CO2 schemes and property

TOBY KRAMERS, head of commercial property at Ashton Graham, explains how measures to cut CO2 emissions could provide opportunities

BRITAIN has committed itself to reducing carbon emissions – nationally under the Climate Change Act 2008, through various European Union initiatives and by signing up to the Kyoto Protocol.

There are several ways in which the Government proposes to meet these targets, which will have a direct bearing on property owners and occupiers.

Firstly, Financial incentives are being provided for the generation of electricity on a small scale from renewable sources. These “feed-in tariffs” (FITs) were introduced on April 1, 2010.

This scheme applies to installations with a generating capacity of 5megawatts or less and guarantees a payment for both electricity used on site and any exported to the National Grid. FITs are available to anyone, including businesses, landlords, local authorities and households.

The Government is also seeking to reduce emissions of carbon dioxide (CO2) by ensuring that buildings are more energy efficient. Buildings are responsible for about 50% of the UK’s total CO2 emissions, with private homes responsible for about 27%.

Thus, changes are on the way for practitioners. Most practitioners will be aware of Energy Performance Certificates, which are required pursuant to the European Energy Performance of Buildings Directive 2002. However, the Energy Performance of Buildings Directive 2010 repeals the 2002 legislation from February 2012 and, amongst other things, introduces the concept of the “Nearly Zero-Energy Building” and requires member states to devise a method of calculating energy performance which is broadly consistent across the EU.

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Moreover, the Government has announced that all new homes should be zero carbon by 2016 and that all new non-domestic buildings should be zero carbon by 2019.

In addition, there has been much recent talk about “Green Leases”, involving a series of requirements to make a lease more environmentally friendly. While Green Leases might involve landlords and tenants in some expenditure, they could be attractive for both parties. They might, for example, result in saving energy costs and promote corporate social responsibility policies.

Evidently, much will depend on the age and nature of the building to which the Green Lease will be applied, but it is clear that a growing number of institutional landowners are now taking these requirements seriously.

Clearly, environmental considerations will have a growing impact on property ownership and occupation. These preoccupations will inevitably involve some inconvenience but out of this could arise some real opportunities.

This article is for general information purposes only and does not constitute legal or other professional advice. You should not act or rely upon this information.