Kerry McCarthy
MP for Bristol East · Labour · United Kingdom
“We see that in four main ways: physical risks, including floods, wildfires, droughts and storms; transition risks as economies move away from high-carbon industries; nature-related risks affecting food production and natural resources; and systemic risks, where shocks spread rapidly across sectors and markets.”
“The glaciers of the third pole function as Asia’s water tower, feeding major river systems that support nearly 2 billion people. When rising temperatures accelerate glacial melt, the consequences extend far beyond the mountains.”
“Following the heatwaves and wildfires across Europe this summer and the destruction caused by the glacier collapse and catastrophic flooding in Nepal and Tibet, the message is becoming impossible to ignore: the consequences of climate change and environmental degradation are real, not some distant future threat.”
“Personally, I cannot see that Rosebank is compatible with meeting our climate objectives, but I recognise that the process should be followed. Green Alliance has reported that the gas being wasted in the North sea would be enough to heat 570,000 homes.”
“I too worked in the financial markets, although I think I have done a better job of hiding it in my 21 years in Parliament. I was more on the debt market side. In fact, I am so old that I was part of the salvage operation for Barings bank when it went under. That brings me to the right hon. Gentleman’s point about regulation.”
“My hon. Friend will not be surprised to hear that I very much agree with the point that he just made. We have some excellent, innovative businesses in Bristol that came up through the Science Creates innovation hubs and attracted private capital.”
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“We are not allowing anyone to dictate to us. I know my hon. Friend has been deep in conversation for some time with the Minister for Energy over Grangemouth’s future. To reiterate, we absolutely need to attract investment to meet our clean power mission, to secure our future energy security and, in the long run, to bring down bills for the British people. We need to balance national security concerns in tandem with that, and neither one takes priority. We need to tackle those challenges together, and that is what we will do.”
“I recognise that the right hon. Member has long-standing concerns about the role of China and its investment in our economy. He has been a great champion of raising concerns about forced labour, and he is right to do so. We have set up the solar taskforce, as I am sure he is aware, to look at whether there is forced labour in our solar supply chains. As I have said, a supply chain mission will be launched as part of the global clean power alliance. This is not something that one country can tackle by itself; we all need to be alert to the risks of slave labour. I know that an amendment was passed in the House of Lords last night that means the issue will come back to this Chamber soon, and I look forward to the discussion then.”
“My hon. Friend is absolutely right, and we are using a number of levers. The growth mission and the clean power mission work hand in hand to ensure that energy security and the decarbonisation of our power system contribute to growth in this country, and that means contributing to job creation and, in some cases, overseas investment. We have set up Great British Energy, and we have the national wealth fund and the clean industry bonus, all of which will help us achieve those objectives.”
“I cannot comment on the extent of conversations, other than to reassure the hon. Member that, of course, those conversations are taking place and will be ongoing and that we are going through robust processes. Again, because it is not my specific role, I cannot say whether that information could be shared. I do not think that it can be shared on a day-to-day basis, but I will investigate whether we could arrange a briefing with Members to give some reassurance as to the general approach.”
“My hon. Friend has been a real champion for Grimsby, and I was glad to see her returned at the recent election, so that she can carry on championing all the potential that Grimsby has to offer, not least in the wind sector. It is important that we link up skills and capacity—that is one of the obstacles. We talk often about how grid capacity and planning issues can hold up the roll-out of clean power, but we have to have the skills base as well. We are working with the Department for Education on how we can train and develop capacity within the existing workforce through things like the growth and skills levy to work on these exciting new projects.”
“If we followed the approach suggested by the Opposition Front Bench, we would be firmly back in the hands of the petrostates and the dictators. As for our relationship with China, as I have said, we will co-operate where we can, compete where we need to and absolutely challenge if we must. We have been clear that no company in the UK should have forced labour in its supply chain. That is why we have set up the solar taskforce and are going through robust processes ahead of the decision that we are talking about. I will take no lessons from the right hon. Member because we have had 14 years of being exposed to a volatile energy market, and we are trying to recreate our energy security through this investment.”
“On the one hand, Conservative Members raise concerns about critical minerals being imported from abroad. On the other, when my hon. Friend, who is a real champion for her area, praises the investment that we have put into lithium extraction in Cornwall, they start jeering. We will continue to invest through GB Energy and the national wealth fund.”
“In that case, I will say that it is important that any investment is place-based, and we need to look at developing the capability, such as the skills and the capacity of the local authorities—that is where community energy comes in. We also need to ensure that the finance goes where the investment is needed. If I have not understood the hon. Member’s question, I would be happy to take it up with her afterwards.”
“Yes, that international co-operation is absolutely crucial. It means talking to countries with which we share a great deal in common and which are signed up to the same objectives, but it also means talking to other countries to bring them with us. That is why we are hosting the International Energy Agency summit in London in April, why we have set up the global clean power alliance, and why the Prime Minister went to the COP climate change talks in Baku last autumn and showed international leadership, which was very much lacking from UK Governments of previous years.”
“As I have said, I cannot comment on individual cases, but there are processes to ensure that our national security is protected as we look ahead.”
“I agree. That is why we are doing all we can to increase capacity through initiatives such as the clean industry bonus, investment from the national wealth fund, the role of GB Energy, and all the other measures that we will take through our industrial strategy to ensure that we keep and create jobs in the UK.”
“That is not very polite of the hon. Member. As I have said, we are doing all we can to attract investment into the UK, so that we can be as reliant as possible on our own resources—that means our own supply chain and attracting investment and so on. We are doing that through the national wealth fund and through GB Energy. I do not know to what extent he took part in debate on the Great British Energy Bill, but there was much discussion then. As I have said, this issue must be solved on an international level. We are doing a lot of work with our colleagues to make the North sea the green power plant of Europe through the North Seas Energy Co-operation council, and we have set up the global clean power alliance. We cannot act alone—although I know that the Scottish National party prefers that approach.”
“That is exactly our approach, and it is the right approach. Perhaps the Opposition Front Benchers would advocate not co-operating with China, but it is an incredibly important player on the world stage, and we gain nothing from completely turning our back on it and not engaging in dialogue.”
“I think I have made it clear that there are ongoing conversations about that, and that we take national security incredibly seriously when we consider investment decisions. On what the hon. Member said about producing more oil and gas here for our own use, I think he needs a lesson in how the energy markets work—there is no guarantee that it would be used here.”
“It sounds very much like the hon. Member is making the case for an industrial strategy that ensures that we can match demand with supply. That approach was particularly missing from the previous Government.”
“We believe that the best route to energy security is through our clean power by 2030 mission and further investment in renewables. That remains our stance.”
“The hon. Member has frequently raised almost every issue that one could think of, but he and I have taken part in many debates about human rights in countries of concern over the years, and he is absolutely right to flag those concerns. As I have said, we have the solar taskforce and the supply chain mission with the global clean power alliance. We are very much alert to those matters. We do not want to see forced labour or any form of modern slavery in our supply chains. We are determined to take action on that.”
“Last week, the UK formally submitted its NDC to the United Nations framework convention on climate change. It is a world-leading, ambitious target that we hope will demonstrate ambition to other countries. In that NDC, we have a youth clause for the first time, and I am very keen to talk to Members across the House about how we can better engage with schools, communities and young people to bring them on board with us as we seek to achieve our ambitions.”
“An early response to the proposals on permanent cessations was published last November. The changes in the draft order will deliver on commitments made by the UK ETS Authority, improve the operational fairness of the scheme and increase certainty for both regulators and operators; and the alterations to the UK ETS will support its role as a key pillar of the UK’s climate policy. These measures show that we will take action to extend and improve the scheme when necessary. I commend the draft order to the Committee.”
“That change will increase certainty for operators and facilitate equivalent treatment for all installations undergoing a cessation. The changes follow comprehensive engagement and consultation with stakeholders. Between 18 December 2023 and 11 March 2024, the UK and devolved governments ran a consultation seeking views on proposals to alter the free allocation methodology for the UK ETS stationary sectors to better target those most at risk of carbon leakage and to ensure that free allocations are fairly distributed. The UK ETS free allocation review covered the provisions included in the statutory instrument on permanent cessations. The responses to the consultation were broadly in support of the proposed technical changes to the treatment of permanent cessation. The authority response to the consultation will be delivered in two parts.”
“Operators are similarly required to provide details of the cessation of operations in respect of a sub-installation in annual activity level reports prepared in relation to the 2025 scheme year and thereafter. Requiring those reports will facilitate the application of the new final year rule. The statutory instrument introduces a new power for regulators to issue a notice to an operator that determines that an installation or sub-installation has ceased operation for the purposes of UK ETS legislation. The new power is available in circumstances in which the regulator is not satisfied that the operator intends regulated activities to resume at the installation, or intends regulated operations to resume at the sub-installation level.”
“The updated definitions provide that an installation has ceased operation when: all regulated activities in the case of an installation, or the relevant operation in the case of a sub-installation, have permanently ceased to be carried out at the installation. That amendment increases certainty for the scheme regulators and the operators. The draft instrument also introduces a requirement for operators to notify the relevant scheme regulator of circumstances in which all regulated activities cease to be carried out at an installation by the end of the scheme year in which the cessation occurs, or within one month of the date of cessation, whichever is later; and to confirm whether the operator intends one or more regulated activities to resume at the installation.”
“The exception will incentivise decarbonisation, as operators that can demonstrate that the relevant requirements are met will continue to be entitled to the free allocation calculated in accordance with existing UK ETS rules, which is calculated in advance on the basis of historical activity levels. The draft instrument also amends the circumstances in which an installation or sub-installation has “ceased operation” for these purposes. The previous definition was: at the point in time when it became technically impossible to resume operation. That definition was difficult to apply consistently in practice, though.”
“That activity level report will be used to recalculate the volume of free allocation that the operator is entitled to in the final year. Any over-allocation will be recoverable in accordance with the existing scheme rules. There is an exception to the final year rule in circumstances where the permanent cessation of operations at a sub-installation is part of a series of changes that has resulted in a material reduction in the specified emissions per unit of production of those pre-cessation products which continue to be produced at the installation.”
“That had the potential to result in the over-allocation of free allowances beyond the volume required for carbon leakage mitigation, and in the distribution of free allowances that were no longer associated with an activity resulting in emissions. The draft order ensures that the volume of free allocation that an operator is entitled to in the final year in which operations are carried out at one or more sub-installations is calculated by reference to the level of activity at the relevant sub-installation in that year. That is the final year rule. To facilitate this change, the draft statutory instrument will require the operators to prepare an activity level report in respect of the final year in which operations are carried out.”
“We introduced it to enable important changes and improvements to be made to the scheme. Under previous UK ETS policy, when a sub-installation ceased operation, the free allowances were no longer distributed in respect of that sub-installation in the year after the year in which it ceased operation, but the operator was entitled to retain the full amount of free allowances made available in respect of the sub-installation, without recalculation to account for the permanent cessation of the sub-installation within the scheme year. In other words, if it ceased operations during a year, it still got the free allowances for the whole year.”
“Under the UK ETS, operators are required to monitor, report on and surrender allowances in respect of their greenhouse gas emissions. Most allowances are purchased at regularly held auctions, but operators in certain sectors at risk of carbon leakage are given a number of allowances free, to manage their exposure to the carbon price and the risk that business decarbonisation efforts could be undermined by higher carbon imports. Under the UK ETS, an “operator” is the person who has control over an installation. An “installation” is a stationary unit at which regulated activities take place, and sub-installations represent operations carried out at an installation in respect of which free allocation operators are required to report activity levels for ETS purposes. The draft statutory instrument introduces the final year rule.”
“I beg to move, That the Committee has considered the draft Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2025. It is, as always, a pleasure to see you in the Chair, Mrs Harris. The draft order was laid before Parliament on 3 December 2024. I will set out some of the background. The UK emissions trading scheme was established under the Climate Change Act 2008 and the Greenhouse Gas Emissions Trading Scheme Order 2020 as a UK-wide greenhouse gas emissions trading scheme, to contribute to the UK’s emissions reduction targets and net zero goal. The scheme is run by the UK ETS Authority, a joint body comprising the UK and devolved Governments. Our aim is to be predictable and responsible guardians of the scheme and its markets.”
“We recognise the importance of long-term certainty to decarbonisation planning. The authority’s intention is to run the scheme until at least 2050. The authority published a long-term pathway for the UK ETS in December 2023, outlining our intention to consult on extending the scheme beyond its current date of 2030. We will consult on that and on any cap for future scheme phases in due course. We are committed to being attentive to views and to bringing forward changes as required to ensure the scheme operates efficiently and achieves emissions reductions. It is an integral part of our journey on our path to decarbonisation coupled with industrial growth. I commend the order to the Committee. Question put and agreed to.”
“To ensure the scheme continues to remain a key driver of decarbonisation, our intention is to expand its scope further. We have recently consulted on proposals to expand it to energy from waste and waste incineration, and we have recently consulted on expansion to maritime operators and on a regulatory framework for integrating non-pipeline transport for carbon capture, usage and storage. Beyond those new sectors, we are exploring options to build the UK ETS into the world’s first integrated market for carbon emissions and carbon removal. Subject to consultation, our intention is to include engineered greenhouse gas removals. That would support the new technologies we need to reach net zero while providing a sustainable path for industry to decarbonise and flourish.”
“It sets out a clear trajectory for emissions from the sectors covered and drives investment in decarbonisation. In November 2024, the UK ETS Authority set out an early response on its proposals on permanent cessations. This draft statutory instrument will implement those changes and improvements to the scheme, following detailed consultation. These changes have the support of the four Governments of the UK. I think Scotland and Wales have already approved them, and Northern Ireland is about to consider them in the next few days, so there is consensus on advancing carbon pricing policy, which adds to the strength of the UK ETS. The shadow Minister mentioned the need for close co-operation with the EU, and we certainly want to achieve that.”
“I think the shadow Minister is arguing that decarbonisation is coming too fast, but we are absolutely at the forefront of the new technologies and industries. My hon. Friend the Member for Redcar could wax lyrical about what that means for a constituency such as hers. Redcar has a strong industrial base but its future will be built on decarbonisation technology and the accompanying jobs. Delivering an industrial strategy is the centrepiece of the Government’s growth mission. It will make us energy independent while creating jobs and providing investment in communities across the UK. A key part of that will be investing and creating the right conditions so that the green industries of the future can flourish, and the UK ETS is a vital element of that approach.”
“The ETS makes fossil fuel electricity generation face the costs of its pollution. It is only a small component of electricity bills, especially compared with wholesale gas prices. As power generation continues to shift to renewables and nuclear, and as we reduce our reliance on volatile international gas markets, the impact on bills will fall and the costs to consumers will be reduced. Only fossil fuel electricity generation will be captured by the UK ETS, so the increasing uptake of renewables and nuclear power will reduce the costs for consumers. By driving green investment as part of our industrial strategy, the UK ETS will also help to deliver a just transition, growing the UK’s economy and securing good jobs for people across the country.”
“The shift away from volatile fossil fuel markets is not just about a desire to reach net zero, although of course that is really important—we see evidence of what happens if we do not tackle climate change around us every day. It is about protecting our security. The UK emissions trading scheme is a key pillar of the climate and net zero policy regime and our industrial strategy. It sets a cap on emissions in the sectors covered, which currently represent about a quarter of the UK’s emissions, and guarantees that those sectors will reduce their emissions in line with our world-leading net zero target. We believe that maintaining a strong UK ETS will play a key role in making Britain a clean energy superpower, delivering on our mission of ensuring secure and clean electricity by 2030 and cutting bills.”
“I suppose I should welcome the shadow Minister to his place, but it is a bit depressing to hear him outline the Opposition’s position. In the last year or two that the Conservatives were in government, we saw them U-turn and row back on getting to net zero. We recognise that it is an integral part of our growth and industrial strategy, which will protect jobs and investment in this country, so to hear the Opposition’s position spelled out in such stark terms is disappointing. Net zero is part of our growth strategy, and energy security is very much at the heart of what we do in the wake of Putin’s illegal invasion of Ukraine and other global factors.”
“We know that nature-based solutions have a key role to play in climate mitigation and keeping to 1.5°C at home and abroad. I have met the Minister for Nature, my hon. Friend the Member for Coventry East (Mary Creagh), and the Government have appointed two special representatives for climate and for nature, who will be working closely together too.”
“We are not convinced that the Bill is necessary as a well-developed legislative framework with legally binding targets is already in place, including, of course, the Climate Change Act 2008 and the carbon budgets. However, I appreciate the action on both climate and nature and the hon. Member’s commitment to both. I believe that our offices are already trying to find a date for us to meet.”
“I am aware of the excellent work being carried out at Lochwinnoch. We know that protecting and restoring our peatlands is essential for tackling the climate crisis. We are committed to restoring approximately 280,000 hectares of peatland. We are also looking at innovative ways of getting funding into those nature-based solutions so that they can thrive.”
“My colleagues at the Department for Environment, Food and Rural Affairs are developing a land use framework, which will consider issues such as food security and how we can expand nature-rich habitats. The framework will work hand in hand with the strategic spatial energy plan. May I just ask, Dr Huq, will the hon. Member for Faversham and Mid Kent be given a minute to respond?”
“In previous years, we worked together on the all-party parliamentary group for fruit and vegetable farmers, which she chaired, so I gained some knowledge of the importance she attaches to standing up for farmers in her constituency. Planning guidance makes it clear that developers should situate their projects on brownfield or industrial sites whenever possible. Where the development of agricultural land is shown to be necessary, developers are steered away from using the best and most versatile land, and we have no plans to change that. We do not believe, however, that the accelerated deployment of solar power poses a threat to food security. The total area of land devoted to solar farms nationally is very small. Even in the most ambitious scenarios, less than 1% of the UK’s agricultural land would be occupied by solar farms.”
“The statement is a helpful tool that allows planning authorities to review any significant effects on biodiversity or the environment. I know the hon. Member for Faversham and Mid Kent is committed to improving the natural environment, and she spoke eloquently about her vision for that part of her constituency. There is some evidence to suggest that solar can improve biodiversity when installed and managed appropriately. The environmental management plan for Cleve Hill includes commitments to build a habitat management area of 56 hectares, which is predicted to increase on-site biodiversity by 65%. I want to touch briefly on the use of agricultural land for solar. I hope I can reassure the hon. Lady that the Government recognise that food security is linked to national security, and that we will always back British farming.”
“We recognise that new infrastructure can have an impact on the local community, and the planning system is designed to take account of the social, cultural, economic and environmental effects. Indeed, all large-scale solar developers are legally obliged to complete an environmental statement as part of any application for development consent. The hon. Members for Faversham and Mid Kent and for Strangford (Jim Shannon) raised disruption, which will be considered as part of the environmental statement. The statement requires the developer to consider the potential environmental impact of a project, not just during the construction phase but during its life. It spans pre-development, construction and operation, all the way to decommissioning.”
“Most projects are assessed by local planning authorities themselves, and those assessments are governed by the national planning policy framework, which encourages developers to engage with local communities before submitting an application. Local planning authorities will continue to seek representations from local communities and will continue to weigh local considerations against the need for renewable energy. As the hon. Member for Faversham and Mid Kent said, larger projects such as the Cleve Hill solar park are decided centrally through the nationally significant infrastructure regime. That is a rigorous process. Developers whose projects qualify for the assessment must complete considerable community engagement before any decision is taken, and decision makers take into account its level and quality.”
“As part of the new plan for change, in which the Prime Minister set out the milestones in how the Government will deliver on our national missions, we will work towards the new target of 150 major infrastructure projects, including energy projects. That will mean tripling the number of decisions on national infrastructure, compared with the previous Parliament. We recognise the impact that such new energy projects can have on local communities and the environment. The Government are committed to striking the right balance between those considerations when delivering the clean power mission. All proposed solar projects are subject to a robust planning process.”
“It will provide lower bills in the long term and create thousands of highly skilled future-proofed jobs across the country. Delivering those benefits for the British people requires the development of new infrastructure. We accept that a top priority should be the deployment of solar on rooftops. That is why we are bringing forward new standards to ensure that all newly built houses and commercial buildings are fit for a net zero future. We will encourage the installation of solar panels on those buildings where appropriate. But we know that our mission will require more ground-mounted solar too, and decisive reform to the planning system is urgently needed to support that. As the Prime Minister said last week, we will streamline the approval process in the forthcoming planning and infrastructure Bill.”
“That is why my right hon. Friend the Secretary of State relaunched the solar taskforce earlier this year. It is also the reason that the Under-Secretary of State for Energy Security and Net Zero, my hon. Friend the Member for Rutherglen (Michael Shanks), who has this portfolio, cannot reply to the debate, because he is at a meeting of the solar taskforce. The taskforce brings together the industry and Government to discuss the actions needed to rapidly increase the deployment of solar panels on rooftops and in solar farms, and it will publish its recommendations in a solar road map very soon. We should never lose sight of the core motivation behind our clean energy mission. Clean power generated here in Britain will reduce our dependence on volatile imported fossil fuels.”
“As I said, I cannot speak specifically about Cleve Hill, but I hope I can reassure her by speaking in general terms about Government policy. First, it ensures that all local impacts are considered in the planning process. Secondly, it makes a steadfast commitment that those who host clean-energy infrastructure should benefit from it. In order to achieve our goal of clean power by 2030, we will need to deploy various renewable energy sources. According to the recent National Energy System Operator clean power pathway report, we need to increase solar deployment from 15 GW to 47 GW. Along with onshore wind, solar is the cheapest clean power option available to us right now, making it an essential part of the UK’s energy mix. Without a substantial increase in solar deployment, the clean power mission becomes very difficult.”
“As a result, I cannot comment today on the details of that project. The reasons for the decision and details of supporting plans are available on the Planning Inspectorate’s website, as the hon. Lady knows. I am afraid I cannot elaborate or speculate on that published material. The hon. Member spoke eloquently about the importance of the site to her constituents—the views, the biodiversity and the birds, and the importance of wetlands. My colleagues in the Department for Environment, Food and Rural Affairs and I are working closely on nature-based solutions to climate change, and wetlands play an important role. I am also glad that the hon. Member acknowledged the importance of reaching our net zero objectives, with that mission for clean power, by 2030.”
“It is always a pleasure to see you in the Chair, Dr Huq. I begin by congratulating the hon. Member for Faversham and Mid Kent (Helen Whately) on securing the debate and giving us a chance to discuss an important topic, not just for her constituents. I hope she will understand, however, that due to the quasi-judicial role that my right hon. Friend the Secretary of State plays in taking decisions on applications for development consent for energy infrastructure proposals, it would not be appropriate for me to comment on matters related to any specific proposals. Although the development consent order for Cleve Hill solar park was granted by the previous Government in 2020, as she said, the Department for Energy Security and Net Zero may still be involved in any proceedings relating to the implementation of that order.”
“The renewable energy transition will always be done through co-operation rather than coercion, ensuring that all parties benefit on our journey to net zero. Question put and agreed to .”