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Carbon Tax

MPs call for embodied carbon regulation

26 May 2022 Written By Will Arnold

Environmental Audit Committee publishes its ‘Building to net zero: costing carbon in construction’ report – May 2022.

The Part Z Authors welcome the release today (26 May) of the UK Parliament’s Environmental Audit Select Committee report, ‘Building to net zero: costing carbon in construction’. In summary, the report finds that current policy inadequately addresses the need to reduce embodied carbon, develop low-carbon materials, or prioritise reuse and retrofit.

The report states that “Other countries and some UK local authorities are already requiring whole life carbon assessments to be undertaken. This leaves the UK slipping behind comparator countries in Europe in monitoring and controlling the embodied carbon in construction. If the UK continues to drag its feet on embodied carbon, it will not meet net zero or its carbon budgets.”

The report makes several recommendations to resolve these issues. In particular, it states that:“…the single most significant policy the Government could introduce is a mandatory requirement to undertake whole-life carbon assessments for buildings. This requirement should be set within building regulations and the planning system. Following introduction of whole-life carbon assessments, the Government should develop progressively ratcheting carbon targets for buildings, to match the pathway to net zero.”

Whilst many in the built environment are already reporting whole-life carbon on every building that they design, the consistent industry feedback we receive is that without regulation (as proposed by the Environmental Audit Committee), the pace of change will never be sufficient to match the UK’s decarbonisation trajectory.

The industry-proposed Part Z amendment to the Building Regulations outlines a method by which the Government could implement the policy suggested by the committee, first introducing whole-life carbon requirements and then later introducing ratcheting embodied carbon targets. Specifically, we propose that the Building Regulations are amended as follows:

  • By 2023, it would be a mandatory requirement to undertake whole-life carbon assessments for all non-residential buildings;
  • By 2025, this would be expanded to include residential buildings;
  • And by 2027, embodied carbon limits would be introduced, based on the real-world ‘average’ data collected during the previous four years, before being ratcheted down in future years.

We believe that this timeline is consistent with international precedent, and balances ambition with achievability within the UK construction industry. To date, we have received statements of support for the regulation of embodied carbon from 160 firms working in the built environment, a number that continues to grow. The Part Z authors remain available to advise on embodied carbon regulation, and would welcome engagement with the Government to do so.

Carbon Pricing is coming. Here’s how CLT will out-compete its carbon emitting competitors on cost.

If you have read the UK government’s Industrial Decarbonisation Strategy you will have noticed that the government intends to use the market to “determine the most cost-effective pathways to de-carbonisation”

Therefore, the first action in their plan is to “Use carbon pricing as a tool to send a clear market signal”. What this means in simple terms is that products that emit carbon will be taxed. We expect CLT which sequesters carbon not to be taxed.

In simple terms, steel, cement, concrete and bricks are likely to be subject to a carbon pricing tax, while CLT will not. Once that happens, CLT can be expected to have a significant market advantage over those other materials.

We can’t say when this will happen, or how high the tax will be, but what we can say is that it seems certain that the tax will be imposed and given the speed of the push to decarbonise, this is likely to happen sooner rather than later. Maybe even in the timescale needed for planning and building a new project.

Our message is this; think about carbon pricing when starting a new project. Carbon taxes could add significantly to your build costs. We recommend that you avoid the taxes and the cost uncertainty by planning and building your project in CLT.