Housebuilders, planners and green groups have condemned the government for scrapping plans to make all new UK homes carbon neutral.

The policy was first announced back in 2006 by the then-chancellor Gordon Brown, who said Britain was the first country to make such a commitment. The proposal would have ensured that all new dwellings from 2016 onwards would generate as much energy on-site, through the use of renewables such as wind or solar as they would use in heating, hot water and lighting. This was supported by even tighter energy efficiency standards that would come into force in 2016, and a scheme which would allow house-builders to deliver equivalent carbon savings off site.

However, both regulations were axed by the government, in a move that has been heavily condemned across the industry. Julie Hirigoyen, chief executive of the UK Green Building Council told the Guardian

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.

House-builders, energy leaders and environmentalists were similarly critical of the move with Ed Davey, former secretary of state for energy and climate change suggested David Cameron “may as well hug a coal power station”.