The bumpy road to Net Zero
A quick google search for quotes about bumpy roads returned:
“Bumpy roads often lead to beautiful destinations”.
There is no doubt that the road to achieving net zero by (the legally required deadline of) 2050 feels very bumpy at the moment, but there is hope that with a renewed focus and further “encouragement” from the / a government which is supportive of climate change mitigation and adaption that we will get to the beautiful destination of net zero, providing a better environment for us and future generations.
The road has always been bumpy, but since the Prime Minister made his speech during the 2023 Conservative Party Conference about the need to roll back on some of the commitments, the bumps have felt like craters.
The Office of Environmental Protection (the OEP) and the Climate Change Committee (the CCC) have both issued reports that conclude the Government is largely off track to meet the 2050 net zero target. Chris Skidmore who chaired the Government’s net zero plans resigned in the face of these roll backs and the bill which introduced new oil and gas licences.
Despite the vast majority of these progress goals not being met, and their overall conclusion that significantly more work is needed in order to meet net zero by 2050, the OEP did seem optimistic in noting, “these prospects are not fixed. There are many clear opportunities to change trends, make progress towards targets, and deliver significant environmental improvements.” It remains to be seen if this same level of optimism will continue in view of the upcoming mid-term target emission reduction goals.
The CCC has confirmed:
Achieving future carbon budgets will require a sustained increase in the pace and breadth of decarbonisation across most major sectors. Carbon Budgets One to Five were set when the country’s 2050 goal was to reduce emissions by only 80%. That commitment has been raised to Net Zero by 2050, in line with global climate goals. It is essential that an ambitious path of emissions reduction is maintained, increasing in pace over the next decade.
So, with this in mind, what can the real estate sector do to help meet this commitment?
Around 40% of UK carbon emissions are linked to the built environment, which includes emissions produced from the operation of standing infrastructure such as with heating, lighting, other servicing and maintenance (operational carbon/energy). A total 15% of global carbon emissions are linked to construction activities (embodied carbon) with the construction sector in the UK generating 60% of waste produced in the UK.
The Real Estate sector therefore has a significant role to play in delivering on the 2050 net zero target.
The UK Green Building Council (UKGBC) in their original report published in April 2019, outlined the framework for achieving net zero within the Real Estate Sector:
- Reduce Construction Impacts
A carbon assessment that addresses the building’s entire carbon impacts across its lifecycle should be conducted at the start of a project to inform early design decisions which aim to minimise the building’s carbon impact.
Further, any embodied carbon impacts from the product and construction stages should be measured and offset at completion.
- Reduce Operation Energy Use
Reduction of energy consumption and sourcing the demand from renewable sources should be prioritised. Buildings should therefore target reductions in energy from energy efficient systems and aim to source the required demand for energy from renewable sources.
In-use energy consumption should be calculated and publicly disclosed annually to address its carbon impact.
- Increase Renewable Energy Supply
Buildings should seek to power themselves from on-site renewable energy sources to increase renewables, reduce demand from the electricity grid and decentralise the energy system, all of which has added benefits for land use seeing the reduction of renewable energy generation on greenfield sites.
Off-site renewable energy should be considered as an addition, but the priority should be focused on-site.
- Offset Any Remaining Carbon
Where all possible measures for reducing carbon have been exhausted, offsets should be utilised to cover the residual carbon to ensure the balance achieves net zero aims. These offsets should be used following completion and annually in respect of operational activities.
The amounts of offsets should also be publicly disclosed to gain feedback from the industry and encourage compliance in reaching net zero.
Whole life cycle carbon assessments are crucial to understanding the overall impact, looking at the scope 1 and 2 emissions for your operation but including scope 3 of tenants’ operational uses will be key to reducing carbon emissions. Incorporating this with the wider industry standards of CREEM and BREEAM will be critical for the development sector.
All of this is not without its challenges – with the increased cost of raw materials, the demands of achieving net zero is an additional cost burden to the development sector which will ultimately be passed on to the end user, be that increase in rents or purchase prices. Add this into the complex matrix of Government planning and environmental policies (such as Biodiversity Net Gain and Brownfield First) there are sensitive cost calculations and implications to consider.
If you’re going to UKREiiF 2024, you can arrange a meeting with one of the team or find us talking about Net Zero in greater depth on Tuesday 21 May, 11am to 12pm, on the Newsroom Stage. I look forward to seeing you there.
