The government has announced that it will not be proceeding with the zero carbon Allowable Solutions scheme, a move which has been described as the “death knell” for Zero Carbon Homes.

The Treasury’s Productivity Plan published on 10 July confirmed that: “The government does not intend to proceed with the zero carbon Allowable Solutions carbon offsetting scheme, or the proposed 2016 increase in on-site energy efficiency standards.”

However, the document added that the government “will keep energy efficiency standards under review, recognising that existing measures to increase energy efficiency of new buildings should be allowed time to become established”.

Allowable Solutions were introcuded in June 2014 and meant that developers could offest carbon emissions through remote measures if on site methods were deemed unsuitable.

The green sector has reacted furiously to the announcement, with Julie Hirigoyen, chief executive of the UK Green Building Council stating: “Let us be in no doubt this announcement is the death knell for zero carbon homes. It is short-sighted, unnecessary, retrograde and damaging to the house building industry which has invested heavily in delivering energy efficient homes. Britain needs more housing but there is no justification for building homes with a permanent legacy of high energy bills.

“The government has not consulted the house building industry sufficiently on this sudden announcement. This arbitrary and regressive action was not mandated by the Conservative Party manifesto. Just last year the Conservative-led coalition government enabled the allowable solutions policy in legislation. This stop-start policy making approach gives industry no confidence in the government’s vision for a low carbon economy and condemns new home owners to higher energy bills.”

Hirigoyen’s sentiments were echoed by Rob Lame, MD of housebuilding company Willmott Dixon Energy Services who said: “Since the original Zero Carbon announcement Willmott Dixon has been supportive of setting a long term trajectory enabling industry to invest with confidence. This announcement seriously undermines industry confidence in government policy and will diminish future investment.”

The renewables industry was already fiercely critical of the government’s move to introduce allowable solutions in the first place. The sector argued that allowing developers to pay money into a fund rather than install carbon-cutting measures on site, would result in homeowners not enjoying the benefit of carbon-cutting measures. Paul King, managing director sustainability, Communications & Marketing LendLease Europe, explained that the decision to now scrap the further watered down proposals was “extremely disappointing”, adding that the government “has today removed a world-leading ambition for all new homes to be zero carbon from 2016”.