Government attempts to shore up the UK’s energy security and reassure industry on its so-called ‘Green Day’ scored mixed reactions.
Drax Group (LSE:DRX) was among the biggest losers from the announcement, as its bioenergy and carbon capture project was ruled out of consideration for a public funding boost.
Rolls-Royce Holdings PLC (LSE:RR.) was a winner though, as the government laid out timescales for its small modular reactor competition, which the FTSE 100-listed firms said it was “well placed” for.
Confirmation that the government would order airlines to use at least 10% sustainable aviation fuels from 2030 will also be positive for Rolls, given its Trent 1000 engines are already able to use a 50% blend of the greener alternative.
Oil and gas firms were left wanting from the announcements, with an anticipated reform of the 35% windfall tax on North Sea companies never coming.
The UK’s already-flailing car industry was also left in the lurch, as the government pressed ahead with a mandate for zero emission vehicles, but avoided the awkward question of subsidies, palming off calls to offer funding in line with the US and EU.
Hitting home the move, chancellor Jeremy Hunt said the UK would not go “toe-to-toe” with others on subsidies, despite firms being drawn overseas by the US$400bn offered under Biden’s Inflation Reduction Act.
Hydrogen firms received a boost from the days proceedings, meanwhile, with Ceres Power PLC and ITM Power Holdings PLC soaring after the government earmarked the fuel, alongside carbon capture, as key in future UK energy strategy.
The long list of announcements widely failed to please, however, prompting calls for clarity and more action across sectors.
Trade body the Society of Motor Manufacturers slated the zero emissions mandate, requiring UK-based manufacturers to ensure 22% of their cars and 10% of vans are electric from 2024, for being overdue and breeding uncertainty.
Friends of the Earth lashed out too, labelling the plans “half-baked, half-hearted and dangerously lacking ambition,” adding legal action was on the cards.
SSE PLC (LSE:SSE), having missed out on support for its Humber-based carbon capture project, said it remained "ready to invest and [...] work with government," as it also called for more clarity.