A rapid transition to ‘zero carbon’ building was announced by the UK Government in December 2006 as a key step forward in reducing the Green House Gas (GHG) emissions from the domestic and non-domestic sectors. This paper elaborates on whether the revised definition of ‘zero carbon’ dwellings in the UK (2009) and the approach to implementing this policy, advocated by the Zero Carbon Hub (ZCH), is coherent with overarching climate change and energy policies. Further, the paper examines the barriers to adopting higher minimum standards of fabric energy efficiency, in particular the German Passivhaus standard. By comparing methodological differences and outcomes associated with these different energy performance standards, an estimate of the real world energy and carbon savings has been determined. The paper concludes that adopting a more robust ‘fabric first’ approach, would achieve better coherence with UK climate change and energy policies, whilst mitigating the risks associated with carbon offsetting mechanisms.