In this series, we take a look at the key legislative changes affecting the UK construction industry, brought about in light of the climate crisis. In this article, we look forward to the 2024 and 2025 changes that businesses in Scotland and England & Wales will want to start thinking about now.
As part of its commitment to reduce carbon emissions to net zero by 2050, the UK Government's "Future Homes Standard" foresees a ban on greenhouse gas emitting heating systems in new build residential properties from 2025.
Scotland also has its own "New Build Heat Standard", which will ban greenhouse gas emitting systems in both residential and commercial properties a year earlier – from 2024. This forms part of the Scottish Government’s wider target to have one million homes and 50,000 non-domestic properties install low-carbon heating systems by 2030.
But what do these landmark changes actually mean for the construction industry north and south of the border?
The position in Scotland - 2024
From this time next year, both domestic and non-domestic new buildings and conversions applying for a building warrant will be prohibited from using direct emissions heating systems - heating systems which produce greenhouse gas emissions when producing thermal energy.
This means that from April 2024 it will no longer be possible to construct buildings in Scotland with gas or oil boilers.
Instead, buildings will have to be built with what are known as “zero direct emissions heating” (“ZDEH”) technologies. In practical terms this translates to the following systems:
- Heat pumps
- Solar thermal and solar thermal storage systems
- Electric storage heaters
- Electric boilers
- Fuel cells
- Direct electric heaters (including electric panel heaters, electric fan heaters, thermal fluid-filled radiators, and electric radiant heaters).
This will clearly impact on all businesses involved in the design, specification, install or procurement of heating systems for new or converted buildings in Scotland.
The position in England & Wales – 2025
For those south of the border, similar changes are afoot. These changes will be introduced by the Future Homes Standard.
The Future Homes Standard is a set of proposed building regulations that aim to significantly reduce the energy consumption and carbon emissions of new homes. Specifically, the changes in 2025 aim to achieve a reduction in carbon emissions of 75-80% as compared with current building regulations.
As with in Scotland, this will be achieved through the installation of low-carbon heating systems. The UK Government lists such systems as including heat pumps and hydrogen boilers. Interestingly, the UK Government's position on hydrogen marks a potential distinction between the approach north and south of the border; citing a lack of data around the potential direct emissions of 100% hydrogen appliances, the Scottish Government is currently undecided on whether they will be permitted under the new Scottish regulations.
The Future Homes Standard changes are currently still in the consultation stage, with the final regulations still to be published. However, it is expected that these changes will come into effect at some point in 2025.
There are also plans to introduce similar regulations for non-domestic properties in England (the "Future Buildings Standard"), although these proposals appear to be at an earlier stage than the Future Homes Standard and it is not yet clear when they will be implemented.
What should businesses be doing now?
With these changes less than a year away in Scotland and less than two years away in England and Wales, businesses should start thinking about how they will adapt to them if they have not done so already.
Recent data shows that over 80% of new build properties were still served by mains gas-fired boilers as their main heating system, and only 10% were served by the kind of zero direct emissions heating systems that will soon become a legal requirement.
That means that there is likely to be a sharp increase in demand in the coming year for these systems. However, it is yet to be seen whether current supply chains are equipped to support the transition.
With that in mind, contractors and others responsible for procuring heating systems in new buildings will want to ensure that they plan ahead to ensure they can rely upon their supply chains to deliver the relevant heating elements on time to avoid the risk of any project delays.
Those tendering for projects due to commence next year in Scotland will also need to ensure that they account for the added expense of installing ZDEH technologies, which for the foreseeable future are likely to be more costly than installing tried and tested traditional boilers.
Finally, home builders may also want to consider how homes incorporating these new technologies are marketed. While the potential cost savings of ZDEH systems in the midst of the energy crisis may be attractive to some, many of us will need to be convinced of the benefits of these newer technologies in a market where gas central heating has traditionally been viewed as the gold standard.