Tracking Buildings

Not on track
Tracking buildings
In this report

Emissions from buildings appear to have risen again in 2018 for the second year in a row, creeping above their 2013 level to an all-time high. This resulted from several factors, including extreme weather that raised energy demand for heating and cooling, which together represented one-fifth of the total global increase in final energy demand in 2018. Enormous potential remains untapped due to the widespread use of less-efficient technologies, a lack of effective policies and insufficient investment in sustainable buildings.

Buildings sector CO2 emissions in the Sustainable Development Scenario, 2000-2030

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Tracking progress

Final energy use in buildings grew from 2 820 million tonnes of oil equivalent (Mtoe) in 2010 to around 3 060 Mtoe in 2018, while the share of fossil fuels decreased only slightly, from 38% in 2010 to 36% in 2018.

As a result, direct emissions from buildings increased to just over 3 GtCO2 in 2018, a slight rebound from just under 3 GtCO2 in previous years.

When indirect emissions from upstream power generation are considered, buildings were responsible for 28% of global energy-related CO2 emissions in 2018. In absolute terms, buildings-related CO2 emissions rose for the second year in a row to an all-time high of 9.6 GtCO2.

This trend reversal since 2013 is due to a combination of factors. Whereas emissions fell after 2013 largely because of progress in reducing power generation carbon intensity, now demand for building energy services – particularly electricity for cooling, appliances and other plug loads, and connected devices – is growing at a faster pace than decarbonised power availability, which has led to a resurgence in buildings-related emissions.

Extreme heat in many parts of the world was responsible for a considerable portion of electricity demand growth in 2018.

Very high temperatures and prolonged heat waves set records in many countries, driving up demand for air conditioning. In Europe, the historical heat record was nearly broken in August as temperatures in parts of Spain and Portugal crept above 48°C. Tokyo had its highest-ever recorded temperature of 41°C in late July, and in South Korea as many as 29 people died from heatstroke after temperatures in Seoul hit a 111-year high. Beijing also broke a 50-year record in June.

The speed of energy intensity reductions in the buildings sector has fallen in recent years, from around 2% in 2015 to an estimated low of 0.6% in 2018 – which is significantly less than the floor area increase of 2.5% from 2017 to 2018.

This is symptomatic of decelerating energy policy progress, demonstrating that the evolution of building energy codes in particular is not keeping up with rapid growth in emerging economies.

To get on track with the Sustainable Development Scenario (SDS), annual drops in energy intensity per m2 globally need to return quickly to at least 2.5% – the rates of the early 2000s.

In some critical emerging markets, particularly in Africa, Latin America and Asia, the rate of change in buildings sector energy intensity needs to double (or more). A similar rate of change is required in major advanced economies, which need to significantly step up deep energy renovations of existing buildings.

Buildings sector energy intensity in selected regions in the Sustainable Development Scenario, 2000-2030

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Energy efficiency policy for buildings continued to progress in 2018, although at slower rate than in 2017, reflecting an overall slowing trend in energy efficiency policy globally. About 40% of energy use in buildings was covered by policies in 2018, only a slight improvement from the 38% coverage in 2017.

The slowdown is due in part to market changes, as growth in energy demand is shifting from China – where policy coverage improved substantially in the last two decades – to other emerging economies, where policies cover a smaller share of buildings energy use.

Lighting, which was the bright spot of energy policy improvement in the past decade, appears saturated at about three-quarters of energy use covered by energy efficiency policies in 2018.

While the major push to phase out incandescent lamps since 2008 has helped improve coverage, annual improvements in 2017 and 2018 were less impressive.

This reflects a worrying trend in overall buildings energy policy coverage, with annual rates of improvement diminishing from 5-8% in the 2000s to 2-3% in recent years.

Figures for policy coverage also do not indicate how stringent polices are, and many policies have not been updated to increase stringency. For example, lighting policies in many countries have not been updated to phase out halogen lamps.


Policy coverage of total final energy consumption in buildings, 2000-2018

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Unsurprisingly, given the lack of major policy progress and clear market signals, investments in sustainable buildings are insufficient.

Although largest energy efficiency expenditures are still in buildings, growth in incremental energy efficiency investments decreased by 3% in 2018, to USD 138 billion.

Effective policies are needed to address current market barriers. Multiple, cost-effective technologies, for high-efficiency lighting to low-cost building envelopes, can unleash major energy savings while also improving comfort and energy services in buildings. Building efficiency and demand side response also reduce the impact of rising electricity demand on the power sector.

Comprehensive policy packages are needed to group solutions under one umbrella. Pairing of traditional policy tools such as mandatory performance standards with more ambitious regulatory and financial incentives to engage the private sector can help bring multiple technical and market-based solutions for buildings together in arrangements such as one-stop shops and energy service companies. This would create a comprehensive framework to deliver cost-effective action tailored to specific building needs, using the most effective technology opportunities.

Governments need to set clear, ambitious commitments to ensure long-term market signals.

Such commitments should put forward specific policy measures, such as building energy codes and mandatory performance standards for equipment to enable and encourage uptake of key energy technology solutions for buildings and to hasten the transition to clean energy and reduce the costs involved.

Policies need to support energy efficiency measures to make them affordable.

Government support for product improvements and technological innovation can create economy-of-scale advantages and raise industry learning rates to deliver cost-effective efficiency mechanisms. Paired with market signals, including energy performance requirements, efficiency gains can be achieved with little increase to manufacturing costs or consumer prices.

Financing and market mechanisms, as well as innovative business models, are required to accelerate the clean energy transition.

Governments can stimulate action through policy interventions that shape market rules to improve access to financing, de-risk clean energy investment and broaden the availability of market-based instruments that reduce barriers to the transition.

Governments need to collaborate to make sustainable buildings a reality. Institutional capacity and global co-operation need to be expanded to enable the clean energy transition.

Governments can co‑operate to share knowledge, best practices and solutions through multiple initiatives such as the IEA Technology Collaboration Programmes and the IEA Global Exchange for Energy Efficiency.

Buildings technologies

Only lighting and data centres are on track with the Sustainable Development Scenario (SDS), while building envelopes and heating, including heat pumps, are well off track.

Cooling and appliances are both showing improvement, but significant policy effort will be needed to put these technologies on the SDS trajectory.

Estimated global buildings construction in the Sustainable Development Scenario, 2018-2030

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Building envelopes

Two-thirds of countries lacked mandatory building energy codes in 2018, meaning more than 3 billion m2 were built last year without mandatory performance requirements. To be in line with the SDS by 2030: all countries need to move towards mandatory building energy codes, high-performance new construction needs to increase from 250 million m2 to 4 billion m2, and deep energy efficiency renovation of existing stock needs to double to at least a 30-50% energy intensity improvement.

Heating technology sales in the Sustainable Development Scenario, 2010-2030

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Heating

Sales of heat pumps and renewable heating equipment such as solar hot water systems have continued to increase by around 5% per year since 2010, representing 10% of overall sales in 2018. Fossil fuel-based equipment, however, still makes up more than 50% of sales, while less-efficient, conventional electric heating equipment adds another 30%. To be in line with the SDS, the share of heat pumps and renewable heating needs to reach 25% of new sales by 2030.

Air conditioner seasonal energy performance in the Sustainable Development Scenario, 1990-2030

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Cooling

Cooling is the fastest-growing end use in buildings, as its energy demand more than tripled between 1990 and 2018 to around 2 000 terawatt hours (TWh) of electricity. While much higher-efficiency air conditioners are currently available, most people purchase new air conditioners that are two to three times less efficient. To put cooling in line with the SDS, standards need to be put in place to improve performance by more than 50% by 2030. This will help cut energy use and emissions from space cooling and limit the capacity additions required to meet peak electricity demand.

Lighting sales by type in the Sustainable Development Scenario, 2010-2030

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Lighting

In 2018, LED sales reached a critical milestone, achieving the same share of global residential sales as less-efficient fluorescent lamps (40%). LED deployment is also progressing for commercial lighting and outdoor applications, especially for linear LEDs to replace fluorescent lamps. As LED costs continue to fall, sales of LEDs are on track with the SDS, although continued robust growth is needed to make up over 90% of sales by 2030.

Consumption by household appliances and plug loads by region in the Sustainable Development Scenario, 2000-2030

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Appliances and equipment

Growth in energy use by household appliances shows no signs of decelerating, having reached more than 3 000 TWh in 2018, or nearly 15% of global final electricity demand. Only one-third of appliance energy use today is covered by mandatory performance standards, and coverage is poor in markets that are expected to grow rapidly in the next decade. Consumer electronics, connected devices and other small plug-loads, which are proliferating rapidly, continue to be unregulated in most countries. Expanded policy coverage and increased stringency are needed in all countries to get on track with the SDS.

Global trends in internet traffic, data centre workloads and data centre energy use, 2015-2021

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Data centres and data transmission networks

As the world becomes increasingly digitalised, data centres and data transmission networks are emerging as an important source of energy demand, each accounting for about 1% of global electricity demand. Despite exponential growth in demand for these services, huge strides in energy efficiency have helped to limit electricity demand growth. Sustained efforts by the ICT industry to improve energy efficiency, as well as government policies to promote best practices, will be critical to keep energy demand in check over the coming decades.
Additional resources