British Property Federation study finds sector likely to miss 2050 net zero deadline

A new report by The British Property Federation (BPF) in collaboration with JLL has revealed the challenges facing the UK property industry as it seeks to reach net zero by the 2050 deadline set by the government. The study surveyed 71 senior leaders from 45 organisations with UK operations, with respondents representing investors, developers, managers, owners and occupiers, with respondents covering all major asset types, including commercial and residential.

The headline finding from the research was that the vast majority of respondents, 9 out of 10, believe that the property sector will not reach net zero carbon emissions by 2050. This is despite willingness within the sector to bring in measures which would accelerate a switch to net zero. Melanie Leech, Chief Executive of the British Property Federation, comments: “The property sector is fully committed to decarbonisation but there are huge barriers and costs to overcome. We need clear long-term policies, regulation and incentives to support the industry’s efforts.”[i]

In the CCCs (Climate Change Committee) most recent annual report, published last summer (read our blog here), the group warned that the UK is on track to cut just 40% of the emissions required to reach net zero[ii]. On the property sector specifically, the CCC writes that the advancement rates in energy efficiency are still at inadequate levels, as they have been for the past ten years. Further, whilst the government wants to increase the number of heat pump installations from roughly 54,000 in 2021 to at least 600,000 per year by the end of the 2020s, to monitor whether this is developing as anticipated, supply chain build-up indicators will be required. Yet at present, there are data shortcomings which make this difficult for the CCC to evaluate[iii].

To ensure the property sector can meet net zero targets, the BPF has set out several essential policies. These are as follows:

• Mandate the sharing of energy consumption data between property owners and occupiers of large commercial buildings and set up a Task Force to explore the particular data challenges faced by owners of residential buildings.
• Confirm urgently the detail of the planned changes to the MEES regulations for both the domestic and non-domestic private rented sectors and the details of the proposed new performance-based energy rating system.
• Zero rate VAT on residential repairs and maintenance and reform capital allowances to incentivise investment to decarbonise.
• Move towards the mandatory installation of PV and/or green roofs on large residential, commercial, and public buildings.
• Strengthen the criteria for a green tariff label.
• Allow Real Estate Investment Trusts (REITs) to invest in off-site renewables.
• Align and resource the planning system to enable the net zero transition.
• Mandate the use and disclosure of Life Cycle Assessments and set embodied carbon reduction targets^[iv].

The BPF recorded a particular willingness from the sector to see the issue of embodied carbon tackled- that is the carbon generated upstream through construction and materials- as well as a desire to reduce operational emissions. As such BPFs report recommends the introduction of mandatory life-cycle assessments for businesses across the built environment lifecycle, therefore improving data on embodied carbon, it also says that the property sector would support embodied carbon reduction targets from the Government.

Support for solar mandates

Renewable energy was noted as one of the key areas property leaders would like to see developed. The report calls for the removal of barriers currently preventing Real Estate Investment Trusts from investing in off-site renewables by broadening the asset classes they are entitled to invest in. It also calls for new rules to mandate the installation of solar panels on large residential, commercial and public buildings. It follows a trend seen across Europe, where solar mandates are increasingly being peddled. For example, in the EU, Ireland confirmed in October last year that it would launch a new grant scheme to help schools retrofit solar panels on their roofs. ZCA previously detailed France’s latest plans to mandate solar panels in all large carparks[v]. The French government believes this scheme could see up to 11 gigawatts of power generated, increasing total French solar output to 24 gigawatts when compared with today[vi].

References

[i] BPF - BPF calls for data-sharing and regulatory certainty to accelerate the decarbonisation of the property industry

[ii] Climate change report lays out what the UK must do to achieve net zero | Natural History Museum (nhm.ac.uk)

[iii] The CCC Mark a Pivotal Point in The UK’s Pursuit of Net Zero as They Look For “Tangible Changes” and Call for Delivery of Promised Action | Zero Carbon Academy

[iv] BPF - BPF calls for data-sharing and regulatory certainty to accelerate the decarbonisation of the property industry

[v] Driving renewables: Could council and privately-run car parks provide the solution for solar space requirements? | Zero Carbon Academy

[vi] France: photovoltaic solar energy capacity 2022 | Statista

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