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Zero carbon homes and the carbon offsetting fund

Carbon offsetting fund

Our planning policies set high environmental standards for new-build homes. We require developers to achieve regulated carbon dioxide (CO2) emissions saving of a minimum of 35% on Part L of the 2013 building regulations for all major developments. This requirement is supported by Policy SI 2 'Minimising greenhouse gas emissions' of the London Plan (2021).

Developers can achieve the regulated CO2 emission savings on new-build homes in a number of ways, including:

  • maximising the energy efficiency of the building fabric
  • connecting to a decentralised heat network
  • installing renewable energy technologies such as solar panels

Developers are also 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. If they do this, they can achieve the 100% CO2 reduction target for new 'zero carbon' homes.

If developers can prove that they can not achieve these carbon savings on site, then they must pay cash in lieu contributions to meet the savings off site. These contributions are secured by the council using Section 106 legal agreements and form our carbon offset fund. This money is spent on carbon offsetting projects around the borough to achieve CO2 reduction savings.

What is our carbon offset price?

Our carbon offset cost was previously £60 for every tonne of CO2 emitted per year over a period of 30 years, which is equal to £1800 per tonne in total. This rate was recommended in the Mayor’s Sustainable Design and Construction SPG (2014). 

Following Consultation on the London Plan (2021) and the declaration of a Climate Emergency by Southwark Council, we decided to increase our carbon offset cost in November 2020. Our current price is £95 per tonne emitted per year over a period of 30 years, which is equal to £2700 per tonne in total. This price was tested as part of the viability assessment for the London Plan (2021) and in the Carbon Offset Funds Report 2019 by the Greater London Authority.

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

Contact us

If you have any questions or need more information, email us.

Page last updated: 06 October 2022


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