UK Government Announces MEES Requirements For Commercial Buildings

UK GOV statement: 

This update provides an interim response to the 2019 and 2021 consultations on strengthening non‑domestic MEES in England and Wales. It sets out how the government intends to implement a targeted approach to strengthening the policy, focused on supporting businesses that rent larger premises by helping to cut energy costs and improve energy efficiency. 

The government is confirming its intention to implement the following: 

• from 2031, it is proposed that all private rented buildings over 1,000 square metres in England and Wales will need to reach a higher standard of energy efficiency of EPC B, where cost effective
• the intention is for buildings below 1,000 square metres to continue to be subject to the current minimum standard of EPC E
• the previously proposed interim EPC C milestone for 2027 will not be taken forward, giving landlords and tenants more time to improve the efficiency of their buildings in a way that suits their buildings and lease agreements
• existing flexibility mechanisms, including the 7-year payback test and exemptions, will remain in place ensuring that only improvements that are practical, affordable and cost-effective will be required

The changes to raise MEES to EPC B for larger buildings will only take effect following the successful passage of secondary legislation through Parliament. 

This targeted approach focuses action where it delivers the greatest benefits, helping tenants in the largest rented buildings save energy and reduce their bills by £360 million* per year by 2031, protecting them from future energy shocks. It is also expected to lower the energy demand from rented non-domestic buildings on the energy system – thereby strengthening our energy security and cutting carbon emissions.

While continuing to improve the poorest‑performing buildings through the existing EPC E standard, we are giving additional flexibility to SMEs and high street landlords of smaller properties to upgrade their buildings over time, with no set deadline for going beyond this level. With a fair and proportionate timetable, the policy supports business investment, reduces exposure to volatile energy prices and strengthens UK energy security. 

Further detail on these proposals and implementation of the threshold will be set out in the forthcoming government response to the public consultations. The government aims to introduce legislation and updated guidance at the earliest opportunity, working with stakeholders to get the detail right.

*The figure of up to £360 million in bills savings for tenants in larger non-domestic buildings was estimated using the department’s discrete event simulation model. This is used to model packages of measures expected to be delivered under the regulations and estimates the impact, including on bills and EPC rating. An overarching description of the modelling approach is set out in the relevant consultation stage Impact Assessment. Bill savings are calculated by valuing changes in modelled energy use in 2031 (the deadline for compliance) using projected retail energy prices for 2031, from the Green Book supplementary guidance. The estimated £360 million figure is subject to refinement as the policy develops.

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