Dealing with embodied carbon

In the current political turmoil, it is easy to have missed the significant response of the government on 30 September to the Environmental Audit Committee’s May 2022 report on improving the sustainability of the built environment.  That report considered the unregulated area of embodied carbon (carbon emissions associated with the materials, construction, maintenance, repair, demolition and disposal of a building”).  The increasing importance of this issue was underlined by the UK Green Building Council’s Net Zero Whole Life Carbon Roadmap. It calculated that embodied carbon is responsible for 20% of the emissions from the built environment but would rise to 50% by 2035 (given the increasing regulation of operational energy emissions and the decarbonisation of the grid).  The committee’s findings The committee found that the UK construction industry is prepared to carry out whole-life carbon assessments. Some local planning authorities already require such assessments. But it also highlighted that the UK was slipping behind comparator countries in Europe, resulting in developers choosing European materials over locally sourced UK products.  The main recommendation was the introduction from December 2023 of mandatory whole-life carbon assessments for new developments of more than 1,000 sq m (10,764 sq ft) gross internal area, or which would create more than 10 dwellings, with this requirement being reflected in national planning policy and established in building regulations. Following the introduction of mandatory assessments, progressively ratcheted up carbon targets for buildings should be introduced (based on the UK carbon budgets for net zero by 2050) and reported on annually.  The committee’s recommendations echo calls from across the industry for regulation of embodied carbon. It is a central plank of the UKGBC’s roadmap. The Part Z initiative proposes a new Part Z of the Building Regulations to regulate embodied carbon. In its June 2022 progress report, the Climate Change Committee recommended mandatory whole-life carbon assessments at the planning stage from 2025, followed by the setting of minimum carbon standards.  Government response The government response includes the acknowledgment that “we must intensify our efforts and eliminate virtually all emissions from the built environment if we are to meet our legally binding target of net zero admissions by 2050”.  It makes the following main points:  Whole-life carbon assessments are likely to play a significant role in reducing embodied carbon and the government intends to consult in 2023 on interventions to “mainstream the measurement and reduction of embodied carbon in the built environment”, which may include ratcheted carbon targets. It will review the National Planning Policy Framework to ensure it contributes to climate change mitigation “as fully as possible”, which will include consideration of incentives for retrofits and the role of circular economy statements. In response to the committee’s recommendation for a national methodology for whole-life carbon assessment, which follows the 2017 RICS professional statement (including the proposed update scheduled to be ready in 2023), it will consider possible endorsement of specific methodologies. In response to the committee’s recommendations for wider requirements for environmental product declarations for building materials and products and for a national database of these, it commits to a consultation by the end of 2022 on product standards and a possible national EPD database based on the evidence received in response to an earlier call for evidence. It will publish a policy roadmap for the safe use of timber and wood products in construction by the end of 2023. It will not consider equalisation of VAT treatment for new-build and retrofit on grounds of the cost.  The UK Net Zero Strategy, which the government is due to review by March 2023, includes an intention to improve reporting of the embodied carbon in buildings and explore a maximum level in new buildings. The government’s response to the committee’s report makes it more likely that we will see regulation of embodied carbon via mandatory whole-life carbon assessments followed by progressively tighter limits on embodied carbon in new buildings.  The way forward Some developers with net zero strategies already seek to tackle embodied carbon, whether by setting targets for maximum levels or operating internal carbon pricing. Those making planning applications in London are required to undertake whole-life carbon assessments and other planning authorities increasingly require them. A decision on the City of London’s whole-life carbon optioneering is due in spring 2023.  However, questions remain over how differing planning priorities should be dealt with, how developments remain viable in an increasingly complex and costly environment and whether whole-life carbon assessments could start to outweigh other planning considerations where demolition and redevelopment is proposed. Some clarification may come from the inspector’s decision concerning the former Marks & Spencer flagship store on Oxford Street, following the conclusion of the public inquiry, although we expect some uncertainty will remain.  Away from planning, reducing embodied carbon should be reflected in construction and procurement contracts. Examples of drafting to assist this are appearing, not least in the Chancery Lane Project’s construction drafting and the recent NEC4 X29 climate drafting.  With the impacts of climate change already apparent, tacking embodied carbon is a priority. As with all change, there will no doubt be some pain while the industry adjusts. But, if done well, with appropriate regulatory support, it could lead to a virtuous circle of lower carbon, lower costs through resource efficiency and an improved bottom line.  Siobhan Cross and Nicholle Kingsley are partners at Pinsent Masons LLP Image © Alexander Pohl/Shutterstock