Japan's Daikin says new UK net zero plan will undermine investment and growth

By Andy Bruce

LONDON (Reuters) -Japanese industrial company Daikin, the market leader for heat pumps in Europe, said Prime Minister Rishi Sunak's decision to push back Britain's plans to tackle climate change will undermine confidence and international investment.

Daikin, the world's largest manufacturer of air conditioning equipment, headquartered in Osaka, said Sunak's decisions would make it harder to hit Britain's target to become a net zero carbon economy by 2050.

"With its policy update, the government seems to have given up on its commitment to see up to 600,000 heat pumps being installed a year by 2028," Henk van den Berg, residential sales manager at Daikin UK, said in a statement on Thursday.

"This is going to undermine confidence, foreign investments, and will have a significant impact on the growth in green jobs."

In a speech on Wednesday, Sunak said he would slow the transition to heat pumps from gas boilers in homes, and said he would not force any household to improve their insulation.

Heat pumps, sometimes described as reverse air conditioners, use electricity to concentrate heat potential and are comparatively more energy efficient than gas boilers.

Berg said continuing to exclude hybrid heat pump systems - which can operate alongside traditional heating sources like boilers - from the government's Boiler Upgrade Scheme was a "real misstep".

Sunak said he remained committed to the legally-binding target of reaching net zero emissions by 2050 but said Britain could afford to make slower progress in getting there because it was "so far ahead of every other country in the world".

(Reporting by Andy Bruce, Editing by Kylie MacLellan and William James)