A new analysis by climate tech company Kamma reveals that Labour’s manifesto commitments could achieve over 11,000,000 tCO2e emissions reductions by 2030, accelerating UK housing decarbonisation by 1311% (13.11x faster). These policies are crucial to helping mortgage lenders advance their net zero plans and keeping the UK on track to meet its climate targets.
Kamma has analysed the key Labour manifesto policy commitments against their advanced environmental dataset for UK housing to determine the expected emissions reductions.
Three key policies are outlined in the Labour manifesto which would drive an acceleration in the decarbonisation of the UK private rented sector to 2030, as follows:
+ Decarbonising the National Grid by 2030
Projected emissions reduction: 1,028,616 tCO2e
+ Implementing Minimum Energy Efficiency Standards (MEES) of EPC C by 2030 for PRS
Projected emissions reduction: 1,568,913 tCO2e
+ Allocating an additional £6.6bn budget to upgrade 5 million homes to EPC C by 2029
Projected emissions reduction: 4,711,172 tCO2e
It is also expected that Labour will maintain the existing commitment of 600,000 heat pumps installed per year by 2028. In 2023 65,853 heat pumps were installed in the UK. Assuming a linear increase, maintaining this would result in a further 5,802,609 tCO2e cut by 2030.
In combination, therefore, these measures are projected to reduce residential emissions by 13,111,310 tCO2e (or 13.1 megatonnes) by 2030. This compares to 929,156 tCO2e under the current rate of progress – a dramatic increase of 1311%.
Of course, there could be some overlap between policies depending on implementation, which would bring the total figure down slightly e.g. some of the heat pumps could contribute to EPC C ratings (although heat pumps currently do not actually impact EPCs).
To put this into context, the overall UK target is to reduce residential emissions by 100% by 2050 compared with 1990 levels – which was 79.7 MtCO2e per year. In 2022 housing was responsible for 55.7 MtCO2e, so the new reductions would bring us to 42.6 MtCO2e in 2030 – a 47% decrease compared to 1990. These commitments, therefore, bring us significantly closer to overall net zero targets, though there will still be a long way to go for 2050.
For UK mortgage lenders, the policies provide both carrot and stick. The new policies will enable more rapid decarbonisation of mortgage portfolios and create opportunities for lenders to provide retrofit education and financing products, playing a significant role in decarbonisation. Concurrently, the mandatory increase of the Minimum Energy Efficiency in the Private Rented Sector (PRS) to EPC C introduces substantial transition risk for lenders.
Orla Shields, Kamma’s CEO, said: “Mortgage lenders play a vital role in driving home energy efficiency improvements among mortgage customers. However, they rely heavily on government policy to facilitate these changes. With new policies expected under Labour, it is the perfect time for lenders to enhance their efforts in energy efficiency education and retrofit products, further accelerating the decarbonisation of UK housing by 2030.”
