The Heat and Buildings Strategy and Net Zero Strategy should act as stepping stones towards generating widespread awareness and acceptance of the need to decarbonise how we heat buildings and make green choices. We are committed to review and improve our policy and regulatory approach to decarbonisation. We will monitor and evaluate progress to remain on track for Net Zero. To measure the effectiveness of our portfolio of action in the 2020s, we will continue to review and refine our approach to ensure it keeps us on track to deliver our carbon reduction commitments in a socially and economically responsible way. These include carbon budgets, our Nationally Determined Contribution (NDC) to the Paris Agreement, and out Net Zero target. In December 2020, the Prime Minister announced that the UK would increase its Nationally Determined Contribution (NDC) from 65% to 68-69% by 2030, to reflect a substantial increase in ambition. We will continue to iterate and develop policies to ensure that our targets are met. 511 BEIS (2020), ‘Transforming public attitudes research’ ( 512 BEIS (2019), ‘RHI evaluation interim applicant reaction to reform announcements’ ( 513 BEIS (2021), ‘Net Zero Strategy’ (

The Prime Minister chairs the Cabinet Committee on Climate Change, which brings together ministers in England and galvanises action to meet our emission reduction commitments.514,515 Recognising the need to decarbonise across all sectors, emissions reduction is one of the core measures that we assess our heating and energy efficiency policies against. Each year we publish updated energy and emissions projections516 calculated through analysing and projecting future energy use and greenhouse gas emissions in the UK. These projections allow us to monitor progress towards meeting the UK’s carbon budgets and are used to inform energy policy and associated analytical work across government departments. Using the latest data on our policies and projects, we will continue to monitor and evaluate projected and achieved energy use and carbon emission reductions during planning and delivery. In this way, we will be able to strengthen and adapt our strategy over time to plot the optimal path to Net Zero, while reducing emissions and meeting our carbon budgets along the way. This includes considering the latest advice from the Climate Change Committee. Our response to the CCC’s carbon budget 6 advice517 was published alongside the Net Zero We will continue to monitor and track our progress to Net Zero and are committed to reviewing and improving our policy and regulatory approach to decarbonising buildings. The emissions reductions contributions anticipated by key technology and building type are 514 In Wales, climate change is discussed at Cabinet every term, led by the First Minister. Over the next 12 months, Cabinet will be revising the legislative framework, updating emissions budgets and targets, delivering existing climate mitigation and adaptation plans, and developing the next All-Wales Low Carbon Delivery Plan 515 The DAERA Minister, Edwin Poots, will chair an inter-ministerial group to oversee development of the NI Executive’s multi-decade Green Growth Strategy and associated Climate Action Plan for Northern Ireland. The Green Growth Strategy and associated Climate Action Plan will be Northern Ireland’s routemap to climate action, green jobs and a clean environment. The Strategy will look out to 2050 and provide a pathway with sector- specific greenhouse gas emission targets. It will also set a pathway for a clean environment and green jobs. The associated Climate Action Plan will focus on shorter term actions across all sectors. 516 BEIS (2013) ‘Energy and emissions projections’ ( 517 CCC (2020), ‘Sixth Carbon Budget’ (

addressing a range of building types. different technologies and heat sources. The UK is home to about 30 million buildings518, which are responsible for around 30% of UK emissions519. The majority of buildings still rely on burning high-carbon fossil fuels for heating, hot water and cooking, and have low thermal efficiency which means that much of the heat that To reach our Net Zero target, in the next 30 years, we need to decarbonise the way we heat and cool our homes and workplaces to near zero (between 0 and 2 MtCO2e). We also need to ensure that in the nearer-term we meet our fuel poverty targets and emission reduction targets. The main ways we can achieve this are • improving the energy efficiency of buildings • switching high-carbon sources of heat (and cooling) to low-carbon alternatives To deliver near and long-term benefits, we have developed 5 1. We will take a whole-buildings and whole-system approach to ensure decisions at any level are not made in isolation – they will consider the relevant interdependencies and impacts to create a secure, efficient, cost-effective energy system. • encourage improvements to energy performance and use of low-carbon sources of heat (and cooling) to be considered together, where appropriate • encourage the use of smart and flexible technologies at work and in the home • continue to develop our approach on action to decarbonise heat alongside action to tackle climate change in other sectors 2. We will continue to invest in research and development to drive innovation, improve data collection, and inform policies at national, sub-national and local levels. As part of our programme of research and innovation, we • drive cost reduction and innovation in energy efficient and low-carbon technologies • continue to develop, test and improve smart technologies and services ( ouseholdprojectionsforengland).
And BEIS (2020), ‘Non-domestic National Energy Efficiency Data-Framework’ ( 519 BEIS) (2021), ‘Final UK greenhouse gas emissions national 1990 to 2019' ( And BEIS (2020), 'Energy Consumption in the UK' (

• collect data to inform and prepare for increased deployment of heat pumps • use local expertise and data to encourage increased efficiency and decreased emissions associated with heat networks • continue to consider how hydrogen may be safely and cost-effectively used to heat buildings through local trials and planning work, which will inform strategic decisions on the role of hydrogen in heating by 2026 • continue to research technologies which may play a smaller role in decarbonisation, such as hybrid heat pumps and bioenergy heating systems 3. We will accelerate ‘no and low-regrets’ actions needed in any scenario to continue to drive down emissions and meet our carbon budget targets. As these activities are needed in all paths to Net Zero, we • support industry to deliver a workforce with the skills to meet Net Zero • increase use of smart technologies, improve energy-related product policies, set minimum standards for existing homes and new-builds, and move to a performance- based rating for large and complex commercial and industrial buildings to improve • futureproof buildings by setting high standards for new-builds and mitigating risks of overheating and poor ventilation leading to poor air quality • reduce direct emissions from public sector buildings, in line with our aim to reduce direct emissions from public sector buildings by 75% against a 2017 baseline by the end of • stimulate and grow heat pump, heat networks, and green finance markets 4. We will clearly communicate upcoming regulatory changes so that households, businesses and industry can prepare in advance. We will ensure that we build flexibility and optionality for consumers into our policies, to help individuals and organisations decarbonise in the way In this strategy, we have committed • explore how best to support improvement of owner-occupied houses • consider setting new minimum energy performance standards in social housing, and to consult the sector before setting such a standard • consult on minimum energy performance standards in owner-occupied commercial and industrial buildings across England and Wales • support deployment of at least 600,000 hydronic heat pumps per year by 2028 through our proposed market mechanism520 520 BEIS (2021), ‘Market-based mechanism for low carbon heat’ (

• aiming to end new and replacement installations of natural gas boilers, including any hydrogen-ready boilers in areas not converting to hydrogen, from 2035 • signal an end to high-carbon heat sources, subject to the outcomes of our consultations on off-gas-grid regulations521,522 and hydrogen-ready boilers • introduce heat network regulation as soon as possible 5. We will target our activities and policies to support those in most need to ensure that the decarbonisation of heat and buildings is accessible and affordable to all. • provide financial support in the early 2020s through a range of schemes including the Home Upgrade Grant and the Boiler Upgrade Scheme • review the costs of decarbonisation and the difference in fuel costs, and work to ensure they are distributed in a socially and economically responsible way • increase public engagement through improved information and advice By employing these principles, we can ensure that heat • is fair and cost-effective for individuals and the energy system as a whole • allows us to meet our carbon budgets 521 BEIS (2021), ‘Phasing out fossil fuel heating in homes off the gas grid’ ( 522 BEIS (2021), ‘Phasing out fossil fuel heating systems in businesses off the gas grid’ (

Annex 1: Descriptions of key heat sources Air source heat pumps Extract heat from the outside air to heat your home and hot water. Extract heat from pipes that are buried in the ground to heat your Hybrid heat pumps Combine heat pump and standard gas boiler technology to heat your home and hot water. Use of smart controls help optimise the system based on cost or efficiency. Biomass boilers Work in a similar way to a standard gas boiler to heat your home and hot water using a renewable energy source such as wood Solar thermal panels Capture heat from the sun to provide hot water, typically in a Hydrogen boilers Work in a similar way to standard gas boilers to heat your home and hot water but use hydrogen gas rather than natural gas as fuel. This technology is not commercially available in the UK and is dependent on the extent to which hydrogen could replace natural Hydrogen-ready boilers Optimally designed to run using 100% hydrogen gas but are initially configured for use with natural gas to heat your home and hot Minimal component conversion is required to convert appliances to use with hydrogen. This technology is not yet commercially Heat networks Provide heat or cooling from a central source and distribute it to multiple customers in a building or across several buildings. Further details of these and other technologies can be found in section 3.1 Key technologies. Annex 2: Current and planned activities for We have grouped each activity into • measures to improve building energy performance and building-specific activities to demonstrate the comprehensive nature of our approach. We are committed to ensuring that no-one is left behind, providing solutions that work for all buildings, income groups and housing types. By spanning different technologies, heat sources, and distribution systems, these policies and projects can meet the variety of heat and energy efficiency requirements of UK homes and non-domestic buildings and provide options to consumers. The technology-specific themes for action in the 2020s heat pumps, heat networks, hydrogen for heat, and bioenergy. Aiming to phase out the installation of new and replacement natural gas boilers from 2035, once costs of low-carbon alternatives have fallen, in line with the natural replacement cycle, including any hydrogen-ready boilers in areas not converting to hydrogen, to ensure that all heating systems used in 2050 are compatible with Net Zero.
Consulting on whether it is appropriate to end gas grid connections to homes constructed from 2025, in favour of alternative low-carbon heat sources. Potential introduction of regulations to end installation of new fossil fuel heating systems in existing off-gas-grid homes from 2026. A consultation on phasing out high-carbon fossil fuel systems for space heating and hot water in businesses and public buildings off the gas grid. 523 BEIS (2021), ‘Phasing out fossil fuel heating in homes off the gas grid’ (

We propose to end the installation of new fossil fuel systems from 2024 at the earliest for the largest buildings and bring the remaining stock into scope from 2026, using the natural replacement cycle and taking a heat pump first approach. Provides upfront capital grants to households and small businesses to support the installation of air source and ground source heat pumps. Consultation closed July 2020, response published in parallel to this strategy.525 Formerly known as the Clean Heat Grant. To create an incentive framework to drive market growth resulting in significantly increased deployment of hydronic heat pumps, supporting growth from around 35,000 to 600,000 installations (across domestic and non-domestic buildings) per year by 2028. Local authorities can support low income households to benefit from low-carbon heating upgrades through the Local Authority Delivery scheme. The Social Housing Decarbonisation Fund aims to upgrade a significant amount of the social housing stock that is currently below EPC C up to that standard, delivering warmer and more energy efficient homes, and reducing carbon emissions and bills, as well as BEIS plan to introduce this grant in early 2022, which aims to deliver low-carbon heating and energy efficiency upgrades to low income off-gas-grid homes. Innovation project to test the practical and technical feasibility of a large-scale roll-out of heat pumps by installing gas-electric, air-source and ground-source heat pumps in up to 750 homes (mainly on-gas-grid). 524 BEIS (2021), ‘Phasing out fossil fuel heating systems in businesses off the gas grid’ ( 525 BEIS (2021), ‘Government Future support for low carbon heat’ ( 526 BEIS (2021), ‘Market-based mechanism for low carbon heat’ ( 527 Welsh Government is also funding the fitting of energy efficiency measures in up to 1,000 existing homes owned by registered social landlords and councils in Wales through their Optimised Retrofit Programme (

Investing £60 million in a Net Zero Innovation Portfolio (NZIP) ‘Heat Pump Ready’ Programme which will support the development of innovative solutions across the heat Work with Ofgem and DNOs to encourage timely and efficient reinforcement of electricity networks, for example through improving visibility of heat pump installations and engaging with Ofgem on the RIIO-ED2 price control (2023 to 2028) and ensure that heat pumps can be quickly and affordably connected to the network, for example by aligning DNO approaches to connections. Hydrogen Trials Deliver safety and feasibility testing, followed by a neighbourhood trial by 2023, village scale trial by 2025. We launched a consultation on facilitating a grid conversion hydrogen heating trial528 in August Hy4Heat Funded by BEIS’ Energy Innovation Programme, an innovation programme exploring the safety and feasibility of using hydrogen for home heating. It includes development of hydrogen heating appliance prototypes including gas fires, cookers and boilers, the development of hydrogen gas meters, a safety assessment for certain types of houses, and technical studies and standards. Consultation on hydrogen-ready appliances to follow the conclusion of Hy4Heat research programme. We are looking to consult on our approach to hydrogen-ready boilers shortly. We will work with industry to deliver our ambition for 1GW of low-carbon production capacity by 2025, and We intend to launch the Net Zero Hydrogen Fund in We will provide up to £60 million under the Low Carbon Hydrogen Supply 2 competition, and further Net Zero Innovation Portfolio (NZIP) competitions for We intend to finalise the design of a UK standard for low-carbon hydrogen by early 2022. 528 BEIS (2021), ‘Hydrogen for facilitating a grid conversion hydrogen heating trial’ (

We will develop further detail on our production strategy and twin track approach, including less developed production methods, by early 2022. Hydrogen blending We are engaging with industry and regulators to develop the safety case, technical and cost- effectiveness assessments of blending up to 20% hydrogen into the gas network. We aim to provide an indicative assessment by autumn 2022, with a final policy decision likely to take Following on from the Heat Network Investment Project, to incentivise the heat network market to adopt low-carbon heat sources and develop low- carbon heat networks. At least £270 million of our Heat Network Transformation Programme investment will be dedicated to the Green Heat Network Fund. Regulations that ensure that more heat network customers are metered and billed accurately, based on their consumption – thereby enhancing consumer protection and driving energy efficiency. Local data-driven solutions that enable the identification of areas where heat networks are the lowest cost low-carbon solution, backed by legislative provisions to free up the growth of low-carbon heat networks infrastructure at scale. We are consulting on proposals to provide local authorities in England with powers to put in place heat network zones, requiring that some buildings connect to networks. Heat networks are not currently regulated. We will implement a market framework to reach three core • decarbonisation of heating networks Creating the conditions to accelerate growth towards a self-sustaining heat networks market that does not require further government subsidy 529 In Scotland, equivalent schemes include the Low Carbon Infrastructure Transition Programme and District

• attracting new entrants to the market and • enabling market competition and effective choices • helping industry to develop the right skillset across the supply chain and build capacity • linking up market players to form an independent ecosystem through building connections A scheme to improve training and skills to build the capacity of supply chain to deliver increased growth. Grant and loan investments to fund the development and construction of heat networks which supply both domestic and non-domestic customers.
Working in partnership with devolved authorities and industry to support and develop a range of commercially viable low-carbon sources to come forward and supply heat networks. Examples include energy-from-waste plants, sewage systems and geothermal heat amongst others. A £190,000 UK-funded Advanced Gasification Technologies (AGT) project (May 2020) was • assess the reasons for the failure of previous • identify the risks and barriers to successful development of commercial-scale AGT projects Will provide tariff-based support for biomethane injection produced from anaerobic digestion plants, replacing the non-domestic Renewable Heat Incentive for biomethane injection. Will support investment in UK biomethane industry. The scheme is expected to launch at the end of November 2021. Provides upfront capital grants to households and small businesses to support the installation of biomass boilers. Installations will need to be located in a rural area and not have an existing mains gas connection, as well as meet high standards for emissions, to mitigate any negative impact on air quality in line with the government’s Clean Air

Strategy. Consultation closed July 2020, response published in parallel to this strategy. 530 Call for evidence on future combined heat and power policy closed in September 2020.531 A summary of responses was published in December 2020. We recently published a further call for evidence on how we support CHP in the future given our decarbonisation objectives, which is open to 20 Improving building energy performance By delineating between building types, we can tailor policies to address the specific challenges and needs of that type of building. This section is organised into policies relevant energy- using products, new-builds, retrofitting and insulation, public sector, large and complex commercial and industrial buildings, and small businesses and small commercial buildings. This will include setting better minimum environmental performance standards for a range of products with high potential for emission reduction and bill savings, and encouraging greater uptake of more energy- and resource-efficient products, for example, through improved consumer information on labels, incentives for purchasing efficient products and other complementary policy levers. A government list of energy efficient products that meet the robust energy saving criteria. BEIS annually reviews the technologies and products that qualify for 530 BEIS (2021), ‘Government Future support for low carbon heat’ ( 531 BEIS (2020), ‘Combined Heat and Power (CHP): the route to 2050 - call for evidence’ ( 532 BEIS (2021), ‘Combined heat and pathway to decarbonisation call for evidence’ (

A 75-80% reduction in carbon emissions from new homes compared to current standards, from 2025, with low-carbon heating and very high fabric Pathway to highly efficient new non-domestic buildings which use low-carbon heat. Increase of energy performance standards for domestic and non-domestic buildings ahead of the Future Homes Standard and Future Buildings Standard, effective from June 2022. Consulting as to whether it is appropriate to end gas grid connections to homes constructed from 2025, in favour of alternative low-carbon heat sources. Local authorities can support low income households to benefit from low-carbon heating upgrades through the Local Authority Delivery scheme. BEIS are planning on the basis that the Home Upgrade Grant scheme will commence (after the LAD scheme) in 2022, and will deliver energy efficiency upgrades and low-carbon heating to low income households living in off-gas-grid homes. Support upgrading fuel poor homes and homes of Review current criteria and how this could best support decarbonisation and improved energy efficiency of social homes, including the ambition set in the Clean Growth Strategy533. The Social Housing Decarbonisation Fund aims to upgrade a significant amount of the social housing stock that is currently below EPC C up to that standard, delivering warmer and more energy 533 BEIS (2017), ‘Clean Growth Strategy’ ( 534The Welsh Housing Quality Standard includes a minimum energy standard of EPC band D. Currently over half of social homes are EPC band C or better as a result of this standard. 535 Welsh Government is also funding the fitting of energy efficiency measures in up to 1,000 existing homes owned by registered social landlords and councils in Wales through their Optimised Retrofit Programme (

efficient homes, and reducing carbon emissions and bills, as well as supporting green jobs. All homes to meet EPC E rating by 2020 and EPC C rating by 2025 for new tenancies and by 2028 for all tenancies. We are aiming to publish a response to this consultation by the end of the year. We consulted on proposals to require mortgage lenders to disclose information regarding the EPC rating of their lending portfolios. We also proposed a voluntary target to reach an average of EPC band C across their mortgage portfolio by 2030, with the option of making this target mandatory if insufficient We are also exploring opportunities to improve the energy performance of owner-occupier homes and plan to consult on options to upgrade homes in this We will consider an ultimate backstop date to ensure that all homes meet a Net Zero minimum energy performance standard before 2050, where cost- effective, practical and affordable. We have committed to halve direct emissions from public sector buildings by 2032, against 2017 levels, and we aim to further reduce emissions from public sector buildings by 75% by 2037. Further funding allocated to ensure our continued commitment to improve schools, hospitals and public sector buildings and reduce emissions. We are investing £1,425 million for the Public Sector Decarbonisation Scheme over 2022/23 to 2024/25. A set of sustainability targets for central government departments and their arm’s-length bodies, which include targets on greenhouse gas emissions. Up to £32 million in funding in 2020/21 to support public sector organisations that do not have the expert skills to identify and develop projects that are eligible for the £1 billion Public Sector

Decarbonisation Scheme. The fund helped them to make applications or deliver funded projects. Up to £15m for eligible public sector bodies to develop heat decarbonisation plans for their estates.
Large and complex commercial and industrial buildings Developing and consulting on a mandatory framework for performance-based energy ratings for commercial and industrial buildings over 1,000m2. Developing amendments to the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 for the non-domestic private-rented sector in order to require increase to EPC band B by 2030, confirmed in our Energy White Paper536. Our consultation on setting the EPC band B standard ran from October 2019 to January 2020.537 We have consulted on how to enforce this target.538 Worked with BSI to establish a new framework specifying requirements for the installation of energy efficiency measures in non-domestic buildings. This A mandatory energy assessment scheme for large UK businesses’ energy use and energy efficiency opportunities at least every four years. In July 2021, we published a consultation on strengthening Legislation requiring all large or listed UK businesses to report their annual carbon emissions and energy usage in Annual Reports submitted to Companies 536 BEIS (2020), ‘Energy white Powering our net zero future’ ( 537 BEIS (2019), ‘Non-domestic Private Rented Sector minimum energy efficiency future trajectory to 2030’ ( efficiency-standards-future-trajectory-to-2030). 538 BEIS (2021), ‘Non-domestic Private Rented Sector minimum energy efficiency EPC B implementation’ ( energy-efficiency-standards-epc-b-implementation). 539 BEIS (2021), ‘Strengthening the Energy Savings Opportunity Scheme (ESOS)’ (

Voluntary agreements made by high-energy-using UK industry to reduce energy use and carbon emissions. In return, operators receive a discount on the Climate Change Levy, a tax added to electricity Small businesses and small commercial buildings £6 million competition in 2019 to develop innovative solutions that encourage the take up of energy efficiency and reduce barriers to SMEs. UK business could apply for an energy efficiency assessment through one of the participating projects and apply for funding to install energy efficiency measures anywhere in the UK. Competition has now closed to Developing amendments to the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 for the non-domestic private-rented sector in order to require increase to EPC band B by 2030, confirmed in our Energy White Paper541 in 2020. Our consultation on setting the EPC band B standard ran from October 2019 to January 2020.542 We have consulted on how to enforce this target.543 Some of the 20% to 30% of non-domestic buildings that have the same size characteristics and heat profile of domestic buildings will be able to benefit from the domestic market-based mechanism for heat We are aiming to consult later this year on policy options to upgrade owner-occupied commercial and industrial buildings. We are currently considering the potential role of minimum energy efficiency standards 540 Environment Agency (2014), ‘Climate change agreements’ ( 541 BEIS (2020), ‘Energy white Powering our net zero future’ ( 542 BEIS (2019), ‘Non-domestic Private Rented Sector minimum energy efficiency future trajectory to 2030’ ( efficiency-standards-future-trajectory-to-2030). 543 BEIS (2021), ‘Non-domestic Private Rented Sector minimum energy efficiency EPC B implementation’ ( energy-efficiency-standards-epc-b-implementation). 544 BEIS (2021), ‘Market-based mechanism for low carbon heat’ (

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