G20 countries are too slow at retrofitting existing buildings in the race to net zero, according to the inaugural Global Retrofit Index by sustainability advisor 3Keel.
- 3Keel has began compiling a Global Retrofit Index to benchmark progress of G20 countries in cutting emissions from buildings.
- The building sector must dramatically cut its emissions to meet global climate goals, which will be achieved by completing retrofits faster.
- Energy security is a key focus for governments and could be increased by improving energy efficiency.
G20 countries are too slow at retrofitting buildings
In its inaugural Global Retrofit Index, 3Keel assessed the progress G20 countries are making to cut emissions from existing buildings. In developed economies, 80% of the buildings that will be used in 2050 have already been built – improving their efficiency plays a crucial part in achieving net zero emissions.
Major economies, however, are falling short of targets, as less than 1% of existing buildings are being upgraded every year. The International Energy Agency (IEA) established a rate of at least 2% per year by 2030 to achieve the goals set by the Paris Agreement. This means that 20% of existing buildings should undergo energy retrofit work by the end of the decade.
In 3Keel’s analysis, Germany was the top G20 country in term of retrofitting performance, followed by France, the UK and Italy. China, Saudi Arabia and Turkey ranked lowest. Researchers could not access data for South Africa, Argentina, Indonesia, India and Russia.
The report also included two non-G20 countries with “interesting retrofits policy”, the Netherlands and Croatia. The Netherlands committed to end new fossil fuel heating systems from 2026 after the war in Ukraine upended the energy market in Europe. It also provides incentive schemes and plans to establish stricter building standards. Buildings in Croatia, instead, are highly energy intensive but the country has a clear long term strategy to address efficiency, such as government grants for retrofits, and has already achieved significant emissions reductions.
Building sector lags on climate goals
The industry needs to cut 50% of direct emissions and 60% of indirect emissions by 2030 to be on track to reach net zero by 2050. This includes achieving a 45% reduction in energy consumed per square metre by 2030 from 2020 levels.
Even though some countries are making progress, it is falling short of what is needed to meet the Paris Agreement goals. This will be achieved by retrofitting buildings so that they are more energy efficient and are not powered by fossil fuels. Some of the solutions include improving insulation and installing heat pumps or solar panels.
According to 3Keel, policymakers should apply minimum standards of energy performance, as they would boost retrofit rates if they were required to rent, sell or renovate buildings.
Energy crisis highlights need for more efficiency
Europe is currently going through an energy crisis, which has put energy security in the spotlight. Many countries are scrambling to ensure their demand is covered, mostly by boosting domestic production or by securing imports. Improving energy efficiency, however, is another key solution as it brings down demand by reducing the quantity of energy needed to power a building – thereby also saving money.
Researchers at 3Keel calculated that countries are spending only $30 per person per year, which is a small fraction of what is being spent on energy bills. For example, a separate report published in October 2022 found that Germany’s gas imports could reach €200 billion by 2030, doubling bills for consumers. More investment in energy efficiency, however, could reduce gas consumption of buildings by a third, therefore cutting bills and energy demand. There are more benefits in upgrading buildings: as well as boosting energy security and savings, they can also alleviate poverty, create jobs and improving human health.
Bianca Wong, global head of sustainability at Kingspan, said: “We have the tools, solutions and technologies needed to improve energy performance in buildings. We now need to apply these at scale.”
She added: “This isn’t just the problem of world leaders and Governments. The onus is on all of us across the built environment value chain to engage positively and proactively.”