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A green focus for the Welsh Draft Budget

On 21st December 2021, Finance Minister Rebecca Evans announced the publication of the Welsh Government’s Draft Budget for 2022-2023.


Not only has the Welsh Government committed to tackle challenges of social and economic injustice, but following on from the progress made at COP26, particular attention has been paid to achieving environmental targets. Rebecca Evans stated that over the next three years, the Welsh Government will commit to providing £1.8 billion worth of investment into green initiatives. These measures include renewable energy schemes, decarbonising housing and protecting biodiversity native to Wales.

As part of this, the Welsh Government has set aside funding specifically for renewable energy generation in Wales. As announced in the Labour Party deal with Plaid Cymru earlier on in the year, a renewable energy firm for Wales is due to be established. The draft budget confirmed that £90 million in capital spending and £8 million in revenue spending over the next three years will be used to establish ‘Ynni Cymru’, the national publicly owned energy company. This will help drive the Welsh Government’s goal of an extra 100MW in renewable electricity capacity.


Complementing the ambitions of the national Net Zero targets, a three-year Infrastructure Finance Plan has been established to strengthen the link between infrastructure and fighting the climate crisis. This will examine how all investments align with the Net Zero Wales Plan and will be supported by £8 billion of capital expenditure.


The Budget Report outlined that 15 per cent of all Welsh demand-side greenhouse gas emissions and 27 per cent of all energy consumed is from the current housing stock. In order to promote greater efficiency, the Welsh Government will invest £580 million in capital funding leading up to 2024-25 to encourage decarbonisation of social housing. Importantly by targeting the worst insulated homes, the scheme will positively affect those from the most impoverished socio-economic backgrounds.


Stressing the urgent need for action on climate change, the possible side-effects of continued global warming were highlighted. In Wales, there is a high probability of rarely seen weather events across the country including coastal storms, flooding, heatwaves, and unprecedented droughts. The report also notes that biodiversity loss is accelerating at a never-before-seen rate in Wales and this Budget attempts to address those concerns. The Welsh Government has committed to investing an additional £9 million revenue and almost £90 million capital in the period up to 2024-25 to enhance current and emerging biodiversity. This is crucial for the health and wellbeing of those living in Wales and further afield. Funding will be concentrated on establishing a new National Park in the Clwydian Range and Dee Valley, the Local Places for Nature Scheme and Sustainable Places programme as well as various other initiatives.


It is clear that the green focus of investment in renewable energy, decarbonising and protecting biodiversity is a focal point of the Draft Budget and the Welsh Government’s vision for the next three years. This will be crucial in meeting recent Net Zero targets and tackling the climate challenges that Wales is expected to face in the future.

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