Part L: Can planning authorities still request carbon offset payments?

In this series of articles, we aim to answer some of your questions about the upcoming changes to Approved Documents L and F, SAP methodology and the Future Homes Standard.

Current proposals suggest these regulations will be coming into force in England from October 2020. Contact us with your own questions about the regulation changes, or to discuss our training seminars and workshops.

Will planning authorities still be able to request carbon offset payments after the regs change?

Yes. And from next year we may find more authorities taking this route, but payments will differ depending on location, and councils will find themselves under more scrutiny about where the money is spent.

Some local planning authorities charge developers a carbon offset payment as a planning condition.

Companies such as Energist can create an Energy Strategy document which predicts the annual amount of CO₂ produced by a new development and demonstrates how this can be reduced in line with the council’s own targets (such as a 10 / 15 / 35% reduction) through fabric enhancements and the introduction of renewable and low carbon technology.

After these improvements are made any remaining emissions can be offset through the carbon offset payment. The developer basically writes a cheque to the council to cover every tonne of CO₂ their development is expected to create, and this cash is spent on green projects in the area.

Other authorities accept ‘allowable solutions’ which means the developer can invest the money themselves to offset the carbon from their development by, for example, upgrading existing council houses in the same town.

Under current proposed changes to Approved Document L, SAP methodology and the introduction of the Future Homes Standard, there is a debate over whether local planning authorities should be allowed to set their own lower targets for emissions. However, this debate makes no reference to either carbon offset payments or allowable solutions.

When the new AD L is published and the Planning and Energy Act 2008 is amended, we may (emphasis on ‘may’) find councils are banned from setting lower targets, but still have freedom to offset carbon production by other means. This means more local authorities could turn to carbon offset payments and allowable solutions in the coming years.

London tends to set the benchmark for how much a tonne of carbon is worth. Currently they charge developers £60 a tonne for the first 30 years of a new development, this is expected to increase to £95.

But that may not be as bad as it sounds… With tighter targets coming into force and an ever-improving decarbonised energy grid, the amount of CO₂ produced by new buildings is going to be significantly lower, which means the amount of carbon to be offset through additional payments will also reduce.

Also, local authorities need to tread carefully when requesting such payments. From next year they will need to report publicly on how much money they’ve collected through Section 106 and Community Infrastructure Levy (CIL) contributions, and what that money has been spent on. This follows independent research by Property Week  (external link) which showed £2.5 billion of contributions over a five year period had not been spent on community improvements.

Over the next year it’s possible that planning conditions setting lower emission targets will cease, but carbon offset requests could take their place. Councils will be able to define their own cost of carbon but will need to clearly show how they are spending the collected cash on environmentally focused projects in the area.

The Energist Technical Team can produce Energy Strategies, Carbon Offset payments and Allowable Solutions reports.