Reducing CO2 emissions from commercial buildings through renovation financing

A new study from Siemens Financial Services (SFS) estimates the amount of carbon emissions that could be reduced in the United States, Europe, China and India by 2030, through the broader deployment of energy efficiency programs “as a service”.

These flexible financing solutions help reduce operating costs, without putting pressure on capital resources, avoid putting capital at risk and guarantee the achievement of expected savings.

“Retrofitting Buildings to Meet Climate Challenges,” a new study from Siemens Financial Services (SFS), estimates how much carbon emissions building owners could save through energy efficiency-as-a-service programs .

More precisely, this study estimates emissions for the four highest-emitting geographic regions in the world: the United States (71,37 MtCO2e), China (71,45), Europe (52,86) and India. (14,91). Given that these four areas are responsible for the majority of global CO2 emissions,[i] this equates to more than 8% of the annual global CO2 emissions reduction targets, as set by the Intergovernmental Panel on Climate Change. climate change (IPCC).

Renovating existing building stock to a zero-carbon compatible level is a key priority to achieve the sector’s decarbonisation targets. However, rising inflation, tightening interest rates, rising fuel costs and supply chain disruption are all factors that are negatively impacting implementation. This study therefore highlights the facilitating role of private sector financing solutions in maintaining crucial investment dynamics, drawing on numerous concrete examples of implementation around the world.

Complete renovations of commercial buildings – including offices, hospitals, factories, warehouses and educational facilities – can reduce their energy consumption by up to 40%, but fall far short of the scale needed to achieve climate objectives, underlines the study. This is likely due to the considerable investments required to upgrade technologies.

For this reason, service contracts, known as energy efficiency as a service, help private and public sector organizations retrofit existing non-residential building stock in an affordable and environmentally friendly manner. cash flow. These innovative financing mechanisms make it possible to reduce operating costs, without putting pressure on resources, to avoid putting capital at risk and to guarantee the achievement of the expected savings.

At the technology component level, financing tools are available to help sellers and distributors add value for their buyers through cash flow capabilities. For larger installations or systems, financing arrangements can be adapted and adjusted to align costs with the rate of benefit from the energy efficiency technology.

For Zakaria Jghab, President of Siemens Financial Services France: “As climate targets loom on the horizon, it is important that we continue to support and enable the decarbonization of buildings. Not only are they a serious contributor to global greenhouse gas emissions, but if left unchecked, these emissions are expected to double by 2050. Specialized financing solutions are designed to take savings into account, making them economic facilitators of the ecological transition. »

Methodology

Data from national and regional statistical institutes on the annual energy consumption of non-residential buildings built before 2010 were used to model the CO2 emissions of buildings likely to benefit from in-depth energy renovation. This figure was then reduced by the likely highest levels of implementation of such deep modernization. The likely energy savings from a deep renovation were calculated using the lower end of the official average ranges. The resulting figures provide a very conservative annual estimate of energy savings achievable through deep renovations, which can be financed through energy efficiency-as-a-service financing techniques.

[I] https://www.visualcapitalist.com/carbon-emissions-by-country-2022/

Illustrative image of the article via Depositphotos.com.