Memorandum submitted by Kingspan Insulated
Panels (GJS20)
SUMMARY
— Research from Kingspan shows that one
of the biggest opportunities for carbon reduction and job creation
in the construction sector can come from refurbishing existing
non-domestic buildings. — A large-scale coordinated programme
of refurbishment would bring the threefold benefits of: —
Creation or safeguarding of up to 75,000 long-term construction
sector jobs.
— Annual carbon savings of 4.74Mt between
2010 and 2022.
— Over £40 billion of fuel cost savings
by 2022.
— The biggest barrier to delivering these
benefits is financing. Schemes such as Salix, for the public sector,
provide guaranteed loans to organisations for investment in energy
efficiency, which are then paid back by the cost savings delivered.
— The Budget 2009 gave a welcome injection
of cash to these schemes, but the money is nowhere near enough
to deliver the potential job, carbon and fuel cost benefits that
exist.
— The jobs which would be created by such
a programme would be mainly in the construction industry, one
of the most hard-hit in the current recession, and a sector where
some of the most important "green skills" currently
exist.
EMISSIONS FROM
THE BUILDING
SECTOR—THE
SCALE OF
THE PROBLEM
1. Kingspan Insulated Panels is the world's
largest manufacturer of insulated panels. Based in North Wales,
it employs over 400 people in the UK and operates in 18 countries
around the globe. It is part of the wider Kingspan Group, a major
construction products company based in Ireland with an annual
turnover in 2008 of €1.67 million. Other divisions of Kingspan
include Off-site sustainable housing, industrial insulation and
environmental renewal energy.
2. Kingspan Insulated Panels is heavily involved
in the cladding of new and existing buildings around the UK, helping
to provide greater energy efficiency, and therefore lower carbon
emissions and fuel costs. As a result of this work, Kingspan commissioned
the independent environmental consultancy Caleb Management Services
to produce a detailed report into the contribution which refurbishing
existing non-domestic buildings can make to reducing carbon emissions,
fuel costs and creating construction sector jobs (from hereon
referred to as "The Caleb research").
3. Much of the focus of the Government's
efforts to reduce emissions from the building sector has been
in the field of new-build (eg zero carbon targets for both domestic
and non-domestic buildings by 2016 and 2019 respectively). However,
given that new buildings each year typically account for only
1% of the building stock, it is clear that this emphasis is not
focusing on the area of greatest need and opportunity.
4. Caleb's research showed that existing
non-domestic buildings account for over 100Mt of carbon emissions
each year, equal to 20% of the UK's total carbon emissions. Given
the Government's hugely ambitious target to reduce carbon emissions
by 80% by 2050, it is clear that in order to have any chance of
meeting this target, non-domestic emissions need to be tackled
urgently.
THE SCALE
OF THE
OPPORTUNITY
5. The Caleb research highlighted three
main areas of benefits which could be realised through a programme
of refurbishment (through upgrading existing non-domestic buildings
to a minimum Energy Performance Certificate C rating in a phased
programme between 2010 and 2022). These were:
(c) Annual energy cost savings of £5.65
billion, equivalent to over £40 billion by 2022.
6. This approach to improving energy efficiency,
we believe, represents one of the easiest, quickest, cheapest
and most effective means of reducing carbon emissions from buildings,
and thus helping to meet the Government's targets in this area.
BARRIERS TO
TAKE-UP
7. Despite the obvious benefits available
through energy efficient refurbishment, the evidence shows that
opportunities are being missed. The biggest barrier to take-up
by businesses and the public sector found by the Caleb research
was access to sufficient financing.
8. £27 billion is already spent annually
by the UK on commercial and public refurbishment, but little emphasis
in this is given to improving energy efficiency. There are perceptions,
wrong in our experience, that investment in energy efficiency
takes many years to generate payback from the capital investment
involved, which thus puts organisations off investing in refurbishment.
POSSIBLE SOLUTIONS
9. Within the public sector, there are a
few good examples of provision of funding for organisations wanting
to invest in energy efficiency. The Salix Finance scheme,[61]
which has been operating since 2004, provides loans to public
sector organisations to improve energy efficiency, with the loans
paid back through the cost savings accrued. Salix was given an
extra £65 million in the Budget 2009, but this represents
only a tiny fraction of what could be achieved. The Budget 2009
also gave the Carbon Trust £100 million to provide in loans
to SMEs for them to invest in energy efficiency.
NATURE OF
EMPLOYMENT POSSIBILITIES
THROUGH ENERGY
EFFICIENCY
10. Programmes to reduce carbon emissions
from existing buildings are job creation engines. With Government
assistance, it would be possible to establish an effective programme
to give fresh impetus to the labour market. Research from Germany
indicates that for every €1 billion invested in energy efficiency,
around 25,000 jobs are created or safeguarded in the construction
industry and its supply chain every year.[62]
11. Improving energy efficiency in buildings
is a particularly effective way to stimulate employment in the
places where it is needed most, and to employ people who have
the greatest trouble in finding jobs. In terms of direct employment,
energy efficiency in buildings is a labour-intensive sector, engaging
many small, geographically dispersed installation companies. Furthermore,
the resulting lower fuel bills mean more money is available to
spend on non-energy items (and the labour intensity in sectors
stimulated by general consumption exceeds that in the energy supply
sector).
12. Thus indirect employment is stimulated
by the energy savings, for years after the work is completed.
Ultimately, energy efficiency contributes to economic efficiency
and growth, which creates more wealth and employment opportunities.
13. To use the German example again, 12
energy savings programmes were monitored, all of which were designed
to reduce energy consumption. The employment benefit between 2006
and 2029 of the programmes was calculated as 300,000 person years,
mainly in the building construction and refurbishment sectors.
The programmes have a net positive impact of about 1 million person
years to 2030, with a maximum of 75,000 person years in 2015.
The development of net employment will remain positive to 2030,
even after the expiry of projects, because of reduced energy costs,
with saved revenue spent elsewhere in the economy.[63]
SKILLS BASE
FOR THE
ENVIRONMENTAL CONSTRUCTION
INDUSTRY IN
THE UK
14. There is good provision of training
for contractors involved in refurbishment. Skill levels required
for operatives involved directly in applying new thermal insulation
systems are relatively low and training is available via some
trade associations and their members. Trade associations such
as EPIC (Engineered Panels in Construction), NFRC (National Federation
of Roofing Contractors), SPRA (Single Ply Roofing Association)
and others should be contacted for training advice which is available
either directly or through their members. Companies such as Kingspan
Panels provide training for contractors at our Holywell site and
in 2008 we trained over 600 contractor personnel on the installation
of our systems. Kingspan also provides on-site training through
our Field Service Engineering Team.
SYNERGY WITH
"LOW CARBON
INDUSTRIAL STRATEGY"
15. Rolling out access to funding for refurbishing
existing non-domestic buildings would very much be in accordance
with the Government's Low Carbon Industrial Strategy, published
in March 2009. The strategy states:
(i) "A national shift to greater resource
efficiency would also support the creation of tens of thousands
of jobs for businesses in this sector."[64]
16. The Strategy also backs the findings
of the Caleb research in identifying finance as the main barrier
to take-up of energy efficiency measures:
(i) "Despite the clear economic case for undertaking
energy efficiency measures, lack of information and lack of finance,
especially in the current economic climate, can prevent businesses
from taking them up.
(ii) "Government has a clear role in removing
these barriers and already provides advice and low-cost finance."
17. As already referenced, Salix and the
Carbon Trust do already provide low-cost finance, but in quantities
far removed from those needed to fully realise the employment,
emission and fuel saving benefits possible.
11 June 2009
61 http://www.salixfinance.co.uk/home.html Back
62
Data from German Federal Minister for Transport, Building and
Urban Affairs [more specific reference needed]. Back
63
Impact on activity & employment of Climate Change and GHG
mitigation policies in the enlarged Europe: Final Country Report-Germany;
Wuppertal Institute for Climate, Environment & Energy; 2006. Back
64
Low Carbon Industrial Strategy, BERR, March 2009, page 4. Back
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