Originally published June 2022.

The UK’s commitment to deliver net zero by 2050 risks more than a cost of living and energy crisis.

By 1 April 2027, it will be illegal to lease a commercial property with an Energy Performance Certificate (EPC) rating below C. By 1 April 2030, it is mooted that the minimum EPC rating to lease commercial property will be raised to B. Based on current EPC ratings, over 60% of commercial property in the UK would be illegal to lease by 2027, rising to 80% by 2030. This equates to some 900,000 commercial buildings and over 1 billion square feet of office space alone. 

Even as recently as 2021, only 18% of all new non-domestic EPC assessments conducted resulted in a rating of B or higher. The rate of improvement in attainment needs to at least triple for commercial property to meet the 2027 deadline. That is not going to happen.

New build is not the solution. Yes, the end result should be marginally more operationally efficient than a retrofitted property, but the financial cost of demolition and rebuild is generally only financially viable at the primest end of the market. Furthermore, the environmental cost of attainment is massive: the production of concrete and steel is among the most carbon-intensive activity on earth. The Carbon Risk Real Estate Monitor (CRREM) estimates that emissions from new build equates to 25-50 years’ worth of emissions from operating a building. In addition, 60-80% of embedded emissions in existing buildings are reusable.