The UK's Net Zero Policy and Your Property

"You will own nothing and be happy", Ida Auken, World Economic Forum, 2016

The UK's net zero policy aims to reduce the country's CO2 emissions to net zero by 2050.

What the net zero measures mean is that the UK government is committed to countering harmful emissions by the removal of an equivalent amount from the atmosphere.

The net zero goal is planned to be achieved in line with the UK's commitment to international agreements like the UN's Paris Agreement for combating climate change /global warming or boiling, by the introduction of a range of measures for the improvement of the UK's energy efficiency in particular as this relates to buildings which are thought to account for more than 40% of the UK’s harmful emissions.

NET ZERO MEASURES

The UK's Net zero measures include:-

1. The Future Homes Standard - this regulation requires all new homes constructed from 2025 to have low-carbon heating systems and high levels of insulation.

2. The Energy Prices Bill - this bill serves to give financial support for businesses and homeowners to change to low-carbon heating systems (e.g., biomass boilers or hydrogen).

3. The Green Homes Grant (now closed) - as a UK government initiative, was planned to give credits of up to £5,000 for homeowners and landlords for the installation of energy-saving measures (e.g., insulation, double glazing or solar panels).

4. Energy Bill (under consideration)- among other things, this bill is proposed to punish and criminalize non-compliance with net zero regulation.

NET ZERO COSTS FOR RESIDENTS AND BUSINESSES

As there are high up-front costs for building or retrofitting homes and commercial buildings, to be compliant with the new standards, homeowners and commercial property owners are facing large bills (some prohibitive) to achieve compliance.

For commercial buildings, like office blocks, compliance could easily run into the millions which would have to be passed on to tenants who are already struggling in the current harsh economic times.

It is fairly clear therefore that the effect of the compliance costs could force residents and commercial property owners to default and face their properties being declared uninhabitable.

PUNISHMENT FOR NET-ZERO NON-COMPLIANCE

Under the Energy Savings Opportunity Scheme (ESOS) (a mandatory regulation), large businesses are required to do energy audits and work out cost-effective energy saving schemes. The Environment Agency is the responsible regulator and is able to issue fines for non-compliance.

The Climate Change Agreements (CCA) (voluntary agreements between businesses and the Environmental Agency) permit some businesses to get a discount on the Climate Change Levy (an energy consumption tax) for agreeing to reduce their energy and energy use and CO2 emissions. The Environment Agency can fine for failure to meet the agreed targets under this scheme.

THE UK'S NEW ENERGY BILL AND EFFECT OF NON-COMPLIANCE

The government has said that all new homes and buildings in England will have to produce a lot less CO2 under new rules that came into effect in June 2022 which provide that CO2 emissions from new homes must be approximately 30% lower than now and CO2 emissions from buildings, such as offices and shops, must be reduced by 27%.

The Bill proposes a wide range inspections and sanctions for non-compliance whereby homeowners and commercial property owners could be punished by one year's imprisonment or fines of up to £15,000. The Bill also creates criminal offences for providing false information or obstructing an energy enforcement authority.