Government Annual “Lack of Progress” Report

As for regulation relating to energy efficiency in commercial real estate, where are we? With thanks to Rob Wall, Assistant Director of Sustainability and Tax Policy at the BPF for the heads up, we have a governmental update – on the back of Rishi’s September speech. The government has responded to the Climate Change Committee’s 2023 Annual Progress Report. Key takeaways for the industry:

  1. EPCs: “The Government is currently working on proposals for improving the reliability, accuracy and accessibility of EPCs…and intends to consult on reforms to the Energy Performance of Buildings regime this year”. Admirable intention but more talk? 
  2. EPC B by 2030, EPC C by 2027:  The government may have rowed back on proposals for domestic property, but where are we on the commercial side? When will this hit the statute books? A notable lack of update from the government. “We are working hard to review the policy design to ensure it remains fair and appropriate for landlords and tenants” and “the proposed timelines within the original consultation will require updating to allow sufficient lead in time for landlords and the supply chain”. No apparent urgency, or indeed certainty of implementation, here then. 
  3. Operational energy ratings: After a promising consultation in 2021 around energy “actual” performance certificates (i.e. a performance-based rating scheme), we have an official pause. So it feels like voluntary uptake of e.g. Nabers will simply remain – clearly no imminent regulatory intervention on actual energy use.   
  4. Owner-occupied commercial property: As for delivering energy efficiency and low-carbon heat in owner-occupied commercial buildings (including potentially minimum EPC ratings), the government plans to consult in “due course”. Not exactly all systems go. 

Is this the regulatory certainty that the industry craves? Clearly not. Arguably, the Building Safety Act is evidence of how the government can make swift legislative progress, if it is minded to do so. Contrast the continuing dithering on energy efficiency!

One notable observation from the programme at the recent BPF dinner, from Sir Keir Starmer: “My Labour government will work with you to unblock any impediments..removing hurdles to ensure the sector can go from strength to strength”. A generic statement and one can think of many notable impediments (e.g. planning system), but how about decarbonisation? One to watch with interest as we approach general election year.  

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