Emissions Remain High and Cost Challenges Intensify: Global Building Decarbonization Awaits Green Incentives

The European Commission recently proposed a new package of measures for building decarbonization, in conjunction with the Energy Performance of Buildings Directive established last year. It stated that a development path will be formulated to improve building energy efficiency and reduce emissions in the construction sector. The European Commission pointed out that approximately 85% of buildings within the EU were constructed before 2000, and 75% of them have relatively poor energy performance. Improving building energy performance will be a crucial component in achieving economic decarbonization goals.

According to data from the United Nations Environment Programme, energy-related carbon dioxide emissions from the global building and construction sector account for about 34% of total emissions. Actions in many countries regarding the renovation of old buildings and decarbonization of the building supply chain have been relatively slow, making the decarbonization of the construction industry a long and arduous journey. Industry experts believe that accelerating decarbonization in the building sector requires not only the expansion of clean energy technology applications but also reasonable policies and financial support to achieve green and low-carbon development across the entire industry chain.

- Multiple countries have proposed building energy efficiency targets.

"More than half of Europe's natural gas consumption occurs in buildings, and the building sector accounts for about 40% of the EU's energy emissions. Improving the energy performance of the building sector is crucial to achieving climate goals," said Dan Jørgensen, EU Commissioner for Energy and Housing. "More efficient buildings will result in lower energy bills and also improve quality of life."

To this end, the European Commission has proposed measures such as amending building energy performance requirements and establishing a stock building database to promote emission reductions in buildings and improve energy efficiency in the construction sector. In fact, as early as 2021, the EU identified the construction industry as one of the key sectors for achieving the 2050 carbon neutrality target. In May 2024, the EU's Energy Performance of Buildings Directive will be officially implemented, and EU member states are required to submit national building renovation plans by the end of 2026.

In recent years, as countries around the world have successively set climate goals, they have also turned their attention to buildings closely related to daily life. From raw material production to building operation, decarbonizing the entire construction industry chain is seen as an important step in reducing greenhouse gas emissions. In 2021, the Singaporean government announced the "Singapore Green Plan 2030," setting green development goals for the next decade and stipulating that from 2030 onward, 80% of new buildings must be super low energy buildings. This May, China also released the "Opinions on Continuously Advancing Urban Renewal Actions," proposing to vigorously build safe, comfortable, green, and smart housing, while strengthening the renovation and utilization of existing buildings. In addition, countries such as Belgium, Malaysia, and Mexico have also launched green and low-carbon urban transformation initiatives, with carbon reduction practices in buildings beginning to take shape.

● The pace is still slow and the scope needs to be expanded.

Although many countries have already begun to take action, industry experts point out that, in the face of established climate targets, the pace of decarbonization in the construction industry remains slow. Accelerating efforts may be key to achieving these goals.

"Globally, less than 1% of existing buildings can achieve zero carbon emissions," said Roxana Slavcheva, Global Lead for Built Environment at the World Resources Institute's Ross Center for Sustainable Cities, in an interview with China Energy News. "If embodied carbon emissions from building materials and construction stages are considered, this number is even smaller than 1%. In the past 5 to 10 years, approximately 5% of new buildings have achieved zero carbon, while current climate targets require this figure to rise to 100%, indicating a significant gap between reality and goals."

The "Global Status Report for Buildings and Construction" released by the United Nations Environment Programme (UNEP) suggests that the current main measures for decarbonizing the building sector include improving energy efficiency, integrating renewable energy, and addressing embodied carbon emissions. Major global greenhouse gas-emitting countries urgently need to upgrade building energy consumption designs and adopt high-performance systems such as heat pumps. Meanwhile, emerging economies should develop relevant standards for older buildings and implement improvement measures and policies through mandatory energy regulations.

Although the decarbonization path is clear, Roxana Slavcheva warns that relatively high upfront investment costs remain a significant challenge. "Whether it's retrofitting existing buildings or decarbonizing new constructions, investors may still perceive the investment risk as relatively high and the return on investment as relatively low. This challenge may be particularly pronounced for emerging economies."

Policy funding support is indispensable.

Faced with numerous bottlenecks, the aforementioned report suggests that countries worldwide should "unlock" more investment in building energy efficiency. Major emitters should leverage public funds and encourage private investment, and governments should ensure that green financing fully accounts for the carbon cost and social value of building decarbonization. By 2030, to achieve the established emission reduction targets, investment in building sector decarbonization should increase from the current $270 billion to $522 billion.

Liu Qiang, the Global Climate Program Director and China Chief Representative of the Children's Investment Fund Foundation (CIFF), suggested that in promoting green and low-carbon transformation in urban and building sectors, it is essential to: firstly, establish a carbon management mindset during urban renewal processes, reducing operational carbon emissions and promoting low-carbon transitions in upstream high-carbon sectors such as steel and cement; secondly, effectively utilize fiscal, financial, and market mechanisms to explore solutions to challenges such as large initial investments and long return cycles in low-carbon retrofitting; thirdly, strengthen information exchange and experience sharing between regions, and replicate and promote successful practices and solutions developed in various regions on a larger scale.

Roxana Slavcheva emphasized that, on the one hand, countries should continue to encourage investment in renewable energy and energy efficiency measures; on the other hand, more attention needs to be paid to the source aspects of building emissions, such as material procurement and construction processes, while continuously advancing low-carbon building materials, exploring the large-scale application of cutting-edge research results, and providing the market with appropriate incentive measures. In this process, China will be an important force, as Chinese green finance still has considerable room for expansion and will more effectively support the green and low-carbon urban renewal.

Based on the current situation of building emissions in China, Ni Jiangbo, president of the China Association of Building Energy Efficiency, believes that efforts should be made to accelerate the renovation of old buildings, innovate energy-saving and carbon-reduction mechanisms, improve policy and financial support, learn from consumer-side efforts, work together to promote green urban development, and facilitate the low-carbon transition of the construction industry.