PAST

Climate Change Act 2008

The Act commits the UK government to ensure that greenhouse gas emission reduction targets of at least 34% by 2010 80% by 2050 (of the 1990 baseline). 

Energy Performance of Buildings Directive 2010

The Directive requires the UK to impose energy performance requirements in respect of commercial and residential buildings including ensuring that all new buildings are “nearly zero-energy buildings” by 31 December 2020. New buildings occupied and owned by public authorities comply with the same criteria from 31 December 2018.

Energy Act 2011

The Act introduced the Green Deal initiative which enables occupiers of residential and commercial premises and private sector landlords to receive finance for energy efficiency improvements. The Act also places a duty on the government to make regulations to ensure that a property achieves a minimum level of energy efficiency before it can be let in England and Wales.

Energy Efficiency Directive 2012

The Directive requires the UK to introduce a framework of measures to promote energy efficiency in order to cut its energy consumption by 20% by 2020.

CURRENT

CRC energy efficiency scheme

A mandatory UK scheme aimed at cutting CO2 emissions in large non-energy intensive organisations which consume over 6,000 megawatt-hours of electricity through settled halfhourly meters during each qualifying year. The scheme operates by reference to phases, which comprise of “compliance years”. During each compliance year, participants must measure and report the amount of CO2 emitted, and purchase sufficient “allowances” to cover qualifying emissions.

Enhanced Capital Allowances

Enhanced Capital Allowances (ECAs) allow businesses to write off the entire cost of their capital investment on environmentally beneficial or energy saving plant and machinery against the taxable profits in the period in which the equipment was bought.

Energy Savings Opportunity Scheme Regulations 2014

Requires “large undertakings” to measure energy consumption from assets and activities (including industrial processes and transport), to undertake ESOS audits and to notify the Environment Agency of compliance by 5 December 2015, and then every four years thereafter. This will include large public and limited companies, partnership, trusts, not-forprofit bodies.

Heat Network (Metering and Billing) Regulations 2014

Imposed new metering and billing obligations on “heat suppliers” (i.e. landlords, developers or managing agents) of multi-occupancy buildings who supply and charge for heat, cooling and hot water through a district heating network or communal heating system. Heat suppliers must notify the National Measurement and Regulation Office (NMRO) of detailed information on heat networks by 31 December 2015, and then every four years thereafter. 

Energy Performance of Buildings (England and Wales) (Amendment) Regulations 2015

The regulations came into force on 6 April 2015 and confirm that a “relevant person” (i.e. a seller, potential landlord or agent) must ensure that the energy performance indicator of a building is included in any advertisement of the building for sale or rent. Energy Assessors must also include recommendations for cost effective improvements in their inspections of air conditioning units.

FUTURE

1 January 2016

All new homes built by large housing developers will be required to meet “zero carbon” standards

Current government policy is that all homes must have zero net emissions of carbon dioxide from all energy use over the course of a year (equivalent to level 6 in the Code for Sustainable Homes). If zero net emissions cannot be achieved through energy saving measures, then in certain circumstances, the remaining proportion of their emissions can be offset under a scheme known as “Allowable Solutions” by supporting off-site carbon abatement projects.

1 April 2016

Tenants living in homes with an EPC rating of “F” and “G” will be entitled to ask landlords to make specific energy efficiency measures.

Any relevant improvement works carried out under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 are to be funded through financial arrangements such as the Green Deal, or wholly or partly by the tenants themselves.

31 December 2016

Heat suppliers must provide separate metering for each final customer of new existing multi-let properties with district or communal heating networks under the Heat Network (Metering and Billing) Regulations 2014.

1 April 2018

Landlords will be unable to grant or renew tenancies of commercial and residential properties which fall below the EPC rating of “E”

Under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, the minimum energy efficiency standard will apply to all private properties which are required to provide Energy Performance Certificates, unless specific exemptions apply. Tenancies of agricultural dwellings will fall within the scope of residential properties.

1 April 2020

Landlords will be unable to let residential properties which fall below the EPC rating of “E” under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015.

1 April 2023

Landlords will be unable to let commercial properties which fall below the EPC rating of “E” under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015.

This timeline captures only a sample of legal developments that are influencing clients across the real estate sector.