Finding the green path to 2050 – the property industry and Government must collaborate
By Paul Jones, Director, Ramboll
With the latest report from the British Property Federation (BPF) revealing 9 out of 10 senior leaders in the property industry believe current Government policy will not deliver a net zero sector by 2050, it is clear the Government and industry must work together more closely to overcome the industry’s current difficulties with decarbonisation.
Whilst also facing economic pressures, the property industry is currently experiencing a period of unprecedented change with policies like the Building Safety Act and Future Homes Standard affecting development at its viability stage. With inflation and labour shortages making it costly to build, Government policy must incorporate financial incentives to support landlords and corporations to decarbonise.
To effect real change, radical industry-wide innovations are needed. The Government must implement policies that deliver robust data sharing to better understand real world building performance and energy demands, encourage retrofit of existing buildings and enhance national electrical infrastructure to improve the industry’s chance of reaching the 2050 goal.
Mandated sharing of energy consumption will be an essential tool to unlock the possibilities of a decarbonised property industry. Unfortunately, designers are still being placed in the challenging position where design decisions are made based on predicted energy usage and are without the relevant data to make improved, considered design choices.
With data closely guarded by building operators, there needs to be greater transparency about post occupancy energy usage so designers can close the gap between predicted and actual energy performance. Given the property sector relies on several industries working in conjunction, mandated transparency and communication will be key for creating real progress on decarbonisation.
A net zero property sector relies on a net zero electrical grid. Despite significant improvements in the UK’s output of renewable energy, the current pace of change is insufficient to meet the 2050 target – the National Audit Office recently warned that without a modernisation plan for the entire power system, the Government risks undermining industry and investor confidence.
Given we are seeing a move towards the electrification of buildings and transport, demands on the grid will only increase. The Government’s own net zero strategy predicted a 60% increase in electricity demand. With this direction of travel, the Government should support innovative new approaches to the way that infrastructure upgrades are funded – an investment in distribution, energy storage, and large-scale renewable energy production that will meet the requirements of the future. It is bold investments in these areas that will help the property industry achieve decarbonisation.
Current Government policy is largely focused on improvements to the standard of new build homes and offices. Changes to Part L brings improvements to building fabric energy efficiency standards that will lead to lower energy consumption and carbon emissions in new buildings. From 2025 there will be a requirement for buildings to achieve an EPC rating of C or higher for any new lettings, this will require landlords to make improvements to existing buildings or risk loss of income. Whilst Part L includes minimum standards for existing dwellings it does not go far enough to address poor energy performance in existing housing stock outside of the rental sector.
With a view to achieving net zero by 2050, the Future Homes Standard aims to cut residential carbon emissions by 75-80% through increasing thermal efficiency and reducing embodied carbon in construction materials by 2025. However, current design practice is woefully underprepared for implementation. A one size fits all approach will be ineffective; instead, bespoke flexible Government policies are needed.
The bigger question is, how can older buildings improve their existing efficiency? At present, the industry is unable to make interventions in existing properties at the scale we need to drive down energy demands. There are also restrictions around older and heritage structures and strategies to make interventions sensitively must be implemented with the support of planners.
Beyond net zero
As we approach our net zero targets, our industry must also be mindful that decarbonising should not be the only metric we explore. We should be considering places for people and their wellbeing, access to light, fresh air and green space. It would be a mistake to purely focus policy on net zero carbon in the fight against climate change.
However, the industry must also do more to engage with tenants and purchasers to relay the benefits of net zero carbon buildings and the idea of the green premium, the value attached to a low carbon building. Demonstrating the value of these features could help attract buyers – at present, trends suggest property purchasers are more concerned with amenities than EPC ratings.
Despite the UK decarbonising faster than any G7 country, cutting emissions by 47% between 1990 and 2021 according to a spokesperson from the department for energy security and net zero, we must work together to ensure the property sector reaches the 2050 target. It is regulatory and financial assistance that will achieve this. With economic and labour pressures mounting, the property sector’s transition to net zero will be impossible without increased data transparency and greater Government intervention to enhance infrastructure and retrofitting policies.