UK government says energy certificates need ‘fundamental reform’ in latest green shift

2023-07-25 17:06:18

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Rishi Sunak’s government is planning to loosen and delay energy efficiency rules for landlords to relieve pressure on the housing market as it prepares to soften green policies ahead of the next election.

A Whitehall official told the Financial Times that the system of energy performance certificates — which measure buildings’ energy efficiency — needed “fundamental reform”.

They added that the government supported delaying the current 2028 deadline to set mandatory efficiency standards for landlords.

The official described the certificate system as “designed as an informational tool to meet the requirement of EU membership” and therefore ripe for reform.

The proposal to alter the regime is likely to win support on the Tory backbenches from both Brexiters keen on cutting EU-derived red tape and net zero sceptics, who are pushing for environmental initiatives that impose costs on struggling Britons to be scaled back.

At the start of the week Sunak indicated he was poised to soften the government’s green policies, saying he did not wish to “hassle” voters or “add to” household bills at a time of high inflation by imposing new costs linked to the environmental agenda.

His intervention followed the Tories’ surprise victory last week in the Uxbridge by-election, which all sides put down to the party’s opposition to a Labour-led flagship clean air initiative that imposes a £12.50 daily charge on high-polluting vehicles.

On Tuesday, Michael Gove, the levelling-up secretary, announced that the government plans to offer landlords “a greater degree of breathing space” on energy requirements.

He told the BBC that ministers were “moving away from the strict deadline that we have at the moment”, which mandates that all private rental accommodation must achieve a minimum “C” grade in its energy performance certificate, whose ratings range from A to G, by 2028.

Gove acknowledged that one of the key methods for improving energy efficiency — installing a heat pump in place of a gas boiler — “does impose costs” at present.

While the EPC system, introduced in 2007 in the wake of an EU directive, has been credited in some quarters with driving up energy performance, critics argue the certificates do not present an accurate assessment of a property’s energy efficiency.

Concerns have also been raised about the cost to landlords of retrofitting their properties to meet the current energy efficiency target and how this could affect the supply of private rental homes.

“We remain committed to our environmental objectives but we cannot overburden landlords facing cost of living pressures,” said the official. Ministers are expected to set out more details after the summer.

UK ministers also announced on Tuesday that they have delayed a new £1.7bn a year recycling scheme until after the next general election following warnings from manufacturers that it would increase already high food and drink prices.

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The Department for Environment, Food and Rural Affairs said that the extended producer responsibility for the packaging scheme would be deferred “for one year” to 2025.

Originally due to take effect in 2024, the EPR would make companies responsible for the costs of collection, sorting, recycling and disposal of packaging waste.

The delay to the EPR — which the FT last week reported was imminent — marks the latest government environmental policy to be kicked into the long grass. Others include a long-awaited biomass strategy, a relaxation of the planning system for onshore wind farms and the introduction of a deposit return scheme for bottles.

Environmental groups had expressed concern at the prospect of a delay, which retailers, manufacturers and food producers had urged. They said the scheme risked increasing household bills amid the cost of living crisis, and welcomed confirmation of the postponement.

Karen Betts, chief executive of the Food and Drink Federation, called the move a “bold decision to go back to the drawing board”.

But some companies in the packaging and waste management sectors criticised the move, with Adam Read, chief external affairs and sustainability officer at Suez, warning that the UK’s indecision was creating “real challenges”.

“The current EPR framework provides us with a great opportunity for our industry to invest in new services and infrastructure. However, constant delays by the government are preventing us from taking the next step,” said Read.

Lucas van der Schalk, chief executive of plastics group Corplex, said the gap between the EU and UK’s approach to recycling was constantly widening and that governments in EU countries had been able to “normalise a culture of reuse through effective deposit return schemes”.

“It is beyond worrying that the Westminster government is falling so far behind other countries — with the public, businesses and the environment bearing the burden,” he said.

The environment department said work was “ongoing to deliver” the EPR, adding: “We’re continuing to engage closely with manufacturers, retailers, and packaging companies on its design and timelines. Full details will be set out in due course.”

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