Net zero – can the planning system do it all?

In-depth analysis

The Government's priorities for the planning system in England include increasing the delivery of housing and other development and combatting climate change. There's an obvious tension between these priorities, particularly given the built environment accounts for an estimated 40% of the UK's total carbon footprint.

So what does planning for net zero mean in practice for property owners or developers wishing to progress new schemes or repurpose existing assets? Can the planning system do it all?

Net zero and the current planning system

While it's been over two years since the Government committed to reducing the UK's greenhouse gas emissions to net zero by 2050, so far this has only filtered through to the English planning system in an ad hoc manner. From the perspective of a developer wishing to start a new scheme or a landowner wanting to carry out a major refurbishment of an existing building, the legal position remains unchanged. A planning application is likely to be required and this must be determined in accordance with the development plan unless material considerations indicate otherwise.

At a national level in England, the National Planning Policy Framework (NPPF) sets the direction for planning policy and is a material consideration that carries significant weight in planning decisions. The NPPF has a section dedicated to meeting the challenge of climate change, stating that the planning system is expected to support the transition to a low carbon future.

The NPPF doesn't go into detail as to how the planning system should achieve this and the July 2021 amendments to the NPPF did little to align national planning policy with the government's overall commitment to achieving net zero by 2050. These amendments have been criticised as tinkering around the edges as far as the climate emergency is concerned. This leaves the job of setting specific, implementable net zero policies to local planning authorities in their development plans.

Local authority approaches

The net zero policies in development plans in England vary between local authorities. A number of aspects can change from one local authority to the next, including:

the sustainability related assessments that will be required to meet the validation requirements for a planning application
the level of carbon reduction needed to be policy compliant
the conditions imposed.
the scope and cost of the section 106 obligations package, including the cost of carbon offsetting

and ultimately the likelihood of planning permission for a scheme being granted.

This impacts everything, from whether a whole-of-life-cycle carbon assessment needs to be submitted with the planning application to the number of electric vehicle charging points that need to be provided in the completed development.

For example - London is often seen as leading the way towards net zero and this is reflected in the London Plan 2021. Specific policy requirements include:

an expectation that major developments will be net zero
a requirement for major development to achieve a minimum on-site reduction of 35% beyond Building Regulations
a carbon offset price of £95 / tonne where net zero cannot be achieved onsite, although boroughs may develop their own carbon pricing
a requirement for whole of life cycle carbon assessments to be submitted with all planning applications that are referable to the Mayor
requirements for detailed energy and sustainability strategies and post-development reporting.

These policy requirements can represent an additional hurdle in an already lengthy planning process and potentially affect the commercial viability of a scheme. But in our experience many developers are already meeting or exceeding policy minimums due to their own net zero drivers or occupier, investor, or purchaser demand.

There are many other examples of UK cities implementing similar policies to take action on climate change and this direction of travel is set to continue. But it's clear that one thing the current planning system is lacking is a nationally consistent approach – could this be set to change?

Future planning reforms

Reforms to the planning system have been a favourite pursuit for successive governments, all seeking to address the housing crisis, improve inefficiencies in the current system, and ultimately deliver sustainable development.

However, nothing in recent history comes close to the radical reforms proposed by the Planning for the Future White Paper published in August 2020. The headline change proposed was the introduction of a zonal system, where all land would be classed as either a growth area, a renewal area, or a protected area. This would allow development to move forward more quickly in some parts of the country, with limited scope for local objections.

It's been widely reported in the press that the Government is likely to abandon the zoning proposals for England. The Secretary of State for Levelling Up, Housing, and Communities declined to confirm this when speaking in the House of Commons in late October, saying that "the Planning White Paper was mischaracterised by many. There is so much that is good in it, but it is important that we listen to concerns that were expressed in order to ensure that an already powerful and compelling suite of proposals is even more effective."

It remains to be seen then whether a zonal system will be taken forward in England, although it's likely that any form of zoning will be significantly watered down. The final shape of the Planning Bill, so far as it relates to climate change, will also be heavily shaped by the outcome of COP26 – the Secretary of State will need to work within the parameters of whatever is agreed in November, whatever his wider vision for the planning system may be.

The jury is out on whether a zonal system would help or hinder the transition to a net zero future, given the lack of detail around how it would be implemented. Deregulation could allow developments in growth and renewal areas to avoid planning application requirements aimed at assessing carbon impacts, as well as planning conditions or section 106 obligations aimed at reducing or offsetting carbon emissions. Even if such developments were built to current Building Regulations standards, without such planning controls there's a real risk that they wouldn't be compatible with net zero by 2050 unless subsequently retrofitted.

On the other hand, a zonal system could incentivise development in existing urban areas where intensification brings benefits like decreased car dependency and increased investment in green infrastructure such as public transport and heat networks.

Other aspects of the proposed reforms are, however, more likely to proceed in the form proposed in the White Paper. These include the proposals to "ensure the planning system supports our efforts to combat climate change". The extent and nature of these measures remains to be seen but further amendments to the NPPF are likely, with the Government's recently published Net Zero Strategy stating that the NPPF will be reviewed to make sure it contributes to climate change mitigation and adaption as fully as possible.

The way forward

In our view, details of the measures to be brought forward in the Planning Bill and the further amendments to the NPPF are urgently needed. They'll need to align with the measures in the Environment Bill (currently bouncing between the Houses), the Government's wider net zero strategies for England, and of course the outcomes of COP26.

As a minimum, many developers navigating the English planning system will be hoping for greater national consistency as to what net zero means in planning terms – both to level the playing field and to deliver meaningful decarbonisation. Other planning reform options could include:

the establishment of a national carbon off-setting fund
amendments to the national validation requirements to require whole life carbon assessments for major developments
changes to planning processes to incentivise the refurbishment of existing buildings over demolition – perhaps through fast-tracked planning processes or reduced requirements for planning obligations.

Whatever becomes of the Planning Bill, achieving net zero will require a co-ordinated effort across national and local government and the private and third sectors – the planning system can't do it all. But within the planning system, the direction of travel is clear and developers should expect greater scrutiny of their carbon emissions at all stages of their development.