In its report, the taskforce notes that Labour signalled five preliminary sectors where capital from the NWF could help to catalyse private investment: green steel, green hydrogen, industrial decarbonisation, gigafactories and ports.
“On paper, they sound good,” says Shayan Ratnasingam, senior research analyst at Gravis, a boutique asset manager.
But citing gigafactories, he says: “One needs to cast their mind back to Britishvolt. The previous government championed that as a success of levelling up, and that went into administration. So how is Labour going to make sure that doesn't happen again, and that public sector money is well spent?”
Craddock-Taylor likewise says the five sectors appear a “logical place” to start, due to their links with the transport, industry and electricity supply sectors from which most of the UK’s emissions come.
But in some cases, she says, these industries require a lot of capital to develop new solutions that are not yet available or scalable. “Instead, we need to focus on how we can rapidly scale existing solutions such as renewables and battery storage, as well as building more energy efficient homes.
“This is perhaps where GB Energy will come in to support the energy sector’s decarbonisation activities we so desperately need, but the NWF must not get distracted by only investing in nascent technologies, and instead continue to scale existing solutions that we know will contribute to the UK’s transition to a net-zero economy.”
Craddock-Taylor also says that a “key area missing” in the identified priorities is nature. “Nature is a hugely powerful tool in our ability to achieve net zero, but it is often negated in net-zero transition plans. It seems the NWF is no different.
“Nature loss is one of the key drivers of climate change, and therefore regulatory drivers and investment solutions need to be created that build nature recovery and climate mitigation into one.”
Chris Tanner, co-lead investment manager of JLEN Environmental Assets, agrees. “It would have been nice to see nature-based solutions referenced in this initial announcement.
“While more detail is yet to be unveiled, it would be a missed opportunity if the government does not use this chance to enable some high-profile pathfinder projects, as a way of demonstrating the investment potential of nature-based carbon sequestration solutions and wider biodiversity schemes.”
A figure quoted in both the taskforce’s report and the King’s Speech briefing notes is the climate change committee’s call for low carbon investment to scale up to £50bn each year to deliver net zero.
