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Fears that UK’s net zero strategy will be blown off course by oil and gas pressures

<span>Photograph: Matthew Horwood/Getty Images</span>
Photograph: Matthew Horwood/Getty Images

It was supposed to be called “Green Day” – a big presentation of the national strategy for reaching net zero carbon emissions by 2050. But it has been rebranded, apparently.

The event, taking place in Aberdeen on 30 March, will no longer share a name with the California pop-punk band; ministers are understood to have plumped for the less lyrical “energy security day”. But climate campaigners fear it looks set to be, to quote Green Day’s 2004 hit, a Boulevard of Broken Dreams.

Energy secretary Grant Shapps and chancellor Jeremy Hunt have come under pressure from industry to produce a meaningful response to US president Joe Biden’s $369bn in climate subsidies, granted through the Inflation Reduction Act (IRA), which has seen major companies reallocate investment to the US. The pair will also be hoping to seize the initiative from Labour, which has made the switch to green energy a key battleground.

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Shapps and his newly formed Department for Energy and Net Zero certainly have a mandate to shake up a crucial industry. As the energy crisis has escalated over the past 18 months, it has exposed flaws across the sector – from tariffs and decarbonisation concerns to the link between wholesale gas and electricity prices.

There are concerns Britain’s prowess in offshore wind could be eroded if Biden’s subsidy tempts investment away from the UK

But the Guardian has revealed that the presentation will contain measures to please the fossil fuel industry, from new offshore drilling plans to a refusal to force oil and gas companies to stop flaring by 2025 – as recommended by Chris Skidmore in his net zero review. It may even give a licence to the huge, and so far undeveloped, Rosebank oil and gas field off Shetland.

It is understood that Ofgem will not, as had been mooted, be given powers to include the net zero target in its regulation of the energy sector, and that the only measure aimed at improving Britain’s energy efficiency will be a consultation on improving insulation in the private rental sector.

On the renewables side, there are concerns Britain’s prowess in offshore wind could be rapidly eroded if Biden’s IRA subsidy tempts investment away from the UK to the US. A windfall tax on some electricity generators has not helped investor confidence. Meanwhile, green campaigners hope Shapps will confirm a lifting of the effective ban on onshore wind developments, amid concerns it will persist.

Industries expected to get particular attention in the presentation are nuclear, hydrogen, and carbon capture and storage.

Hunt made great fanfare of nuclear at this month’s budget, aiming to reclassify the technology as “sustainable” so as to attract environment-conscious investors, and kicking off a competition for small modular reactor (SMR) designs. However, it is unclear whether the reclassification will help in the hunt for co-investors alongside EDF and government in the Sizewell C project in Suffolk. And industry insiders say the SMR competition has merely delayed the decision on which projects to fund.

The chancellor also announced £20bn of spending on carbon capture and storage projects over 20 years, with a promise to get “spades in the ground” from next year. The technology captures the CO2 emitted by big polluters and stores it underground.

Backers of the projects hope Thursday will provide answers on which proposals will receive approval. Last week, power station owner Drax said it had paused investment in carbon capture until the government decides whether it will offer financial support. Hunt’s £20bn has been labelled a PR exercise and a “dangerous gamble” on unproven technology, as the £1bn-a-year spending primarily falls outside this parliament.

Onlookers also hope to see firmer plans on supporting the green hydrogen industry – seen as important to decarbonising heavy industry – electric batteries and storage facilities, vehicles and the supply of critical minerals into that sector.

Related: Interest rate rises in doubt as fear of new global crisis rattles central banks

Shadow climate secretary Ed Miliband is not getting his hopes up. He criticised the Conservatives’ “low ambition and chronic underfunding of green projects”, and added that Labour plans to create a “publicly owned national champion in clean power generation, and deliver a million good green jobs”.

Rebecca Newsom, Greenpeace UK’s head of politics, said: “This is the best opportunity for the government to stop us being left behind in the global race on green growth … [it] must put the budding UK industries of renewable energy, electric vehicles, batteries and green steel at the heart of the UK’s economic plan.”