The global buildings sector made some headway in curbing its energy appetite and output of greenhouse gas (GHG) emissions last year, but speedier advancement will be needed to meet the International Energy Agency’s (IEA) envisioned targets for 2030 and 2050. The IEA’s recently released annual progress report upgrades the sector’s status from “not on track” to “more efforts needed” — an assessment attached to 28 of 53 identified key elements of clean energy and the low-carbon transition.
Perhaps tellingly, behavioural change is among the 22 elements designated as not on track. Looking at other sectors, electricity is urged to make more efforts, while oil and gas, low-emission fuels, transport and industrial manufacturing/processing all receive the lower designation of not on track. Drilling down to technologies/products, just three — solar photovoltaics (PV), lighting and electric vehicles — are deemed to be “on track” with the vast remainder trailing the IEA’s calculated required pace to achieve net-zero emissions by 2050.
Even so, the progress report applauds the rise of some breakthrough technologies and accelerated uptake of other measures evidenced in the nearly 15 per cent year-over-year increase in clean and efficient energy investment in 2022, for a total expenditure of about USD $1.6 trillion. Within the buildings sector, approximately USD $250 billion was invested in energy efficiency, representing a 14 per cent increase from 2021.
“The extraordinary growth of key technologies like solar and electric cars shows what is possible,” asserts Fatih Birol, the IEA’s executive director. “The clean energy economy is rapidly taking shape, but even faster progress is needed in most areas to meet international energy and climate goals.”
Floor space expansion underlies growing energy demand
The IEA offers the buildings sector some praise for keeping energy demand and emissions increases below the growth rate, but new development presents an ongoing challenge for meeting ambitious targets. Average global energy intensity dropped from 164.6 kilowatt-hours (kWh) per square metre (m2) or about 15.3 kWh per square foot (ft2) in 2010 to 142 kWh/m2 (13.2 kWh/ft2) last year. However, total energy demand from buildings has crept up by about 1 per cent per year as approximately 56.6 billion square metres (609 billion square feet) of space was added to the global built stock over the same 12-year period.
Nearly two-thirds of that growth occurred in countries defined as developing or emerging economies, but countries with advanced economies, which include Canada, also collectively built another 4.6 billion square metres (49.5 billion square feet) of real estate. Looking ahead, a 15 per cent increase in global floor space is projected by 2030, which is roughly equivalent to North America’s current total built footprint.
A 35 per cent cut in energy intensity compared to 2022 levels will be needed over the next eight years to achieve the IEA’s interim 2030 global average target of 94.1 kWh/m2 or 8.7 kWh/ft2. As well, the building sector accounted for 9.8 gigatonnes (Gt) or 9.8 billion tonnes of direct and indirect carbon emissions in 2022, which will have to drop by 55 per cent, or more than 9 per cent annually, to hit the IEA’s 2030 target of 4.4 Gt.
That will require a dramatic reversal of the upward trend that saw global buildings’ combined direct and indirect emissions output increase by 0.8 Gt or 800 million tonnes between 2010 and last year. Since that carbon footprint expansion is primarily linked to indirect residential emissions, arising from the production of electricity that housing consumes, IEA analysts stress the importance of both cleaner supply and improved energy efficiency as the envisioned widescale switchover from fossil fuel heating to electric heat pumps unfolds.
Geopolitical factors complicate investment in promising technologies
The IEA’s deeper examination of six categories of building systems finds them at varying stages of progress, with lighting in the lead and building envelope trailing the pack. In between, heating, space cooling, heat pumps and appliances/equipment are judged off-pace to reach the 2030 target, albeit closer to catching up than building envelope.
Among positive indicators, the report cites the 11 per cent increase in global heat pump sales last year and LEDs’ 50.5 per cent market share of residential lighting sales, up from 1.1 per cent in 2010. More than 110 countries enforce minimum energy performance standards (MEPS) for new appliances, covering roughly 90 per cent of global refrigerator sales last year, 87 per cent of freezers, 78 per cent of fans and 72 per cent of televisions.
From the perspective of technological feasibility, heating systems relying on renewable energy sources are deemed to be mature and relatively available. Notably, nearly 30 per cent of heating in the European Union is now supplied through a combination of renewables, including bioenergy, solar thermal, geothermal, district energy and electricity, but that percentage drops to 11.7 per cent worldwide.
As well, renewable cooling technologies are emerging, tied to solar thermal, energy storage and district cooling. These could be reinforced through passive house design features, initiatives to mitigate urban heat islands, and innovations in insulation and building envelope technologies related to supercool and smart materials.
Myriad impediments lurk on the flipside, related to ever-increasing global floor space, cost pressures and some missing puzzle pieces still to be secured. The latter includes requirements for: a clean and smart electricity grid; refrigerants with lower global warming potential (GWP); improved performance of heat pumps in cold temperatures; commercialization of enabling technologies and products; and an adequate workforce to implement and maintain the required upgrades. World peace and lower interest rates would also be a boon as the IEA foresees a pullback on investment.
“Early signals suggest that a major slowdown can be expected in 2023. Increased geopolitical uncertainty surrounding the length of the conflict in Ukraine combined with adverse global economic trends, including high inflation and stringent monetary policies, are expected to slow construction and energy efficiency spending. This is compounded by the end of a subsidy cycle in many markets, including in China and Europe,” the report warns.
Gaps to 2030 targets persist and widen
Pegging 2022 performance against the IEA’s 2030 targets, year-over-year global emissions from cooling nudged up 2 per cent last year, to reach 1.02 Gt or 1.02 billion tonnes, and will need to drop by nearly 63 per cent to hit the aspirational target of 0.38 Gt or 380 million tonnes. At the same time, more than half of the projected new building construction over the next seven to eight years will occur in countries deemed to have a high need for space cooling.
Space and water heating accounted for 4.2 Gt or 4.2 billion tonnes of emissions last year, with 2.4 billion tonnes of that attributable to direct emissions from on-site gas, oil or coal-burning sources and the remainder in indirect emissions from electricity or steam production. The IEA is targeting a heating carbon footprint of 2.063 billion tonnes by 2030, with about 1.14 billion tonnes in direct emissions and 920 million tonnes in indirect emissions.
The buildings sector also carries a significant share of embodied carbon linked to construction practices and manufacturing, processing and shipment of a wide range of materials, most notably cement, steel and aluminum. The IEA pegs that at 2.5 Gt or 2.5 billion tonnes of emissions last year, representing about 6.8 per cent of global emissions.
The cement, steel and aluminum industries are currently designated as “not on track” in the IEA’s grading system. However, a Quebec-based venture, Elysis, is among a handful of innovators the progress report cites for its early-stage advancements in carbon-free aluminum smelting. Various promising innovations in cement production, including carbon capture and electric kilns, are also highlighted.
Along with the annual progress reports, the IEA hosts a digital database that tracks more than 500 clean energy technologies and a database of demonstration projects.
