In simple terms, the Minimum Energy Efficiency Standards (MEES) do not apply in Scotland or Northern Ireland. But Scotland at least is not taking a back seat when it comes to energy efficiency in commercial buildings.
With around 230,000 non-domestic buildings in Scotland, the country has an ambitious goal that these achieve net zero by 2045, and an even more ambitious target of net zero for heating publicly owned buildings by 2038.
Scottish legislation sets more effective incentives
Scotland's approach is radically different to the one being taken south of the border. The key legislation comprises the Climate Change (Scotland) Act 2009, in particular section 63, and the Assessment of Energy Performance of Non-domestic Buildings (Scotland) Regulations 2016, which apply to buildings of more than 1,000m2 in size.
The aim of the 2009 Act was to reduce emissions 42% from a 1990 baseline by 2020, 75% by 2030 and 80% by 2050. The later target was subsequently revised in 2019 to net zero by 2045.
The key element of the regulations is the stated aim that all new buildings are to be 'nearly zero energy'. The regulations were further amended in June this year to prohibit the installation of direct-emission heating systems in new-build properties from 1 April 2024.
Compliant buildings are exempt from section 63, as are:
- temporary structures and those that meet Scotland's low energy demand rule such as agricultural buildings or workshops
- buildings in the Green Deal scheme
- prisons and young offenders institutions.
The 2016 Regulations effectively enact the requirements of section 63, requiring that energy performance certificates (EPCs) produced in Scotland after 2016 include a declaration of compliance with the regulations current thereafter.
Action plans prescribe or propose improvements
If the building does not comply with the relevant regulations, a further assessment is required.
This is typically referred to as a section 63 assessment, and in turn this creates a section 63 action plan that includes recommended improvements and requires works to be implemented within 42 weeks. After these works are completed, a new EPC can be applied for.
The action plan must be made available to a purchaser or lessee before any transaction progresses, and fines may be incurred should the owner fail to provide a new EPC or, if works are outstanding, the action plan.
Action plans fall into two categories, namely prescriptive and alternative. Prescriptive plans may include measures such as:
- adding central heating time controls
- upgrading lighting controls to manual and photoelectric switching
- draught-stripping windows and doors
- adding insulation to the hot water storage cylinder
- replacing incandescent lamps with compact fluorescent alternatives
- replacing the boiler if it is older than 15 years
- insulating accessible roof space.
Alternative plans, meanwhile, aim to provide a more tailored way of meeting the targets, requiring an assessment of the building in greater detail to target the specific areas of inefficiency.
While necessitating more initial input, such plans may ultimately prove more cost-effective because they can identify less expensive measures than the prescriptive option.
Whichever plan is used, should the owner not wish to undertake the recommended improvements they can defer the need for compliance by lodging a display energy certificate (DEC) on an annual basis.
This deferral does not mean the owner avoids the need for compliance, and they must still make the action plan and EPC available in any transaction; fines may be levied if they do not.
However, if the DEC is renewed annually then there is currently no clear deadline for deferral.
Pathway to net zero likely to get more difficult
Whether the ability for pre-2016 building stock to defer compliance is a critical flaw in the regulations will only be seen if it affects Scotland's emissions reduction commitments over time.
However, the Climate Change (Emissions Reduction Targets) (Scotland) Act 2019 strengthened the 2009 Act by introducing a new net-zero emissions target for 2045, in place of the earlier 80% target for 2050.
The 2019 Act also sets the following interim goals for net emissions in Scotland:
- levels in 2020 must be at least 56% lower than they were in the baseline year of 1990
- 2030 emissions must be at least 75% lower than the baseline
- the 2040 figure must be at least 90% lower than the baseline.
These targets are arguably among the most ambitious in any European country – England's net-zero target date for example being 2050.
According to Scotland's greenhouse gas (GHG) emissions inventory for 2020, an overall reduction of 51% in emissions had been achieved since 1990.
The 2019 Act, however, also changed the method for reporting emissions in line with advice from Scotland's Climate Change Committee (SCCC), which is part of the wider UK Climate Change Committee.
The new calculation method is known as the GHG account, and aims to better distinguish data identifying improvements in technology, such as more efficient wind turbines, from that relating to policy, like the ban on fossil fuel boilers in new Scottish homes.
Under the new method, Scotland reduced emissions by 58.7%, thus exceeding the 2020 goal of 56%. However, the SCCC acknowledges that a large part of this reduction was due to the impact of COVID-19.
Indeed, emissions were only reduced by some 2% in 2019 according to the emissions inventory, with a 44% overall reduction since 1990 – significantly short of the 56% goal for the following year.
In simple terms, the easy reductions in carbon emissions have already been made and more significant cuts are, by the SCCC's own account, going to be difficult to achieve.
Certainly, given that the 2020 target was only hit because of the impact of the pandemic, the current position is likely to need reviewing if the overall targets are to be met.
'The easy reductions in carbon emissions have already been made and more significant cuts are going to be difficult to achieve'
Approach targets fabric and energy measures
It is fair to say Scotland is taking a hybrid approach that includes fabric improvements and changes to services alike.
In 2021, the country published its Heat in Buildings Strategy, which concentrates largely on the domestic property sector, although it does acknowledge the impact of commercial buildings.
Scotland is prohibiting the use of direct-emissions heating systems, such as gas boilers or fires in new buildings, from 1 April 2024.
After this date, all new buildings – unless exempt from applying for a building warrant – will not be allowed to produce any greenhouse emissions at the point of use.
The Building (Scotland) Amendment Regulations 2022 paved the way for this revised requirement, and new technical handbooks to provide guidance were published in February this year for domestic property and June for non-domestic property.
This combined approach recognises the positive impact of increased renewable energy generation capacity in Scotland, which rose from 1.4GW in 2001 to 14.2GW in March 2023, while still looking to reduce energy consumption through fabric improvements.
Northern Ireland seeks to redress lack of standard
The approach in Northern Ireland is somewhat behind that in Britain, and although EPCs are required – and fines can be applied if they are not produced – there is no minimum standard.
In 2019, the Department for the Economy did publicly consult on an energy strategy that would include implementing MEES, but no formal proposals have been forthcoming.
However, the Private Tenancies Act (Northern Ireland) 2022 amended the Private Tenancies (Northern Ireland) Order 2006, and under section 9 enables the Department for Communities to make regulations on energy efficiency.
More significantly, the Climate Change Act (Northern Ireland) 2022 includes a target for a minimum 100% reduction in greenhouse gas emissions by 2050.
This is intended to encourage carbon-negative positions, so properties make a positive contribution to reducing emissions.
They could do this by, for instance, feeding excess renewable electricity they produce on site into the grid, which will help to offset the wider climate impact of buildings.
Under the act, the Department of Agriculture, Environment and Rural Affairs (DAERA) has recommended that the Northern Ireland government set up interim emissions targets to achieve a minimum of net zero by 2050, but this has yet to be done.
Committee advises on carbon budgets and reduction
Section 23 of the act also requires DAERA to make regulations pertaining to carbon budgets, with maximum emission levels for the respective budget periods.
The first of these budgets covers 2023–27, and the deadline for setting it is the end of December this year.
Two further budgets are scheduled for 2028–32 and 2033–37. The act also requires DAERA to consult with the UK Climate Change Committee regarding the budget levels.
The committee reported in this respect in March, and recommended the following:
- the first, second and third carbon budgets should on average reduce emissions from 1990 levels by 33%, 48% and 62%, respectively
- the 2030 and 2040 interim targets should be set at 48% and 77% reductions from 1990 levels, respectively.
The report makes interesting reading, referring to both stretch ambitions and speculative options such as afforestation and extended use of biomass as a fuel source.
Further examples given in the report include direct capture of airborne carbon dioxide and reducing livestock numbers, while leaving the Northern Ireland assembly to decide what particular action to take.
The direct carbon capture proposal is perhaps less surprising when taken in the context of wider UK schemes, such as those proposed in the Mersey Basin, a short distance across the Irish Sea.
Ultimately, though, Northern Ireland must take urgent action in terms of property legislation if its ambitious carbon reductions are to be achieved.
Some progress has been achieved through The Building (Amendment) Regulations (Northern Ireland) 2022, which require the energy efficiency of new houses to be improved by 40%, new flats by 25% and other new buildings by 15%.
But there is still considerable work to be done.
'Northern Ireland must take urgent action in terms of property legislation if its ambitious carbon reductions are to be achieved'
Domestic property requirements vary across UK
It is also important to note that Scotland's approach in respect of domestic property does differ from that to commercial property, and also from the approach in England and Wales.
All new Scottish homes are currently required to achieve an EPC rating of C, and this is expected to be raised to B by 2032.
By contrast, there remains no general minimum standard for most domestic property in England, with the notable exception of social housing.
However, all new-build property is required to achieve a C rating in England by 2030, while all housing stock must do so by 2035.
Wales also takes a slightly differing approach; there are unconfirmed reports that the Welsh government will require a minimum EPC rating of A for all social housing by 2030.
In July 2022, the UK government published EPC rating data for England and Wales as well, indicating that 86% of new homes in England and Wales achieved an A or B.
Although similar data is not currently available for Scotland, Holyrood does provide incentives for homeowners to improve the energy efficiency of their property in the form of grants and loans.
Northern Ireland is again lagging behind in terms of domestic property, with no clear EPC targets currently set, despite the targets set by The Building (Amendment) Regulations (Northern Ireland) 2022.
What is clear, though, is that the Scottish approach to energy efficiency in commercial property is more proactive than that in the rest of the UK.
Perhaps the system currently in place in England and Wales should look northward, rather than trying to reinvent its legislation. Certainly, Scotland would serve as a good model for Northern Ireland.
RICS champions sustainability across professions
With the built environment estimated to be responsible for around 40% of global carbon emissions, RICS is championing sustainable practices across the built and natural environment. We are also empowering professionals to embed sustainability considerations into the way they work and better measure environmental impacts.
