What is the Public Sector Decarbonisation Scheme?

18 October 2023

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What is the Public Sector Decarbonisation Scheme?

As the UK government remains committed to its target of Net Zero by 2050, we’re seeing more and more in the way of projects designed to drive progress towards that goal. The Public Sector Decarbonisation Scheme is one of these many schemes supporting public sector businesses with reducing emissions by 75% by 2037.  

And with more than 300,000 individual properties, with a combined value of £515bn, the UK public sector represents the largest property portfolio in the country. This means that public sector buildings are responsible for around 2% of the total UK emissions for greenhouse gases. The scheme will build on the progress the sector has already made; in 2020-21 alone, the sector reduced its emissions by 57%.

However, like all sectors, there is still work to be done.

Here, we’ll outline the scheme in more detail, including how it can benefit public sector businesses looking to minimise their own emissions going forward.

What is the Public Sector Decarbonisation Scheme?

The Public Sector Decarbonisation Scheme (PSDS) is a funding initiative that supports public sector bodies in achieving their sustainability goals. As it relates to the Government’s target of Net Zero by 2050, the strategy aims to reduce direct emissions across the sector by at least 50% by 2032, and by 75% by 2037.

Launched in 2020 to reduce the level of emissions from public sector buildings, as well to supporting the ailing economy in the wake of the pandemic, the scheme is now in its third phase. Funds as part of Phase 3c are set to become available in autumn 2023.

Both the funding and the delivery of the scheme has been handled by Salix Finance, a Government-owned, non-departmental BEIS (Department for Business, Energy, & Industrial Strategy) body.

What does this scheme mean for businesses in the public sector?

Since it’s being overseen and completed through Salix, the scheme gives public sector corporations the opportunity to reduce their emissions and energy costs through the installation of modern and renewable energy technologies. As such, the scheme eliminates the outdated and energy-intensive methods that public sector businesses might currently be using.

Additionally, organisations can submit separate applications for individual projects, or numerous projects can be combined into one application, whether the funding is required for a single year or distributed over the course of a number of years.

What’s more, for Phase 3c of the scheme, an additional financial year of funding has been granted. This increases the value of the overall funding to the scheme, and so Phase 3c projects will be able to deliver across two financial years.

Soft sector caps, introduced in Phase 3b, will continue to support the fair allocation of funding across three categories: Education, Health and Public Sector. When a sector cap has been reached, funding allocation for that sector will be paused until all applications for other sectors have been allocated up to their own sector soft cap

How can your business benefit from the scheme?

Public sector businesses can benefit from the scheme in a variety of different ways, including:

  • Reduced emissions, making a significant improvement to Corporate Social Responsibility efforts
  • As buildings become cheaper to heat, organisations will be able to keep colleagues comfortable for less
  • By committing more money to the creation of new green jobs, the move will strengthen the green economy while creating more value overall for businesses across the public sector

For more information of the importance of investing in sustainable energy, and how SEFE Energy can support your business’ efforts, head to our page here.

SEFE Energy is one of the UK’s leading business energy suppliers, helping thousands of businesses manage their gas and electricity contracts. To find out more about what we can offer your business, visit the homepage or call us today on 0161 837 3395.

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