In February 2007, the Welsh Government made a bold announcement. All new buildings would need to achieve zero carbon by 2011, five years ahead of the UK Government’s own 2016 target. At the time, it felt like Wales was genuinely about to lead the way.

It didn’t happen. And we are still waiting.

It’s 2026; new building regulations for energy performance come into force in March 2027, and they still stop short of net zero. So, it will be more than 20 years since that original policy was announced before anything close to it reaches the statute book and even then, we won’t have fully reached our target.

I want to put some hard numbers on what that gap has actually cost us. Not as an exercise in blame, but because the National Infrastructure Commission for Wales exists precisely to help Wales make better long-term infrastructure decisions, and you cannot do that without being honest about the consequences of the decisions we have already made or failed to make.

The lost opportunity

Since 2011, around 78,000 new homes have been built in Wales. If those homes had been built to a net zero standard ie heat pumps, solar PV, properly insulate and airtight, the cumulative operational carbon saving to the end of 2025 would have been approximately 1.95 million tonnes of CO₂. That is roughly 5% of Wales’s entire annual greenhouse gas emissions, wiped out by changes to how we build homes. Not by retrofitting. Not by grand industrial transformation. Just by building new homes properly from the start.

The fuel bill savings are more striking. A net zero home costs roughly £300–400 a year to heat and power. A standard new build in 2022 at the peak of the energy crisis was costing occupants over £2,200 and it set for further increases later this year. Those three crisis years alone account for around £200 million of an estimated £550 million total in bill savings that Welsh households have missed out on. When people talk about the cost of living crisis, this is exactly the kind of structural intervention that could have softened it significantly.

And fuel poverty. Wales defines it as spending more than 10% of household income on energy. Around 8,500 households, concentrated in the social housing cohort would likely have been lifted above that threshold if their new home had been built to net zero rather than the standard of the day. PS that is probably an underestimate.

Extend the analysis to non-domestic buildings and the picture is larger still: approximately 3.5 million tonnes CO₂ of cumulative savings, and £1.55 billion in energy costs that businesses and public services have paid unnecessarily.

I was there at the beginning

I have a personal stake in this story. In 2007, when I was director of BRE Wales, I established Woodknowledge Wales with the then Forestry Commission of Wales, with the specific aim of driving Welsh timber up the value chain, away from pallets and paper, and into construction. The connection between sustainable buildings and a sustainable Welsh forest economy seemed obvious to me then, and it still does.

In 2010, as part of the Heads of the Valleys programme, BRE, United Welsh Housing and Cardiff University constructed three net zero homes in Ebbw Vale, on the old steelworks site, The Works. The Larch House and the Lime House, designed by bere:architects, were built primarily from Welsh timber and Welsh products. They were the first affordable Passivhaus homes in Wales, and the UK’s first zero carbon social housing. They proved it could be done.

So why didn’t it happen?

I have to be honest here. Back in 2007, the cost uplift from a standard Part L new build to a net zero home was significant, around 33%. That would have had a real impact on new build volumes in the short term. My estimate is that we might have seen a temporary drop of somewhere between 1,000 and 2,000 homes. That is not nothing, and it is the argument the house builders’ lobby made, successfully, when they pushed back against the policy. The Welsh Government blinked, and the mandate was dropped.

I understand the political logic. A visible short-term reduction in housing completions is far more politically exposed than the invisible, diffuse cost of failing to act on carbon and fuel poverty. But that decision has compounded for nearly two decades.

Here is what makes it so painful in retrospect: that 33% cost uplift would not have stayed at 33%. Supply chains mature, skills develop, products become standard. Today, the cost uplift from current Part L to a genuinely net zero home is approximately 10%. The Welsh Government’s own consultation data for Part L 2025 shows that a 93% carbon saving over current standards can be achieved at just a 3.3% build cost increase. At scale, credible estimates put the premium for full net zero at 6–8%.

We dropped the policy when it was expensive. We still haven’t reinstated it now that it is affordable. That is a policy failure of some magnitude.

What we could have had

Think about what a different trajectory might have looked like. A Welsh timber construction sector that had two decades of growing demand behind it. A supply chain for high-performance windows, insulated panels and heat pumps that had been built up in Wales rather than imported. Renewable energy installation and maintenance companies that had scaled on the back of consistent domestic policy. A generation of builders, designers and assessors with deep expertise in sustainable construction.

We would have had approximately 30,000 people lifted out of fuel poverty. We would have 3.5 million tonnes less CO₂ in the atmosphere from Welsh buildings alone. And Wales would have been genuinely recognised as a world leader in sustainable construction, not just the country that wrote an inspiring policy in 2007 and then quietly shelved it.

A second missed opportunity

In 2013 Wales had a second opportunity to lead the way on energy efficiency. Carl Sargeant was the Minister at the time, and he led a consultation on emission reductions in new homes. The consultation suggested a 40% reduction; the actual target chosen was 8%, a figure that seemed to have been already achieved in new construction. The decision was criticised as “ridiculous Mickey Mouse politics”, with campaigners described as being ‘speechless with rage’.

Once again, weaker standards locked-in future generations to higher energy bills and lower quality housing, and needlessly exposed tens of thousands to the vagaries of the fossil fuel market. Although this decision was taken prior to the Well-being of Future Generations Act, it can be seen in hindsight as directly contradictory to the Goals.

Conclusion

The National Infrastructure Commission for Wales exists to take the long view, to make the case for infrastructure decisions that may be politically difficult in the short term but are essential over a generation. The evidence on net zero buildings is unambiguous. The cost of inaction is real, it is measurable, and it falls hardest on the people who can least afford it. March 2027 is a significant step forward; but a step is not the destination. Wales needs a clear, credible timetable to reach what was promised in 2007. We have already waited long enough.

References
¹ The February 2007 WAG zero carbon by 2011 announcement: orca.cardiff.ac.uk/27164
² Wales new house building statistics, StatsWales: statswales.gov.wales/Catalogue/Housing/New-House-Building
³ New house building 2024-25 (record low 4,631 completions): gov.wales/new-house-building-april-2024-march-2025-html
⁴ Wales fuel poverty modelled estimates, October 2024 (340,000 households, 25%): gov.wales/fuel-poverty-modelled-estimates-wales-october-2024-html
⁵ Wales climate change targets and carbon budgets (~36 MtCO₂e/year): gov.wales/climate-change-targets-and-carbon-budgets
⁶ Net Zero Wales Carbon Budget 2 plan: gov.wales/net-zero-wales
⁷ Wales Part L 2025 consultation and outcome (3.3% uplift for 93% carbon saving): gov.wales/building-regulations-part-l-2025-review
⁸ Wales Part L 2025 regulatory circular — in force 4 March 2027: gov.wales/building-etc-amendment-wales-regulations-2026-wgc-0032026-html
⁹ Savills research on net zero new build cost uplift (10–14%): savills.com/research_articles/255800/348619-0
¹⁰ BEIS Building for 2050 — low cost, low carbon homes: gov.uk/government/publications/building-for-2050
¹¹ Larch House and Lime House, Ebbw Vale — UK’s first zero carbon affordable Passivhaus (2010): bere.co.uk/research/larch-lime-houses
¹² Woodknowledge Wales: woodknowledge.wales
¹³ National Infrastructure Commission for Wales: nicw.gov.wales

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