The intricate intersection of Energy Performance Certificates (EPCs) and listed buildings presents a multifaceted challenge for property owners, legal experts, and sustainability advocates alike. Grosvenor’s sustainability director offers a detailed examination of this issue, elucidating the complexities and the pressing need for regulatory clarity.
The story originates in 2002 when the European Union, responding to the Kyoto Protocol, introduced the Energy Performance of Buildings Directive (EPBD). This directive aimed to standardise the measurement of energy performance across the EU, including the introduction of EPCs. Initially, EPCs were part of Home Information Packs and held relatively minor significance.
However, the landscape underwent a significant transformation in 2010 when the EU recast the EPBD, intensifying efforts to reduce carbon emissions from buildings. This revised directive included a pivotal clause permitting member states to exempt certain buildings from the minimum energy performance standards. Specifically, it allowed exemptions for “buildings officially protected as part of a designated environment or because of their special architectural or historical merit, in so far as compliance with certain minimum energy performance requirements would unacceptably alter their character or appearance.”
When the UK adopted this revised EPBD into The Energy Performance of Buildings (England and Wales) Regulations 2012, it replicated this exact phrase. The broad wording of the EU exemption was designed to accommodate the diverse approaches of member states to heritage buildings. However, the UK government, cautious of introducing additional regulatory requirements, opted to adopt the precise wording without any jurisdiction-specific adjustments.
Initially, this decision did not pose significant issues, as EPCs were not rigorously enforced, and the penalties for non-compliance were minimal. The landscape shifted dramatically in 2015 with the introduction of the Minimum Energy Efficiency Standard (MEES) regulations, which rendered it unlawful to let domestic and commercial private rented properties with an EPC rating below E.
Policymakers developing the MEES regulations referred back to the 2012 regulations, which contained the ambiguous EU exemption. This created a convoluted and confusing situation, where determining whether listed buildings or properties in conservation areas were exempt from EPC requirements became crucial. Regrettably, the government has yet to provide clarity on this issue, leaving property owners in a state of uncertainty. The current understanding is that an EPC is required unless compliance with minimum energy performance requirements would unacceptably alter the character or appearance of the building.
Guidance for the Minimum Energy Efficiency Standards, published in 2017 and updated in 2020, states that it is the responsibility of the owner of a listed building to determine whether their building requires an EPC. This implies that property owners must first obtain an EPC, which includes a list of recommended energy efficiency improvements, and then assess whether these improvements would be suitable for the building. This convoluted process is indicative of poor regulation. Ideally, the requirement for an EPC should be a straightforward yes or no question for all buildings, irrespective of their protected status. Exemptions should only arise when regulating minimum energy efficiency standards to prevent unnecessary or damaging works.
The ambiguity surrounding EPCs for listed buildings underscores the urgent need for clear and consistent regulations. Property owners, businesses, and consumers require certainty to make informed investment decisions and respond effectively to government policies. While resolving this issue may not constitute a national emergency, it exemplifies the industry’s call for regulatory clarity. Clear regulations are essential for driving improvements in the sustainability of the historic built environment. Rather than contending with EPC ambiguity, stakeholders should focus on determining whether the EPC and its underlying methodology are the most effective tools for achieving sustainability goals.
The current situation regarding EPCs and listed buildings epitomises the complexities inherent in property regulations. It highlights the critical importance of clear and well-defined regulations to support sustainability efforts within the built environment. As Grosvenor’s sustainability director aptly remarks, “It’s complicated,” but addressing this issue is imperative for a sustainable future.
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