Web special report: Energy review implications

The government’s energy review offered the prospect of further regulations on the UK’s building industry as the government sought to promote the development of a carbon neutral society.

The review, out last week, proposed to issue a consultation later in the year on extending the European Union carbon emissions trading scheme to non-intensive energy users in the UK. This could have implications for the building industry, as large organisations such as local authorities and supermarkets not covered under the energy performance certificates would be obliged to participate.

Organisations with an annual energy consumption of more than 3,000 megawatt hours a year would be targeted under the scheme, to be known as the Energy Performance Commitment. The emissions trading scheme (ETS), currently active at European Union level since 2005, allows large industrial plants to buy and sell permits to release carbon dioxide into the atmosphere. It enables companies exceeding individual carbon dioxide emissions targets to buy allowances from 'greener' ones on the carbon market. Equally, those companies emitting less than their allocated target, can sell their permits. The overall effect is of one organisation paying for another’s investment in emissions reduction.

Simon Storer, external affairs director, the Construction Products Association, said: “If the ETS was extended, it might affect our members. Although it’s difficult to say what the impact would be, if regulations were more stringent in the UK than elsewhere in Europe, it would have a negative effect.”

James Wilde, head of strategy at the Carbon Trust, said: “The current Energy Performance of Buildings directive looks at the performance of a particular building. The Energy Performance Commitment would focus on company strategy for dealing with emissions.”

Wilde said the scheme, initially proposed by the Carbon Trust last December, would not necessarily increase costs. “It’s about a flexible, business friendly mechanism to get companies to look at energy in a strategic way.”

The review was criticised by the Royal Institution of Chartered Surveyors who called it a “failed opportunity” to challenge the wider fundamental issues about sustainability. Chief executive Louis Armstrong said: “Energy policy needs radical surgery not first aid.”

The review reiterated the government’s commitment to change the way it procures its own buildings, goods and services to move towards sustainability in government-owned buildings. The government also promised to tighten building regulations to improve the feasibility of using small-scale generation near large developments, known as microgeneration. It also said it would conduct a feasibility study into the Thames Gateway becoming a low carbon development area within a decade, and zero carbon thereafter.