Spending Review: slim pickings for whole life carbon savings

With huge infrastructure and housing targets to fulfil, decarbonising industry was low on the Spending Review agenda.

Commitments to a revised Carbon Budget and Growth Delivery Plan, and building on previous funding for carbon capture, usage and storage (CCUS) projects, demonstrated good progress, but as BCIS’s executive director, James Fiske, argues below, there’s a long way to go.

Decarbonisation rests on data investment

On a carbon front, the main takeaway from the Spending Review can be boiled down to progress for carbon capture and slim pickings for the whole life carbon agenda. At this stage in the net zero game, the government is simply running out of chances to increase whole life carbon measuring and reporting in the built environment. Delivery of the next Carbon Budget and Growth Delivery Plan in October, confirmed in the Spending Review, brings fresh hope for decarbonisation, but the government must also consider an investment in carbon data.

The Spending Review’s purpose was to set out departmental budgets for 2028-29 and capital investment for 2029-30. Given the economic reliance on infrastructure and innovation, coupled with Labour’s pledge to improve energy-efficiency and energy security, it’s unsurprising transport, housing, energy generation and science and technology that went home the biggest winners.

In terms of emissions reduction, the biggest announcement for the built environment was confirmation that the government’s upcoming Carbon Budget and Growth Delivery Plan will include plans to decarbonise industry. Considering the plan’s predecessor was ruled ‘unlawful’ by the High Court last year due to ambiguity on how emissions targets would be met⁽¹⁾, it will be interesting to see if revisions truly address past shortcomings.

Elsewhere, the £14.2 billion investment in Sizewell C is a welcome boost. If the government’s cash injection pays off, and notwithstanding the significant emissions generated during its construction, Sizewell C promises a long-term solution for cutting energy emissions. The combined £22.6 billion investment in CCUS and the Warm Homes Plan will help to rein in carbon emissions over the next decade too.

However, last Wednesday also shed light on the government’s tunnel vision focus on operational carbon. Of the Spending Review’s announcements, it could be said that just £5.6 billion was allocated to efforts to reduce embodied carbon – emissions generated through the extraction, manufacture, transportation, use and demolition of building materials. Specifically, this figure included £3 billion for the advanced manufacturing sector to reinforce the supply chain of zero emission vehicles, batteries and ultra-low and zero-carbon aircraft, and £2.6 billion to decarbonise transport from 2026-27 to 2029-30⁽²⁾.

Albeit a typically small proportion, emissions caused through materials transportation contribute toward a building’s whole life carbon, so it’s certainly a start to see some funding directed at transport decarbonisation generally. That said, the Spending Review was another missed opportunity to move the whole life carbon approach to construction and demolition forward.

What’s desperately needed is investment in data and data-driven tools. With this, the construction and manufacturing sectors will be empowered to better understand the link between materials and carbon. To date, the Built Environment Carbon Database (BECD) has been instrumental in facilitating the whole life carbon agenda, providing a two-way street for users to report and access embodied carbon data on projects and products. But there is a great need to build on this work and make carbon measuring and reporting in the built environment more accessible.

For instance, the government could have used the Spending Review to invest in Environmental Product Declarations (EPDs). EPDs are the basis for understanding the environmental performance of building materials but observations from the BECD suggests their quality and consistency is not where it needs to be. Government investment in subsidising EPDs, which come at a high cost for manufacturers, and funding a centralised EPD database, would help incentivise a bigger commitment to delivering high-quality EPDs.

It could also join up data sharing and usage in construction supply chains. The more product and project carbon data businesses and construction professionals have access to, and the greater their ability to use this data in carbon forecasting and benchmarking, the faster the built environment will decarbonise.

While understandable from an economic perspective, the release of the government’s 10 Year Infrastructure Strategy and investment in major housing and infrastructure projects, has preceded progress in the standardisation and development of greener building practices.

The bottom line is construction is hard to decarbonise and holding the much-needed mandate for carbon assessments at arm’s length does nothing to improve this reality.

Spending Review settled, let’s hope the government’s Carbon Budget and Growth Delivery Plan, and its measures to decarbonise industry, are worth their salt.

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^{(1) Britain’s climate action plan unlawful, high court rules  - here}

^{(2) HMT – Spending Review – June 2025   - here}