UK business urges government not to abandon zero carbon homes target as pressure on energy supply grows

More than 200 UK businesses have strongly urged the Government not to abandon the zero carbon homes policy.

Image of roadsign with CO2 reduction as downhill graphic
Carbon emissions targets hit by zero carbon homes U-turn

They, and other leading organisations have sent an open letter to the Chancellor, George Osborne warning that his move last week has “undermined industry confidence in government”.

Their criticism comes at the same time as the National Grid has underlined the precarious state of energy production and supply in the UK, which the zero carbon homes policy would have gone some way to offsetting.

The decision to ditch the policy, which had set a target for all new homes to be zero carbon by 2016, was announced in the Chancellor’s productivity plan, Fixing the foundations earlier this month, reasoning that the targets made housebuilding too expensive. The plan also abandoned the goal of making all new non-residential buildings such as offices, schools and hospitals zero carbon from 2019.

Under the old rules that had broad support, developers would have complied with more robust energy efficiency standards and installed clean energy technologies or funded local clean energy installations.

Curtail investment

The opposition group, which includes major housebuilders, large property companies, manufacturers, energy firms and retailers along with the Green Building Council and the Renewable Energy Association, says the move will “curtail investment in British innovation and manufacturing”.

To us, the Government’s decision is extremely short-sighted and also now appears to be built on shaky foundations, with reports in the past week showing how zero carbon homes can be built cheaply and quickly, within the national budget parameters.

As the National Grid report shows, the production and supply of energy is under continued pressure and there needs to be concerted effort to reduce demand. As we’ve argued consistently, a comprehensive and coherent national policy should be introduced that helps businesses and households to cut energy and water consumption in a sustainable way.

This includes support for adoption of solutions like LED lighting and lighting controls, HVAC controls, smart pumps, and effective water management, all of which have a rapid payback and ensure savings year after year.

Higher energy bills

The open letter uses the most forceful language to attack the Government’s decision.

It says:

“There was a broad consensus in support of the zero carbon policy which was designed to give industry the confidence it needs to invest and innovate in order to drive higher energy efficiency standards and low carbon energy solutions.
“The weakening of standards will mean our future homes, offices, schools and factories will be more costly to run, locking future residents and building users into higher energy bills. It also runs counter to advice from the Committee on Climate Change, impeding our ability to meet our statutory carbon targets cost-effectively at a time when we should be showing international leadership on this issue.

“Abandoning the zero carbon policy will have regressive impacts and be harmful to British industry.”


The strength of feeling that the policy change has generated is clear in the strident comments from Julie Hirigoyen, chief executive of the UK Green Building Council, which coordinated the open letter response.

She says:

“The speed and the stealth with which this administration has destroyed some of the long-term policies supporting the renewable and low carbon industries has been breath-taking. We have witnessed an unparalleled wave of support from our members and the wider industry who are deeply concerned about how the Government’s sudden, regressive and arbitrary decision to scrap the long established zero carbon policy will impact their business and investment. Abandoning the zero carbon policy will have regressive impacts and be harmful to British industry.”

National Grid pressures

Further indications of the urgent need to strengthen energy efficiency strategies across the UK are given in the National Grid report which signalled that power demand and supply margin this winter will be the tightest in a decade.

While contingency plans and forward energy purchase have reduced the strain, there are still questions about the structural strength of UK energy generation, as plants are decommissioned under EU carbon reduction regulations and delays continue with new plant build.

The National Grid also advises in a further strategic report that the UK is not likely to meet carbon reduction targets for 2020. In 2015 UK Future Energy Scenarios (FES), the National Grid sets out four “credible futures for how Great Britain’s energy landscape might evolve through to 2035 and 2050”.

Only one of the four scenarios, Gone Green, would provide conditions for meeting targets. The other three – Consumer Power, No Progression and Slow Progression practically ensure that targets are missed.

Energy efficiency is a long-term play but with many quick rewards. The Government needs to wake up to the need for active, positive and effective policies that support and promote the adoption of all forms of energy-saving solutions.



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