The battle over net zero has only just begun

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

h/t Paul Kolk

Scotland’s last remaining oil refinery – Grangemouth – is to shut, we learned last week, with the loss of 400 jobs.

The plant – co-owned by Sir Jim Ratcliffe’s Ineos – is closing due to the UK’s incoming ban on new petrol and diesel cars to hit net zero targets.

Grangemouth produces most of the petrol, diesel, heating oil and aviation fuel used in Scotland, Northern England and Northern Ireland. The closure, said Ineos, reflected lower fuel demand given the “ban on new petrol and diesel cars due to come into force”.

While Sharon Graham, general secretary of Unite, accused Grangemouth’s “billionaire owners” of “industrial vandalism”, she also highlighted the car ban. “The road to net zero cannot be paid for with workers’ jobs,” said the boss of Britain’s second-biggest union.

Along with Grangemouth, the Government recently confirmed the closure of the last two blast furnaces at the iconic Port Talbot steelworks, resulting in 2,500 more layoffs.

Labour’s green policies are “hollowing out working-class communities”, said Gary Smith, the leader of GMB, Britain’s third-biggest union. The Government, he said, must stop “decarbonisation through deindustrialisation”.

At last week’s Trades Union Congress conference, Unite and GMB highlighted union concerns about the route to “net zero” – a journey Labour is determined to pursue more doggedly than the Tories.

The two unions pushed through a joint motion opposing Labour’s incoming ban on new North Sea drilling licences, championed by Energy Secretary Ed Miliband.

They want “cast-iron” guarantees for the workers affected – some 30,000 off-shore North Sea oil and gas jobs, plus another 200,000 or so along the UK’s oil and gas supply chain.

Graham evoked the coal mine closures of the 1980s. “Unite will not stand by and watch those workers becoming the miners of our generation,” she said, one of Britain’s most powerful union barons raising the spectre of Thatcher-era industrial relations, marred by chaos and violence, barely two months into the first Labour Government for 14 years.

Attention has lately focused on the row between Downing Street and the Labour Left over the means-testing of pensioners’ winter fuel payments – complaints Downing Street has largely waved away.

But there are signs of a much more substantial, long-term conflict, as the existential industrial cost of the UK’s bid to hit legally binding “net zero carbon emissions” target by 2050 comes into sharper focus.

Grangemouth and Port Talbot are just the latest in a growing list of closures linked to net zero at plants that have long provided decent, well-paid jobs in parts of the country where such jobs are hard to come by.

The destruction of the UK’s North Sea oil and gas operations, and the huge range of related activities, will cause enormous industrial tensions – exposing the chasm between Labour’s relatively wealthy, often urban-based “environmental” voters and its traditional base.

Already, there is growing awareness among voters that “net zero” is aggravating the cost of living crisis. Yes, the UK boasts a relatively high share of what Miliband insists on calling “cheap renewables” – which produced around two-fifths of our electricity over recent months.

But the subsidies involved, added to bills, mean despite the growing use of renewables, or even because of it, UK firms and households are paying almost the highest electricity prices in Europe.

Unless net zero starts delivering soon for ordinary people, instead of just adding to their financial burden, the consensus to pursue the 2050 targets – taken for granted by much of our political and media class – could come under serious pressure.

And as trade unions fight for tens of thousands of blue-collar jobs during Sir Keir Starmer’s “first term”, the resulting environmental-industrial conflicts could tear the Labour movement apart.

The first big test is the incoming ban, from 2035, across Britain and the European Union, on new petrol and diesel cars – with second-hand sales remaining legal.

The Labour manifesto pledged to bring that forward to 2030 – which I strongly suspect won’t happen. I predict the 2035 deadline will slip as well.

Why? Because consumer take-up of electric vehicles (EVs) is far lower than forecast and imposing the planned ban could destroy much of the UK car industry, which employs around a million people – while handing vast swathes of our car market to massively subsidised EVs made in China, which already accounts for around 60pc of global production.

UK car sales, up around 3pc over the last year, remain 15pc lower than before lockdown. Within that, EV sales have slumped, with their market share stuck at around 18pc for the last three years.

Last week I interviewed Robert Forrester, co-founder and chief executive of Vertu Motors – one of the UK’s biggest car retailers – for The Telegraph’s Planet Normal podcast. He described how the incoming petrol and diesel ban is already impacting sales.

That’s because manufacturers, since January, face fines if 22pc of the cars they sell in Britain aren’t fully electric – paying £15,000 for every vehicle by which they fall short. The target ratchets up to 28pc next year and is expected to hit 80pc by 2030 – even if the complete ban remains at 2035.

Forrester describes how this will lead to the “rationing” of petrol and diesel cars as the ban approaches, with prices soaring as low EV sales mean manufacturers can only avoid ruinous fines by dramatically curtailing petrol and diesel car production.

He is just the latest senior car industry figure to highlight the dangers of a rapid switch to EVs – joining bosses at Ford, Stellantis and Renault.

Governments in the UK and across Europe face a mighty industrial battle over the coming years to push through net zero policies, in the teeth of trade union and popular resistance which is certain to grow.

With each high-profile plant closure, the intensity of that fight ratchets up.