UK Trends and Developments Contributed by: Ruth Byrne KC, Andrea Stauber and Erin Vandzura, King & Spalding International LLP
Evolution of the UK’s Net Zero Policy in Recent Years The global energy crisis, which began to unfold in the autumn of 2021, had an immediate impact on households, businesses, and energy policy in the UK. An unprecedented increase in gas and electricity prices – initially caused by grow- ing international demand in the wake of the COVID-19 pandemic – was then escalated by the Russian invasion of Ukraine in February 2022. In response to the Russian invasion, in April 2022, the UK government committed to ending imports of oil and coal from Russia by the end of 2022 and legislated to ban Russian gas in October 2022. According to a govern- ment research briefing, imports of gas, oil and coal from Russia to the UK in 2021 were worth a combined GBP4.5 billion. This fell to GBP2.2 bil- lion in 2022 and GBP1.3 billion in year to January 2023. On 1 January 2025, the flow of Russian gas via Ukraine to the EU ceased following the end of a transport agreement. This will challenge Europe’s energy market, which has continued to grapple with an energy crisis and reached its lowest levels of gas storage in three years at the end of 2024. There is also uncertainty about gas supply in the UK, as gas reserves are concerningly low ‒ rest- ing at levels down 26% compared to last year. Under the July to September 2025 direct debit price cap, the average annual bill for typical gas and electricity consumption in the UK is GBP1,720. This is 10% higher than the price cap set for the same period in 2024 (GBP1,568) but well below the peak level of GBP2,380 under the UK government’s Energy Price Guarantee from October 2022 to June 2023. While some of the immediate effects of the glob- al energy crisis have begun to recede, Russia’s
ongoing war in Ukraine and escalating conflict in the Middle East underscore the risks of energy security throughout the world. Geopolitical ten- sions have exposed the fragility of the global energy system and have incentivised countries to accelerate momentum behind the deployment of a range of clean energy technologies. According to analysis published by the Interna- tional Energy Agency (IEA) in its World Energy Investment 2024 Report, global energy invest- ment in clean energy is expected to exceed USD3 trillion and is now higher than total invest- ment spend on oil, gas and coal for the first time. For perspective, in 2015, the ratio of investments in clean power versus fossil fuel power was roughly 2:1. In 2024, this ratio was 10:1. This rise in investment in clean energy technologies and related infrastructure is driven in part by national emissions reduction goals, technology gains, energy security policies (particularly in the EU) and new industrial strategies being deployed to incentivise clean energy manufacturing. The UK was the first major economy to enshrine its target of net zero carbon emissions by 2050 in law. However, there has been concern among many – including climate activists, politicians, and the renewables sector – that the UK govern- ment’s net zero policies did not go far enough to allow the UK to meet that target and relied too heavily on private investment. This article will summarise the evolution of the UK’s net zero policy in recent years and set out the main fea- tures of its three key pillars – wind, nuclear, and carbon capture. Labour’s landslide victory in the UK election on 4 July 2024 ended a 14-year run by the Con- servative Party and now Labour’s commitment to making Britain a “clean energy superpower” by 2030 is high on the agenda. Indeed, within
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