What property investors need to know about the UK Net Zero Carbon Buildings Standard

What is the NZCBS, and why now?

The NZCBS introduces the first ever science-based targets for embodied carbon emissions from the built environment, which is aligned to the UK’s carbon budget and a 1.5-degree warming trajectory. 

This is a significant development for the industry, providing clear limits on embodied emissions, which for the first time demonstrably align with the nation’s decarbonisation commitments.  

The clever inclusion of ratcheting embodied carbon limits over the next 26 years provides industry with the headroom required to further develop low-carbon practices and products in the short to medium-term, which will allow for these increasingly stringent limits to be met in the long term.

Asset managers who engage with the NZCBS requirements to limit embodied carbon imminently will put themselves ahead of the curve when new regulatory requirements are enacted. 

The recently published pilot version of the standard does not yet include details of the proposed verification process, but it does describe all criteria which must be met to allow a project to be declared net zero.

An excellent opportunity for asset managers

There is an excellent opportunity here for asset managers to prepare a project for the publication of version one of the NZCBS, expected Summer 2025, allowing them to be among the first to demonstrate that their developments meet net zero.

The first step is to establish whether a project or asset is suitable for net zero certification. Engaging with an ESG consultant with suitable experience in decarbonisation and carbon assessment as early as possible will allow them to support asset managers in this decision-making process.

New build projects will be relatively straightforward to assess but retrofit projects will require that the embodied carbon impacts of any works undertaken in the past five years be assessed, so suitable information must be available for analysis. 

While there is no specific requirement within the standard to undertake modelling during design, assessing energy performance and embodied carbon impacts during development is critical to ensure an asset can meet NZCBS requirements once constructed. 

As NZCBS is designed to assess a building in-use, it won’t be possible to declare an asset net zero until a year’s worth of energy data is available and the application has been verified. In practice, this will mean that no claims can be made before a building is occupied.

The NZCBS currently only considers whole buildings, so can’t be applied to individual tenanted offices within a larger asset, for example. This will limit the applicability of the current version of the standard, however the NZCBS technical steering group is undertaking work to resolve this issue, which they hope to include in version one of the standard. 

Undertaking whole life carbon assessments is vital

Asset managers should consider undertaking whole life carbon assessments (WLCAs) at concept to identify easy-win embodied carbon reduction strategies, and to ensure that the energy usage and performance of the future asset are well understood. 

In order to maintain claims of net zero, an annual application must be made with the previous year’s energy data and a WLCA of any certifiable works undertaken. Engagement with an experienced ESG consultant is critical in ensuring these processes are streamlined and the resultant costs minimised. 

How does the NZCBS fit in with other green building certifications?

The expectation is that other green building certification schemes such as Nabers UK and BREEAM will be aligned with this standard, which will streamline certification processes and allow for multiple schemes to be applied to a project.

This alignment might take some time, with most schemes not expected to update until well into 2025. However, the intention is that this standard will catalyse the alignment of existing certifications and target schemes, and the NZCBS technical steering group is actively seeking collaboration with other standards and certification schemes, including Nabers UK, to ensure equivalence.

BREEAM is currently being updated to version seven by the BRE and is expected to align with the NZCBS across relevant energy and carbon credits. Meanwhile, the UK Green Building Council’s Net Zero Carbon Buildings Framework Definition is also under review, as are the LETI Climate Emergency Design Guide’s embodied carbon and operational energy use targets. 

As ever, the overriding goal must be to reduce both operational energy and embodied carbon as much as possible, regardless of whether the building is formally certified.

Danielle Dinneen, sustainability consultant, Workman