Opinion piece by Joe Giddings, UK Networks Lead, Built by Nature

Since 2020 the industry has been consistent. We have persistently called for unchecked embodied carbon emissions to be addressed alongside operational carbon. Multiple industry-led initiatives such as Part Z, ACAN’s Regulate Embodied Carbon campaign and the emergent Net Zero Carbon Buildings Standard have all make this clear. But to no avail. Embodied carbon is still largely ignored by Government policy, leaving the construction industry to make up its own rules, and mark its own homework.

Despite the continued dramatic warming of our climate (in January 2024, climate scientists confirmed that the past year smashed the record for the world’s hottest year by a huge margin, taking the planet to within a whisker of the 1.5 degree “limit” agreed in Paris in 2015), the Government has repeatedly ignored calls to introduce policy and regulation to reduce the significant emissions across a building’s whole life cycle, not only the slice of emissions caused through their heating and cooling. These operational emissions are still the only part of a building’s footprint which is subject to The Building Regulations.

In 2024 we can finally begin to address this, with a general election expected in either May or November providing us with the first chance in 5 years to choose who Governs the country, who defines the rules of the system, the boundaries and limits that development must respect, and the degree of freedom that is afforded to the sector as it continues to build. It is critical that we use this opportunity wisely and call on the prospective parties of Government to address the chasm between policy and practice.

Last year the leader of the opposition, Kier Starmer, promised that under a Labour Government the UK would not diverge and “do things differently” from the EU. However, in the relatively short space of time since Brexit, divergence has already occurred, and the UK is falling far behind our closest neighbours in ensuring construction respects planetary boundaries.

I want to set a challenge to any incoming administration. Below are 5 progressive policies affecting materials and construction which have been implemented in Europe. Can we expect an incoming Labour Government to align with all 5, and set the UK on a path to truly zero carbon buildings?

1. National targets for carbon storing biobased materials. To stimulate the “large-scale cultivation, processing and application” of biobased construction materials The Netherlands has introduced a target whereby 30% of the materials used in renovation and new construction in 2030 should be biobased.
2. Nationally mandated carbon limits on construction. The French Government made whole life carbon assessments mandatory for all new buildings in 2022, and in 2025 strict limit values will be placed on embodied carbon, which will be lowered in 2027 and again in 2031. Following this sequential reduction, all new buildings in 2031 will demonstrate at least a 52% reduction in carbon emissions compared to 2022 levels.
3. Regional carbon reporting reduction frameworks. Not content with a handful of EU Member States going it alone, the European Parliament adopted a directive in March 2023 that requires all member states to ensure that by 1^st January 2027 at the latest, the “global warming potential”, i.e. whole life carbon emissions, shall be reported for all new buildings. Further to this, all Member States are required to introduce reduction targets by 2030 at the latest, and set out a roadmap for these targets to be lowered ensuring that the leadership of countries like France will be replicated across the continent.
4. Emissions Trading Scheme & Carbon Border Adjustment Mechanism. Carbon intensive industries such as steel and cement are subject to the ETS, with a price placed on CO2 emissions that can be ratcheted up through a trading system for “carbon permits”. The number of permits will be reduced each year. To mitigate the risk of carbon intensive imports displacing local production, importers of iron, steel, cement and aluminium will be subject to the Carbon Border Adjustment Mechanism, making up for this difference in carbon price. CBAM will come into force in 2026, at least a year earlier than the UK’s own mechanism.
5. Financial services regulation. To ensure that private investment is aligned with sustainability goals, the EU Sustainable Finance Disclosure Regulation (SFDR) requires all fund managers to classify their portfolios in terms of their level of sustainability. Funds must be declared as either Article 6, 8 or 9, with the latter articles denoting levels of environmental or social sustainability of assets. Alongside this, the EU Taxonomy was introduced as a classification system for environmentally sustainable economic activities, and is integrated into the SFDR. When applied to property investment, this will require portfolio managers to disclose a much greater level of information related to both existing and new buildings, including factors like whole life carbon of new construction activity. Guidebooks educating investors on whole life carbon have sprung up as a result, and the sector will be scrambling to ensure it meets these new regulations.

Taken together, this comprehensive suite of policy and regulation will combine to usher in a new era placing construction emissions on an irrevocable downward trajectory across Europe. The property sector in the UK is ready and willing to meet this challenge, but leadership from central Government is lacking, despite it being critical to progress.

This recipe of measures could be implemented in the UK, just as they could be implemented anywhere. More than half of the world’s population goes to the polls this year, as 4.2 billion people will vote across 65 countries. Elected officials are much more likely to act if the concerns of their electorate, and of businesses, are heard loud and clear. Wherever you are in the world, the time is now to call for much needed action.