creating an oligopoly if nothing is done
In a stark warning, Age UK said the risk of people “freezing to death in their own homes… cannot be completely discounted this year”.
Analysis by the charity found “150,000 older households could be dragged into fuel poverty by the spring, unless the Government acts now to provide those at greatest risk with more financial support”.
Age UK raised concerns that pensioners would ration their heating this winter after learning many are already staying in bed for longer and worried about their bills.
It called on the Government to provide older people eligible for means-tested cold weather payments with an additional one-off £50 payment and to double the Household Support Fund to £1bn to help safeguard all those on low incomes this winter.
Full story
3) Energy costs could delay revival, hospitality sector warns
The Times, 26 November 2021
One of Britain’s biggest pub companies has reported a return to profitability since Covid restrictions were lifted but warned that cost pressures now posed huge challenges to the sector.
Mitchells & Butlers (M&B), which owns brands including Harvester, All Bar One and Miller & Carter, said that utility bills, where prices of gas and electricity could swing wildly from one day to the next, were the biggest issue, followed by labour costs, which are forecast to grow by up to 5 per cent.
Phil Urban, M&B’s chief executive, said that pre-pandemic the company was already facing cost headwinds of £60-£65 million. Ordinarily it would be able to offset these, but an added problem was soaring energy costs.
“Utilities costs this year are forecast to double,” he said. “If they stay where they’re projected, we’re unlikely to be able to mitigate the full amount of that this year. If it’s a 100 per cent increase, we could be talking another £60-£70 million in utility costs.”
Full story
Phil Urban, M&B’s chief executive, said that pre-pandemic the company was already facing cost headwinds of £60-£65 million. Ordinarily it would be able to offset these, but an added problem was soaring energy costs.
“Utilities costs this year are forecast to double,” he said. “If they stay where they’re projected, we’re unlikely to be able to mitigate the full amount of that this year. If it’s a 100 per cent increase, we could be talking another £60-£70 million in utility costs.”
Full story
4) EV charging costs soar as energy crisis bites
Autocar, 25 November 2021
Cost of charging an electric vehicle increases in line with rising energy wholesale costs
Autocar, 25 November 2021
Cost of charging an electric vehicle increases in line with rising energy wholesale costs
The cost of charging an electric vehicle is climbing in the UK as some of the biggest charger providers increase prices in line with surging energy costs.
In an email to customers, BP Pulse – which operates more than 8000 public chargers across the UK – explained that "significant rises in the wholesale costs of electricity" have impacted its own procurement costs so it's raising charging costs to compensate.
"We've always worked hard to keep the cost of charging as low as possible, and we've been cheaper than our competitors for some time," said network lead Mark Bloxham, but "we're now no longer able to absorb the rising costs."
From 1 December, new prices will apply across the BP Pulse network. The cost per kWh of energy for subscribers has risen from 23p to 32p for the firm's standard public chargers (AC 43kW/DC 50kW) and from 29p to 38p for registered users.
The firm's fastest (150kW) devices will now cost 38p per kWh subscribers, 44p for registered users and 50p for pay-as-you-go users, while the slower 7kW units cost from 28p per kWh.
Meanwhile, Instavolt, which claims to be "the largest owner-operator of rapid DC charging stations in the UK", has announced a price hike from 40p per kWh to 45p – also effective from 1 December.
CEO Adrian Keen said: “We're in a period of unprecedented increases in the wholesale price of energy that's affecting consumers and businesses nationwide, including Instavolt."
He highlighted that "a homeowner seeking a new energy-supply deal today would be offered a tariff similar to public charging", reflecting the impact of the hike in wholesale energy costs, which in recent weeks has led to the collapse of several UK energy providers.
Keen noted that Instavolt's 5p price hike "doesn't reflect the full cost impact of wholesale prices more than doubling". He said Instavolt will "absorb the difference" while it awaits market stability.
In August, Osprey took its charging price per kWh up from 36p to 40p "in line with the UK rapid charging market". It also attributed the increase to rising energy costs, explaining that its own costs had climbed by 38% in the course of a year.
Ecotricity, meanwhile, was "in as good a position as we can be" in September, according to founder Dale Vince. He claimed the company had "hedged its electricity and gas suppliers" and secured 90% of its required energy for the following 12 months, while its trading team was "keeping a close eye on the situation".
The rise in the cost of EV charging comes as the price of petrol and diesel soars to unprecedented levels. Last week, the average cost of a litre of diesel broached the £1.50 mark for the first time, which RAC representative Simon Williams called "a particularly miserable milestone".
In an email to customers, BP Pulse – which operates more than 8000 public chargers across the UK – explained that "significant rises in the wholesale costs of electricity" have impacted its own procurement costs so it's raising charging costs to compensate.
"We've always worked hard to keep the cost of charging as low as possible, and we've been cheaper than our competitors for some time," said network lead Mark Bloxham, but "we're now no longer able to absorb the rising costs."
From 1 December, new prices will apply across the BP Pulse network. The cost per kWh of energy for subscribers has risen from 23p to 32p for the firm's standard public chargers (AC 43kW/DC 50kW) and from 29p to 38p for registered users.
The firm's fastest (150kW) devices will now cost 38p per kWh subscribers, 44p for registered users and 50p for pay-as-you-go users, while the slower 7kW units cost from 28p per kWh.
Meanwhile, Instavolt, which claims to be "the largest owner-operator of rapid DC charging stations in the UK", has announced a price hike from 40p per kWh to 45p – also effective from 1 December.
CEO Adrian Keen said: “We're in a period of unprecedented increases in the wholesale price of energy that's affecting consumers and businesses nationwide, including Instavolt."
He highlighted that "a homeowner seeking a new energy-supply deal today would be offered a tariff similar to public charging", reflecting the impact of the hike in wholesale energy costs, which in recent weeks has led to the collapse of several UK energy providers.
Keen noted that Instavolt's 5p price hike "doesn't reflect the full cost impact of wholesale prices more than doubling". He said Instavolt will "absorb the difference" while it awaits market stability.
In August, Osprey took its charging price per kWh up from 36p to 40p "in line with the UK rapid charging market". It also attributed the increase to rising energy costs, explaining that its own costs had climbed by 38% in the course of a year.
Ecotricity, meanwhile, was "in as good a position as we can be" in September, according to founder Dale Vince. He claimed the company had "hedged its electricity and gas suppliers" and secured 90% of its required energy for the following 12 months, while its trading team was "keeping a close eye on the situation".
The rise in the cost of EV charging comes as the price of petrol and diesel soars to unprecedented levels. Last week, the average cost of a litre of diesel broached the £1.50 mark for the first time, which RAC representative Simon Williams called "a particularly miserable milestone".
5) Ben Marlow: The energy price cap was a catastrophic Tory error
The Daily Telegraph, 26 November 2021
The price cap has massacred the energy market to such an extent it risks creating an oligopoly if nothing is done
If you thought the energy price cap was confusing, spare a thought for John Penrose.
Maybe it’s all that sea air but the Conservative MP for Weston-super-Mare has gone from being one of its key proponents, to calling for it to be lowered, to now admitting that it was a pretty bad idea after all. As political contortions go, it’s up there with the very best.
Still, in a crowded field, the price cap must rank as one of the worst government policies ever, and it wasn’t even this Cabinet that introduced it.
Under the chaotic leadership of Boris Johnson, this is a Conservative government that has become unashamedly but wildly interventionist, propping up failed companies, subsidising the ones it wants to do well, bailing out industry and shaping supposedly independent processes to suit its own interests and that of allies.
Its latest fixation is the creation of a new independent football regulator, as if anyone really believes that would save the national game.
Many fans have already given up, convinced that the life was sucked out of football long ago by ruthless oligarchs, money-hungry TV executives, sky-high ticket prices, soulless commercialised stadiums and a generation of mercenary players happy to jog around the pitch for no less than £100,000 a week.
Whatever the problem, state interference in markets is rarely the answer as many were quick to warn when the price cap was being debated. But the Government, under the hapless direction of Theresa May, panicked.
Desperate to appeal to working-class voters and see off the perceived threat of a Jeremy Corbyn-led opposition, ministers stole a flagship Labour policy that Boris Johnson himself dismissed as meddling jiggery-pokery and claimed it as their own.
Government and the regulator Ofgem are sticking doggedly to the mantra that the price cap has helped to keep costs down for millions of households, which is true but only up to a point.
It has been raised twice in the space of a year anyway, and is set for its sharpest rise yet in April, possibly adding another £500 to bills in one fell swoop.
The bailout bill risks wiping out any savings anyway. In forcing better-capitalised companies to take on the customers of those that have gone bust, bills have to go up eventually, so it’s totally self-defeating.
The industry estimates the total cost so far to be in the region of £4bn to £5bn. In the meantime, the direct cost to the taxpayer of propping up Bulb alone is expected to be a staggering £1.7bn.
Mansfield-based Entice Energy and London supplier Orbit Energy both went under on Thursday, bringing the total number of failures since the summer to almost 30.
6) Oh dear: Top-selling climate funds fail to deliver on CO2 emissions
Bloomberg, 24 November 2021
Some of Europe’s most popular climate funds have been found to do no better at avoiding carbon emitters than a benchmark index with no environmental focus, according to new research.
A report by analytics provider Investment Metrics found that four of the seven best-selling European climate funds were more exposed to carbon emissions than the MSCI World Index, which tracks over 1600 of the biggest companies across North America, Europe and Asia-Pacific.
Funds that failed to beat the MSCI index include climate strategies managed by DWS Group, Franklin Resources Inc. and Lombard Odier Investment Management, according to Investment Metrics, which provides portfolio analytics and data to institutional investors and advisers representing $14 trillion.
More from
The findings underscore the difficulty climate-focused investors face when selecting funds with a view to reducing their carbon footprint. It also raises questions around labeling as financial products marketed as having an environmental, social and governance focus proliferate.
Concerns about greenwashing, a term given to exaggerated or misleading claims of ethical investing, have picked up this year as the ESG market mushrooms. Bloomberg Intelligence estimates ESG assets exceeded $35 trillion last year, and will soar past $50 trillion by 2025.
Regulators have started to take a more aggressive stance in policing ESG labeling. DWS made headlines in August, when it emerged that the Deutsche Bank AG unit is being investigated by the U.S. Securities and Exchange Commission, the Department of Justice and German regulator BaFin, after its former sustainability head alleged its ESG claims were misleading. DWS has vehemently rejected the allegations.
The report by Investment Metrics said part of the reason some climate funds were failing to deliver low-carbon results was because they hold so-called transition stocks, whereby companies gradually try to wean themselves off carbon-intensive activities. The alternative would be to exclude such firms altogether, and ignore transition assets.
A separate research report released earlier this year by London-based nonprofit InfluenceMap found that more than half of climate-themed funds sold by asset managers failed to achieve goals established in the Paris Agreement.
Full story
7) Government has ‘fundamentally got it wrong’ on hydrogen, Teesside mayor says
Building, 26 November 2021
Ben Houchen slams officials for ‘playing it safe’ in last month’s heat and buildings strategy
The government’s decision to support heat pumps over hydrogen in last month’s heat and buildings strategy was a mistake, the Conservative mayor for Teesside has said.
Ben Houchen told Building that officials had “fundamentally got it wrong” by believing that it is not possible to safely pump hydrogen through the existing gas network.
He said that trials being carried out in Teesside are proving this untrue but that the government was instead “playing it safe”.
The strategy set out how the UK’s 30 million buildings will be decarbonised as part of the government’s goal to reach net zero emissions by 2050.
It provided £5,000 grants for homeowners to install electric heat pumps but deferred any decision on what role hydrogen will play until 2026 while tests are carried out to determine whether it can be safely used in gas boilers.
Asked if he was disappointed with the document, Houchen said: “The short answer is yes.”
The 34-year old mayor, who was re-elected with 73% of the vote in May’s local elections and is considered a rising star in the Tory party, is credited with driving a huge expansion of net zero industry in the North-east of England.
He blamed officials for not being “open” to alternatives technologies for the strategy’s focus on heat pumps, saying: “My view is that too many civil servants six or seven years ago decided to go all-in on electric.
“And what you’ve actually found over the last five or six years is, it feels to me, like there’s a reinforcement of that decision on every piece of work that happens.”
Houchen said that the government’s caution on hydrogen, which he argued would be a much cheaper solution to decarbonising buildings than heat pumps, risks “stymying” investment in production of the gas.
He also said the ban on gas boilers in newbuild homes from 2025 was “wrong” because hydrogen could be used in upgraded boilers costing only £100 more than a traditional boiler.
Air source heat pumps, which absorb heat from the air, currently cost around £10,000, while ground source heat pumps, which absorb heat from underground, can cost up to £35,000.
Houchen said he “frequently” speaks about hydrogen to business secretary Kwasi Kwarteng, who the mayor said is a “big believer in the gas”.
But according to Houchen, the minister told him that “all I can do is act on the advice and the evidence that my officials are giving me” when asked why the government was not being more supportive of hydrogen.
Teesside currently makes more than half of the UK’s supplies of hydrogen. Last month, green energy firm Protium confirmed plans to build a 40mw hydrogen production facility in the region, with construction set to complete by 2026.
In March, BP announced plans to build a 1gw hydrogen plant, which would be the UK’s largest, in Teesside by 2030.
Maybe it’s all that sea air but the Conservative MP for Weston-super-Mare has gone from being one of its key proponents, to calling for it to be lowered, to now admitting that it was a pretty bad idea after all. As political contortions go, it’s up there with the very best.
Still, in a crowded field, the price cap must rank as one of the worst government policies ever, and it wasn’t even this Cabinet that introduced it.
Under the chaotic leadership of Boris Johnson, this is a Conservative government that has become unashamedly but wildly interventionist, propping up failed companies, subsidising the ones it wants to do well, bailing out industry and shaping supposedly independent processes to suit its own interests and that of allies.
Its latest fixation is the creation of a new independent football regulator, as if anyone really believes that would save the national game.
Many fans have already given up, convinced that the life was sucked out of football long ago by ruthless oligarchs, money-hungry TV executives, sky-high ticket prices, soulless commercialised stadiums and a generation of mercenary players happy to jog around the pitch for no less than £100,000 a week.
Whatever the problem, state interference in markets is rarely the answer as many were quick to warn when the price cap was being debated. But the Government, under the hapless direction of Theresa May, panicked.
Desperate to appeal to working-class voters and see off the perceived threat of a Jeremy Corbyn-led opposition, ministers stole a flagship Labour policy that Boris Johnson himself dismissed as meddling jiggery-pokery and claimed it as their own.
Government and the regulator Ofgem are sticking doggedly to the mantra that the price cap has helped to keep costs down for millions of households, which is true but only up to a point.
It has been raised twice in the space of a year anyway, and is set for its sharpest rise yet in April, possibly adding another £500 to bills in one fell swoop.
The bailout bill risks wiping out any savings anyway. In forcing better-capitalised companies to take on the customers of those that have gone bust, bills have to go up eventually, so it’s totally self-defeating.
The industry estimates the total cost so far to be in the region of £4bn to £5bn. In the meantime, the direct cost to the taxpayer of propping up Bulb alone is expected to be a staggering £1.7bn.
Mansfield-based Entice Energy and London supplier Orbit Energy both went under on Thursday, bringing the total number of failures since the summer to almost 30.
6) Oh dear: Top-selling climate funds fail to deliver on CO2 emissions
Bloomberg, 24 November 2021
Some of Europe’s most popular climate funds have been found to do no better at avoiding carbon emitters than a benchmark index with no environmental focus, according to new research.
A report by analytics provider Investment Metrics found that four of the seven best-selling European climate funds were more exposed to carbon emissions than the MSCI World Index, which tracks over 1600 of the biggest companies across North America, Europe and Asia-Pacific.
Funds that failed to beat the MSCI index include climate strategies managed by DWS Group, Franklin Resources Inc. and Lombard Odier Investment Management, according to Investment Metrics, which provides portfolio analytics and data to institutional investors and advisers representing $14 trillion.
More from
The findings underscore the difficulty climate-focused investors face when selecting funds with a view to reducing their carbon footprint. It also raises questions around labeling as financial products marketed as having an environmental, social and governance focus proliferate.
Concerns about greenwashing, a term given to exaggerated or misleading claims of ethical investing, have picked up this year as the ESG market mushrooms. Bloomberg Intelligence estimates ESG assets exceeded $35 trillion last year, and will soar past $50 trillion by 2025.
Regulators have started to take a more aggressive stance in policing ESG labeling. DWS made headlines in August, when it emerged that the Deutsche Bank AG unit is being investigated by the U.S. Securities and Exchange Commission, the Department of Justice and German regulator BaFin, after its former sustainability head alleged its ESG claims were misleading. DWS has vehemently rejected the allegations.
The report by Investment Metrics said part of the reason some climate funds were failing to deliver low-carbon results was because they hold so-called transition stocks, whereby companies gradually try to wean themselves off carbon-intensive activities. The alternative would be to exclude such firms altogether, and ignore transition assets.
A separate research report released earlier this year by London-based nonprofit InfluenceMap found that more than half of climate-themed funds sold by asset managers failed to achieve goals established in the Paris Agreement.
Full story
7) Government has ‘fundamentally got it wrong’ on hydrogen, Teesside mayor says
Building, 26 November 2021
Ben Houchen slams officials for ‘playing it safe’ in last month’s heat and buildings strategy
The government’s decision to support heat pumps over hydrogen in last month’s heat and buildings strategy was a mistake, the Conservative mayor for Teesside has said.
Ben Houchen told Building that officials had “fundamentally got it wrong” by believing that it is not possible to safely pump hydrogen through the existing gas network.
He said that trials being carried out in Teesside are proving this untrue but that the government was instead “playing it safe”.
The strategy set out how the UK’s 30 million buildings will be decarbonised as part of the government’s goal to reach net zero emissions by 2050.
It provided £5,000 grants for homeowners to install electric heat pumps but deferred any decision on what role hydrogen will play until 2026 while tests are carried out to determine whether it can be safely used in gas boilers.
Asked if he was disappointed with the document, Houchen said: “The short answer is yes.”
The 34-year old mayor, who was re-elected with 73% of the vote in May’s local elections and is considered a rising star in the Tory party, is credited with driving a huge expansion of net zero industry in the North-east of England.
He blamed officials for not being “open” to alternatives technologies for the strategy’s focus on heat pumps, saying: “My view is that too many civil servants six or seven years ago decided to go all-in on electric.
“And what you’ve actually found over the last five or six years is, it feels to me, like there’s a reinforcement of that decision on every piece of work that happens.”
Houchen said that the government’s caution on hydrogen, which he argued would be a much cheaper solution to decarbonising buildings than heat pumps, risks “stymying” investment in production of the gas.
He also said the ban on gas boilers in newbuild homes from 2025 was “wrong” because hydrogen could be used in upgraded boilers costing only £100 more than a traditional boiler.
Air source heat pumps, which absorb heat from the air, currently cost around £10,000, while ground source heat pumps, which absorb heat from underground, can cost up to £35,000.
Houchen said he “frequently” speaks about hydrogen to business secretary Kwasi Kwarteng, who the mayor said is a “big believer in the gas”.
But according to Houchen, the minister told him that “all I can do is act on the advice and the evidence that my officials are giving me” when asked why the government was not being more supportive of hydrogen.
Teesside currently makes more than half of the UK’s supplies of hydrogen. Last month, green energy firm Protium confirmed plans to build a 40mw hydrogen production facility in the region, with construction set to complete by 2026.
In March, BP announced plans to build a 1gw hydrogen plant, which would be the UK’s largest, in Teesside by 2030.
8) An energy crisis looms for Germany’s new chancellor
The Daily Telegraph, 25 November 2021
The incoming government envisages phasing out coal by 2030 and gas by 2040 – a timetable that seems far too ambitious to be realistic
Two months after its general election, Germany finally has a new government, a three-party agreement melding disparate political outlooks that will be hard to contain.
The “traffic light” coalition is made up of the pro-business Free Democrats (FDP), the German Greens and the centre-Left Social Democrats (SPD), whose leader Olaf Scholz will be the new chancellor.
The immediate challenge for the administration concerns its handling of a dramatic upsurge in Covid cases, with Germany recording another 70,000 cases and more than 300 deaths yesterday. The three parties have differing views, with the FDP opposed to nationwide lockdowns and compulsory vaccination while the SPD is said to be undecided. The disease is exacerbating the German divide, with infections relatively lower in the west of the country while in the east hospitals are overflowing.
Another point of potential attrition is energy and environmental policy, which has been placed in the hands of the Greens. The coalition deal envisages phasing out coal by 2030 and gas by 2040. Since Germany has the largest population in the EU and is the bloc’s biggest energy user due to its manufacturing sector, it is hard to see how its future needs will be met.
Germany has already turned its back on nuclear power following the accident that befell the reactor in Fukushima in 2011. Much of its gas comes from Russia with the dispute over the new Nord Stream 2 pipeline still unresolved. Whether and when to proceed with this scheme will be another issue to be resolved.
Germany is dependent on imported fossil fuels which the Greens will presumably seek to eradicate from the energy mix. The pace of decarbonisation will shift reliance onto intermittent renewables such as wind or solar which cannot possibly meet the country’s demand. While technological advances will help, the timetable seems far too ambitious to be realistic.
One sign of the political shift Leftward is a list of “progressive” policies including cannabis legalisation and family reunion for immigrants, the latter a legacy of the outgoing Chancellor Angela Merkel’s ill-starred decision to open the country’s borders in 2015. Though she remains in office for another fortnight, with problems mounting in Germany she looked relieved to be handing over the reins after 16 years in power.
The Daily Telegraph, 25 November 2021
The incoming government envisages phasing out coal by 2030 and gas by 2040 – a timetable that seems far too ambitious to be realistic
Two months after its general election, Germany finally has a new government, a three-party agreement melding disparate political outlooks that will be hard to contain.
The “traffic light” coalition is made up of the pro-business Free Democrats (FDP), the German Greens and the centre-Left Social Democrats (SPD), whose leader Olaf Scholz will be the new chancellor.
The immediate challenge for the administration concerns its handling of a dramatic upsurge in Covid cases, with Germany recording another 70,000 cases and more than 300 deaths yesterday. The three parties have differing views, with the FDP opposed to nationwide lockdowns and compulsory vaccination while the SPD is said to be undecided. The disease is exacerbating the German divide, with infections relatively lower in the west of the country while in the east hospitals are overflowing.
Another point of potential attrition is energy and environmental policy, which has been placed in the hands of the Greens. The coalition deal envisages phasing out coal by 2030 and gas by 2040. Since Germany has the largest population in the EU and is the bloc’s biggest energy user due to its manufacturing sector, it is hard to see how its future needs will be met.
Germany has already turned its back on nuclear power following the accident that befell the reactor in Fukushima in 2011. Much of its gas comes from Russia with the dispute over the new Nord Stream 2 pipeline still unresolved. Whether and when to proceed with this scheme will be another issue to be resolved.
Germany is dependent on imported fossil fuels which the Greens will presumably seek to eradicate from the energy mix. The pace of decarbonisation will shift reliance onto intermittent renewables such as wind or solar which cannot possibly meet the country’s demand. While technological advances will help, the timetable seems far too ambitious to be realistic.
One sign of the political shift Leftward is a list of “progressive” policies including cannabis legalisation and family reunion for immigrants, the latter a legacy of the outgoing Chancellor Angela Merkel’s ill-starred decision to open the country’s borders in 2015. Though she remains in office for another fortnight, with problems mounting in Germany she looked relieved to be handing over the reins after 16 years in power.
9) Green NGOs disappointed about German government's natural gas policy
European Environmental Bureau, 25 November 2021
The deal seems to leave the door open for fossil gas to remain in the German energy mix with provisions on “H2-ready gas power plants” and inclusion of methane-based H2.
Presented by the party leaders of SPD, Greens and FDP, the government agreement includes an accelerated coal phaseout “ideally” by 2030 (eight years earlier than previously planned). Despite leaks pointing at outlawing gas boilers by 2035 and the end of power generation from gas by 2040, no such commitments appear to have been announced in the end.
An accelerated 2030 coal phaseout is inevitable in order to meet the EU’s environmental, energy and climate targets, as well as the goals of the Paris Agreement. Ambition must be maintained to ensure that “ideally” does not allow for delays.
The collapse of coal profits has made coal uneconomic and means that subsidising German coal would be an intolerable waste of public money.
The 2030 coal phaseout of Germany, a top EU coal consumer, applies pressure on other Member States lagging behind in their coal exit plans, namely Bulgaria, Czechia and Poland.
On heating, the announcement of “all newly installed heating systems must be operated with 65% renewable energy by 2025” is highly disappointing. All new dwellings should only rely on renewable heating and hybrid solutions should be left only for niche renovation markets such as protected buildings. Time is running out to decarbonise a heating sector which is responsible for 12% of the EU’s total CO2 emissions, equivalent to the emissions of all the cars in the EU.
Furthermore, the deal seems to leave the door open for fossil gas to remain in the German energy mix with provisions on “H2-ready gas power plants” and inclusion of methane-based H2 in the short term, putting climate targets at risk and leaving citizens exposed to the volatility of its prices.
Our Paris Agreement Compatible energy scenario proves that by reducing demand for electricity generation, especially in buildings, and increasing renewable energy supply, we can achieve a fossil gas phaseout by 2035. [...]
Patrick ten Brink, EEB Deputy Secretary-General, added:
“We hope that the new German coalition adds its weight to avoid nuclear and gas being part of the EU green taxonomy. This German Government must play a pivotal role in the climate negotiations and push for ambitious ‘Fit For 55’ and Zero Pollution Action Plan policy files, and helping to ensure the European Green Deal reaches its transformative potential.”
The deal will be put to the three parties for their consideration, which if approved would see SPD’s Olaf Scholz elected as chancellor in the week beginning 6 December.
Full story
European Environmental Bureau, 25 November 2021
The deal seems to leave the door open for fossil gas to remain in the German energy mix with provisions on “H2-ready gas power plants” and inclusion of methane-based H2.
Presented by the party leaders of SPD, Greens and FDP, the government agreement includes an accelerated coal phaseout “ideally” by 2030 (eight years earlier than previously planned). Despite leaks pointing at outlawing gas boilers by 2035 and the end of power generation from gas by 2040, no such commitments appear to have been announced in the end.
An accelerated 2030 coal phaseout is inevitable in order to meet the EU’s environmental, energy and climate targets, as well as the goals of the Paris Agreement. Ambition must be maintained to ensure that “ideally” does not allow for delays.
The collapse of coal profits has made coal uneconomic and means that subsidising German coal would be an intolerable waste of public money.
The 2030 coal phaseout of Germany, a top EU coal consumer, applies pressure on other Member States lagging behind in their coal exit plans, namely Bulgaria, Czechia and Poland.
On heating, the announcement of “all newly installed heating systems must be operated with 65% renewable energy by 2025” is highly disappointing. All new dwellings should only rely on renewable heating and hybrid solutions should be left only for niche renovation markets such as protected buildings. Time is running out to decarbonise a heating sector which is responsible for 12% of the EU’s total CO2 emissions, equivalent to the emissions of all the cars in the EU.
Furthermore, the deal seems to leave the door open for fossil gas to remain in the German energy mix with provisions on “H2-ready gas power plants” and inclusion of methane-based H2 in the short term, putting climate targets at risk and leaving citizens exposed to the volatility of its prices.
Our Paris Agreement Compatible energy scenario proves that by reducing demand for electricity generation, especially in buildings, and increasing renewable energy supply, we can achieve a fossil gas phaseout by 2035. [...]
Patrick ten Brink, EEB Deputy Secretary-General, added:
“We hope that the new German coalition adds its weight to avoid nuclear and gas being part of the EU green taxonomy. This German Government must play a pivotal role in the climate negotiations and push for ambitious ‘Fit For 55’ and Zero Pollution Action Plan policy files, and helping to ensure the European Green Deal reaches its transformative potential.”
The deal will be put to the three parties for their consideration, which if approved would see SPD’s Olaf Scholz elected as chancellor in the week beginning 6 December.
Full story
The London-based Net Zero Watch is a campaign group set up to highlight and discuss the serious implications of expensive and poorly considered climate change policies. The Net Zero Watch newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.netzerowatch.com.
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