The UK is the first major economy to pass laws to stop all of its greenhouse gas emissions by 2050. In order to meet this target, the Government will need to take a number of steps. The Government has recently launched the following three consultations (with further consultations to follow) to advance the reduction of carbon emissions as soon as possible.
1. Consultation on Changes to the Minimum Energy Efficiency Standards for Commercial Property
The Government’s preferred option is for all commercial properties to achieve a minimum energy efficiency rating of B by 1 April 2030 (if cost effective) or if this cannot be achieved, the alternative would be for all commercial properties to achieve a minimum energy efficiency rating of C by 1 April 2030 (if cost effective). The current minimum energy efficiency rating for commercial properties is E. If the rating is changed in April 2030 as the Government currently proposes, landlords will not be able to let their properties which are below rating B or C (depending on the outcome of the consultation and subsequent legislation made).
For the improvements to be cost effective, the expected savings from these improvements over a seven-year period must be equal to, or outweigh the cost of, the improvements to get the property to the energy efficiency rating prescribed. If the seven-year payback test cannot be met, there will be an exemption (as there currently is for buildings which fail the seven-year payback test to achieve at least an E efficiency rating).
The consultation also asks for views on whether this should be a single change to the minimum energy efficiency rating or whether the change should be gradual so that the rating is improved in stages. The idea behind a gradual change is there is likely to be more incentive to carry out the works sooner instead of them being done just before the proposed deadline of April 2030.
The consultation applies to England and Wales only. Responses are welcome from property owners, landlords, and investors. A link to the consultation can be found here. The consultation closes on 7 January 2020.
2. Consultation on Increasing Energy Efficiency for New Builds by Amending Building Regulations to Achieve the New Future Homes Standard
The Future Homes Standard for new-build homes in England was proposed by the Government earlier this year and is to be introduced by 2025. The Future Homes Standard proposes that new homes must be future-proofed with low carbon heating and improved fabric standards (such as triple glazing) to limit heat loss.
The consultation sets out two options (Option 2 is preferred by the Government) to amend Building Regulations to raise energy efficiency in new homes as follows:
Option 1 – To achieve a 20% reduction in carbon emissions (from the current standard) by requiring new-builds to be constructed with very high fabric standards (e.g. triple glazing) to limit heat loss and to have a wastewater heat recovery system installed in the house; and
Option 2 – To achieve a 31% reduction in carbon emissions (from the current standard) by requiring the installation of low carbon heating, renewables (such as solar panels) and better fabric standards in new-builds.
The consultation is for England only and responses are welcome from property owners and occupiers, property developers, and builders. A link to the consultation can be found here. The consultation closes on 10 January 2020.
3. Consultation on Amendments to the Heat Network (Metering and Billing) Regulations 2014
This consultation sets out proposals to amend the Heat Network (Metering and Billing) Regulations 2014 to ensure, where cost-effective and feasible, that individual heat consumption meters are installed on heat networks and that customers are charged based on consumption.
‘Heat Networks’ are systems where heat for an area is produced centrally and is transported to end users through a network of underground and overground pipes. Heat Networks reduce carbon dioxide emissions.
The consultation also seeks views on the introduction of three building classes (which will determine whether heat consumption meters need to be installed or not). The suggested building classes are as follows:
- the ‘Viable’ class (individual meters must be installed)
- the ‘Exempt’ class (meters not required)
- the ‘Open’ class (meters or heat cost allocators required if cost-effective)
A link to the consultation can be found here. Responses are welcome from landlords. The consultation closes on 12 December 2019.