Aletho News

Net-zero: the annals of absurdity

By Richard North | Turbulent Times | September 17, 2023

Most readers will recall the excited chatter of some commentators, speculating on the result of the summer’s Uxbridge by-election – which was attributed to a backlash over Khan’s ULEZ plans.

After vague noises from No.10 about being “pragmatic”, there was a widespread feeling that Sunak might capitalise on what some took to be an “anti-green” rebellion, and row back on the implementation of net-zero.

Whatever hopes there might have been, though, it must now be crystal clear that, short of any trivial, cosmetic concessions, Sunak has absolutely no intention of slowing down to destroy the British economy in the name of the Great God climate change.

If any further evidence was needed, it comes in an article in The Times yesterday, which tells us that the prime minister has rejected any idea of a reprieve for petrol and diesel cars. The 2030 electric vehicle targets, we are told, will stay.

As if that wasn’t bad enough, we are also warned to expect punitive measures aimed at incentivising the few remaining car manufacturers in the UK to increase their sales of EVs.

The plan is that next year, 22 percent of new cars sold will have to be electric, rising to more than 50 percent in 2028. It is left to the Independent, though, to tell us that manufacturers who fail to meet the targets will face fines of up to £15,000 per car.

A similar stratagem is being used to push the sales of heat pumps, with gas and oil-fired boiler manufacturers being required in the financial year 2024-2025 to ensure that heat pumps make up 4 percent of their sales.

An alternative is to buy “credits” from manufacturers who are over-quota, failing which the manufacturers will have to pay an eye-watering fine of £5,000 for every heat pump short of the quota. As with EVs, the quota will increase each year.

This has led some manufacturers to warn that they will have to increase the unit prices of boilers by £300 – a sum which also might have to increase each year as sales quotas increase.

This way of doing things is particularly devious as it distances the government from the consumer and puts the responsibility on manufacturers to implement net-zero policy, which must then take the blame for the increased prices when people turn their backs on “green” products.

As such, one might expect that manufacturers would be up in arms at this cynical attempt to make them take the fall, except in the case of car-makers, the sales quota system favours those which have committed only to produce EVs – apparently an intended consequence of the plan.

This has emerged after talks between the government an BMW, when it was announced that the car-maker would receive a subsidy of £600 million for its Cowley plant in Oxford – a bribe to dissuade the company from moving its whole operation to China.

But part of the package, it seems, was an “understanding” that the net-zero timescale would not be relaxed, giving the company “certainty” about the rules, and thereby protecting their investment in EVs. In order to protect the developing market, car-makers are said to be keen to see the 2030 ICE new car sales ban go ahead.

This also applies to the emerging charging industry. Ian Johnston, chairman of the industry body ChargeUK, is quoted as saying: “To go further our sector needs certainty in the form of a firm commitment to a strong zero emissions vehicle mandate”. He is said to have cautioned that scaling it down would mean “billions of pounds of investment” being put at risk.

We thus have an interesting, if not disturbing situation where the market in cars is to be heavily distorted, so that consumer preferences will no longer be the primary driver of production plans. A nexus of government, investors and car manufacturers is conspiring to create a producer-led industry.

As for the minor detail of a lack of charging points – which is one of the factors inhibiting sales – officials argue that tough annual targets will give confidence to investors to start building thousands of charge points.

That alone, however, is unlikely to be sufficient to incentivise private buyers, who have proved extremely reluctant to convert to electric. Although the government “fines” may narrow the price differential, EVs will still be substantially more expensive than their ICE counterparts and the lack of chargers continues to put off buyers.

Even then, car-makers are not yet out of the woods as there is the vexed question of battery production to resolve. Faced with subsidies pouring out of the coffers of EU and US governments, Alan Hollis, chief executive of AMTE Power – head of one of Britain’s few surviving homegrown battery manufacturers – is holding out the begging bowl, threatening to build its planned new factory overseas unless the UK closes the subsidy gap. So far, though, the UK’s experiences with building battery plants have not been happy.

Nevertheless, last May, the government offered the owners of Jaguar Land Rover £500 million in subsidies in an effort to persuade the carmaker to build a new electric battery plant in the UK.

The Indian conglomerate Tata, the parent company of JLR, was in the process of deciding whether to build the new electric battery production facility in the UK or Spain and, in July, announced that it was to build a 40GW battery cell gigafactory in the UK – although this may have Chinese backing as well.

BMW has not yet decided on the manufacturing location for its Mini batteries – with mainland Europe or the UK remaining options – but it is germane to note that the company is also producing the Mini marque in China, with exports from that country due to start in 2024.

Therein lies another tale, as Chinese EV and battery production has been heavily subsidised since the inception of the industry. State subsidies for electric and hybrid vehicles were reported at $57 billion from 2016-2022, helping China become the world’s biggest EV producer and to pass Japan as the largest auto exporter in the first quarter of this year.

However, China is not only delivering the volume, but its cars are also typically 20 percent below the prices of European-built models. This has moved the Commission to consider imposing punitive tariffs under anti-dumping laws. It is possible that the UK will follow suit although to do so would present the government with something of a conundrum.

As it stands, the import of cheaper Chinese vehicles is the only sure-fire way of eroding the price differential between ICE and electric cars, and thus the best way of achieving the government’s net-zero targets – notwithstanding that Chinese industry is largely powered by fossil fuels.

Thus, despite its Faustian deal with its own car manufacturers, the government’s best option is to open the doors to Chinese imports, at the risk of wiping out British car manufacturing.

When the BMW deal was done, Sunak was full of himself, declaring that the “investment” was “another shining example” of how the UK was the best place to build cars of the future, claiming that his government was “securing thousands of jobs and growing our economy right across the country”.

But, from current moves, it appears that Sunak is far more interested in the deindustrialisation of Britain through net-zero, in which case he should be looking to ditching the car industry as soon as possible – which is no doubt already in his mind.

After all, except for a few small-scale specialists, most of the industry is already in foreign hands, so handing it over to the coal-fired Chinese shouldn’t make too much difference. In the pursuit of net-zero targets, nothing is too much or too absurd for our government to countenance.

September 19, 2023 - Posted by aletho | Deception, Malthusian Ideology, Phony Scarcity | UK