23rd January 2023
The Government has set out ambitious targets to achieve Net Zero carbon emissions by 2050 – but developers will need to act now. Here’s what developers need to know.
The term ‘Net Zero’ is one most of us have now heard – but it’s a relatively new concept. It was first mentioned by climate scientists in 2009 in a paper on the effects of cumulative carbon dioxide emissions on global warming.
Just over a decade later, Net Zero is the driving force behind much national planning policy.
What is Net Zero and how will the UK achieve it?
Net Zero is defined as achieving a balance between the amount of greenhouse gas emissions produced and the amount removed from the atmosphere. In October 2021, the Government published its Net Zero Strategy. Subtitled ‘Build Back Greener’, the scale of its ambition left no doubt about the likely impact of Net Zero on policies and proposals in decades to come.
The strategy sets out the UK’s aim to achieve Net Zero by 2050, describing it as ‘a net win for people, for industry, for the UK and the planet’ and closely linking the journey to net zero with the overall prosperity of the nation. This would see vast reductions in the use of emission-heavy fossil fuels leading to the growth of green energy industries such as on and offshore wind farms, electric vehicles and carbon capture and storage.
As the then Prime Minister, Boris Johnson, put it: “Our strategy for Net Zero is to lead the world in ending our contribution to climate change, while turning this mission into the greatest opportunity for jobs and prosperity since the industrial revolution.”
The pressure has not let up since the publication of the strategy – and at the start of 2023 the chair of the Government’s Net Zero Review, Chris Skidmore, made 129 recommendations while admitting that more could be done for the UK to reap the benefits of green growth.
How will Net Zero be delivered?
Net Zero is a hugely ambitious target, only reachable through a transformation of the way we live. It impacts on how we travel, how we heat our homes, use our land, what we buy and where our energy comes from, as well as the methods we use to assess, calculate and capture carbon and manage energy costs. Achieving Net Zero requires us all to play our part.
Planners and developers – both in residential and commercial property – bear a huge level of responsibility for meeting Net Zero targets, as some estimates assess that the built environment accounts for 40% of carbon emissions. The wider built environment sector including investors and financiers are following suit with increasing ethical lending requirements and strategies – for more on this see our piece on ‘green financing’.
What does Net Zero mean for developers?
There is currently very little in law that relates to the delivery of Net Zero targets in planning, although we expect the legal framework to evolve over time.
However, there are very clear milestones along the pathway that will need to be met – and developers will need to act now to anticipate them.. For existing buildings, there may be a need to retrofit – a costly and laborious process but still preferable to knocking down buildings and starting again.
Developers will increasingly need to consider the development’s whole lifeycle carbon emissions. This means during the construction phase, and also the operational energy consumption. Alongside this, incentives for greener finance options are on the increase, with green and sustainability linked loans becoming ever present. Owners, occupiers, developers and design consultants as well as built environment policy makers will all be required to inform policies and practices to achieve and define future Net Zero development.
These measures include:
Heating for homes and workspaces makes up a third of all UK carbon emissions.
There is a declared ‘ambition’ of 2035 to phase out gas boilers in new homes – in line with the government’s goal of decarbonising the power generation industry by the same date.
The Review states that a key recommendation is to have gas free homes and appliances (which means no new or replacement boilers), and all homes sold to be achieve an Energy Performance Rating (EPC) C by 2033.
The alternatives to gas boilers will be low carbon technologies. Currently, electric heat pumps are the most advanced of these. The Review goes on to say that the Government should provide certainty by 2024 on the new and replacement gas boiler phase out date to drive industry and investor confidence, and recommends bringing the proposed date of 2035 forward and legislating for 2033.
For existing homes, there will a £450million, three-year Boiler Upgrade Scheme to offer £5,000 to £6,000 grants to households towards replacing gas boilers with heat pumps.
Also set for 2035 is the phasing out of fossil fuels for new vehicles – so production of diesel and petrol vehicles will cease in favour of electric, hydrogen or biofuel-powered alternatives. This means developers should plan for electric car charging points to be included as standard in any new development.
Currently, Building Regulations in the UK stipulate that every new home created should have an electric vehicle charge point. For residential buildings with more than 10 parking spaces, there must be cabling for at least one charge point per dwelling, and for all new non-residential buildings with more than 10 parking spaces this applies to 20 per cent of parking spaces.
We can expect that figure to rise and to be vigorously enforced by planners in the years to come – and this combined with increased consumer demand for electric vehicles means that more will probably be better when it comes to allocation of charging facilities.
Energy efficient buildings and EPC (Energy Performance Rating)
No matter how much more efficient and greener we can make energy production, we will fail to reach Net Zero targets if domestic and commercial properties leak that energy.
There will be clear obligations for developers meet to ensure any new builds are as energy efficient as possible. There are several consultations on energy policy under way, with a major focus on how to improve the energy efficiency of existing buildings through better insulation, ventilation and a reduced reliance on gas.
Energy Performance Certificates (EPCs), which give buildings a rating based on set criteria, are seen by some in the industry as a blunt but useful instrument. It is very likely that we will see the criteria updated and tightened to include more metrics, including where electricity in the building comes from and the associated fuel costs.
Increasingly, Passivhaus and similar standards are being utilised in the construction industry as a ‘gold’ target for energy efficient and carbon neutral eco-buildings.
It is an impossible task to eliminate carbon emissions altogether – as we have said, Net Zero is about achieving a balance, and often the only way to do this is to offset the carbon produced by development activity.
In planning there is an order of preference – first to reduce emissions at source, then to offset locally (for example by planting trees nearby) and then, as a last resort, to purchase biodiversity credits. These Biodiversity Net Gain (BNG) schemes represent opportunities for landowners, especially in rural areas. You can find out more in our Take 5 BNG Guide for Developers.
How can I find out more about Net Zero for developers?
The Journey to Net Zero and its implications for developers will be one of the topics at our Clean Energy event on Tuesday, January 24th.
The Thrings Clean Energy and Environment Team includes specialists from across the firm and its disciplines, and advises commercial developers, farmers and landowners on the legal aspects of clean energy, environment and biodiversity. We are here to support you on your pathway to Net Zero. Find out more and contact us here.