UK government sets legislative priorities, including closer ties with the EU on the CBAM and clean energy
Energy security — driven by renewables — was singled out as a priority in King Charles’ annual address to parliament. The King’s Speech details the UK government’s legislative priorities for the coming year. The focus on Wednesday was on building economic resilience in an “increasingly dangerous and volatile world”.
Sustainability was largely absent despite an ever growing body of research linking climate change with economic and societal instability. The lack of any new measures to protect nature and biodiversity was a “major omission”, says director of nature risk consultancy Biodiversify Michael Burgass. He referenced the recent national security assessment, which warns that ecosystem collapse poses a direct threat to the UK economy.
The speech confirmed government plans to move forward with an “energy independence bill” — first pledged as part of the Labour Party’s manifesto ahead of the 2024 election — which would establish a legal framework for the government’s energy and climate policies, and “scale up homegrown renewable energy”.
Energy secretary Ed Miliband said the bill will give the government “the power . . . to drive [forward] with clean power to cut bills, support families out of fuel poverty and deliver well-paid, secure jobs”.
A briefing document published by the government to accompany the speech insists that Labour will keep its “manifesto commitment not to issue new licences” for oil and gas in the North Sea and to “ban fracking”, despite pressure from rightwing opposition parties to increase drilling in light of the Iran war. The government will still allow for additional drilling at pre-existing oil and gasfields through “tiebacks”.
Need to address financing
The speech showed “ambition” on clean power, but investors want to see legislation that addresses renewables financing hurdles such as “planning consent delays and grid connection bottlenecks”, says UK Sustainable Investment and Finance Association chief executive James Alexander.
“If the [energy independence bill] gives clearer powers, shorter consenting pathways and more predictable regulation, on balance it should help unlock private capital,” Mark Richards, regional head of energy, environment and infrastructure at law firm Bryan Cave Leighton Paisner, tells Sustainable Views.
“Faster approvals matter,” he adds, but “the bill’s success will be measured by whether it turns clean energy projects into deliverable infrastructure, not policy announcements”.
We Mean Business Coalition chief executive Maria Mendiluce said the bill is good for business. “Companies want predictable energy costs, faster grid connections and long-term policy certainty,” she said in a statement. “Countries that can deliver affordable clean electricity at scale will have a major competitive advantage in the global economy.”
Faster approvals matter, but the energy independence bill’s success will be measured by whether it turns clean energy projects into deliverable infrastructure, not policy announcements
The speech also includes plans for an “electricity generator levy bill”, which would move older generators on to new, fixed-price contracts. The law is part of government plans, announced last month, to “break the link between electricity and gas prices”, allowing consumers to benefit more easily from cost savings associated with the energy transition.
Also confirmed were government plans to implement the recommendations of the Nuclear Regulatory Review by the end of 2027, despite criticisms from nature and conservation groups that it would result in fewer protections for biodiversity.
Meanwhile, a “regulating for growth bill”, also introduced in the speech, is supposed to give regulators including Natural England and the Environment Agency a “mandate to prioritise growth” without “undermining” their core focus, such as protecting nature. And a “civil aviation bill” claims to “unlock the benefits of airport expansion”, despite the cross-party Environmental Audit Committee warning this would put UK net zero ambitions in “serious jeopardy”.
Closer EU ties
The government intends to build a closer alignment with the EU through a “European partnership bill”, which will facilitate “new deals” on electricity, emissions trading, and food and drink.
The UK likewise plans to negotiate an electricity agreement to make trade more efficient and increase exports with mainland Europe, and to link its Emissions Trading Agreement with the EU’s ETS, making a “larger and more stable carbon market”, says the government briefing document.
ETS linkage will “create the conditions for mutual exemptions” from the UK and EU Carbon Border Adjustment Mechanisms, where the two regimes are treated as equivalent, saving £7bn of UK exports from being exposed to the EU CBAM, it adds.
The UK’s CBAM is due to apply from 2027 to aluminium, cement, fertiliser, hydrogen, iron and steel. The EU’s CBAM, in force since the start of this year, also applies to electricity.
Stronger water rules
Elsewhere, the government pledged in the speech to implement a “clean water bill” to reduce sewage spills; an independent and integrated water regulator that combines Ofwat, the Drinking Water Inspectorate, the Environment Agency and Natural England; and statutory resilience standards for water companies to encourage investment in infrastructure.
A “steel industry bill” is likewise on the cards, which would lead to the nationalisation of British Steel, after it was brought under special measures by the government in April 2025 following threats by Chinese owners Jingye to walk away from the failing plant, and could also fund the company’s green transition. The government has already committed up to £2.5bn for the “modernisation and decarbonisation” of the sector.
Ahead of the King’s Speech there was some speculation about a bill to put the National Wealth Fund, a government-run investment vehicle for national infrastructure projects, into law, but this did not materialise.