Decarbonization of real estate: all the news on the future of buildings at EXPO REAL
Decarbonizing buildings—one of the major topics at EXPO REAL
Climate change has become noticeable, and it is inevitable to contain global warming. Rising temperatures are mainly attributable to the emission of carbon dioxide (CO₂), which is produced when fossil fuels are burned. On the list of polluters, buildings and transport rank third and fourth (after the energy sector and industry). Along the path to a climate-neutral city, the goal is to cut CO₂ emissions from buildings by about half by 2030 and to make buildings completely climate-neutral by 2050. These real estate decarbonization goals can only be achieved by innovative solutions in their construction, renovation and operation.
The decarbonization of cities and buildings will be addressed this year at Transform & Beyond by EXPO REAL, along with many other future topics.
What events are there related to decarbonization and climate-neutral cities?
At the Decarb Arena of the Munich real estate fair, discussions have focused on fundamental issues such as the Paris Climate Agreement and the 1.5 °C limit, and what this means for the real estate industry, but also on how to specifically drive decarbonization in housing, office locations and urban logistics. Also on the agenda were the renewal and transformation of cities for “healthy people and a healthy planet.” And since especially the energy demand is a dominating topic, it was also necessary to take a closer look at this “anything but simple” complex. Similarly, it was of vital interest to all stakeholders as to whether decarbonizing cities can become a competitive advantage of Europe.
However, other forums at EXPO REAL also directly or indirectly addressed the decarbonization of real estate and cities. For example, in the EXPO REAL Forum, there was a block on “Urban Development”, dealing with mobility and how to improve the quality of life in cities; the “Changes” block calls for “Climate Action: Walk the Talk.” The REAL ESTATE INNOVATION Forum dealt with building in existing structures "Turn old into smart for a new climate". And at the GRAND PLAZA, the city center was under scrutiny with “Major construction site city center: How can the transformation succeed?”
What does “decarbonization” mean?
Decarbonization is the reduction of carbon dioxide (CO₂) emissions through the use of low-carbon or, even better, zero-carbon energy sources. Zero-carbon energy sources are renewables such as wind, solar, geothermal heat, hydropower or biomass. Wood too is a renewable energy source, but releases the once-stored CO₂ when burned. The aim of decarbonization is to limit climate change and contain global warming. The target is to limit global warming to well below the 20 °C threshold—currently, we are already 1.1 °C above pre-industrial levels.
With the entire economy and our lives today being based on energy use, almost all sectors are affected by the transformation towards climate-neutral energy use. Also the real estate industry is required to make the use of energy in buildings and real estate climate neutral.
Decarbonizing real estate
According to the German Federal Ministry for the Environment, the building sector accounts for 16 percent (around 120 metric tons) of total CO₂ emissions in Germany. This calculation, however, only includes emissions that occur during the operation of the building, i. e. during heating, cooling, hot water preparation and the consumption of electricity for lighting, household appliances and other technology in the house. When adding the so-called gray energy required to construct a building—this energy is largely attributed to the industry sector—the building sector's share of CO₂ emissions is a good 30 percent.
To start with the operation of buildings: for new buildings, the increasingly stricter requirements of the Energy Saving Ordinance, and since 2020 of the Buildings Energy Act (GEG), have led to a relatively high level of energy efficiency in the operation of the properties. The far greater challenge is to renovate the existing building stock to make it more energy efficient. In 2022, Germany counted about 19.5 million residential buildings and 3 million non-residential buildings (office properties, hotels, gyms, churches, schools, supermarkets, etc.), 5.7 percent of which were built in the last 20 years. In other words: the majority of buildings require renovation to improve energy efficiency if CO₂ emissions from the operation of buildings are to be reduced in the long term.
Renovation of existing properties
In Germany, little has been done in recent years to renovate existing properties. Notably, for the 43.4 million housing units (destatis.de/DE/Themen/Gesellschaft-Umwelt/Wohnen/_inhalt.html), the average renovation rate is just over one percent—equivalent to about 500,000 units. To achieve the climate targets in the housing stock, the renovation rate would need to be doubled (bmwk.de › Redaktion › 2021/06).
Renovating for energy efficiency means first and foremost ensuring that buildings have the lowest possible heating requirements. Primary means are to increase the tightness of windows and doors and to insulate the building envelope so that less heat escapes from indoors. Likewise, this includes reducing energy requirements (hot water, electricity) via solar and photovoltaic systems and relying largely on non-fossil energy sources for heating in the cold season. Additionally, control systems can regulate the heat demand in individual rooms and thus also contribute to energy savings.
Toward a climate-neutral city thanks to decarbonization
A sustainable decarbonization must start from the cities. This is where around 80 percent of global CO₂ emissions occur (bmz.de/de/themen/klimawandel-und-entwicklung/stadt-und-klima), compared with more than 70 percent in European cities (germany.representation.ec.europa.eu/news/neun-stadte-deutschland-nehmen-der-eu-mission-100-klimaneutrale-stadte-teil-2022-04-28_de). This is attributable to the density of buildings—after all, 75 percent of EU citizens live in urban areas—but also, among other things, to transport and mobility as well as production and industry. At the same time, it is in cities that global warming is being felt most acutely. Hence, one goal of EU climate policy is to reduce climate-damaging emissions in cities by 55 percent by 2030 and to achieve climate neutrality by 2050 (netzerocities.eu).
This does not just mean more buildings that are as climate-neutral as possible, it also means transforming mobility in cities. In this context, the term “15-minute city” is often used, meaning a city in which all vital facilities—shops, parks, restaurants, cafés, post offices, doctors' offices, schools, train stations and, if possible, workplaces—can be reached on foot, by bicycle or by public transport within 15 minutes. This means a shift away from a city with a central hub, where more or less everything is concentrated, to a polycentric city.
Challenges & opportunities of decarbonization
Considering climate change, a reduction of CO₂ emissions is inevitable and increased efforts are needed to achieve the goal of reducing these emissions in the building stock by a good half by 2030. The recent political back-and-forth over the German Buildings Energy Act (GEG) has not made this task any easier. Added to this is the economic situation—the real estate sector is suffering from high financing costs, a skills shortage as well as inflation, which is leading to rising construction and renovation costs. According to estimates, these costs per square meter of living space range from €400 to €900, depending on which standard is chosen and how much renovation is required. For this purpose, there are corresponding subsidies, which, however, do not completely cover the costs. Another question is which measures really make sense, i. e. are particularly efficient—decisions that have to be made on a case-by-case basis. Insulating the outer facade alone brings energy savings of 19 percent, while replacing the windows saves around 7 percent. Together, they reduce the energy requirement already by a quarter. Insulating the roof/upper floor ceiling and the basement, the energy savings amount to more than one third. And a building that is better insulated is more likely to use a largely carbon-neutral heating system such as an air-source heat pump.
Although the costs of such measures may frighten some people at the moment, it is also clear that buildings that have not been renovated to make them more energy efficient will lose a great deal of their value in the foreseeable future. Thus, measures to combat CO₂ emissions not only help the climate, they also increase the value of a property and prevent value losses in the medium and long term.
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