The highly anticipated Budget 2020 was delivered by Government yesterday. The document outlines future spend across all parts of the UK economy, with a particular underlying focus on the transition to a Net Zero emissions economy by 2050. However, it also takes place against the backdrop of the global outbreak of COVID-19, which is creating short-term uncertainty in the global markets.

With that aside, we review some of the key takeaways for Net Zero within the agricultural sector and the natural environment.

Whilst Budget 2020 will not be to everyone’s taste, it is a step in the right direction. This is not surprising, given it attempts to balance the economy in the short term; provide more investment in public services and infrastructure to support growth in the long term; and tackle the climate and biodiversity emergency and transition to Net Zero, all at the same time.

The Budget starts to create a pathway towards Net Zero – the government’s ambition to reach Net Zero carbon emissions by 2050. The Budget recognises that the transition will require radical changes in every sector, and investment and funding will be critical to help drive this transformation.

First and foremost, Net Zero policy development has been recognised as a priority, with the government allocating an additional £10 million in 2020-21 to support the design and delivery of Net Zero policies and programmes.

Natural Environment and Biodiversity

The Budget outlines a suite of new investments in the natural environment, which will support action to reach Net Zero in the land-use sector, with commitments to plant enough trees to cover an area the size of Birmingham, restore peatlands, and provide more funding to protect the UK’s unique plants and animals. Commitments include:

  • Nature for Climate Fund – The government will invest £640 million in afforestation and peatland restoration in England, delivering more than a 600% increase in current tree planting rates.
  • Nature Recovery Network Fund – The government will invest up to £25 million in England to partner with landowners, businesses, and local communities in the creation of Nature Recovery Areas. These will deliver habitat and species restoration and recovery, alongside wider natural capital benefits.
  • Natural Environment Impact Fund – The government will commit up to £10 million to stimulate private investment and market-based mechanisms to improve and safeguard our environment.

The government also outlined commitments within other sectors to help the transition to Net Zero, these include:

  • Carbon Capture and Storage (CCS) – The government will establish CCS in at least two UK sites; one by the mid-2020s, and the second by 2030. This will be supported by the creation of a new CCS Infrastructure Fund of at least £800 million.
  • Decarbonisation technologies – A commitment to at least double the size of the Energy Innovation Programme.
  • Green Gas Levy – The government will consult on introducing levy-funded support for biomethane production to increase the proportion of green gas in the grid.

What the budget means for farmers and primary producers

There were a number of other items in the budget that will be of interest to food businesses and their supply chains, farmers, and landowners:

  • Direct Payments to farmers – Last year the government announced £2.8 billion of funding for Direct Payments to farmers for 2020. This funding is spread over two financial years to provide flexibility for Defra and the devolved administrations, with £2.7 billion falling in the financial year 2020-21.
  • Plastic Packaging Tax – A new Plastic Packaging Tax will be introduced from April 2022 to incentivise the use of recycled plastic in packaging. The Budget sets the rate at £200 per tonne of plastic packaging that contains less than 30% recycled plastic. This will apply to the production and importation of plastic packaging.
  • Low carbon heat support – The government will consult on introducing a new grant scheme from April 2022 to help households and small businesses invest in heat pumps and biomass boilers.
  • Red diesel entitlement being removed – The government will remove entitlement to the use of red diesel and rebated biofuels from April 2022. However, there are some exceptions, including for agriculture (including horticulture, pisciculture and forestry).

Find out more

For more information on the 2020 Budget, please visit GOV.UK.

To discuss requirements or options for your organisation to reduce greenhouse gas emissions, please see our Net Zero service offer or contact Sarah Wynn, Managing Director – Sustainable Food and Farming at ADAS.