More corporate chiefs warn UK net zero policy is deterring green investors

Criticism on the British Government that its new net zero approach is harming green investments is growing fast across the board.

Following a letter by dozens of business leaders across the UK, signed by the chiefs of more than 100 businesses, including Tesco, Amazon and IKEA, more corporate bosses are urging the government of Rishi Sunak to "to demonstrate a renewed focus and commitment” to honour Britain's climate goals.

If not, the UK risks leaving being “left behind” in terms of investment flows, they said.

In fact, many warned the British government's net zero approach is outright deterring clean energy investors from committing to projects in the UK.

To attract fresh investments in renewables, clean technologies and low carbon solutions, it is vital government policies are consistent and long-term, they argued, with many saying that is currently not the case.

“When you’ve got the government watering down its commitments, it sends absolutely the wrong signal at a time when so much of our action has to be signal-led," said Ana Haurie, CEO of carbon credit market Respira.

In addition, James Alexander, chair of impact investment firm Finance Earth, stressed "it is super-important that the government is clear on the signalling and then the follow-through."

“What any investor in the UK requires is confidence about the future."

Alexander said that the "mixed messages" from the UK government is providing potential new investors no such confidence, namely by stating fossil fuel dependency should be reduced while at the same time issuing new oil and gas drilling licenses for the North Sea.

The move led to investor and billionaire Andrew Forrest to say he mulls moving his battery tech investments away from Britain. 

The Australian green financier said if the UK government continues its "clickbait cycle" of mixed messages he may transfer his firm to the US, as he said the administration of President Biden has been more consistent.

IRA in the US

By rolling out the Inflation Reduction Act 2022 act, Biden is aiming to boost the production and rollout of clean energy and green technologies.

In fact, the new IRA is creating unprecedented investment opportunities in renewables for investors seeking to enter or expand into clean energy and low-carbon tech and infrastructure as it may hand investors around $30 trillion in new opportunities, also stretching to wind and solar, as recently reported by Net Zero Investor.

The BNEF report stressed that scaling up investments in wind and solar will be the most effective and cost-efficient way to decarbonise the world's largest economy, thereby creating billions in new investment opportunities.

“The IRA is a multibillion-dollar down-payment on decarbonization, [and] it will stimulate trillions in investment to reach net zero," said Tara Narayanan, BloombergNEF’s senior associate for US Power Markets.

“Carbon capture could be a solution to emissions from natural gas if the subsidies are extended rather than being phased out just when the technology starts to become competitive," she noted.

Narayanan added that tax credits and direct subsidies "will certainly help", pointing out that tax credits for electric vehicles and carbon capture may lower emissions by up to 9% by 2050.

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IRA to hand investors $30 trillion in renewables opportunities