Zero carbon aspiration becomes local policy reality

The goal of Zero Carbon development has been part of the property industry landscape for so long that it’s hard to imagine what the real commercial implications will be. That is until very recently, because the London Borough of Islington now requires zero carbon development for their Borough. So what can the rest of us learn from this seven years ahead of zero carbon becoming national policy?

You could be forgiven for not being up to speed with zero carbon policy progress, because the government has tended to favour short-term economic growth at the expense of longer-term environmental targets, but that is now starting to change.

Current GLA planning policy

The current planning policy in London states that, from 1st October 2013, the GLA will expect development to achieve a 40% reduction from a 2010 Baseline. Within the GLA guidance they explicitly state that:

“London Plan Policy 5.2 sets out that where the required percentage improvements beyond Part L of the Building Regulations are not met on-site, any shortfall should be provided off-site or through a cash-in-lieu contribution to the relevant borough.”

So the GLA anticipate emissions offsetting is to be done to their stated policy targets for difficult sites/buildings for residual emissions above the 40% reduction.

London Borough of Islington local policy

Islington have taken the lead and made zero carbon local policy a reality seven years ahead of the national policy deadline:

“…offset all remaining CO2 emissions associated with the building through a financial contribution towards measures which reduce CO2 emissions from the existing building stock. This contribution would be made on the basis of an established price per tonne of CO2 which would be based on the cost of reducing emissions from existing buildings, for example through retrofitting of energy efficiency measures.”

The offset of residual emissions is defined within proposed new Building Regulations as an ‘Allowable Solution’ to achieve zero carbon development. So Islington are requiring zero carbon development for their Borough.

A key upside of this is that developers will be able to see the positive impact of zero carbon to their portfolio (where all buildings are expected to be nationally in 2019) while a key issue is that Islington offer no alternative means to provide the emissions savings through, for example, efficiency measures adopted across a nationwide property portfolio.

The financial contribution for a typical scheme (for example, 90 dwellings, a smaller format supermarket or a 75 bed hotel) would have a baseline emissions target of around 100 tonnes CO2/annum. The GLA policy compliant target therefore is 60 tonnes CO2/annum. Anticipating that a scheme can meet the policy target through passive design, efficient equipment and/or low or zero carbon technologies, the application of Islington’s policy would require the contribution of £55,200 for the residual development emissions (based on Islington’s £920/tonne CO2 abatement cost).

The additional cost will obviously further challenge development margins and raises two important questions: Why is there no alternative scheme to demonstrate emissions savings made elsewhere? And if the emissions offset by Islington Council, how are these linked back to development within the Borough?

If you would like to know more about the commercial implications of zero carbon policy in relation to your projects, email Iain.Fraser@greengage-env.com.