The CCC Release their Annual Progress Report to Parliament.
The CCC & the report
The Climate Change Committee (CCC) is an independent, statutory body established under the Climate Change Act 2008. The committee’s purpose is to advise the UK and devolved governments on emissions targets and to report to Parliament on progress made in reducing emissions and adapting to the impacts of climate change.
At the end of June, the CCC released their yearly Progress Report to Parliament for 2022. The report provides a comprehensive overview of the UK Government’s advancements in reducing emissions to date, with a distinct focus on the developments of the previous year. The report’s findings concerning buildings are outlined below.
2022 was one of the six warmest years on record, and the warmest year on record for the UK. 2023 is likely to be warmer than 2022. In 2022, the Earth was 1.15ºC (± 0.13ºC) warmer than the pre-industrial (1850 – 1900) average.
UK greenhouse gas emissions – 450 MtCO2e
This is an increase of 0.8% since 2021 but remains 9% below pre-pandemic (2019) levels. This indicates a lasting shift from pre-pandemic behaviour, with the public spending more time at home.
Buildings emissions – 76 MtCO2e
Buildings accounted for 17% of the UK’s emissions, remaining the second highest-emitting sector behind surface transport (23%). The CCC reported that progress remains broadly insufficient to ensure that the buildings sector reaches zero emissions by 2050 stating:
‘The Government has laid out broad ambitions for the buildings sector, but the details of the policies that will achieve these are largely missing. The next ten years are the crucial period to decarbonise buildings, requiring a complete policy framework to be put in place, together with the necessary supply chains and supporting infrastructure, alongside public acceptance of the transition.’
16% decrease in emissions from residential properties
This fall in emissions was predominantly due to a relatively mild winter in 2022 compared to the colder winter of 2021. The CCC found that after adjusting for winter temperatures, emissions from homes fell by only 6% in 2022, which is likely to have been driven by a behavioural response to the record-high gas prices. Due to these circumstances, the CCC concluded that the balance between improvements in efficiency and people having colder homes because of the unaffordability of energy, is unclear.
Regarding space heating, the CCC asserted that by refraining from making strategic decisions on the respective roles of electrification and hydrogen until 2026, the Government was impeding decarbonisation progress:
‘The lack of a strategic direction is creating systemic uncertainty. This is actively hindering the growth of supply chains for low-carbon heat and limiting progress on power and hydrogen infrastructure. Waiting three more years to set a clear direction will lead to further lost progress in buildings, and hinder infrastructure development more widely.’
The CCC stressed that heat pumps should be being installed at pace now, providing insight into the heat pump market at present:
- Heat pump installations:the UK installed 72,000 new heat pumps in 2022, 69,000 of which were installed in homes (approximately 40,000 retrofits and 29,000 in new homes). In comparison, the CCC’s balanced pathway projected 130,000 installations in 2022.
- Boiler Upgrade Scheme (BUS): launched in May 2022, the BUS has started slowly with it predicted to only fulfil 45% of its potential for 22/23.
- Heat pump costs: the average cost of installing a heat pump in a home fell by 1.9% in 2022. This followed sharp rises in 2020 (10.3%) and 2021 (19.2%).
The report highlighted that despite the energy crisis providing a clear incentive to insulate buildings, progress in carrying out energy efficiency improvements remains slow. The CCC drew on new research that shows that a combination of stop-start funding, labour and material costs, and regulation costs, present barriers to the growth of supply chains for buildings-level energy efficiency measures.
Fuel poor homes & social housing
The CCC found that through the combined efforts of the Home Upgrade Grant (HUG), Local Authority Delivery (LAD) and Energy Company Obligation (ECO4) 79,000 measures were delivered in fuel poor and social housing in 2022. Of which, 1,400 heat pump installations were delivered through ECO, and a further 2,000 via HUG and LAD.
Summary of progress
The CCC use a monitoring framework to track progress against real-world key indicators, their current assessment of buildings is as follows:
- On track: Electricity to gas price ration, greening government commitments (set actions Government departments are taking to reduce their environmental impact between 2021-25).
- Slightly off track: Low-carbon share of heat supply.
- Significantly off track: Energy efficiency measures, heat pump installations, heat pump costs, trained heat pump installers.
- Too early to say: Residential energy demand, non-residential energy demand, non-residential buildings energy intensity.
In the report the CCC outlined 27 priority recommendations, with the subsequent three directly concerning buildings:
- Narrow the scope of the strategic decision on low-carbon heat prior to 2026.
- Finalise plans to prohibit fossil fuel boiler replacements in off-gas grid buildings from 2026. Confirm the proposed regulatory mechanism for phasing out fossil fuel boilers.
- Finalise and implement plans to require privately rented homes in England and Wales to reach EPC C by 2028 (MEES).
No-regrets & low-regrets actions
In addition to the CCC’s priority recommendations, the report also stressed the importance of immediately pursuing no and low regrets actions. These are as follows:
- No-regrets actions: electrical heat in new buildings, electrical heat in off-gas properties, and energy efficiency in fuel-poor homes and social housing.
- Low-regrets actions: low-carbon heat networks, energy efficiency in other existing buildings.
Finally, the need for Government to engage the public was a common theme of the report, with the CCC on the topic of low-carbon heat:
‘The government should engage the public to improve their understanding of low-carbon heat, its benefits, and the choices they will be able to make. General lack of information makes it harder for consumers to make decisions, the government has an institutional role here to guide people through this transition.’
Sava are encouraged by the report’s finding that 2022 saw a reduction in emissions from the residential sector. We also support the CCC’s stance that the government must narrow the scope of their 2026 strategic decision by pursuing the no-regrets actions of heat electrification and energy efficiency in fuel poor and social housing. With faltering heat pump installation and BUS rates, this is testament to the current uncertainty felt within the low-carbon heat market, which could be dispelled through government commitment.