Building Decarbonization

Evanston, Illinois, wants to phase out natural gas in new buildings, with the City Council aiming to develop and pass a policy this year. But a development in April will “definitely flavor” the city’s discourse around developing a rule, said Councilmember Jonathan Nieuwsma in an interview: The U.S. Court of Appeals for the Ninth Circuit overturned a landmark rule banning gas in new construction in Berkeley, California, following a lawsuit by the California Restaurant Association that claimed the city bypassed federal energy regulations. 

“Is it intimidating? No,” Nieuwsma said of the potential for litigation over Evanston’s efforts to phase out gas. “But it is certainly something we’d like to avoid.” 

Since Berkeley became the country’s first city to ban gas in new buildings in 2019, a spate of other cities and counties have followed, and “they should prepare for litigation because the natural gas industry is fighting for its life,” said Carra Sahler, staff attorney at Lewis & Clark Law School’s Green Energy Institute. 

The decision “certainly puts another arrow in the quiver” of “well-funded and well-organized opponents” of building electrification policies, said Amy Turner, senior fellow at Columbia Law School’s Sabin Center for Climate Change Law, in an interview. 

Although the federal appeals court decision only applies in the Ninth Circuit — which comprises Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington, Guam and the Northern Mariana Islands — Turner is concerned that the decision will chill building electrification efforts nationwide in small communities with limited staff and financial resources to hire outside legal counsel.

“Even if everyone understands that they'd be on the right side of the litigation if it were to come to fruition, just that fear of incurring those costs can be really significant in a lot of places,” she said. 

Turner offers reassurance to those communities: “Totally lawful opportunities” exist for local governments to phase out gas in new buildings, she said. The Green Energy Institute’s Sahler agreed. 

Outside of the Ninth Circuit, local governments can use their “police powers,” as Berkeley did, to prohibit gas piping in new buildings as a matter of health and safety, Turner asserts in a blog post. If sued over this approach, a local government could defend it as lawful, but Turner warns that this is “a strategy approach not to be taken lightly,” as conflicting circuit court decisions could make the Supreme Court more likely to take up the case.

In states where cities and towns have authority over building codes, they can require or incentivize all-electric construction, since the federal Energy Policy and Conservation Act contains a statutory exemption preventing it from preempting state and local building codes, Turner said. 

The building code approach can be “time-consuming,” however, Sahler said, as codes must meet seven conditions outlined in EPCA and require technical expertise to craft. An advantage of the building code approach is that it allows local governments to very specifically tailor the rules, she said. 

“Whereas a Berkeley-style ban is more like a blunt instrument saying no new gas, building codes give cities versatility to allow it in some buildings or not in others, phase electrification in, encourage certain kinds of appliances over others,” Sahler said. 

New building electrification can also result from local governments setting air emissions standards that prohibit combustion of substances with high carbon emissions, according to Turner’s blog post, although only New York City has taken this approach to date. “Legal questions remain in connection with the air emissions standard approach, particularly with respect to limitations of state law, but many local governments retain authority to regulate air pollution to some degree,” she writes.

As long as state law allows them to, local governments can also phase out gas through zoning regulations or renegotiation of franchise agreements with utilities if they were to “decide not to allow new pipes in its public rights-of-way,” Sahler said.

Both of these options are on the table in Ann Arbor, Michigan, said the city’s sustainability and innovations director, Missy Stults.

“I think litigation is always something we think about and plan for,” Stults wrote in an email. “And yet we have a very clear mandate from the public and our elected leaders that we need to equitably address the climate crisis, protect public health, reduce safety risks from things like explosions, and be a leader and innovator.”

As the push to reduce embodied carbon in buildings accelerates, research, advocacy and industry groups are releasing guidance for local governments on how they can support the transition to more climate-friendly building materials. 

Embodied carbon is the name for the greenhouse gas emissions associated with the entire lifecycle of building products, including extraction of raw materials, manufacturing, transportation, construction and eventual disposal. Building materials and construction are responsible for 11% of global energy-related carbon emissions. 

The U.S. Green Building Council and think tank RMI published a report in September outlining key actions to accelerate the decarbonization of U.S. building construction. While it was geared toward industry participants, the report identifies a role for local governments. 

“Governments must prepare the way for embodied carbon regulation by investing in low-embodied carbon public buildings and supporting research and market development of low-embodied carbon building products and practices,” it says. 

The report points to “a surge” of federal and state action plans and programs to reduce the embodied carbon of construction materials. It notes that the federal government and some state governments have recently launched “Buy Clean” initiatives, which promote the procurement of low-embodied-carbon construction materials.

“Buy Clean” efforts target high-emission materials such as concrete and steel, but the report warns governments to design these policies so they don’t “unintentionally constrain carbon cutting investments for these sectors. This could drive segments of the industry out of business without lowering overall emissions intensity of the industry or even leak emissions abroad.”

Steel and carbon will remain “important in building construction for the foreseeable future,” the report states.

Other jurisdictions have set financial incentives for projects with lower embodied carbon emissions, the report says, highlighting the Massachusetts Clean Energy Center’s Embodied Carbon Reduction Challenge. 

The report acknowledges concerns and assumptions local officials may have about reducing embodied carbon. For example, choosing lower-embodied-carbon building materials does not automatically make construction more expensive, it says. There is no consistent correlation between the embodied carbon and cost of a material, it adds. 

The report also addresses the sustainability of wood: Despite it having the potential to be a renewable and even carbon-storing building material, wood can have high emissions and ecological impacts depending on where it comes from, it states. “The jury is still out” on whether using more wood will contribute to or prevent climate change, the report says, and the building industry will need to learn to distinguish between wood products with good and bad climate consequences. 

A separate report that Arup and the Natural Resources Defense Council published in September also examines strategies to reduce embodied carbon in the built environment, examining the issue through a policy lens. 

The report focused on the California state government and local governments to “consider feasibility more practically and specifically.” In August, California became the first U.S. state to approve a “whole-building” embodied carbon policy in its state building code, requiring most new large buildings to drive down embodied carbon through one of three pathways.

The report recommends that policymakers focus more on policies that encourage embodied carbon reductions at the project and building scale; many emerging policies instead address the carbon performance of the materials themselves.

“Building code policies can direct designers towards more efficient resource use which, when paired with material-level decarbonization driven by ‘Buy Clean’ type policies, sets us on a scalable pathway to net zero,” said Lauren Wingo, senior structural engineer at Arup, in a statement.

Lauren Kubiak, a senior scientist at NRDC, said in a statement that existing technologies and strategies to decarbonize construction materials “need a policy push to be more widely adopted.”

New York City is making a bid to become a national leader in mass timber construction with a technical assistance program launched in September that will support active projects in early planning and design phases.

Roughly a dozen buildings using mass timber now exist in the city, and the program aims to overcome the building industry’s current lack of technical know-how and fire-safety concerns regarding mass timber, the New York City Economic Development Corp. told Smart Cities Dive. The NYCEDC operates the program alongside the Mayor’s Office for Climate and Environmental Justice.

The “mass timber studio” will provide an anticipated nine design teams with grants of $25,000 each to conduct design, technical and economic feasibility assessments, according to the NYCEDC. 

New York City’s interest in mass timber is rooted in its climate goals to drive down embodied carbon: the greenhouse gas emissions associated with building materials. Building materials and construction are responsible for 11% of global energy-related carbon emissions. 

Much construction relies on the high-emissions materials of concrete and steel. But mass timber has emerged as a lower-carbon alternative, with its potential to be renewable and even store carbon pulled from the atmosphere as trees grow. Mass timber, short for “massive timber,” is an umbrella term for engineered wood products that are created by sticking together smaller pieces of wood. 

Despite the benefits, “the jury is still out” on whether using more wood will contribute to or prevent further climate change, since the emissions and ecological impacts of wood depend on where it is sourced from, according to a recent report by the U.S. Green Building Council and nonprofit research organization RMI. The report says the building industry will have to learn to distinguish between wood products with good and bad climate consequences. 

The NYCEDC said its purview is within the five boroughs of New York City, but in order to make mass timber thrive in the city, “we need to be thinking more holistically about a supply chain.” That’s why the “mass timber studio” includes partners well positioned to think about wood sourcing, such as the U.S. Forest Service, the industry-funded Softwood Lumber Board and nonprofit WoodWorks, the NYCEDC said.

The NYCEDC told Smart Cities Dive that mass timber represents a “huge untapped potential” to make a dent in New York City’s carbon footprint. Mass timber construction is also quieter, cleaner and can be roughly 25% faster than traditional construction, since the materials are fabricated in advance and put together on site, the NYCEDC said. 

Recent policy changes in the city seek to tap mass timber’s potential, with 2022 building code updates allowing mass timber buildings up to 85 feet tall. Also last year, Mayor Eric Adams signed an executive order requiring the city’s capital project agencies to lower embodied carbon from municipal construction projects. 

The building industry has a “ton of appetite” to use mass timber but lacks familiarity with doing so, NYCEDC said. In particular, skepticism exists regarding the fire safety of mass timber, a lingering symptom of fires that blazed decades ago in wood buildings, according to the NYCEDC. But the organization said that mass timber is a totally different set of materials that is just as fire safe as concrete or steel. 

Overcoming that hesitancy is the mass timber studio’s goal, along with raising public awareness about mass timber benefits, connecting design teams with city actors and identifying the potential for new business and job creation through mass timber construction expansion, according to a news release.

Heat pumps are gaining recognition across many parts of the U.S. for their energy efficiency and reduced greenhouse gas emissions compared with other building heating and cooling options. The U.S. Climate Alliance, a bipartisan coalition of 25 governors, recently pledged to increase heat pump installations across their states to reach 20 million by 2030. Currently, the U.S. has about 4.8 million heat pump installations, according to RMI, a clean energy think tank. 

Adoption varies from state to state. In Massachusetts, concerns about initial expenses and the intricacies involved in selecting appropriate heat pump equipment have slowed adoption, putting the state behind counterparts like Maine, which has already surpassed its 2025 target of 100,000 heat pumps. Maine Gov. Janet Mills recently established a more ambitious target of reaching 175,000 heat pumps by 2027. 

Facilities managers looking to deploy heat pumps in existing buildings have concerns about cost— despite the availability of federal incentives — as well as the significant work and disruption that can come with retrofits. 

Physical challenges

The feasibility of retrofitting existing buildings with heat pumps varies from building to building. “It’s certainly a proven technology. [But] just doing a swap-out of your HVAC system for a heat pump system may not be the best strategy,” said Ryan Colker, vice president of innovation at the International Code Council.

Kailash Viswanathan, director of energy at Arch Energy, a subsidiary of Consigli Construction, names two significant challenges: First, building occupancy. The ability to make such a significant renovation in a building is “very much occupant-driven,” Viswanathan said. “If it's a centralized plan, it's easier. But you still have to get into the building. You have to open up walls and change pipes to make it happen. [In most cases], such changes can be made only when occupants are leaving or when there's a turnover of tenants.”

Second is maintaining space heating and water heating temperatures. Heat pumps work best at lower water temperatures, Viswanathan said. Retrofitting heat pumps in existing buildings will involve reducing the water temperature from 180 degrees Fahrenheit to 120 degrees to 140 degrees Fahrenheit, he said. To achieve the same level of heat with lower-temperature water requires a greater flow rate. “That means you need to increase the diameter of the pipes. And that involves getting into an occupant's space and removing and changing the pipes. That's disruptive,” he said. “That's why there are 10- to 12-year plans. It’s not going to happen overnight. And challenging buildings, like historic buildings, will take a longer time to retrofit — about 20 years or so.''

Viswanathan is part of a team retrofitting heat pumps into a high-rise building at 345 Hudson St. in New York City. This inaugural initiative by the New York State Energy Research and Development Authority aims to rapidly electrify one of New York City’s century-old buildings. “We help engineers [and the clients] find solutions and … figure out what the best way [is] to reduce carbon emissions in this building,” he said.

“Facilities managers are always part of the decision-making process,” he added. ”They think about what challenges are involved in operating, maintaining and controlling heat pump technology better. There's a lot of automation that comes with it, and they have to learn that.”

Economic challenges

Another significant barrier: Installing heat pumps in existing buildings is expensive. Estimates from Rosen Consulting Group suggest that the overall cost in 2022 of retrofitting a typical gas-powered office building in New York state with a ground-source heat pump ranges from $17 to $24 per square foot, while the cost for an air-source heat pump would range from $12 to $21 per square foot. Those estimates include heat pump water heaters, necessary infrastructure and electrical upgrades.

The report notes that heat pump retrofits in office buildings have the potential to create “significant energy bill savings” on an ongoing basis, although estimates of those savings were predicated upon additional building shell improvements that would incur additional costs. The Inflation Reduction Act makes it possible to obtain federal tax credits and state-administered rebates to offset heat pump purchase and installation costs. 

Facilities managers need a clear understanding of the financial costs and benefits of heat pumps, including long-term maintenance factors, to validate their decision to deploy these systems, said Doug Davenport, founder and executive director of Prospect Silicon Valley, a nonprofit cleantech accelerator focused on transportation, energy and infrastructure. 

Facilities managers also need more “education and training [on] aggregating and interpreting performance outcomes from real installations to prove that the technology works as reported. [This] is going to be especially true with a wave of new designs coming to market,” Davenport said.  

One approach to reduce the cost of a heat pump retrofit is to implement a hybrid system. Geothermal heat pumps with hybrid heat exchange can help building owners and operators reduce capital expenses and bolster the economic feasibility of retrofit projects, the National Renewable Energy Laboratory reported in September. NREL added the ability to analyze such systems to its REopt tool, which aims to help building managers evaluate the mix of renewable energy, conventional energy, storage and GHP technologies they can use to meet their cost, clean energy and resilience goals.

Potential grid challenges

Despite heat pumps’ immediate benefits for decarbonization, when used at scale they can exert more strain on local power grids that may lack the necessary generating capacity to accommodate anticipated building electrification growth. “You can’t just install heat pumps and not fix the grid. What everyone is waiting for is whether the grid is going to green itself,” said Owen Glubiak, vice president of revenue at Cortex Sustainability Intelligence. 

Cortex recently rolled out an automation feature to its building decarbonization platform to help clients cut energy use and carbon emissions. Using heat pumps within a demand response-driven scenario can alleviate that strain on the grid, he said. “You see the biggest problems during the warmest and coldest days. So, demand response programs are going to become very important to ensure that you are meeting peak demand,” Glubiak said. 

One piece of the decarbonization puzzle

As Glubiak indicates, heat pumps alone are not the be-all and end-all of electrification. The benefits of electrifying buildings will be felt most when facilities managers look at adopting heat pumps as part of a full system that includes solar panels and battery storage systems, said Thomas A. Kwan, Schneider Electric’s sustainability research director.

While deciding whether a heat pump retrofit project makes economic sense or not, ICC’s Colker recommends an in-depth energy audit that can provide comprehensive insights into “where you’re going to get the most bang for your buck and where you’ll get the best climate change impacts.” 

Facilities managers looking to upgrade decades-old building systems tend to make decisions that are more pragmatic, said Mark Grinis, who leads digital transformation initiatives for EY Americas’ real estate practice. “If something is broken, let’s fix it properly. But do we want to entertain a very complex retrofit?” he said about how facilities managers typically think through the process. The feasibility of a heat pump retrofit project is also location-dependent in terms of the ability to draw broader groups of tenants and realize higher economic returns, he noted. There may be opportunities to install cool roofs and rooftop solar panels in older buildings, he added, but “I feel like I see heat pumps much more on new builds.” 

Heat pumps currently fulfill only around 10% of the worldwide heating demand in buildings, significantly falling short of the deployment necessary to align with 2050 net zero emissions targets, according to the International Energy Agency. It calls for more policy support and technical innovation to boost energy efficiency, reduce upfront purchase and installation costs and remove market barriers to complex retrofits.

New York became the nation’s first state to pass a law banning natural gas in most new buildings, Gov. Kathy Hochul said in an April 27 announcement of agreements reached with legislators for the fiscal year 2024 budget.

Hochul said the law would take effect in 2025 for small buildings and 2028 for large buildings. A coalition of environmental and social justice advocates said in a statement they worry the law will include a “poison pill” provision backed by the oil and gas industry that would give local governments or other entities the ability to effectively veto it. 

After Berkeley, California, became the nation’s first city to ban natural gas hookups in new buildings in 2019, dozens of local governments followed suit, including New York City in 2021. At the state level, Washington state and California have encouraged new building electrification through building codes, but New York would be the first to do so with a law.

By mid-century, New York aims to reduce planet-warming emissions by 85% compared with 1990 levels. Hochul first voiced support for a gas ban in new construction over a year ago, in January of 2022, but the idea was repeatedly blocked by the Democratic speaker of the state Assembly, Carl Heastie, despite finding support in the state Senate, according to Energywire. 

“Building all-electric will save New Yorkers money on energy bills, reduce climate-heating pollution, create jobs in clean energy, and reduce childhood asthma, a win-win for New Yorkers,” said Earthjustice, Food & Water Watch, New York Communities for Change and the New York Public Interest Research Group in a statement in April. 

“Gas bans” have faced pushback nationwide, with the gas industry dedicating millions of dollars to fight local building electrification rules. 

Berkeley’s landmark ordinance prohibiting gas hookups in new construction was overturned in April by the U.S. Court of Appeals for the Ninth Circuit, following a lawsuit by the California Restaurant Association arguing the city overstepped federal energy regulations. 

That decision was used by New York state Senate Republicans in their arguments against Democrats’ support for the new building electrification law, reports The Washington Post. However, the decision only applies in the Ninth Circuit, which comprises Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington, Guam and the Northern Mariana Islands.

In Washington state, opponents of the new building codes are also seeking to overturn them through the legal system, filing a lawsuit in February that argues the Washington State Building Code Council overstepped its authority and didn’t account for the costs to homeowners, workers, businesses and developers. 

The New York law may face similar opposition. Local governments that pass gas bans “should prepare for litigation because the natural gas industry is fighting for its life,” said Carra Sahler, staff attorney at Lewis & Clark Law School’s Green Energy Institute, in an April interview. 

New York’s mandatory emissions limits for concrete used in state-funded public building and transportation projects will go into effect Jan. 1, 2025, Gov. Kathy Hochul announced in September. They stem from a law signed in 2021 that called for these guidelines to be developed.

The rules represent the first state-level mandate in the country to implement greenhouse gas emission limits covering all agency projects, according to the release.

The Buy Clean Concrete guidelines apply to all state agency contracts exceeding $1 million that involve the use of more than 50 cubic yards of concrete, or New York DOT contracts exceeding $3 million that include at least 200 cubic yards of concrete. The guidelines include exceptions for emergency projects and those requiring high-strength or quick-cure concrete and do not apply to state authorities, according to the release.

The guidelines mandate that environmental product declarations must be submitted for all concrete mixes used in qualifying state construction projects and must demonstrate that they achieve an environmental impact below the limits set by the state, effective Jan. 1, 2025. Officials are working toward providing concrete producers with the technical assistance they need to meet these EPD requirements, the release said.

With some of the nation’s most aggressive climate and clean energy initiatives, New York aims to achieve a zero-emission electricity sector by 2040, including 70% renewable energy generation by 2030 and economy-wide carbon neutrality by 2050, according to Hochul’s office.

The guidelines will impact construction costs and the availability of concrete, according to Sarah Patrie, vice president of transportation services at the Associated General Contractors of New York State.

“Producers are going to need to invest over the next three to 15 months in upgrading equipment, technology and methods to pursue environmental product declarations and reduce emissions,” Patrie said in an email. “We anticipate the impacts will be greater in the rural areas of New York state where concrete producers tend to be smaller plants, geographically further from project locations and service a lower annual volume of concrete than those in more urban areas.”

Nationwide, concrete prices jumped 0.5% in August and remain 8.7% higher than August 2022, according to Associated Builders and Contractors’ analysis of U.S. Bureau of Labor Statistics producer price index data.

Looking ahead

Nevertheless, guidelines like this provide an opportunity for innovation, especially as the industry shifts toward a more sustainable future, said Patrie. The key priority needs to be the strength and durability of concrete mixes, she added, while accounting for workability and final finishing requirements on projects.

Carlo Scissura, president and CEO of the New York Building Congress, applauded the move to slash emissions from concrete.

“The building industry, like every sector, has a responsibility to embrace more sustainable, cleaner systems and materials to combat climate change,” Scissura said in an email. “While there are a lot of unknowns as New York makes this transition, we will work closely with our members and government partners to ensure that the industry can keep on building sustainably without being negatively impacted.”

The guidelines support the governor’s Leading by Example initiative, which requires state agencies to collect New York-specific data from common construction materials, including concrete. That information will be used to set lower limits on greenhouse gas emissions from concrete, starting in 2027.

“Adopting Buy Clean Concrete guidelines marks a monumental step in our journey toward a more sustainable and eco-friendly New York State,” Hochul said in the release. “By setting mandatory emissions limits on concrete used in state-funded projects, we’re not just leading by example but creating a tangible roadmap for reducing greenhouse gas emissions across the board.”

The U.S. will need to triple its retrofit rate to meet net-zero targets, with 80% of today’s office buildings to still be in use by 2050, according to a JLL report sent to Facilities Dive. 

The Retrofitting Buildings to be Future-Fit report, released last November, found that existing stock will have to be retrofitted at 3% to 3.5% per year if net-zero targets are to be met. 

The report points to a significant knowledge gap and emphasizes the need to upskill the labor force and encourage sustainability training for building technicians.

The current rate of retrofits in the global North is about 1%, or less than a third of the required 3% to 3.5% target rate, which will not provide enough decarbonization to align with the Paris Climate Agreement. The report conservatively estimates a need for more than $3 trillion to retrofit office stock across the 17 major countries in that territory. 

Even in high-growth emerging cities, where new construction could more than double existing stock by 2050, tripling the current retrofit rate will be a “formidable undertaking,” the report noted. In addition to the estimated cost for 2050 net-zero target retrofits, it also found a large knowledge gap when it comes to conducting deep retrofits. 

JLL attributes this knowledge gap to a shortage of technical expertise, pointing to an urgent need to upskill the labor force; encourage sustainability training for building engineers, architects and consultants; and apprise stakeholders of the benefits of retrofitting existing buildings. 

These changes will need to be made rapidly now, and consistently for the next 30 years, to meet climate pledge goals and decarbonization mandates. But the knowledge gap and labor shortage pressures across U.S. facilities present key roadblocks, and occupiers are already feeling the pinch. As a result, some have started upskilling workers, aiming to bridge the chasm of scarce labor supply. Biotech trade society MassBio, for instance, launched its own nonprofit aimed at training and upskilling workers in May to reduce the facilities labor crisis affecting the life sciences industry. 

The healthcare platform lists future-proofing assets, ROI, rental uplift, tenant retention and attraction and reducing financial risk as critical factors to accelerating the race to retrofit buildings.

Tenant retention, attraction and rental uplift are important aspects of those suggestions, as evidenced by 74% of organizations included in JLL’s 2022 Future of Work Survey responding they would pay a premium to lease a building with leading sustainability and green credentials. Twenty-two percent of respondents said they already have paid a premium for offices with these credentials, suggesting that buildings that do not undertake deep retrofits will see reduced demand and lower lease agreements. 

The report also provides estimated energy efficiency savings by type of retrofit and outlines how facilities management professionals can ensure that their buildings meet net-zero carbon emission standards and decarbonization goals. 
 

The report estimated 40% to 60% energy efficiency savings for deep retrofits of whole office buildings compared with 10% to 15% for light retrofits. 

While electrifying building systems requires a large capital investment, JLL says it is more effective than implementing incremental, small energy conservation retrofits, such as replacing a fossil fuel burning boiler with a more efficient gas burning system. While cheaper in the short term, these retrofits do not fully remove emissions from a building’s operations. 

On the other hand, system electrification helps to future-proof assets, enables better ROI determinations for investors and can be used to bundle initiatives into larger capex projects and reduce payback periods for the upgrades.

The number of U.S. jurisdictions adopting building performance standards has nearly doubled since 2020, with legislation enacted in three states and nine localities, according to a report published in May by the nonprofit research organization American Council for an Energy-Efficient Economy.

The report says these regulations, which aim to reduce the carbon footprint of buildings by requiring them to meet certain standards, are a key climate policy and can, in some ways, “be thought of as the existing-building analog” to building energy codes for new construction.

ACEEE Executive Director and report co-author Steven Nadel said in an interview he is “really impressed how much progress there has been made” since the nonprofit published a similar report on building performance standards in 2020. For example, he said, more jurisdictions are creating longer-term plans and recognizing that affordable housing may require special provisions.

It’s not new for states and cities to encourage energy efficiency upgrades in existing buildings, with such programs existing for decades, the report says. 

However, these programs are too weak in the face of climate change, the report continues, noting that at current rates, it will take more than 300 years to complete whole-building retrofits on all homes and apartments and more than five decades to complete retrofits on all commercial buildings. 

Jurisdictions that have enacted building performance standards include Colorado, Maryland and Washington state, as well as cities such as Reno, Nevada; St. Louis and New York City, the report says.

A “key issue” is whether jurisdictions should base standards on buildings’ energy use or greenhouse gas emissions, the report says. They are increasingly turning to the latter, Nadel explained — whereas “virtually all” the standards examined in ACEEE’s 2020 report were energy standards, many more jurisdictions examined in the new report are carbon standards or a combination of carbon and energy standards. 

Leaders have historically shied away from carbon standards in part due to the complexity of determining the exact carbon footprint of energy used by a building, Nadel said. However, cities are starting to determine ways to overcome that barrier by administratively setting a standard number for the carbon footprint of each unit of energy, he said.

“That way, the building owners know, ‘OK, there’s so many pounds of carbon per kilowatt-hour,’ and they can just do it, as opposed to ‘Well, I don’t know what the utility is doing. Why are you putting this on me?’” Nadel said. 

Jurisdictions are also increasingly accounting for the unique challenges building performance standards pose for affordable housing — a nascent issue in 2020, Nadel said. It can be particularly difficult for affordable housing to comply with building performance standards because the buildings tend to be less energy efficient, owners often don’t have the money to improve the buildings and upgrades spur concerns about rent increases, the report notes.

To address these challenges, many jurisdictions have made special allowances for affordable housing, such as delayed compliance deadlines and extra funding and technical assistance. While many building performance standards include exemptions, meaning certain buildings are not subject to the rules, the report says that program implementers generally advised other jurisdictions to limit those cases.

Building owners may be motivated to get ahead of the regulations as an increasing number of cities set long-term goals for building performance standards, Nadel said.

“When I talk to some people I know in the HVAC industry, for example, already in places like New York and Boston, they’re finding that building owners are saying, ‘OK, I know this is coming. When I replace my chiller, when I replace my boiler, that’s going to be the one that’s going to have to meet this long-term standard,’” Nadel said. 

While the report highlights that regulations will be unique to each jurisdiction, it floats the idea of “improved standardization” of building performance standards to reduce the workload associated with these regulations. The report also stresses that jurisdictions implementing or considering building performance standards should consult stakeholders; have adequate staffing; and complement standards with education, financing and technical assistance for building owners.

The federal government plans to define what a “zero-emissions” building is as part of a push to address the building sector’s contribution to climate change. 

The proposed definition will rest on a three-pillared approach to building decarbonization: an adherence to stringent energy-efficiency guidelines, the use of 100% clean energy and a requirement for buildings to refrain from generating emissions on-site, White House National Climate Adviser Ali Zaidi announced Sept. 28. 

The definition is part of the Biden administration’s effort to establish uniform guidelines in an industry that accounts for roughly a third of the country’s annual greenhouse gas emissions, according to calculations from the U.S. Environmental Protection Agency.

The Biden administration is proposing a “holistic federal definition” that “can provide a unifying guidepost for real estate professionals to strive for zero emissions over time,” said Duane Desiderio, senior vice president and counsel at the Real Estate Roundtable, which represents real estate firms and trade associations. The three-pillar approach “addresses both megawatts of energy use avoided by building owners, tenants and other occupants as well as new renewable energy generation,” he said. 

The zero-emissions definition will most likely come from the U.S. Department of Energy, according to Liz Beardsley, senior policy counsel at the U.S. Green Building Council. 

“Given the conversations taking place around net-zero emissions, what the White House has realized is that there’s a need to have a common definition that the market can align [with],” Beardsley said in an interview after the announcement at the Greenbuild International Conference and Expo Sept. 28. The three pillars, she noted, would come into common use and drive the industry toward core strategies that help buildings achieve net-zero emissions. Investors, financiers, real estate companies and facilities managers would then have ''that common definition to understand where a given portfolio is with zero-emission buildings,” she said. 

The DOE plans to publish the definition in January 2024 after a series of stakeholder engagement meetings aimed at hashing out various components of the definition, including what on-site emissions means, what energy-efficiency targets existing buildings will need to meet and what counts for 100% clean energy, said a White House official. The official, who spoke on the condition of anonymity as they are not authorized to comment on the details publicly, added that the definition will most likely be verified using the U.S. Environmental Protection Agency’s portfolio manager tool. 

William Leddy, vice president of climate action for the American Institute of Architects California, said that while his organization is “delighted” to have the new federal definition, “Unfortunately, with the climate emergency accelerating at a disastrous pace, definitions aren’t enough. … We are all contributing to the existential threat of climate change, and we must all work to rapidly decarbonize the built environment.” 

In the absence of a national definition, certain states have independently established their own regulations for sustainable buildings. For instance, California’s Climate Corporate Data Accountability Act, passed on Sept. 12, will, if it becomes law, require companies to report emissions from their energy use and operations starting in 2026. By 2027, companies will also need to report emissions from their supply chain and other scope 3 emissions outside of their operations. Likewise, New York City unveiled a plan to support a proposed rule for implementing a landmark 2019 law, which requires buildings over 25,000 square feet to report their greenhouse gas emissions to the city’s Department of Buildings starting May 1, 2025. 

“Individual states like California and New York will continue to legislate urgent change,” Leddy said, “but we need even more action from the federal government to build a resilient future for all Americans.”

The proposed zero-emissions definition is not legally binding, according to James Coleman, a nonresident senior fellow at the American Enterprise Institute, and states may not immediately embrace a single federal blueprint. “A lot of the new building construction is taking place in states that would be likely to not go along with any of the recommendations coming out of this proposed definition,” Coleman said in an interview. “And it’s harder for existing buildings to meet any kind of newer energy efficient standards. They’re facing really difficult trade-offs — how much they must invest in adopting more efficient, but more expensive, technology.” 

However, energy efficiency is an important area of focus because it reduces reliance on the grid, Kailash Viswanathan, director of energy at Consigli Construction subsidiary Arch Energy, told Facilities Dive. “When you reduce, recover and electrify, you’ll get to a point where carbon emissions in your building go down. The electric grid that provides you the electricity may still be providing electricity generated from fossil fuels. [The question is] how we can make that greener,” Viswanathan said.

Adopting clean energy technology in new and existing buildings holds significant job-creation potential, according to a study by Schneider Electric and Boston University announced Oct. 10. 

Implementing and sustaining technologies like solar photovoltaic, heat pumps and battery storage systems could generate more than 2 million new clean energy jobs and around 141 million additional job years across Europe and the U.S, according to the study published in the June 2023 Electricity Journal.

The findings can help building owners and operators make retrofit estimates and help improve forecasts around scope, investment, lifecycle management and impact for building projects, Schneider Electric said. 

"This study brings greater detail to the sizable potential for new jobs created by low-carbon buildings," Benjamin Sovacool, director of the Boston University Institute for Global Sustainability, said in a news release. IGS conducted the study with Schneider Electric’s Sustainability Research Institute.   

U.S. job creation will vary by region, the report states, estimating the creation of 182,000 potential new jobs in the West, 123,000 in the Northeast, 18,900 in the Midwest and 319,000 in the South and Southeast. 

The potential for job creation depends on the location and building type, the research said, noting that job creation at commercial buildings could range from 0.3 to 4.7 jobs per building. For heat pumps, solar PV and batteries, the largest share of additional job years comes from construction and installation, the release said. A job year refers to one year of employment per person. The 141 million job years the study estimates clean energy adoption could create includes 2 million jobs created by adopting clean energy technologies and the duration of jobs that would be needed to support clean energy technologies in buildings. 

“It’s facilities managers, adopting these [clean energy] technologies, who are doing installations and maintenance work, as those jobs are needed for new technologies, hardware and the management of that hardware,” Thomas Kwan, director of sustainability research at Schneider Electric and one of the authors of the study, said in an interview.

The study calculated the employment impacts associated with low-carbon building archetypes across various sectors, from healthcare and hospitality to offices, retail and education, in North America, Europe and Asia. It primarily focused on the potential benefits of installing rooftop solar PV, heat pumps and energy storage batteries for building owners and operators. These low-carbon technologies are crucial to cutting greenhouse gas emissions, the research said. The employment projections will gradually materialize in alignment with global net-zero emissions objectives set for 2050, making it a reasonable timeline for achieving full renovation of all eligible buildings, it said. 

The study modeled two building classes—the “building of today” versus the “building of the future.” Both building classes share the same attributes, such as the level of energy intensity for various loads — heating, cooling and appliances — retrieved from the ASHRAE database, the report said. “The building of the future differs from the building of today as the heating load is further electrified with heat pumps, digital controls are implemented to optimize energy use with occupancy, and distributed generation alongside storage is also deployed,” the paper said. 

Kwan recommends that facilities managers consider adopting a full system of solar panels, battery storage and heat pumps rather than gravitating solely toward heat pumps for purposes of electrification.  

“In cases where clean energy technologies have a higher ‘green’ premium on the costs, there may be an additionality to the cost, which is not as palatable as business-as-usual technologies,” Kwan said.

He recommended three levers that facilities managers with limited budgets can use to find the resources for clean energy: First, facilities managers can tap into policy initiatives and government support mechanisms. Second, facilities staff must make decisions that involve considering the costs of gas and electricity over the period of the asset’s life, including whether those costs will increase or decrease in the future. Doing that “could dramatically change how facilities managers would see the upfront costs” of clean energy technology investments, he said. Third, implementing smart controls where new assets are deployed for heating and cooling can be an additional cost-cutting measure for the life of those assets. 

A separate September 2023 report from Schneider Electric’s Sustainability Research Institute pointed to the potential of deploying digital building and power management tools in existing office buildings to slash up to 70% of emissions. The company said this research, alongside another report on net-zero buildings released last year, which found implementing low-carbon technologies can cut over 60% of carbon emissions, can help inform companies, communities and governments seeking to engage in building projects.