Following the enactment of the Climate Action Bill this summer, the Government is expected to publish the next iteration of the Climate Action Plan later this year.
Meeting the legally-binding 2030 decarbonisation targets depends to a large extent upon success in four key areas: reduction in agricultural emissions, increasing renewables’ share of electricity, widespread uptake of electric vehicles and decarbonisation of building heat.
The most important measures to decarbonise building heat are deployments of heat pumps and upgrades to building fabric to improve energy performance.
The Housing for All plan recognises the interrelationship between increasing national housing stock and improving the overall energy efficiency of the total stock. All of the houses set to be built under the Housing For All plan are to achieve a nearly zero energy building standard – meaning they will be much cheaper to run and will impact to a lesser degree on the environment.
There is also a reaffirmation of the Climate Action Plan target to retrofit 500k existing buildings by 2030, focussing initially on local authority, social and Approved Housing Body homes.
There is also reference to a planned new regulation to set a minimum standard for rental property, as well as a commitment to develop a new Local Authority Energy Efficiency Retrofit loan.
High level targets for energy efficiency upgrades in the plan are broadly in line with those described in the Climate Action Plan – albeit the increase in the proposed number of NZEB new homes will also require the number of heat pumps to increase from 600k by 2030 (which is already considered challenging) to 700k by 2030.
Setting a minimum standard for rental properties is a positive step for homes in this sector; landlords have been slow to invest as the benefits of lower heating costs accrue to their tenants. Implementation will need to be carefully handled to ensure that landlords are not incentivised to reduce the available stock due to costs of upgrade being too high. Lack of a suitable financing mechanism has long been seen as a barrier to the uptake of energy efficiency measures by homeowners. Having an effective scheme (as contemplated in this plan) will be key to delivery of 2030 retrofit targets.
Finally, the programme will require an increase to the existing workforce. The planned retrofit programme of 500k homes by 2030 was already projected to require 30,000 additional workers. It is positive therefore that the Housing for All plan also considers measures to address skills shortages and expand the labour force.
The pace of change is challenging leaders like never before. To find out more about how KPMG perspectives and fresh thinking can help you focus on what’s next for your business or organisation, please get in touch with Tomas Murray of our Sustainable Futures team. We’d be delighted to hear from you.