With last week's release of the 2014 budget, the IES looks at how the new announcements affect the environment and environmental professionals.

Carbon, energy and air quality
Oil and gas exploration
The new budget strongly supports the growth of the petrochemical industry as a means of providing the UK’s energy.  The industry is supported through significant tax incentives and there will also be a new allowance for ultra high pressure, high temperature (HPHT) exploration.  This allowance is designed to encourage exploitation of oil and gas reserves in the North Sea. An additional new allowance will be introduced to support and encourage onshore oil and gas exploitation and a package of measures is being introduced to support oil and gas exploration in the UK and UK continental shelf. The Government is also introducing a ‘Capacity Market’ to ensure security of energy supply through incentivising investment in new gas capacity.

Emissions, energy usage and air quality
The carbon price floor (CPF) is a tax on fossil fuels used to generate electricity and is designed to reduce GHG emissions from energy generation.  With the 2014 budget the Government have announced a cap to the CPF to “limit any competitive disadvantage British companies face in the global race”. The Government is also exempting fuel used in Combined Heat and Power (CHP) plants that is used to supply energy for manufacturing firms from the CPF. In order to ensure that energy intensive industries remain competitive internationally, the Government will compensate them for higher costs of electricity resulting from the renewables obligation and feed in tariffs. Additionally, the Government is providing £60 million to support Carbon Capture and Storage technologies.

The Government is abolishing higher tax bands of the Air Passenger Duty (APD), which will cut tax on long-haul flights and will be increasing and extending the Regional Air Connectivity Fund to include new routes from regional airports.

Vehicle Excise Duty on HGVs is going to be reduced and re-structured.

Renewable energy deployment
Companies and schemes that benefit from the Renewables Obligation Certificate or the Renewable Heat Incentive will now be exempt from the Enterprise Investment Scheme and Venture Capital Trusts. This means that investment in renewable schemes is now no longer subject to the same tax exemption as investment in other schemes.

Water
The Government is increasing funding by over £140 million to repair and maintain flood defences between 2014 and 2016.

Contaminated land
The Government is supporting a new Garden City in Ebbsfleet, which will be based on existing brownfield land, there will also be ring-fenced support to deal with the remediation of contaminated land in Stirling.

Big data / research
The Government will be providing £42 million over five years to the newly-established Alan Turing Institute. The Government will also be investing in developing graphene.