The built environment is the UK’s second highest carbon emitting sector. To decarbonise quickly, long term investment and planning will be required from the government and industry.
People spend on average 90% of their time in buildings. Therefore, the spaces we occupy shape our lives and have a huge impact on our wellbeing, health and finances.
This week, Prime Minister Rishi Sunak announced a new approach to net zero. He has vowed to take forward a “pragmatic, proportionate and realistic path to reach net zero by 2050” by reducing costs on British families while still meeting international commitments. Addressing both the climate and cost-of-living crises are complicated challenges which will require complex solutions.
What was announced?
From 2026, off-gas-grid homes will be banned from installing oil and LPG boilers, and new coal heating. This policy has now been postponed until 2035. Positively, it was announced that the Boiler Upgrade Scheme, which offers cash grants to people to replace their boiler, is being increased from £5,000 to £7,500. This new approach could help to ease the pressure on people who may be struggling to pay.
What does this mean for the heat pump market? In the UK, only 1.9 heat pumps per 1,000 households were sold last year – the least in Europe. This is compared to 20 for every 1,000 households in France, and nearly 70 per 1,000 households in Finland.
Slowing down the pace of heat pump delivery will likely harm supply chains which have been scaling up to deliver the original plan. By backtracking, we will struggle to build the workforce and upskill, while reducing market confidence. All of these are needed to help bring the cost of heat pumps down, benefiting us all.
The Prime Minister also announced changes to improve the energy efficiency of the private rented sector. It was planned that from 2025, new tenancies would only be possible on properties with an EPC C or higher - from 2028, this would apply to existing tenancies as well. Both of these policies have been scrapped.
The private rented sector is the least energy efficient of all tenures and research shows that people living in more poorly insulated homes spend around £1,000 on gas over a winter. This puts tenants in a tough position, where they are unable to retrofit the home they live in but are stuck paying higher bills. Given these measures are intended to reduce the cost-of-living impacts, it is hard to see how this matches up.
What does this mean for wider sustainability policy?
The Future Homes Standard, due to come into force in 2025, was not mentioned in the Prime Minister’s statement yesterday. The government intends to consult on it later this year, as well as an initial consultation on policy initiatives to reduce embodied carbon in the built environment.
It is important that these key climate policies are implemented – and we continue to work with the government to embed operational energy and embodied carbon targets in regulation.
What is needed to reach net zero?
In addition to operational energy and embodied carbon regulation, we must prioritise upgrading our existing housing stock. A National Retrofit Strategy, which includes grant funding, incentives and creative funding solutions, will be key to reaching net zero while limiting the impact of the green transition on those most affected by the cost-of-living crisis.