Embodied carbon: the next big climate challenge for real estate

Embodied carbon is defined by LETI and the UK Green Building Council as the carbon emissions of a building created by its materials: their extraction, transportation, construction, maintenance, replacement, and end of life treatment. The embodied carbon associated with buildings contributes 11% of global carbon emissions and represents 28% of emissions originating from the built environment. In this blog, I look at the challenge of reducing embodied carbon emissions.

Optimising the whole life carbon of a building involves striking a balance between minimising embodied carbon and reducing operational emissions. But unlike operational emissions, embodied carbon impact is fixed at the time of construction and can’t be reduced thereafter. This means that embodied carbon will account for around 50% of built environment emissions by 2035, as operational emissions of buildings reduce – but we carry on building.

This suggests that without action on embodied carbon, the UK’s 2050 net zero goal is not achievable. There are tough choices ahead around whether operationally-efficient new builds or refurbishments are most effective at reducing overall carbon emissions. But given that 80% of 2050’s built stock is already standing, the need to reduce the impact by refurbishing existing buildings is clear.

Fortunately, there is evidence that refurbishment is less risky, quicker to the market and allows carbon savings to be realised sooner (by limiting the weight of additional embodied carbon). The decision can be further informed by the choice of building materials – both the energy that was used to create them, and the amount of energy that can be saved if they are re-used. Material re-use can be relevant to both new builds and refurbishments and save up to 95% of the embodied carbon emissions compared to buying new.

With this in mind, transparency and data sharing throughout the material and building lifecycle would allow for more informed strategic decisions about new build, retrofitting and carbon savings through sustainable planning and design.

Building regulations issued under the 1984 Building Act aim to improve the energy efficiency of buildings, but there are currently no formal regulations or planning policies nationally for the measure or reduction of embodied carbon emissions. However, there are a number of active or proposed initiatives, to include:

• Life cycle assessments are already implemented or agreed for some public buildings and projects, and a number of widely adopted green building certifications (such as BREEAM and LEED) recognise the benefits of such assessments.
• The UK Green Taxonomy, which looks likely to follow the model of the EU Taxonomy. Amongst other things, these instruments aim to define a sustainable building, and although embodied carbon is not yet a major feature of such definitions, it seems likely that it will become one, not least through their ‘circular economy’ component.
• The Greater London Authority’s 2021 London Plan, requires ‘referrable’ development proposals (and encourages other major infrastructure proposals) to submit a circular economy statement explaining how materials will be disassembled, re-used or recycled. This policy aims to move towards longer-life, adaptable buildings and promote the deconstruction and re-processing of useful materials at the end of a building’s life.
• Through environmental product declarations (EPD’s) and material passporting, a building’s material composition and the environmental footprint of its products could be clearly outlined. These systems can promote sustainable builds and deconstruction in lieu of demolition, encouraging the re-use of key materials in construction. A wide and increasing number of products produced in the UK have EPD’s, and research to implement material passports is underway by Orms, but whilst the value of materials passports is acknowledged, national implementation is some way off.
• UK Green Building Council’s Net Zero Whole Life Roadmap outlines timebound policy recommendations for government based on building size and sector and guides an approach for local authorities. Actions for tackling embodied carbon include managing data, cutting refurbishment VAT and standardising EPD’s.
• London Energy Transformation Initiative (LETI) Embodied Carbon Primer, Retrofit Guide and Client Guide for Net Zero Carbon Buildings are publications from a leading working group of industry professionals driving low carbon design through practical examples and guidance across the built environment and have informed benchmarks adopted by the GLA and RIBA 2030 Challenge.
• The Architects’ Journal ‘RetroFirst’ campaign aims to equalise VAT differences between new and refurbished stock, which could remove some cost pressures from sustainable strategy planning.
• Part Z is an industry-driven proposed amendment to current building regulations, emphasising the need for assessment and minimisation of whole life carbon emissions and outlining specific methodology that could be followed for embodied carbon. While the UK Government has not committed to implementing it, MPs have made similar legislative proposals in Parliament.

All of these activities suggest that embodied carbon is rising up the agenda whether regulators act or not. However, until firm policy is in place, the willingness of occupiers and landlords to pay to reduce this source of emissions is likely to be the principal factor in pushing forwards initiatives such as these. And there’s some evidence that they are willing to pay. We’ve found that progressive industry players do wish to differentiate themselves by reducing embodied carbon across their real estate, driven by their brand and the need to attract and retain talent.

If you want to know more about how embodied carbon affects you, CBRE UK’s ESG Consultancy team can advise.

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