England and Wales

Despite Rishi Sunak’s September 2023 MEES U-turn and announcement of a “more pragmatic, proportionate, and realistic approach” to meeting net-zero, energy costs and climate policies remain crucial topics of national debate ahead of the election on 4 July.

MEES is (was?) a flagship policy designed to support the UK’s drive and commitment to reach net zero emissions by 2050. For many years, we have been examining and discussing the impact of the MEES regulations on commercial real estate: from application through to enforcement (or lack thereof).

With the Climate Change Committee’s warning that current UK policies will not deliver net zero in time for 2050, how are the main political parties proposing to approach MEES in the coming years?

Generally speaking, in the context of energy efficiency, the manifestos from the Conservatives, Labour, Liberal Democrats and Reform UK tend to focus on the approach to residential property, but the manifesto commentary released by each party provides an indication of the likely direction of travel for commercial real estate:

  • The Conservative Party remains committed to reaching net zero by 2050 but will put security and family finances “ahead of unaffordable eco-zealotry”. They have pledged £6bn for energy efficiency over the next 3 years but make no specific reference to MEES or the future use of Energy Performance Certificates.
  • The Labour Party pledge to reintroduce MEES and ensure homes in the private rented sector meet minimum energy efficiency standards by 2030 – but Labour’s focus is on its “Warm Homes Plan” and the “importance of improving energy efficiency in British homes”. MEES is not mentioned in the context of commercial property.
  • The Liberal Democrat Party promise to take the “bold, urgent action needed to tackle climate change” and commit to cutting greenhouse gas emissions to net zero by 2045 at the latest. The Liberal Democrats also intend to reintroduce MEES by requiring landlords to reach EPC C or above by 2028 – but again, it is not clear whether this pledge relates to both residential and commercial property.
  • Reform UK makes no reference to MEES or EPCs presumably as the party plans to scrap net zero to “save the public sector over £30 billion per year for the next 25 years”.

Based on recent projections, the Labour Party is on track for the second largest majority since the Second World War. It is therefore incredibly likely that MEES will be reintroduced by 2030, but with the caveat that “nobody will be forced to rip out their boiler”. The impact on commercial property remains unknown, but with a new mission to “Make Britain a Clean Energy Superpower by 2030”, it is anticipated that commercial real estate will be subject to higher MEES benchmarks in the coming years.

A complete overhaul – or at the very least a shake up?

  • Any future government would be naïve to simply reintroduce MEES without a significant shake up of the legislation.
  • Our data proves that despite the government’s drive and commitment to reduce carbon emissions and the energy consumption of the non-domestic building stock in England and Wales, and the government’s emphasis on MEES as a way to do this, local authorities have failed to effectively enforce the MEES regulations.
  • Any active reintroduction of MEES must tackle the challenges posed by the current regime.
  • If MEES v.2 is to succeed, at the very least, decision makers will need to consider:
    • EPCs

      Do EPCs remain sufficient? Would MEES and the UK’s drive to net zero be more effective by considering real world data and the actual energy use in a building rather than points being awarded by an assessor for meeting certain criteria?
    • Enforcement

      It is clear from the data obtained that the majority of local authorities simply do not have sufficient resource and/or funding to effectively manage and enforce MEES.

      If local authorities are to retain the role of MEES enforcers, government must lead from the top and provide them with the resource and funding so desperately needed.
    • Leadership

      MEES needs leadership and coordination from the very top.

      Rishi Sunak’s September 2023 MEES U-turn was counter to achieving net zero and the commercial real estate market needs clarity and consistency on the future trajectory of the MEES benchmarks.