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The UK voted to leave the European Union: What next for the sustainable built environment?

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The UK has voted to leave the European Union and significant changes are set to take place for the sustainable built environment. The landscape is uncertain and the scale and reach of the impacts are still unclear.

It is necessary to identify and minimise the risks presented by the economic and political uncertainty. Nonetheless, the business case for sustainability should not be side-lined.

Major transformations in environmental policy are expected. The legislative landscape will be crucial for supporting the established link between property value and sustainability performance. Legislation linked to the EU Energy Performance of Buildings Directive (EPBD) are expected to be affected the most. This includes the Display Energy Certificates (DECs) and the Energy Savings Opportunity Scheme, which are linked to the Energy Efficiency Directive (EED).

The future is complex and there will be many opportunities and risks. Our main objective is to keep our clients informed and provide the most appropriate support, foster collaboration and help raise the business case for sustainability.

If you have any questions or would like to discuss any sustainability issues, please contact our experts today, who will be happy to advise you on the best course of action.

 

Photo: Gary Ullah Flick Creative Commons

 

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EU Referendum and the Environment: The Final Few Days

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On Thursday the 23rd of June, the UK will decide on its membership of the European Union. Thus far, it has been a closely fought debate with arguments presented by the Brexit and Remain campaigns. One key discussion point is the future of the legislative landscape for the environmental sector. This touches on the built environment and wildlife, as well as climate change targets. On the whole, there is consensus that voters lacked information throughout the period leading up to the referendum to take sustainability and the environmental issues into account.

Drawing on a survey of key professionals within the industry, the latest webinar held by the Institute of Environmental Management and Assessment (IEMA) suggested that:

  • Sustainability professionals thought the EU provides greater stability for environmental policy;
  • The UK is a leader on environmental and climate change policy;
  • The EU presents opportunities for the circular economy and fosters collaboration

In a similar way, the Institute of European Environmental Policy (IEEP) concluded in its latest report, “Potential Policy and Environmental Implications for the UK of a departure from the EU” that the UK’s environmental policy has been partly influenced by its EU membership. The IEEP argued that Brexit would trigger uncertainty unless the UK had alternatives in place. Going forward, the UK will need to review its environmental policy and significant transformations are set to take place.

The legislative landscape will be crucial to spur investment within the industry. In relation to real estate, links between property value and sustainability performance have already been established and this realisation will be further supported through environmental legislation. The UK Green Building Council (UK-GBC) has recently commented on the possible impacts of the outcome of the EU referendum, with those requirements linked to the EU Energy Performance of Buildings Directive (EPBD) expected to be affected the most. This includes the Display Energy Certificates (DECs) and the Energy Savings Opportunity Scheme, which are linked to the Energy Efficiency Directive (EED).

What is most certain are the unknown consequences of the EU referendum. Environmental and climate change consequences for the built environment and relevant legislation will be key areas of change.

Burns et al (2016) presents a summary of the scenarios and uncertainty levels. It is clear that the leave scenario presents the greatest uncertainty, with the potential of key transformations in the UK’s environmental policy. It seems that sustainability professionals must await on the side-lines as the debate draws to a close.

Table 1 The EU Referendum and the UK Environment (Burns et al, 2016)

Whatever the outcome, specific legislation within the UK, such as the Minimum Energy Efficiency Standard (MEES) coupled with the potential of a reformed legislative landscape means that all businesses operating within the built environment must be prepared for all eventualities. Sustainability and productivity within the built environment are valued globally not least in the business sense, but on a social level as well.

As for EVORA, regardless of the outcome, we are well positioned to navigate our clients through the post-EU referendum environment. With offices in the UK and Europe and a depth of knowledge within the industry, we will continue to help our clients manage their risks and realise the business case for sustainability.

If you have any questions or would like to discuss any sustainability issues, please contact our experts today, who will be happy to advise you on the best course of action.

Links:

http://www.iema.net/event-reports/2016/06/16/the-environment-and-the-eu-referendum/

http://www.ieep.eu/assets/2000/IEEP_Brexit_2016.pdf

http://ukandeu.ac.uk/wp-content/uploads/2016/04/Executive-summary-EU-referendum-UK-environment.pdf

Burns, C., A. Jordan, V. Gravey, N. Berny, S. Bulmer, N. Carter, R. Cowell, J. Dutton, B. Moore S. Oberthür, S. Owens, T. Rayner, J. Scott and B. Stewart (2016) The EU Referendum and the UK Environment: An Expert Review. How has EU membership affected the UK and what might change in the event of a vote to Remain or Leave? Executive Summary

http://www.ukgbc.org/news/uk-gbc-comment-eu-referendum

(Photo: Rock Cohen, Flickr Creative Commons)

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Budget 2016: Changes to the UK Government Energy Efficiency Strategy

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Significant changes to the Government’s energy efficiency strategy were announced in today’s budget (16 March 2016).  Key points are summarised below:

  • The Carbon Reduction Commitment (CRC) energy efficiency scheme will be scrapped at the end of the 2018-19 compliance year (the end of Phase 2). Obligated businesses will be required to surrender allowances for the final time in October 2019.
  • Lost revenue will be recovered through an increase in the Climate Change Levy (CCL).  This will come into effect from 1 April 2019.  This is designed to cover the cost of CRC abolition (although 2019 appears to be a bumper year for the Government – with increased CCL rates and a final CRC payment).
  • CCL rates and CRC allowance prices will increase in line with RPI annually until 2018-19.
  • The CCL discount for sectors with Climate Change Agreements will be increased to cover increases in CCL main rates.
  • The Government will retain existing eligibility criteria for Climate Change Agreement schemes until at least 2023.
  • The main rates of CCL for different fuel types will be rebalanced to reflect recent data on the fuel mix used in electricity generation. In the longer term, the Government intends to rebalance rates to deliver greater energy efficiency savings and reach a 1:1 ratio of gas and electricity rates by 2025.
  • Finally, the Government will consult later in 2016 on creation of a simplified energy and carbon reporting framework planned for introduction by April 2019.

Please contact Paul Sutcliffe at EVORA for more information (psutcliffe@evoraglobal.com)

70% of organisations on the road to ESOS compliance

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Latest figures from the Environment Agency show 6000 organisations have ESOS compliance.

In the two days before 29 January deadline, the agency received a further 1,015 notifications of compliance. This last-minute action reflected earlier fears of a slow start to compliance by organisations covered by the scheme.

More information via The Environmentalist

DECC launches Energy Innovation Consultation

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A new consultation published by the Department of Energy and Climate Change invites the energy sector to contribute thoughts and ideas to encourage innovation across the sector.

The consultation is open until 11th February and asks the following three questions:

  • How can legislation and enforcement frameworks help support new technologies and business models to encourage growth?
  • How is new technology likely to shape the energy sector?
  • How can regulators better utilise new technologies to generate energy savings and reduce burdens on business?

The final Innovation Plan will be published in spring 2016.

More information via Business Green.

Air Pollution: UK Environment Ministers face court action within weeks

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UK environment ministers will be taken to court within weeks to make them speed up plans to reduce dangerous urban air pollution.

Law firm ClientEarth, which last year forced the Department for the Environment, Food and Rural Affairs (Defra) to come up with fresh plans to tackle illegal NO2 levels in British cities, warned that it would seek urgent court action because thousands of people’s lives were at risk if present government plans were not strengthened.

Under new plans revealed before Christmas, Defra promised clean air zones for five cities by 2020 in addition to one already planned for London. But it will still take at least five years to clean up pollution in many cities, including Manchester, Cardiff and Edinburgh.

Andrews said that ClientEarth would go to the high court by 17 March and would ask for the case to be fast-tracked because people’s lives were at risk. Nearly 6,000 people die prematurely each year in London alone because of NO2,according to one study.

NO2 pollution limits for the whole year were breached in Putney high street and Knightsbridge just one week into 2016 . These state that maximum hourly nitrogen dioxide concentrations are not exceeded for more than 18 hours a year.

Full article can be read via the Guardian here.

The World Health Organisation describes global air pollution as a ‘public health emergency’ with countries such as China, India and Pakistan the worst affected. Full story via the Independent.

Two tech giants, Microsoft and IBM have developed smog forecasting technology to help make the air breathable again in China. Full story via the Huffington Post.

Blackout risk on the rise for UK this Winter

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National Grid expected to confirm increased blackout risk, as experts warn crisis will worsen unless subsidies are paid to new gas power plants. Emergency interventions have already been prepared to help keep the lights on.

Read the full article on the Telegraph here

 

Regulatory Energy Regime under Review

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Last week, the UK Government announced plans to review the business energy tax landscape to consider approaches to simplify and improve the effectiveness of the regime.

This message was circulated to all CRC, Energy Savings Opportunity Scheme and Climate Change Agreement participants (who have been further advised to continue to participate in the various schemes until further notice).

This news is in part welcome but also worrying.  Current energy legislation is confused and uncoordinated – this must be addressed.

By way of example, last year, the Government issued consultation on plans to (amongst other options) scrap use of Display Energy Certificates.  At the same time the ESOS scheme was in process of being rolled out.  One of the core compliance approaches referenced in ESOS is … use of Display Energy Certificates!

The structure of regulatory requirements surrounding energy is confusing and a revised coordinated, and structured approach designed to help business understand energy and carbon emissions, whilst appropriately incentivising improvement, would be welcome from me.

However, over-simplification will ultimately make UK business less competitive. Furthermore, if the Government take a similar approach to that taken for Zero Carbon homes plans last week (i.e. scrapping everything) then we should be very worried indeed.

The Government has committed to launching a formal consultation in the autumn and I strongly encourage participation.

 

What Can We Expect from the New Government?

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The dust has settled after the UK General Election and today will mark the State Opening of a new Conservative Government. The Queen is set to deliver the legislative plans decided by the Conservatives, so what does this mean for the Environment? EVORA has rounded-up the predictions and opinions outlining what we are likely to see over the next five years.

Sky News: What to Expect in the Queens Speech.

The Telegraph: The new Energy Secretary, Amber Rudd, plans to “unleash a new solar revolution” across Britain.

The Guardian: Damian Carrington discusses Cameron’s impact on the green issues.

IEMA suggests the Top Ten Sustainability Actions for the New Government.

New Scientist: Conservatives confirm to fight against Climate Change but shun wind power. New Scientist explains here.

The Independent: Britain’s green energy industry voice their concern about the future of onshore wind development and other renewable technologies.

Changes to Display Energy Certificates

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The Government is proposing a shake up to the current Display Energy Certificates to reduce the cost burden on the public sector with the likely outcome that schools, town halls and swimming pools will be exempt from the requirements to have a DEC. We have responded to the Department for Communities and Local Government (DCLG), who have produced the consultation document, expressing our negativity and concern to the proposals. The reality is that far greater financial savings can be achieved if DECs are acted upon to generate energy efficiency savings in these buildings compared to the relatively modest administrative savings of abolishing the DECs.

Our response is provided below.

To whom it may concern.

EVORA is a niche energy and sustainability consultancy working in the real estate field. We are involved in energy performance assessment of public and private sector occupied buildings. One of our core service offerings is to support clients with compliance requirements and this can involve obtaining DEC assessments (although we do not complete the assessments in house). I am the Operations Director of EVORA. My responses to consultation questions are provided below.

Question 1 – How could the existing enforcement regime be improved?

A clearer definition of ‘public authority’ and ‘frequently visited buildings’ are important and good steps (point 32). However, I think there is a risk, based on your planned definitions that schools will be excluded going forwards. I think it is vitally important that educational establishments are covered by DEC regulations. As a parent, I am regularly reminded of the energy inefficient operation of school buildings, on my infrequent (based on consultation paper definitions) school visits.

Questions 2 and 3 – How can enforcement be improved?

I do not think enforcement is effective and I am not aware of any enforcement action being taken. LWMAs may not be the most appropriate enforcement authority. However, I do not believe that passing this responsibility on to local authorities is the answer (point 43). In my opinion, this will create a ‘self-policing’ conflict of interest and open the scheme to criticism – as LAs will be the primary occupiers of public buildings. Furthermore, I do not believe that passing enforcement responsibility on to neighbouring local authorities will work.

I understand why this is being considered, as local authorities have a significant interest in the proper application for Energy Performance of Buildings. However, it may be worth considering the Environment Agency as an option. The EA is already responsible for CRC and ESOS schemes and transferring responsibility for policing of DEC (and EPC schemes) will allow for more joined-up thinking. It will also enable enforcement funding to be ring –fenced and will improve access to enforcement data. I also suggest that publication of non-compliance is considered.

Question 4 – Should the existing system of Display Energy Certificates and recommendation reports remain unaltered?

I believe that the DEC scheme, whilst it has failings, is well recognised and can be further developed to form an essential element of the UK Government’s approach to tackling inefficient buildings and more generally, climate change. Scrapping, or even diluting the scheme, will be a major step backwards for UK energy policy.

Question 5 – Should the exemptions from the requirements of the Directive be applied to qualifying buildings for Display Energy Certificates?

I do not believe that exemptions should be introduced. The consultation document (point 57) assumes that 1% of buildings may be exempted, creating savings of £83,520k annually. However, I believe that correct application of the DEC scheme, across the buildings at risk of being exempted, will identify energy saving opportunities well in excess of this figure. The benefits of applying the scheme correctly, will exceed the exemption benefits.

Question 6 – Should those buildings that have and display their Energy Performance Certificate be exempt from the requirements to have a Display Energy Certificate?

No – Display Energy Certificates and Energy Performance Certificates display different information. This approach would lead to confusion.

Question 7 – Should an energy certificate be required when 500m2 is occupied by public authorities and frequently visited by the public?

A clearer definition of ‘public authority’ and ‘frequently visited buildings’ are important and good steps (point 32). However, I believe that exclusion of schools will be a mistake. As referenced above, I think it is vitally important that educational establishments are covered by DEC regulations.

Question 8 & 9– Should the validity period of all Display Energy Certificates and their accompanying recommendation reports be five/10 years?

No – lengthening inspection cycles would lessen the effectiveness of the scheme.

Question 10 – Should the Display Energy Certificate regime be altered in the way outlined above?

Question 11 – Should the mandatory Display Energy Certificate regime be abolished?

The DEC scheme should continue as is, with focus on improved enforcement. Changes to simplify, or even abolishment, will be a major step backwards.

Question 12 – If Display Energy Certificates were no longer a statutory requirement, would you still obtain one (for example in order to monitor the energy efficiency of any non-dwelling)? Question 13 – Which proposal (or combination) is your preferred outcome?

I think DEC completion would fall significantly (and be exceeded by private sector voluntary take up) if it were no longer a statutory requirement. I therefore believe it is vital that the scheme is maintained and that enforcement practices are strengthened.

Kind Regards,

Paul Sutcliffe
Operations Director
EVORA