The British Property Federation has called on the UK government to set out guidance for carbon emissions regulations beyond 2030 to give investors clarity and support them on the road to meeting the UK’s net-zero targets.
The comments came in response to the government’s publication of its Industrial Decarbonisation Strategy and two consultations on energy efficiency within commercial property.
The first consultation was on the extension of Minimum Energy Efficiency Standards (MEES), setting out a target EPC B rating for all commercial properties by 2030. The second was on the introduction of performance-based energy ratings in large commercial and industrial buildings.
Though welcoming these proposals as a “vital step forward” in the industry moving toward net-zero, the BPF said commercial property investors need the government to provide more clarity on net-zero regulations.
The trajectory for regulations beyond 2030 is still relatively unknown, but property owners will be making investment decisions today for existing buildings and developments that will long outlive 2030.
In order to facilitate new investment into UK towns and cities and to support investors working toward net-zero goals, the government needs to provide a roadmap for regulations that look beyond the coming decade, the BPF said.
The government has proposed a policy framework for assessing energy use within buildings. The first step will require commercial and industrial buildings larger than 1,000 sq m in England and Wales to publish annual performance-based ratings.
For years, EPC ratings have been the main guide for assessing energy performance and carbon emissions in buildings, which, as the consultation argued, does not necessarily reflect the reality of a building’s energy consumption.
Despite contributing to a 14% fall in carbon emissions in buildings between 2008 and 2018, EPCs do not measure metered energy consumption, which means a high EPC does not guarantee that a building emits less carbon.
Under newly proposed rules, owners and single tenants will have to disclose a performance rating – based on energy use and emissions from the building compared to other similar buildings – publicly online.
Initially, the rules will apply only to the office sector, about 10,000 buildings in England and Wales are larger than 1,000 sq m.
Overall, the government expects these rules to have a “transformative effect”, reducing bills by £1bn in 2030 while offering valuable information to businesses, investors, insurers and others.
Alex Green, assistant director, development & sustainability, at the BPF said: “It is important that the government applies this new rating system to other commercial building uses, including retail, in the near future, but with consideration of the unique challenges presented by other building types.
