574. Scale of decarbonisation. The built environment and construction activity are significant contributors to carbon emissions in the UK. It is estimated that around 43% of UK emissions are from the built environment (both buildings and infrastructure), mostly from the heat and energy that buildings consume, but also from the production of energy-intensive products and materials that are widely used within the industry, such as concrete.402
575. At the same time, the sector is crucial for delivering net zero, through retrofitting existing buildings, improving building design to increase energy and heat efficiency, more sustainable product selection and improving manufacturing processes to reduce energy consumption and eliminate waste.
576. Size of the economic opportunity. Evidence suggests that an additional 350,000 workers would be needed by 2028, mainly to be involved in delivering improvements to existing buildings to reduce energy demand. These workers will be largely working in small construction firms, tasked with carrying out vital retrofit works in households.403
577. To meet this demand for net zero engineering services skills, the UK needs to recruit around 11,500 electrical apprentices (currently 7,000), and almost double the number of plumbing and building services engineering apprentices. From 2023 to 2030 this creates an additional 64,000 new net zero engineering services apprentices, bringing the total to 156,000.404
578. There are new business opportunities from the transition, such as in the engineering services sector to facilitate electric vehicle (EV) charging, heat pumps, smart energy and building management and battery storage. For builders' merchants, the beneficial opportunity is in supplying the materials and products needed to improve the energy and thermal performance of homes and workplaces.
579. The use of new, sustainable building materials presents opportunities for greater resource efficiency. For example, the reuse of structural steel could see a 95% carbon saving kilogram for kilogram, with a 10-40% cost saving depending on how the steel is sourced and procured.405
580. Barriers to action. The sector is being constrained by three key areas in its attempts to grow and decarbonise.
• Continued changes to government net zero policy and measures to undermine business confidence:
"We believe that clear policy would encourage sustained business investment, increase consumer confidence, enable the skills system to train the workers required to deliver retrofit, and for the supply chains to develop across the UK. [...]
"Businesses need to know about, and be able to rely on, any rules and financial implications affecting net zero investment. The current planning, fiscal and other rules around the procurement of net zero technologies can be too complex, particularly for smaller business." - Construction Leadership Council406
• The availability of skills to complete the retrofits and other work required:
"The skills issue is a huge challenge. With retrofitting [buildings], if a customer is spending a lot of money to airtight a house but the person delivering the job isn't delivering the job correctly, the house won't be airtight." - Construction firm407
• Questions over the availability of zero carbon materials, products, and vehicles:
"Essential material, product, and component shortages are currently affecting the speed of some key technology delivery in the short term (e.g., electronic components)."
- Construction Leadership Council408
• As well as these three specific areas, the overall business environment for construction impacts on the ability for industry to change and adapt.
".cash-flow issues due to payment delays and unfair contractual arrangements, which impact on the ability of the SMEs to train and innovate." - Construction Leadership Council409