Net Zero Carbon
October 4, 2024 | Net zero carbon is achieved when all carbon emissions associated with a building – from production and operation through to deconstruction and end of life – are zero or negative.
What is Net Zero Operational Energy?
In order to effectively mitigate the adverse impacts of climate change, it is imperative to achieve net zero global energy-related emissions by 2050. The real estate industry needs to demonstrate that it is on a pathway to achieve this critical target and take actions to ensure that their portfolios are resilient and deliver long-term value for their investors.
Net zero carbon is achieved when all carbon emissions associated with a building – from production and operation through to deconstruction and end of life – are zero or negative. In most Net Zero Carbon (NZC) commitments the scope of carbon includes operational carbon, i.e. carbon associated with the energy used to operate a building. When reporting on opera- tional carbon, differences are found in whether targets only include landlord energy usage (Scope 1 & 2 emissions) or also include occupier energy usage (Scope 3 emissions)
WHY? Due to the changing climate, real estate players now have new obligations to revalue and future-proof their portfolios to foster resilience, and ensure the viability of their invest- ments. But the pathway to becoming NZC can also have new opportunities to generate new sources of value.
Transition risks: It is expected that the demand from investors for sustainable and low carbon buildings will increase. In areas where the market is expected to shift sooner, buildings that do not conform to being green, will suffer from a reduced value. Sustainable buildings will give rise to a higher market and rental value for those buildings.
Physical risks: Decarbonizing buildings is needed to mitigate mounting physical risks. Fund managers will need to have a clear understanding of how, where and when the physical effects of climate change will become material to protect asset value and portfolio performance.
CO2 tax: More countries are proposing a CO2 tax on excess emissions for companies. Per tonnes CO2 emitted over the carbon budget (determined by a benchmark) would be taxed.
Understanding the 2 baseline & set targets
Articulate the investment boundary of your Net Zero Carbon Target.
Understand the baseline emissions per asset.
Create an overview of missing data to prepare roadmaps for all assets.
Analyze the energy intensity and GHG intensity to the CRREM pathway and set reduction targets up to 2050.
Net Zero- and Cost-Benefit analysis
Identify the range of decarbonization options.
Set up an improvement plan based on CRREM analysis, create a Net Zero strategy and prioritize buildings by making an asset level strategy.
Have a clear cost and return on investment analysis of a given emissions-reduction lever and consider the impact on the OPEX and CAPEX of the portfolio.
Draw up your Action plan towards Net Zero
We help you take various actions to improve alignment with CRREM pathway:
Reduce Energy demand:Reducing energy demand is one of the quickest and most cost-effective CO2 mitigation options while lowering energy bills and increasing energy security. Actions such as replacing lightbulbs with led, single glazing with double glazing
Reduce Energy consumption (energy efficiency measures): Energy consumption can be reduced by several actions such as tenant engagement, placing smart systems into the buildings, phase out or substitution of products and processes.
Onsite renewable energy: On-site renewable energy are resources such as wind and solar and are generated on the asset site. Thereby relieving reliance on the grid and providing alternative sources of electricity.
Offsite renewable energy (with demonstrable additionality): Actively procuring renewable energy from the grid, such as local wind energy.
Carbon offsets:
The last action is offsetting GHG emissions by demonstrating reductions or removals through climate change mitigations projects that are not directly linked to the company’s operation but have been funded using carbon credits.
Monitor & improve
Continuously improve your data and monitor progress towards your Net Zero goals, adjusting targets if necessary
Share the insights with your shareholders and potential stakeholders.
Want to know how we can help your business achieve Net Zero Carbon? Get in touch at: info@cooltree.nl.