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Zero carbon homes and the carbon offsetting fund

Carbon offsetting fund

The council currently implements planning policies requiring high environmental standards in new-build homes. This includes a requirement for a regulated carbon dioxide (CO2) emissions saving of a minimum of 35% on Part L of the 2013 building regulations for all major developments, in accordance with Policy 5.2 of the London Plan.

This can be achieved in a number of ways, for example by maximising the energy efficiency of the building fabric, connecting to a decentralised heat network and installing renewable energy technologies such as solar panels.

However, where it is demonstrated to be not possible to achieve the target on site the council has established a carbon offset fund for cash in lieu contributions from developers to meet the target off site. This money is spent on carbon offsetting projects around the borough to achieve CO2 reduction savings.

Southwark Council’s carbon offset cost was £60 for every tonne of CO2 emitted per year over a period of 30 years (or £1,800 per tonne of annual residual CO2 emissions). Full details are set out in the Section 106 and CIL SPD.

This rate is recommended in the Mayor’s Sustainable Design and Construction SPG and is also in accordance with the Department for Communities and Local Government (DCLG) August 2013 consultation on allowable solutions.

Following Consultation on the New London Plan and the declaration of a Climate Emergency by LB Southwark the carbon offset cost was increased to £95 per tonne.

‘Chapter 9 Sustainable Infrastructure’ of the London Plan references under the reasons for Policy SI 2 ‘Minimising greenhouse gas emissions’ that a nationally recognised non-traded price of £95 per tonne has been tested as part of the viability assessment for the London Plan which boroughs may use to collect offset payments. The price was viability tested in the Carbon Offset Funds Report 2019 by the GLA.

This carbon price will be updated in Appendix 1 of the S106 and CIL SPD to reflect this change in price.

Full details are set out in the Section 106 and CIL SPD.

Zero carbon homes – new policy requirement from 1 October 2016

The Mayor of London has set out the approach to achieving the London Plan policy aim of 'zero carbon homes' for major developments in the Housing Supplementary Planning Guidance (SPG), published in March 2016.

From 1 October 2016, any new homes forming part of major developments will be required to continue to meet the on-site 35% CO2 reduction target for regulated carbon dioxide emissions.

However, they will also be required to offset all remaining regulated CO2 emissions to 100% or “zero carbon emissions”, rather than simply offsetting the residual emissions above the 35% CO2 reduction target. This will achieve the 100% CO2 reduction target for new 'zero carbon' homes as set out in London Plan policy 5.2.

The funds secured by the council will be ring-fenced to deliver carbon emissions savings off site through a variety of projects and will be secured through Section 106 legal agreements.

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Page last updated: 04 December 2020

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