01 December 2021

The recent COP26 has brought environmental issues into sharp focus again for all industries. There is no denying that the construction industry, by its very nature, can create a negative environmental impact in terms of the processes utilised, waste and the performance of the end product.

As has been well publicised, the Scottish Government has set an ambitious target of achieving net zero emissions by 2045. While significant legislation and regulations are already in place in respect of certain aspects of the construction process that will help achieve this target (for example, in respect of planning regulations, waste management requirements etc.), it is anticipated that further legislation and regulations will follow to both incentivise and compel those in the construction industry to work towards the achievement of net zero.

On 11 November 2021, the Scottish Government published the draft fourth National Planning Framework for consultation. This draft Framework includes proposals that planning applications will have to demonstrate how the project will help meet the net-zero emissions target before they will be approved. This is a clear indication that the Government is looking to enhance the existing powers both it and local government has to compel the construction industry to adopt green business practices and strategies.

At present, reducing greenhouse gases emissions from housing has been identified as one of the most important goals in achieving net zero. The Scottish Government has published a number of reports and strategies concentrating on this issue. The Heat in Buildings Strategy published in October 2021 has set a number of energy efficiency and heat decarbonisation targets, including:

• All homes should meet energy efficiency standards equivalent to, at least, an EPC band C standard by 2033; and
• A 68% reduction in emissions from heat in buildings by 2030 (relative to 2020 figures).

Further, in line with the housing strategy to expand the social housing portfolio, the Government has also focused on ensuring social housing leads by example and that new social housing is energy efficient. The Energy Efficient Standard for Social Housing 2 (EESSH2) has set an energy efficiency target of EPC Band B or above, to be obtained in all social housing by the end of 2032. Given this is only 10 years away, those working in the social housing construction sector should ensure all new schemes will meet this requirement.

The EESSH2 also provides that no social housing below EPC band D is to be re-let from December 2025. While this may be achievable for new build social housing stock (and many RSLs are already constructing to this standard or higher), it does mean that substantial works may be required in the next 3 years to existing housing stock to meet this December 2025 deadline. Accordingly, RSLs should be reviewing their existing portfolio now to identify units that are not EPC band D, so that the necessary works can be carried out over the next 3 years to ensure the housing stock meets the required performance levels.

It seems inevitable that those operating in the housing sector will find the Government’s focus on net zero having an increasing impact - whether by having to adopt new processes, materials and/or technologies, achieving higher “green” standards in constructed buildings, or simply by requiring those operating in the construction industry to demonstrate their green credentials. At this stage, it is important to ensure those operating in the housing sector keep up to date with the current requirements, while also monitoring and being ready to react to what will be expected of them in the future.

Fraser Hopkins, Partner: fho@bto.co.uk / 0141 221 8012