On the commercial upgrade of existing buildings

Numbers tell a clear story: The construction industry is responsible for more than 37 % of CO₂ emissions and 60 % of resource consumption, worldwide. If the real estate sector is to do justice to the EU’s Green Deal and “Circular Economy” strategy, it is essential that it retains more existing buildings and ensures that CO₂ is treated as an economic factor. Now, the basis for a CO₂ certificate has been created on the initiative of the ÖGNI, in cooperation with ATP sustain and its consortium partners Madaster, EPEA, Sedlak, Schiefer Rechtsanwälte, and TU Wien. The first moves were made by the gif (Gesellschaft für Immobilienwirtschaftliche Forschung e. V.) in Germany.

Why we need the CO₂ certificate
One cornerstone of effective CO₂ reduction is the differentiation between red and gray emissions: Red or “dynamic” emissions occur during the use of a building and are influenced by the production and consumption of energy. The steadily growing share of sustainable and CO₂-neutral energy is increasingly changing the electricity mix. For example 80 % of electricity consumption in Germany should be covered by renewable sources by 2030. On the other hand, gray or “static” emissions were already created during – and are inherent to – the construction or refurbishment of a building. However, the current energy certificate only indicates the calculated energy needs and tells us nothing about the actual total consumption and, hence, the related CO₂ emissions.

In other words: We must also properly differentiate between actual “gray” emissions and estimated “red” emissions. Because new and existing buildings are currently regarded equally in terms of their emitted CO₂ and associated environmental impact. This approach means that refurbishment is indirectly regarded as the worse option due to its concrete environmental impact, although the CO₂ emitted by existing buildings is already partly compensated. By highlighting gray emissions, the CO₂ certificate should fundamentally alter this approach.

The principle of the CO₂ certificate
The introduction of the CO₂ certificate enables a CO₂ value to be given to every building. This is done by calculating the CO₂ emissions on the basis of generic values for, for example, the type of construction, age, or geometry of a building. This allows the CO₂ footprint of existing buildings to be determined retrospectively. The basic idea of a CO₂ certificate is to regard the CO₂ inherent in a building as a commodity for accounting purposes, so that this can be written off across the building’s entire functional life. For example: If an existing building is demolished due to the planned construction of a new building, the CO₂ that is still inherent in the old building is transferred to the new building and recorded as a liability. In other words, it must be written off, in addition to the CO₂ inherent to the new building. And this inherent CO₂ is also passed on when a building changes ownership.

Existing buildings as levers for protecting the climate
According to this approach, a new building has more CO₂ in its account than an existing one. For example, a building dating from 1980 has already depreciated by 88 % because its inherent CO₂ has already been compensated or “written off.” This means that it is automatically commercially more attractive than a new building, which must compensate for not only 100 % of the new emissions but also those transferred due to the demolition. This commercial upgrading of existing buildings represents an important step towards climate protection in the construction and real estate sector. By avoiding demolition, the consumption of resources and, hence, the creation of emissions during the production of material will be significantly reduced, while the lifecycles of buildings will be lengthened.