Southwark Ramps ROI on Offset Payments 

Buildings account for 75% of emissions in Southwark. Addressing these emissions will be a key focus for the Borough which wants to hit net zero by 2030. Learn how Southwark determined the most effective way to progress towards this target by evaluating potential interventions across their capital portfolio.

Measuring the cost of carbon

Southwark has recently launched the Green Buildings Fund, which uses Section 106 carbon offset payments from developers to fund retrofit and low carbon technologies in council buildings. As of August 2022, developers in Southwark have contributed more than £5 million to the fund, and works are already underway to use this fund to decarbonise our buildings.

However, in order to work out the most effective way to spend this money, the council needed to evaluate how much different interventions would save. What was the cost per tonne of carbon?  

Baseline energy performance and pick cost effective interventions

Southwark measured a baseline energy performance for its building stock through engagement across departments:

  • Housing
  • Corporate facilities
  • Leisure centres

This brought together multiple individual studies of energy performance and then worked out the energy savings which would result from different interventions. Finally, they calculated the equivalent carbon saving and cost per tonne. This enabled a review of the pipeline of capital works to determine the most efficient way of maximising carbon savings.

344 tonnes of carbon saved annually

So far, the Green Buildings Fund has been used to fund the planned £700,000 refurbishment of 18 council homes on the Tustin Estate in Southwark, part of a wider development of around 700 homes which will be virtually zero-emission in operation. In addition to carbon savings, this work will improve insulation and thereby reduce energy bills for residents as well as combatting legacy damp and mould issues. During the retrofit works, residents will be re-housed elsewhere on the estate, a benefit of taking a holistic approach to a large-scale development project like this.

The work includes cavity wall insulation, triple glazing, air source heat pump systems and solar panels. It is estimated that the project will save 344 tonnes of carbon per year (the equivalent of driving around the equator around 500 times), at a cost of under £70 per tonne. This has shown that a rigorous carbon measuring methodology can be applied to energy efficiency improvements in buildings, while also delivering strong outcomes for residents. Residents were closely consulted on all the works and voted in favour in a ballot, demonstrating the value of meaningful engagement through the process.

What next?

The Climate Change Team at Southwark are actively seeking new projects within the council’s portfolio to fund. The Council has pledged to spend £2m from the Green Buildings Fund by 2024, and this includes launching the fund to the public, so that local organisations can also decarbonise their buildings. In addition, Southwark’s leisure centres will be council run from June 2024 presenting another opportunity to drive impact through this funding. Southwark will also be using an Early Review of its local plan to review the amount of money that developers pay for offsetting, which is currently set at £95 per tonne.

Find out more

Green Buildings Fund

Southwark local plan


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