Frost: Reduced Energy Goals Push Growth in Euro Green Buildings Market

July 15, 2008 // Published as a news service by IHS

With oil prices skyrocketing throughout Europe, the demand for alternative energy sources is paramount. Analysts said " green buildings" is a fairly new concept that has been recognized as a necessary EU initiative.

These buildings serve as the catalyst across the market for building technologies and services. For the past decade, this new market has garnered praise and attention as the need for energy efficiency comes to the policy-making forefront.

"On an average, the Green Buildings Programme aims to achieve reduction of energy consumption by 25% on all new buildings built with the traditional building materials," said Priya Cheriyan, building technologies analyst for Frost & Sullivan.

"The EPBD lays down guidelines to realize energy-saving potential in the buildings sector, which is estimated at 28%, thereby reducing the total energy use across the EU by 11%. Hence, it is the strong catalyst for the growth of this market."

While every state is aware of the need for green buildings, the term took on different meanings in the various EU states. Analysts found that the majority of states focus on reducing the energy consumed as heat and electricity for both commercial and residential houses.

With residential housing consuming approximately three times more energy than commercial, the importance of green buildings is clear, analysts said. The EPBD legislation helped to clear up any inconsistencies, but full implementation differs due to the varying national programs and priorities.

Countries like Denmark, Austria, Germany, Sweden and Finland are farther along in their national implementation, analysts said. This is due to the increased awareness of the benefits of green buildings, as well as various programs and rewards, which extrinsically motivate developers to choose green buildings.

In Austria, for example, constructors are rewarded €30,000 for ensuring that a building meets the Green Building requirements. Denmark leads the pack at 60% full EPBD implementation, due to the existing Building Labeling Scheme, which ensured green buildings since 1997. These countries have quickly found success, analysts said.

In countries more concerned with nuclear power, however, these energy efficiency policies are slowly being implemented. Analysts said states like Hungary, Bulgaria, Czech Republic, Slovakia and Poland, although quite aware of the environmental importance of these measures, are less successful in its administration.

Analysts said it is peremptory for all the EU states to follow the EPBD legislation so that a uniform system can be developed to classify buildings as green across the EU. However, there is still no defined paradigm to assess and classify buildings as Green Buildings in the EU as compared to the U.S. Defining the market size individually and collectively in the EU states is untenable in these circumstances.

This promising market still needs to mature, analysts said. The answer seems to lie in the uniform certification grants of buildings that comply with current standards, as well as award programs. As demonstrated through Austria and Denmark's success, these methods will propel the market share in the commercial and public buildings stock to reaching its full potential.

"Over the last 10 years, the green buildings market has experienced exponential growth," said Cheriyan. "Experts are optimistic about the continued growth and evolution of this market with expected growth predictions for the next 10 years at 30%."

Source: Frost & Sullivan.