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Report highlights SME opportunities in low carbon construction

Michelle Ward
30th November 2010
A report published this week identifies areas the Government and construction industry need to tackle in order to reach carbon reduction goals, offering opportunities for SMEs.
The Innovation and Growth Team (IGT) released the Low Carbon Construction report this week, which highlighted ways SMEs could benefit from the Government’s efforts to achieve its low carbon agenda.

The report, which was commissioned by the previous Government, says the construction industry is facing the largest change management programme since Victorian times. The Climate Change Act demands that the net UK carbon account in 2050 be 80 per cent lower than it was in 1990, and construction is essential in achieving this goal, says the report.

"Meeting the low carbon agenda is both a challenge and an opportunity for the construction industry," said Paul Morrell, director of IGT.

"It will require radical change to the way we do business as well as Government action to meet the scale of the challenge. There are no easy answers. I hope this report will mark the start of a detailed collaboration between industry and Government to address this complex issue."

Potential for SMEs
IGT highlighted several themes in its report to the Government, one of which was the potential growth SMEs in the construction sector could see over the next 40 years. Transforming the built environment to low carbon will provide the construction industry with decades of work, according to the report, and more than 200,000 SMEs could see growth in this sector.

The report acknowledges the task ahead of the UK to reduce greenhouse gas (GHG) emissions, but states that there are numerous changes that could be put into effect immediately. For example, the report says Government should introduce minimum standards for existing buildings by mandating that all non-domestic buildings have an EPC-rating of F or better by 2020. IGT also suggests that the Government make it mandatory to post Display Energy Certificates in all non-domestic buildings.

"This report recognises the vital role the construction industry has to play in our transition to a low carbon economy," said Dr. Neil Bentley, CBI director. "If we are to meet our climate change targets, we must make homes and businesses more energy efficient, and build more sustainable infrastructure."

Plan for carbon reduction
In addition to the Green Deal, the report urges the Government to introduce a variety of measures including regulation, fiscal incentives and penalties to ensure the transition to low carbon. IGT also asks the Government to publish a detailed programme of actions expected to achieve the 2050 carbon reduction target.

"This report makes clear what a complex task it is for the construction sector to help deliver the nation’s legal carbon targets, but it also makes clear that it is the single most important sector in doing so," said Paul King, chief wxecutive of the UK Green Building Council.

"Getting to grips with the low carbon challenge will put UK industry at a competitive advantage globally, will be a springboard to growth in uncertain economic times and will put the industry in a unique position to enable low carbon living."

Stimulating the market
IGT also suggests the Government work with the industry to identify the best ways to stimulate the market for low carbon and energy efficiency measures, so that businesses will see the incentive for developing the skills to bring about these changes. Creating a low carbon construction industry will also develop skills and expertise that would be valuable to other sectors.

"It is very encouraging that the report finally acknowledges the importance of creating demand in the market to retrofit existing buildings," said Brian Berry, director of External Affairs at the Federation of Master Builders.

"The recommendation to apply additional fiscal incentives to deliver the Green Deal is an essential one because without such incentives this flagship policy has little hope of success. Cutting the rate of VAT on energy efficient repairs would be the most obvious and simplest choice to kick-start the retrofit market."

Future for the industry
The report will be considered by the Government, which will respond to the recommendations next year. Lawmakers promise that regulations for construction will go into effect soon.

"The Government wants to make it easier for housebuilders to go green," said Andrew Stunell, Communities Minister. "That's why we're already scrapping a myriad of regulations so the construction industry has one simple and concise set of guidelines for environmental assessments, making it user friendly, removing excessive red tape while also ensuring that the environment can be protected."

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Report highlights SME opportunities in low carbon construction
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