The first quarter of 2022 has been a busy one for the construction industry. There have been various reforms, talks about new regulations for achieving net zero targets, continued fluctuations in material prices further exacerbated by the war in Ukraine and a lot more. Navigating through such stormy waters can be a challenge. But the best way to do so is by keeping up with all the changes and reforms in the industry and planning around them. So, before we enter Q2, here are five key insights that construction companies need to be aware of as they plan for the rest of the year ahead:
Talks About the Part Z Bill
North Norfolk MP Duncan Baker is to propose a bill making it mandatory to calculate and reduce embodied carbons in the construction industry. Once the Part Z Bill is passed into law, major changes in the current building regulations will be required in order to limit carbon emissions from materials and construction of buildings in the UK. This currently amounts to roughly 50 million tonnes of CO2 each year. The bill hopes to correct the government’s strategy for reaching net-zero emissions by 2050 as it failed to address the issue of embodied carbons. The strategy instead focuses on operational emissions resulting from heating and powering buildings.
In the Part Z Bill, Baker proposes that architects should be legally required to “measure, report, and reduce” the embodied carbon emissions of major building projects. With this bill, the government policy will also be in line with various industry groups like the UK Green Building Council, the Royal Institute of British Architects and the independent Climate Change Committee. In fact, the bill has been drafted with the input of authors from the Institute of Structural Engineers and the Royal Institute of British Architects and is based on invaluable insights collected from the industry.
Fuel Taxation Changes
Red diesel is commonly used in the construction industry to power generators and various other products on-site. This diesel is untaxed as it is used for off-road equipment and vehicles. But as the country moves towards net-zero carbon emissions, the government has changed this. Red diesel will no longer be made available at a rebated rate for most commercial applications starting from this month. This will further increase costs for construction companies.
Withdrawn Consolidated Advice Note and Building Safety Plan
Earlier in February this year, the government finally announced that the Consolidated Advice Note has been replaced by PAS (publicly available specification) 9980: Fire risk appraisal and assessment of external wall construction and cladding of existing blocks of flats. This new PAS has been developed by the British Standards Institute and will be used by fire risk assessors as guidance while carrying out the assessment of external wall systems.
Business Rate Exemptions for Generation of Renewable Energy
In the Autumn budget last year, the government had announced business rate exemptions for businesses using plant and machinery to generate renewable energy. This exemption was to come into effect starting from April 2023.
However, the Spring Statement announced that this measure would take effect starting from April 2022, a year earlier than previously planned. The business rate exemption will greatly help the construction industry with the decarbonisation of non-domestic buildings.
Material Prices to Stay High in 2022
A new report by Linesight suggests that the raw material prices for the construction industry will remain high throughout 2022. The high prices will grow as supply chain problems and high production costs will continue to drive up costs for raw materials like steel and timber.