Budget 2018 Environmental highlights

The Chancellor, Phillip Hammond, presented his 2018 Budget to Parliament on 29th October 2018.
The main points of the budget relating to the environment are highlighted below:

  • A new tax on plastic packaging which does not contain 30% recyclable material in a bid to incentivise manufacturers to increase their use of recycled materials
  • The Environment Agency will be provided with £10 million to clear up abandoned waste sites
  • No tax on takeaway coffee cups but this will be reconsidered if the industry doesn’t make enough progress to reduce their environmental impact


  • Fuel duty to be frozen for the ninth year in a row;
  • Air Passenger Duty for long-haul flights will increase in line with inflation, while Air Passenger Duty for short-haul flights will be frozen until 2021;
  • Enhanced capital allowances for companies investing in electric vehicle charge points to will be extended to March 2023;
  • Vehicle Excise Duty on heavy goods vehicles will be frozen for the next financial year; and
  • The difference between alternative and main road fuel duty rates will be maintained until 2032 to support the decarbonisation of the transport sector.

Energy and Climate 

  • The Budget sets the Climate Change Levy (CCL) main rates for 2020-21 and 2021-22 and continues with the government’s commitment to rebalance the main rates paid for gas and electricity. The electricity rate will be lowered in 2020-21 and 2021-22. The gas rate will increase in 2020-21 and 2021-22 so it reaches 60% of the electricity main rate by 2021-22. Other fuels, such as coal, will continue to align with the gas rate. The discount for sectors with Climate Change Agreements will change to reflect the change in CCL main rates.
  •  The carbon price support on the power sector will be frozen at £18 per tonne of CO2 next year, and will be reduced in subsequent years after if the overall carbon price remains high. 
  • A carbon tax of £16 per tonne in the event of a no-deal Brexit, in which the UK would have to leave the EU’s emissions trading scheme. The tax would apply to all stationary installations currently participating in the scheme on each tonne of CO2 emitted above an installation’s emissions allowance, which would be based on how many free allowances it is entitled to under the emissions trading scheme.


  • £13m allocated to tackle risks from floods and climate change, through pilot projects to ensure property owners have the best information on protecting their homes, and expanding the flood warning system to an additional 62,000 at-risk properties;
  • £20m funding will be given support more local authorities to meet their air quality obligations;
  • the government will set up a Woodland Carbon Guarantee scheme which will support the planting of around 10 million trees by purchasing up to £50 million of carbon credits for qualifying tree planting;
  • £20 million in funding to support more local authorities meet their air quality obligations

Link to full 2018 Budget summary.

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