Government U-turn on green energy policy

The government has been accused of performing a U-turn over applying a key energy efficiency measure to commercial buildings, in a move that has sparked a furious backlash from the construction and property industry.

In March the government committed to roll out Display Energy Certificates (DEC), which are currently used to rate the actual energy performance of public buildings, to all commercial buildings by the end of October 2012.

This is a missed opportunity. DECs are critical for making buildings more sustainable

Liz Peace, British Property Federation

Building understands that chancellor George Osborne blocked plans to insert an amendment into the Energy Bill this week that would have made DECs mandatory in commercial buildings. It is understood Osborne does not want to increase business regulation. However, DECs are supported by both the CBI and the British Property Federation.

The move, expected as Building went to press, was described as a U-turn likely to cost the construction industry millions in lost work to upgrade commercial buildings. DECs are seen as a key driver of work to improve energy performance. Last year prime minister David Cameron pledged the coalition would be the “greenest government ever.”

Liz Peace, chief executive of the British Property Federation, said: “This is a massive missed opportunity. DECs are a critical tool for making buildings more sustainable. When you look at the issue of sustainability it always comes back to measuring and reporting - we all need to be speaking a common language to push the necessary changes.”

The promise to roll out DECs was contained in the Carbon Action Plan launched jointly by Cameron, deputy prime minister Nick Clegg and energy secretary Chris Huhne. A source close to the process said: “The chancellor is wary of anything that looks like regulation. There has been furious wrangling.”

Paul King, chief executive officer of the UK Green Building Council, said: “This is a very big own goal from government. Its much trumpeted ‘Carbon Plan’ sadly appears not to be worth the paper it’s written on.”

Commercial buildings account for 17% of carbon emissions but low-cost changes to the way a building is managed are estimated to save 5%-30% in energy output. The industry has campaigned for the roll-out of DECs, with 15 chief executives, including Dan Labbad from Lend Lease and John Frankiewicz from Willmott Dixon, signing a letter in support in May.

The Energy Bill was undergoing its third reading as Building went to press but no DEC amendment had been tabled.

Hywel Davies, technical director of the Chartered Institute of Building Services Engineers, said the move would cost the industry “at least” millions in lost work. “It’s bad news for the economy.”

A spokesperson for the energy department said: “We recognise that there are potential benefits in rolling out DECs to commercial properties, and we continue to explore the options, while developing the evidence base for achieving this without placing undue burdens on business.”