New zero carbon homes policy in London from 1 October

A new zero carbon homes policy involving off-site payments will come into force in London from 1 October 2016.

In July 2015, government announced that it would scrap plans to introduce a national requirement for zero carbon homes. However, the policy will be introduced in London from 1 October 2016. The London Plan already requires that both major commercial and residential schemes – those of 10 homes or more – meet an on-site emissions reduction target of 35% below the national energy efficiency standard set in Part L of the 2013 building regulations.

However, following supplementary planning guidance (SPG) published by the Mayor in March this year, major residential schemes in the capital will have to meet a new zero carbon target from next month. The new policy requires schemes to continue to achieve the 35% reduction on the site itself. However, any remaining on-site emissions that exceed the zero carbon target "are to be offset through a cash-in-lieu contribution to the relevant borough. Funds will be ring-fenced to secure the delivery of carbon dioxide savings elsewhere".

For this off-site payment, the SPG suggests that boroughs should charge £60 per tonne of carbon dioxide emitted over the next 30 years, but boroughs will be free to set higher charges if they wish.

Colin Morrison, head of sustainability at planning consultancy Turley, said that some developers fear the cost will "significantly impact viability", especially at a time when there is also "a big push for affordable housing". Turley has estimated that a three-bed home in an eligible scheme would, on average, generate a fee of £2,000.

Morrison said the policy "has come a bit under the radar" and may be a surprise for many developers, especially given the government's position.

Graham Suttill, sustainable buildings assessor at energy efficiency consultancy Darren Evans Assessments, also said that many developers would not be aware of the new requirements and may be caught out when submitting applications. However, he said that the amounts that developers are likely to have to pay were unlikely to affect viability in London.

But Morrison said that many local authorities may not be prepared for, or have the necessary resources to be able to use, the cash-in-lieu contribution. He called for "detailed guidance and a clear requirement for local authorities to spend this in a cost effective manner," adding: "The money is intended for carbon reduction projects, such as improving the energy efficiency of an authority's social housing stock. Councils will have to work out pretty quickly what to spend the money on."

Suttill added that local authority planning teams were often short on sustainability assessment expertise. He said: "They will have to find people to understand these calculations and set a price per tonne figure for their charges. But who will be enforcing this change in policy?"

Mike Kiely, chairman of the Planning Officers Society, said: "It requires specialist knowledge to know whether a scheme is being properly delivered in a way that meets these targets – and that won't necessarily exist in a council planning department."