Carbon Emissions (Buildings) Bill

Jerome Mayhew Excerpts

Friday 25th November 2022 Commons Chamber

[Jerome Mayhew]

I beg to move, That the Bill be now read a Second time.

This Bill creates a mechanism to boost United Kingdom construction while driving down our greenhouse gas emissions, which is key to delivering UK growth in a manner aligned with the country’s net zero targets. The proposal has come from the industry, which supports the Bill wholeheartedly. The industry is working to reduce these carbon emissions voluntarily, but it needs the Government to take the lead and accelerate the work that it has started.

The Bill tackles an area of greenhouse gases called embodied carbon. Every year, our buildings and construction are responsible for the emission of more than 150 million tonnes of greenhouse gases, fully a quarter of our country’s total carbon footprint. Two thirds of those emissions are due to the lighting of buildings, their power and their water—the heating and cooling—and bear the tag “operational carbon”, and the Government have taken bold steps to reduce them as part of the net zero strategy. The building regulations, under part L, effectively address the reduction of operational carbon. As a direct consequence of the regulations and, importantly, the decarbonisation of the electricity supply, it is anticipated that by 2035 the emissions related to the services side—the operational carbon side—of buildings and construction will have fallen to an almost negligible level.

That is fantastic news, and the Government deserve our praise for gripping the issue and creating a plan, enforcing it through regulation and then implementing it with the very significant reductions in operational carbon that we are already seeing; but what about the other third of building emissions? Where do those remaining emissions come from, and what plan do we have to deal with them?

That other third comes from our use of construction materials: their production, transportation and installation on our construction sites; their maintenance, refurbishment and replacement during a building’s life; and ultimately their demolition and removal at the end of the building’s life. That is 50 million tonnes of carbon emissions each year, which are called embodied carbon. Let me put that amount into perspective: it is greater than the emissions of all the United Kingdom’s aviation and shipping industries combined.

Let us think about how much effort we put into the control and planned reduction of those emissions. We have the sustainable aviation fuels plan, we have jet zero, and we have plans for corridors for emission-free shipping based on ammonia and hydrogen. We take all those plans very seriously, but what are the Government doing, and what are we doing as a nation, to deal with embodied carbon from construction? With 50 million tonnes of embodied carbon emissions a year, we might expect that the Government would already have plans to direct a reduction in line with our legally binding net zero targets.

The truth is that embodied carbon remains completely unregulated, and it shows from the data. Operating carbon emissions are dropping rapidly because of part L and the decarbonisation of our electricity supply, but the data on embodied carbon shows no current trend towards any reduction at all. In 1995, there were 43 million tonnes of greenhouse gas-equivalent emissions; by 2018, emission levels, far from reducing, had crept up to 49 million tonnes and were approaching 50 million.

The Environmental Audit Committee, on which I sit, reported on the issue in May. Its report, which I commend to the House, concludes that

“the single most significant policy the Government could introduce is a mandatory requirement”

to assess embodied carbon in buildings. Not only do we not regulate the reduction of embodied carbon, but we currently have no idea how much a construction or design will emit, because we do not require business constructors to calculate that amount.

To be fair to the Government, their net zero strategy sets out an intention to

“support action in the construction sector by improving reporting on embodied carbon in buildings and infrastructure with a view to exploring a maximum level for new builds in the future.”

In a similar vein, the Government’s construction playbook calls for carbon assessments on all public projects. However, it provides no details as to how that should take place or what an appropriate carbon emissions level is. With every school, hospital and road we build, a different approach is therefore taken to calculating overall carbon. That is hopelessly inefficient for the industry, and it costs the taxpayer more.

As is so often the case, the real world is moving at a faster pace than the Government. Major design firms that employ tens of thousands of staff are making voluntary commitments to calculate the carbon emissions due to their designs. Construction industry bodies such as the Royal Institute of British Architects have set out voluntary embodied carbon emissions targets. The Royal Institution of Chartered Surveyors has defined a methodology for calculating embodied carbon, but its ambition is hampered by a lack of regulation.

Voluntary industry targets remain just that. Every project that businesses work on has different reporting requirements and different carbon targets, costing them time and money. Regulation is needed to speed up the processes by identifying an agreed methodology and spreading acceptable practice throughout the sector, not just among the market leaders but in the long tail that any sector has, to bring everyone up to a minimum level of best practice.

Today, nearly 200 of the country’s leading developers, clients, contractors, architects, engineers and institutions have written statements of support calling for the regulation of embodied carbon. The Royal Institute of British Architects calls on the Government

“to introduce regulations that stipulate consistent assessment and reporting of whole life carbon, including setting specific targets for embodied carbon.”

NatWest, one of the leading investors in the sector, highlights the role of regulation as

“one of the key mechanisms that drive sustainable behaviour and action amongst investors, tenants, developers and home owners.”

The UK’s largest active asset manager, abrdn—it is spelled rather strangely—believes that

“the requirements to report whole life carbon, and set informed limits on embodied carbon, would help the real estate sector to decarbonise.”

Barratt Developments, one of the big four providers of homes in the residential sector, says:

“We have been calculating the embodied carbon of our homes for over ten years now…We are also developing requirements for our supply chains to support this process”.

Similar sentiments come from corporate leaders such as Landsec, British Land, Lendlease, Willmott Dixon, Sir Robert McAlpine, Laing O’Rourke, Morgan Sindall and ISG—I could go on. Industry bodies, such as the Construction Industry Council, the Chartered Institute of Building, Timber Development UK, importantly, the Concrete Centre, and, equally importantly, the Steel Construction Institute, also support that approach. Industry already has the tools necessary to respond to the Bill; regulation would simply unlock the final door to enable existing mechanisms to run smoothly.

What are other countries in Europe doing? France, Sweden and the Netherlands already have embodied carbon regulation in force, and the Netherlands, the market leader, has had its in force since 2012. Finland, Denmark and Norway are in the process of introducing it, and the European Commission is considering proposals to roll it out across the whole of the EU. So, why are we not?

Despite the Government recognising that they need to act, and despite the industry agreeing and setting out a widely supported solution, the Government seem to be beset by hesitation. Their response to the Environmental Audit Committee stated that they intend to consult, and undertake “parallel stakeholder engagement”, some time in 2023, on what its approach to embodied carbon should be. That was to a report published in May 2022. When the cost of inaction is 50 million tonnes of carbon emissions per year, where is the dynamism of Government? Where is their sense of urgency?

My Bill would enable the Government to catch up on the issue, directly amending the building regulations. It will require the reporting of carbon on significant building work, both new projects and refurbishments, from 2023 in the large-building, non-domestic sector, and by 2025 for housing in developments of more than 10 dwellings. It will then move to introduce limits on the embodied carbon emitted through construction from 2027—something that can be ratcheted down over time, in line with our net zero targets.

That strategy, of “report first, limit later”, follows the precedents set elsewhere in Europe, and makes the transition towards zero-carbon construction easier while sending a clear signal that legislated limits are coming. Similarly, to assist small and medium-sized enterprises, the Bill introduces those requirements only for major projects—those greater than 1,000 square metres of useful internal area or responsible for the construction of 10 new dwellings.

A clear policy signal on the direction of travel is what the industry needs to accelerate its development and the large-scale use, and more efficient use, of lower-carbon products. Just as how the policy statement that vehicles will not be sold with an internal combustion engine post 2030 has transformed the car manufacturing market, the construction industry needs that kind of market signal to invest in lower-carbon alternatives and take the next step to the wider adoption of what are currently niche products. By sending a clear policy signal from Government to industry, we will enable the sector to grow ahead of time. We must signal the road map to the end of high-carbon construction in the United Kingdom to enable the building industry to take the needed steps towards zero-emission construction.

Is it really too soon to move, as the Government suggest? In their response to the EAC report, the Government identified three workstreams before they want to take a decision. First, they want to continue understanding the actions that industry is already taking and the impact. Secondly, they are watching the outcomes of the Greater London Authority’s planning policy requirement “with interest” and, thirdly, they are

“looking at international policy examples.”

I have already demonstrated that my Bill is the outcome of industry consensus and that it follows the “report first, limit later” approach adopted internationally. So the only additional consideration is an assessment of the use of the planning policy by the Greater London Authority in its London plan to require measurement of embodied carbon as part of the planning process, yet even here there is a consensus that regulation via the building regulations is the right approach.

During the Environmental Audit Committee evidence session, the principal strategic planner for the GLA’s London plan was asked in terms what role building regulations could play. Her answer was explicit. She said:

“We would agree…it is something that the Government should regulate. We think it should be part of building regulations”.

Even the GLA, whose planning policy approach the Government apparently see as a potential alternative to the use of building regulations, agrees that building regulations are the right way to go. There are of course very sound practical reasons for that. Detailed decisions on materials will not have been made at the date of a planning application, so only vague guestimates of carbon intensity and emissions could be used at that stage. It is at the point of construction that meaningful figures can be generated, which is where planning control comes in. In any event, we do not expect planning officers to assess the properties of, for example, rooftop insulation as part of a planning application. That kind of technical assessment is the job of building control and the same applies in respect of embodied carbon.

When the Government say that they want to consult on their approach on measurement and reduction of embodied carbon, we may be beginning to wonder who else is there that they are intending to consult. The sooner we start this process, the sooner we can reduce our emission of 50 million tonnes of carbon every year. My Bill will reduce the construction industry’s carbon footprint, while sending certainty to UK industry that investing in decarbonisation is economically sound. It will bring economic growth and it will save the taxpayer money by standardising the decarbonisation process. The Government have great ambition to decarbonise. We all support it, and they should be commended for their ambition and for the many actions they have already taken in this field. The construction industry has the appetite, tools and skills to match that ambition. We have here a tremendous opportunity to make a significant impact on the UK’s carbon emissions and ensure that the UK remains a global leader by regulating embodied carbon in construction. I commend this Bill to the House.

--- Later in debate ---

[Holly Mumby-Croft (Scunthorpe) (Con)]

It is a pleasure to follow my hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell). I wholeheartedly agree with his points about offshoring; he is absolutely spot on as always. My hon. Friend the Member for Darlington (Peter Gibson) has made three cracking speeches today and scored a hattrick of his own.

I thank my hon. Friend the Member for Broadland (Jerome Mayhew) for bringing forward the Bill; he knows that he has my full support, although I gently point out that we in Scunthorpe are not overly worried about the precedents set in Europe. It is right that we have a discussion about the wider impact of buildings on our carbon output, beyond their day-to-day energy consumption.

As the long title of the Bill highlights, a building does not just emit carbon when it is operational, but from the moment an architect is asked to design it to the day it is demolished. The Bill sets out two ways to advance our national mission to reduce emissions, and I want to ask some questions about the proposals in the hope that it will be helpful to my hon. Friend the Member for Broadland.

First, the Bill mandates the reporting of the whole-life carbon emissions of a building. Whole-life carbon assessments help us to put a numerical value on the impact of a development. It is also a statistic on which developers can compete with each other, hopefully driving down emissions across the sector. However, I am keen to understand how that requirement will fit in with existing criteria for buildings—something that hon. Members have raised this afternoon.

The national planning policy framework already sets out that new developments should help to reduce greenhouse gas emissions through their location, orientation and design, in line with the emissions obligations in the Climate Change Act 2008. Using those guidelines, local planning authorities then put forward a local plan, against which planning applications must be considered. Indeed, my excellent local council—probably the best council, in fact—North Lincolnshire Council, released its local plan this month, and it contained standards that encourage developers to reduce whole-life carbon emissions. The plan states that all developments should maximise the reuse or recycling of materials in new construction, and make the best possible use of existing building infrastructure. According to the plan, that should be done by minimising the use of non-renewable and unsustainable finite resources, during both construction and use. Hypothetically, if every council was as good as mine, and every planning proposal in the country was tested against standards like those, developers would already need to show that they are minimising carbon emissions through their building materials.

Mandatory reporting should only be introduced if there is a strong case for saying that local planning authorities do not put enough weight on whole-life emissions when considering applications. In short, it is important that we justify our introducing the Bill.

[Jerome Mayhew]

There are many ways to skin a cat; that is the nub of my hon. Friend’s speech. However, the logical time for a detailed assessment of the whole-life carbon of a building and its construction materials is when those materials have been finalised. That is not typically at the planning stage. Yes, there will be an outline of the building, but the detailed decisions on what materials will be used are not yet made. As a result, and as happens in the Greater London Authority—its planning policy takes a similar approach—guesstimates are made of the whole-life carbon impact. Later, when building control is involved, we can get accurate calculations.

[Holly Mumby-Croft]

My hon. Friend makes a really good point, but I think he would agree with me that the ethos behind what councils such as mine are doing is exactly in line with what he aims to achieve through the Bill. To reiterate, it is important that we justify clearly why this Bill is needed, because it will cost time and money, and it is an extra hoop that we will be asking businesses and individuals to jump through.

The Bill also rightly acknowledges that the Secretary of State would need to approve a national methodology for whole-life carbon assessments. Right now, public works projects and programmes are required to have a whole-life assessment as part of the tendering requirement, but contracting authorities are encouraged to create their own specific guidelines on how that is presented, or, as my hon. Friend the Member for Broadland mentioned, to use the guidelines released by the Greater London Authority.

If we are to ultimately pass that requirement on to private developments, the top-down direction on the appropriate methodology needs to be addressed. We need to ensure that we do a decent job of that. The industry is generally familiar with the Royal Institution of Chartered Surveyors whole-life carbon assessment, but the availability of other guidance risks creating inconsistency.

I know that the Government have plans to hold a consultation in 2023 on how best to mainstream the measurement of embodied carbon, and I would be keen to know whether my hon. Friend the Member for Broadland has explored the options available. He is an expert on this subject and could make a really valuable input to that. As he said, other countries in Europe have begun legislating for whole-life carbon assessments, and I hope that those will prove an inspiration, and will help us not to fall into any pitfalls that other countries have fallen into.

The Bill may lead to limits on embodied carbon, including carbon emitted in the acquisition, assembly, maintenance and end-of-life disposal of building materials. I know the Government are considering that, as stated in their response to the Environmental Audit Committee’s report on costing carbon in construction. If we created embodied carbon limits, we would have to consider a number of factors. First, the limits would need to be relative to not just the purpose of the building, which is obvious, but the size of the development.

However, if larger developments can reduce emissions through economies of scale but smaller ones cannot do that as easily, there may be perverse outcomes for the property market. This legislation would also favour larger developers who have the capacity to better absorb emissions reduction costs. It is important to be wary of how this could affect small and medium-sized enterprises in the industry, given that we aim to increase our housing supply.

I am curious about how the Bill would address the impact of location choice on emissions. For example, should a residential or commercial property receive relief from the embodied carbon limits if the choice is made to locate it on a public transport network—for example, near to a railway or bus station? Large employers may prevent hundreds of car journeys a day if they set up shop on an easily accessible site. To take that a step further, could we find ourselves using plans for a railway station, bus route or metro in our constituency as a lever during the planning process and the calculation of those emissions?

My hon. Friend the Member for Broadland will not be surprised to hear that I also have questions regarding the steel industry. Members understand that steel is a carbon-intensive product to make. The future of the steel industry will inevitably at some point be around decarbonisation, finding greener ways to make steel and mitigating the impact of production, but while that process takes place, the adoption of embodied carbon limits on development may affect demand for steel if they do not appropriately recognise steel’s value of recyclability.

Steel is one of our most sustainable materials due to its immense durability and the capacity to reuse it—it is almost endlessly recyclable and can be repurposed. Any definition of embodied carbon has to appropriately weight that value against the carbon emitted during the production, and has to consider the lifespan and quality of the materials that we are able to produce in this country. As my hon. Friend will know, we make the finest steel in the world.

[Jerome Mayhew]

I am grateful to my hon. Friend for giving way a second time. On the question of steel, she is absolutely right. If enacted, the Bill would be a great opportunity for British steel. As she will know, about 50% of all steel used for construction in this country is imported. Given the additional carbon emissions that result from the transportation of a very heavy and bulky product, British Steel and steel producers in her constituency—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Could the hon. Gentleman please face the microphones when he speaks?

[Jerome Mayhew]

British Steel and other steel producers, including the one in my hon. Friend’s constituency, already have plans in place to reduce the carbon intensity of their products before 2035 and 2055 by as much as 80% by reusing scrap metal instead of exporting it abroad for reuse. Does she agree that the Bill gives impetus to this developing new sector in the steel industry, rather than restraining it?

[Holly Mumby-Croft]

I agree that we need to be extremely careful about the transportation of materials—my hon. Friend is absolutely right—but therein lies a challenge. To work through the restrictions in the Bill, we would need a level of confidence when we imported materials, be they steel or anything else. We would need confidence about how much carbon has gone into the steel; trust in the people who made it; and to know how far it has come, where the fuel for the ship has come from and how the steel in the ship was built. He is right that there are opportunities for steel, but if he is seeking to persuade me solely on the terms that he mentioned, he has not quite managed to do so.

That brings me to my next point: we need to discuss whether we have that level of assurance. Inevitably, many of the products that go into the buildings of the future will come from abroad, and we need to understand that. As always, companies in this country will play by the rules, but my hon. Friend knows that that is not always the case across the world.

Concrete is another sector that could face problems, if sustainability advantages are not weighted properly. I have a fantastic firm in my constituency, Techrete, which I am very proud of. It has contributed to a number of buildings across the country and the world. There have been 600 projects in the past 37 years, and I will draw your attention to a small number that you may have seen, Mr Deputy Speaker, because they are all quite close to where we are. The projects include King’s Cross station, the Olympic village and The Broadway on Victoria Street—if you walk out of here and look to your right, Mr Deputy Speaker, before you get to M&S, you will see that building. They also include Victoria Square, the Heathrow Express tunnel—we probably made the steel for the rails in that tunnel as well, and if we did, it will be the finest steel in the world—Wembley Park and University College London Hospital. On the South Bank, on the other side of the river, there are some buildings that we made, and there is also the Tottenham Hotspur stadium, Westfield shopping centre, the Imperial War Museum, St Bartholomew's Hospital, the V&A and the lettering at Arsenal.

--- Later in debate ---

[Dehenna Davison]

I am grateful to my hon. Friend, who I know is incredibly passionate about construction, building and all things planning and will continue to help champion the agenda in the coming months and years.

I think many in industry would agree that, as hon. Members across the House have highlighted, one of the biggest challenges in tackling embodied carbon right now is a lack of data, because consideration of embodied carbon is relatively new compared with operational carbon for both industry and Government. Without enough information at product and building level, industry cannot make decisions about design and construction, and the Government cannot establish the right benchmarks or targets, either.

[Jerome Mayhew]

It is generous of the Minister to give way. Given that data is what the Government need, does she not agree that the format of the Bill, which is to report now—deliver data—and decide later, in 2027, serves the purpose of providing the data that the Government need so they can make an informed decision as part of the Bill?

[Dehenna Davison]

I am grateful to my hon. Friend for his contribution. I know that was the intent of the design of the Bill—we have discussed that before today. The important thing to note is that we will be consulting not just on how we reduce embodied carbon but on how specifically we go about gathering that data, because that data collection will be so important in ensuring that we can decarbonise embodied carbon. I hope he will appreciate that that is one of the reasons why we are keen to consult before we take any further action.

I want to quickly highlight some of the contributions made by hon. Members across the House. My hon. Friend the Member for Darlington (Peter Gibson) raised some fantastic points about broader decarbonisation and asked some questions about decarbonisation within existing housing stock. I know that we are pressed for time, so I will write to him with some further details on that.

My hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell) was absolutely right to highlight that the Government are on the side of those who want to decarbonise. For all the rhetoric, this Conservative Government’s action on decarbonisation has been exemplary, and some of the small examples highlighted by hon. Members during this short debate have really shown that. I note that he mentioned the ever-famous “Stop the Stink” campaign, about which he is so passionate, and it would be remiss of me not to mention his incredible campaigning on that.

Finally, my hon. Friend the Member for Scunthorpe (Holly Mumby-Croft) talked about the planning framework as being incredibly important on the decarbonisation agenda. She is absolutely right, and I congratulate her and North Lincolnshire Council on their brilliant progress on that. It would be remiss of me not to thank her for her stellar work in championing the British steel industry and, in particular, the steelworks in Scunthorpe in her own constituency, on which she has been and is an incredibly passionate campaigner.

I will conclude, in the hope that others may make a brief contribution, and in the hope that my short speech has explained some of the system’s complexity and why the Government cannot support the Bill today, even though we empathise with the sentiments and ambition underpinning it. We are concerned that passing such legislation now could bounce the industry into making changes for which it is not fully prepared. In the current context, at a time when the SMEs that depend on this industry are struggling and facing a hard time, the industry may not be able to afford these changes. We do not want to run the risk of negatively affecting the industry and the market in ways that we do not intend, which is why consulting seems like the most practical and sensible solution.

I reiterate my thanks to my hon. Friend the Member for Broadland for all his dedicated work in introducing this Bill. Again, I make it crystal clear that the Government’s opposition to the Bill is in no way a dismissal of the seriousness of the issue or of our commitment to tackling it. Officials in my Department are working with many of the supporters of this Bill to carry on the essential work of measuring and reducing embodied carbon in construction.

Together, I believe we can adopt the right approach that lets industry and markets properly prepare for change, while not letting up in our fight to tackle carbon emissions, to win the race to net zero and to build the cleaner, greener homes and buildings this country needs.