Three months into the decarbonisation project - what have we learned?

We launched our NHF decarbonisation project in April and it continues apace. Since my last update in May, we are still working with Savills to clarify the costs of decarbonisation to the housing association sector and a variety of funding models that could help the sector to reach net zero carbon emissions by 2050. Working with our member groups and with members individually, we have been tackling some thorny questions regarding the decarbonisation journey.

Working with NHF members and SHIFT Environment we have made progress on our roadmap to net zero for housing associations, and we will soon be publishing a discussion paper exploring the definition of net zero and the 2050 trajectories for our sector. As part of this work we are taking a closer look at the specific challenges and opportunities facing smaller and rural housing associations. 

Following on from their superb report earlier this year, we are also working with TPAS and Placeshapers to explore ways of working with residents on the journey to net zero. 

In June, we held the first meeting with the new Sustainability Strategy Group, which brings together housing associations from across the sector to help us shape this important work. We welcomed Eddie Hughes MP, Minister for Rough Sleeping and Housing at MHCLG, to join the first meeting and we also heard the latest from the Department for Business, Energy and Industrial Strategy (BEIS) regarding the government’s Social Housing Decarbonisation Fund.

As we await the government’s Heat and Buildings Strategy, the Climate Change Committee (CCC) introduced their 2021 Progress Report to Parliament, analysing the UK's collective progress toward net zero. A key headline from the report is that our national carbon reduction targets are set to be missed ‘by a huge margin’ and that in recent years, ‘there has been little of the necessary progress in upgrading the building stock’. Insulation rates remain well below peak market delivery achieved up to 2012, stuck at only a third of the rate needed. Across the country the installation of heat pumps is also lagging behind targets to scale up 30,000 to 900,000 per year by 2028.

So, we need to get back on track, but what can be done and how much is this going to cost? The CCC have put forward their own figures, estimating that it would cost about £22.5bn to decarbonise housing association properties. Roughly £4.95bn of this is for the necessary ‘fabric first’ energy efficiency measures (insulation, draft proofing, double glazing, etc.), with £4.05bn of this to be spent by 2035. They argue that with the right policy measures and scaling up of supply chains, it will cost only £10,000 per home on average to decarbonise.  

The government’s Social Housing Decarbonisation Fund (SHDF) is looking to spend at least £3.8bn up to 2030 on supporting the sector to decarbonise, with a focus on bringing as many homes as possible up to the EPC C efficiency rating through fabric first measures. With say 30% match-funding from the sector, this would be roughly £5bn, closely aligning with the CCC’s estimates for energy efficiency work. The SHDF looks promising then, and we continue to work closely with BEIS to shape the fund, and to ensure that it is accessible and supportive for housing associations. 

The Heat and Buildings Strategy should answer some questions regarding any additional funding to scale up heat pumps and heat networks. It will also confirm whether the EPC C deadline for all social housing properties will be brought forward to 2028, as recommended by the CCC.

There is also the question of public engagement around decarbonising our homes. 80% of people are concerned about climate change but only 50% are aware that their gas boiler produces emissions. 

Whilst giving us some more information on what it will cost financially to decarbonise our homes, the CCC report also tells us more about the costs if we continue along our current path. The CCC’s trajectories, if matched by the global community, would still only give us a 50% chance of avoiding global heating greater than 1.5C, and a 66% chance of avoiding 2C (the absolute upper limit before catastrophe). The question of ‘adaptation’ features prominently in their report but the costs of such adaptation to a <2C world will certainly outweigh any costs of decarbonisation. It’s a stark reminder of why we are all in this fight.