Comment
Towards a new London Plan: Energy, carbon and circular economy
Meeting ambitious climate commitments and improving London’s environment are key objectives within the new London Plan consultation; sitting alongside the overarching theme of tackling the housing crisis and delivering economic growth. How will these objectives play out side by side? Senior Consultant, Lizzie Bolton and Director, Barny Evans explore this question and look at the changes that could be made, with a focus on energy, overheating, whole life carbon, and circular economy.
Set to be adopted in 2027, the new London plan will take us through 2030, the year at which the Mayor has set the target for the city to reach net zero. Climate action is, of course, already key a theme within the current London Plan, with several requirements going beyond those of national policy. With the 2030 net zero target looming ever closer, however, bold action will be required, and the consultation states that several stakeholders would like to see the new London Plan go further.
Another theme central to the consultation is the need to fix the housing crisis and deliver sustainable economic growth. London is faced with a highly ambitious housing target of 88,000 new homes per year, far more than have ever been built before. The consultation draws attention to industry concerns that overly complex requirements will have implications in terms of housing delivery, and repeatedly highlights the need to carefully consider the impact of policies on cost and viability to ensure that growth isn’t hampered.
Existing requirements of the London Plan
The existing London Plan has some of the most ambitious sustainability-related targets and requirements in the UK. These include:
Energy efficiency
Major development should be net zero for regulated energy, with a minimum onsite reduction in carbon emissions of 35% over current building regulations, including energy efficiency improvements of 10% for residential and 15% for non-residential developments.
Offsetting
Once carbon reduction measures have been implemented, remaining carbon emissions must be offset, typically at a rate of £95 per tonne of carbon. This usually works out at around £500-£1,000 per home.
Heat networks
Heat networks have been a priority for the GLA for the past few decades. Developments within heat network opportunity areas are required to connect where feasible. The vast majority of heat networks in London are gas powered and, with the decarbonisation of the electricity grid, these heat networks produce much more carbon emissions than all-electric development, and can even result in some developments with individual high-efficiency gas boilers. These gas-powered systems are also typically technically and commercially challenging to convert to heat pumps.
Overheating
The London Plan requires development to reduce the risk of overheating in line with the cooling hierarchy. Overheating is a major issue for Londoners in their homes. Some of the requirements to reduce the risk can pose a significant design challenge. There can also be a tension between providing adequate daylight and preventing overheating, particularly in high density development and taller buildings.
Whole life carbon and circular economy
Development is required to measure and report on whole life carbon emissions, and to demonstrate that action has been taken to reduce emissions. There are no specific whole life carbon targets, however proposals are compared to benchmarks set out in guidance. Developments are also required to produce a Circular Economy Statement which includes consideration of retention and refurbishment options alongside reuse, recycling, and the recycled content targets.
What does the consultation propose for a new London Plan?
The consultation is understandably high-level, given its early stage of development. Climate change and resilience is a key theme of the consultation, and several options are proposed for consideration, with somewhat varying levels of ambition. These include:
Energy efficiency
Options proposed under the energy efficiency theme include maintaining the current approach, leaving energy efficiency to new national standards, adopting different energy standards (such as those used by other boroughs, or emerging national standards), changing the threshold to include smaller developments, or increasing the proportion of carbon savings that should be delivered through on site energy efficiency measures. The Future Homes and Buildings Standard (FHS / FBS) is due to be released in autumn 2025 and will require new development to be all-electric with slightly higher levels of energy efficiency. Speaking to clients and co-professionals, there is a feeling that continued on-site improvements in efficiency over building regulations will increasingly experience diminishing returns, particularly for non-domestic buildings which are possibly at optimal levels in terms of fabric. Homes built to the FHS will have very low energy use, low energy bills, and will be all electric meaning their operational emissions will fall to net zero in line with the decarbonisation of the electricity grid. Implementing standards that are significantly higher than the FHS will complicate development, and it could be possible that the money spent on higher U-values may be better off spent elsewhere. The consultation recognises that grid capacity is a huge constraint to decarbonisation and suggests efficiency as a way to reduce demand on the grid. However, much more important than efficiency is smart energy management (such as energy storage, demand side response, smart controls), which is not mentioned in the consultation at all.
Offsetting
The consultation states that the role of offsets will be reviewed, and it is unclear if these will continue to feature in the new London Plan. The total value of carbon offset funds secured or collected since 2016 is £332,900,000, just £44,500,000 (13%) of which has been spent[1]. With £288,400,000 of offset funds left unspent, it is fair to question if the approach to offsetting is driving effective carbon reductions.
Heat networks
The new London Plan will remove duplication with national Heat Network requirements. The Government is currently developing national ‘heat network zones’ where heat networks are expected to be the lowest cost solution for decarbonising heat. Within these zones, certain types of buildings and low carbon heat sources can be required to connect to a network. The suggestion to align with national regulations seems logical and should help to streamline the planning process; however, it is essential that any heat networks utilise low-carbon heat sources and waste heat, and that no new development is connected to a gas-powered heat network.
Overheating
Several options are proposed in relation to overheating, these include removing bespoke overheating policies, continuing to prioritise passive design through the cooling hierarchy, or continuing to require modelling and designing for warmer conditions. Since the current London Plan was published in 2021, Part O of the building regulations has come into force at a national level, following an almost identical method to the London Plan overheating requirements. The London Plan was ahead of the curve in terms of overheating requirements, but now that this has been picked up by national regulations, aligning with these requirements may help to reduce some of the planning burden. As some of the London Plan requirements, such as dual aspects, can result in less efficient layouts, a more flexible approach could help to maximise floor space and meet housing delivery targets. However, with overheating set to become a key issue in London, it is important that this issue is not overlooked.
Whole life carbon and circular economy
The consultation discusses the potential for developing a framework that can be used for assessing retention or demolition options and help to decide when an existing building should be retained or demolished. The consultation document also states that whole life carbon and circular economy benchmarks could be set to provide certainty around whether these topics have been suitably addressed. This could be accompanied by streamlined reporting to minimise reducing the information that needs to be submitted with an application. Addressing the embodied carbon in existing and new buildings is a growing area of concern (as evidenced by the recent Marks & Spencer case) and it seems like the new London Plan will be retaining a keen focus in this area. The use of a framework which demonstrates the carbon impacts of different proposals will help to reduce uncertainty around which options are the best in terms of carbon emissions. It will be interesting to see how this interacts with wider considerations such as growth demands and heritage.
Our views on the proposed plan
Overall, the consultation reveals a tension between the desire to increase ambition and meet net zero goals, vs the need for a simple and streamlined plan that minimises barriers to development. With some of the most challenging housing delivery targets for some time, a key task will be to strike the right balance between ambitious climate action and deliverability. It appears the plan will aim to achieve this through streamlining policy implementation, reducing reporting processes, removing duplication with national policies, and/or aligning with existing standards that are already used by the industry.
The range of energy efficiency options being considered is broad and it seems the plan could go in any direction at this point. The consultation has a particular focus on the embodied carbon impact of new development and developing an optioneering methodology that allows for clearer consideration of the embodied carbon impacts of retrofit vs demolition. With the decarbonisation of the electricity grid and all-electric energy strategies, the embodied carbon impact of new development will become increasingly significant, and it is important that this is addressed.
What does concern us, however, is that discussion on smart energy management is conspicuously absent from the consultation. With the almost all-electric future, energy management will be critical to the net zero transition. While the consultation does discuss the need for infrastructure, utilities capacity and energy efficiency to reduce demands on the grid, it misses out on some key opportunities such as energy storage, demand side response, smart controls, and smart transport (car clubs, micromobility etc). It is this smarter approach that offers the opportunity for more housing, faster climate action and a better quality of life for Londoners.
Please get in touch with Lizzie Bolton or Barny Evans to discuss how sustainability targets in the new London Plan could affect your development.
17 June 2025