President Trump issued executive orders this week for a policy agenda to develop domestic energy supplies, ensure grid reliability, and meet increased electricity demands driven by artificial intelligence (AI). (AP News, April 8)
It states that America’s leadership in technological innovation “depends on a reliable supply of energy from all electric generation sources, particularly those secure, redundant fuel supplies that are capable of extended operations.” (Politico, April 8)
Building efficiency measures that yield energy savings are also key to relieving electricity grid constraints to accommodate more energy users. RER and a broad coalition of real estate organizations urged heightened focus on efficiency programs by voicing strong support for ENERGY STARin a recent letter to EPA Administrator Lee Zeldin. (RW, April 4)
State Overreach EO
The EO on “Protecting American Energy from State Overreach” reflects the administration’s view that “American energy dominance is threatened when State and local governments seek to regulate energy beyond their constitutional or statutory authorities.” (Axios, April 9)
Governors committed to reducing the use of fossil fuels and combat climate change within their borders said they were not “intimidate[d]” by the Trump order, signaling likely litigation. (E&E News, April 9; Reuters, April 9)
In February, RER submitted a letter to Congress requesting oversight of federal DOE grants that induce states and localities to require all-electric buildings and zero emissions “targets,” through onerous Building Performance Standards (BPS). (RW, Feb. 28)
RER’s peer reviewed 20-point policy guidefor fair BPS mandates emphasizes that states and localities receiving federal grants should not levy fines on buildings that meet US-EPA and US-DOE high performance industry leadership standards. (RW, Oct. 11)
Tariffs and Energy
While the administration’s recent executive orders could bolster grid reliability, the potential for broad tariffs may introduce new costs and complexities undermining energy affordability and infrastructure investment. (PoliticoPro, April 8)
Tariffs on critical grid components could exacerbate supply chain shortages and drive up electricity prices. (CNet, April 4)
On Tuesday, U.S. Senators Bill Cassidy (R-LA) and Lindsey Graham (R-SC) introduced the latest version of the Foreign Pollution Fee Act (FPFA), a carbon tariff aimed at penalizing imported goods manufactured with higher CO2 emissions than domestic alternatives. (E&E News, April 9) (Press Release, April 8)
Prospects for imminent passage of the FPFA are remote. Yet, the bill signals some interest by Republican Senators to tie climate policy to tariff policy where overseas manufacturers produce aluminum, cement, iron, steel, and glass with higher carbon emissions compared to like-kind U.S. manufactured products. (American Action Forum, April 8)
RER submitted comments on the FPFA in January, raising concerns regarding the impact of a carbon tariff on affordable housing construction, rebuilding after natural disasters, and technical issues on calculating “indirect emissions” associated with product manufacturing. (RW, Feb. 7)
RER will continue engaging with policymakers to ensure federal actions promote reliable, affordable energy without unintended economic repercussions.
The Real Estate Roundtable (RER) and industry partners voiced strong support for Environmental Protection Agency’s (EPA) ENERGY STAR program in a letter to Administrator Lee Zeldin this week—urging continued support for the voluntary, market-driven platform that underpins building efficiency, grid reliability, and energy cost savings. (Letter)
Why It Matters
Commercial real estate relies more on ENERGY STAR than any other voluntary federal public-private partnership. It provides CRE’s standard tool to track and reduce building energy use—supporting lower utility bills, smart cap ex investments, and reduced regulatory red tape. (Letter)
“Real estate assets that do more with less energy – as quantified, monetized, and recognized though Portfolio Manager and other ENERGY STAR offerings – are critical to achieve EPA’s pillars to “power the great American comeback,” the letter stated.
Facts and Stats
More than 330,000 buildings—representing nearly 25% of U.S. commercial building floor space—utilized EPA’s Portfolio Manager software last year.
ENERGY STAR-certified buildings achieve an average of 35% less energy usage compared to similar non-certified buildings.
The program has saved businesses and families nearly $200 billion in utility bills since 1992, including $14 billion in 2024 alone.
Driving the Energy Comeback
The real estate industry letter how ENERGY STAR supports EPA goals to:
Restore Energy Dominance and Competitiveness: Helps reduce operating costs, ease grid strain, and boost building global competitiveness.
Support Cooperative Federalism: Serves as a unifying national platform across varied state and city energy rules.
Lead in AI Innovation: Electricity savings supported by ENERGY STAR, combined with American-made energy of all types, are requisite to meet the massive demands for power we need to lead the world in AI innovation.
Energy Hearings on Capitol Hill
Congressional committees held a series of energy-related hearings over the past two weeks, zeroing in on grid reliability, domestic supply, and the mounting electricity demands from artificial intelligence and data infrastructure.
Last week, the CEOs of the nation’s grid operators in competitive electricity markets testified at a House Energy Subcommitee hearing, “Keeping the Lights On: Examining the State of Regional Grid Reliability.” Witnesses explained that power demands are forecasted to exceed grid capacity and reinforced the need to reduce burdensome regulations to generate new power supplies. (Chairman Latta (R-OH) Statement, March 25)
RER remains committed to continued collaboration with EPA to advance the ENERGY STAR program as part of the administration’s ‘all of the above’ energy strategy, and goals to make the grid more resilient and reliable.
A major escalation in the White House’s trade agenda this week introduced new tariffs on imports from major global partners—while sparing Canada and Mexico in a move important for construction and development.
Recap
On Wednesday, President Trump announced a minimum 10 percent tariff on imports from most countries, set to take effect Saturday. In addition, individualized, “reciprocal” tariffs that apply to specific countries will take effect next Wednesday, including raising overall tariffs on China to 54 percent. (White House, April 2)
While Canada and Mexico did not receive any new tariffs, other key trading partners were affected. The European Union was hit with a new 20 percent tariff, along with Japan (24 percent) and South Korea (25 percent), spurring a statement from the European Commission President indicating that plans for countermeasures are in motion. (Reuters, April 3)
The tariff exceptions for Canada and Mexico are positive for the real estate industry. Canada supplies about 85% of all U.S. softwood lumber imports—nearly a quarter of the total domestic supply in the U.S. Further exempting Mexican products is also a win given major construction cost drivers such as gypsum, concrete and near-shored appliances. (NAHB, April 3)
National Association of Home Builders Chairman Buddy Hughes said, “While the complexity of these reciprocal tariffs makes it hard to estimate the overall impact on housing, they will undoubtedly raise some construction costs. However, NAHB is pleased President Trump recognized the importance of critical construction inputs for housing and chose to continue current exemptions for Canadian and Mexican products, with a specific exemption for lumber from any new tariffs at this time.” (NAHB, April 3)
In TV interviews after the announcement, Treasury Secretary Scott Bessent called for patience to not immediately retaliate and “asking to let’s see where this goes.” (Politico, April 3)
Markets and financial experts remain concerned about the ultimate endgame of the tariffs—whether they are meant to be permanent or represent negotiating leverage for the Trump administration to garner better deals with trading partners.
Speaking with reporters on Thursday, Trump seemed to indicate the latter, saying that “the rest of the world wants to see if they can make a deal.” (NBC News, April 3; Forbes, April 3)
Implications for CRE
Tariffs may present several challenges for commercial real estate, including increased construction costs, potential project delays, and heightened uncertainty among investors. (CBRE, March 19 | Roundtable Weekly, Feb. 14)
Higher tariffs on imported Chinese steel and aluminum will raise structural material costs, increasing expenses for developers and complicating efforts to address the housing shortage. (Roundtable Weekly, Jan. 24 | Nov. 27)
New tariffs also threaten to escalate energy costs by disrupting supply chains and raising prices for essential clean-tech components, underscoring the need to prioritize energy conservation strategies in commercial buildings. (E&E News, April 3 | NYT, April 3 | Forbes, March 20)
Embracing efficiency measures such as EPA’s ENERGY STAR program is now more important than ever—ensuring grid reliability, controlling operational costs, and unleashing American energy dominance amid growing economic pressures. [See ENERGY POLICY story below]
For now, deep uncertainties around trade and the administration’s tariff strategy leave long-term planning for investment and development in limbo. This latest round of tariffs is unlikely to be the last. RER will continue to track coverage on tariffs, and the implications for commercial real estate.
This week, The Roundtable urged the Departments of Treasury, Energy, and the Environmental Protection Agency to develop voluntary, science-based guidelines to help U.S. real estate companies align their climate-related programs with global targets. (July 16 letter)
Treasury’s principles can guide net-zero corporate commitments in the United States.
However, foreign organizations aim to exert significant influence over capital decisions in America’s real estate – which can leave buildings “stranded” in the eyes of some overseas investors because they do not meet “energy requirements being rolled out in Europe.” Bloomberg (June 18)
These market risks prompted the Roundtable’s letter requesting voluntary building “decarbonization curves” designed by the U.S. government reflecting climatic, market, and data conditions in our country.
Investment principles for America’s real estate “should not be the creation of the European Union,” The Roundtable states.
“This is a matter of global economic competitiveness for capital access,” said the Chair of The Roundtable’s Sustainability Policy Advisory Committee, Anthony Malkin (Chairman and CEO, Empire State Realty Trust, Inc.). “America’s buildings should not be expected to meet standards that speak to assets, laws, power grids, and regulatory environments in Europe or elsewhere.”
U.S. Energy Programs and Recommendations
Anthony Malkin (Chairman and CEO, Empire State Realty Trust, Inc.)
Malkin continued, “The United States leads the world in government developed, voluntary guidelines for all types of buildings’ energy use and emissions. Agencies like US-EPA and US-DOE know the conditions of our markets, climate zones, and power grids and can help make it easier for capital to come into real estate and grow jobs and tax revenue in the United States.”
America’s global leadership in developing climate-related real estate guidelines is shown through tools and resources such as:
DOE: The first voluntary National Definition for a Zero Emissions Building (“ZEB”) (Roundtable Weekly, June 7), and the wealth of scientific research from the agency’s 17 national labs.
The Roundtable urged the U.S. government to develop building “pathways” through a robust public input process that considers the experiences of companies that own, develop, manage and finance America’s real estate.
The Sustainability Policy Advisory Committee (SPAC) will continue to work with the agencies and Congress to shape policies that promote cost-effective investments to optimize building energy efficiency and help the real estate sector mitigate the effects of climate change.
The Biden-Harris administration is accelerating actions at the intersection of climate and real estate policy in the lead-up to November’s elections to implement its signature clean energy legislation passed during its first years in office. RER’s Sustainability Policy Advisory Committee (SPAC) remains engaged with policymakers on a variety of initiatives coalescing in 2024 that include the following:
Climate-Related Financial Risk
The U.S. Securities and Exchange Commission (SEC) is expected to issue a final rule this spring for registered companies to disclose financial risks from climate change.(RER fact sheet and Roundtable Weekly, March 10, 2023).
Scope 3 “indirect” emissions from sources in a company’s supply chain are controversial elements of the anticipated SEC rule. RER’s 2022 comments urged the Commission to drop its “back door mandate” for Scope 3 disclosures. (Roundtable Weekly, June 10, 2022)
Litigation against the SEC’s imminent rule is widely expected. A recent lawsuit filed by industry groups against a California disclosure package passed last summer (modeled after the SEC’s proposal) signals similar claims that the federal government might face in court. (Wall Street Journal, Jan. 30 and RER fact sheet)
The Environmental Protection Agency (EPA) will accept applications for its NextGen building label starting in September. (EPA slides to SPAC, Jan 24) ENERGY STAR assets will be NextGen-eligible if they also meet an emissions “target” and source 30 percent of energy use to renewable power. (RER fact sheet)
NextGen certification may serve as an “intermediate step” for buildings that strive for a voluntary Zero Emissions Building(“ZEB”) definition coming from the U.S. Energy Department. Recent comments from RER and Nareit maintain that the federal ZEB definition can lend consistency to the confusing state-local regulatory patchwork of building performance standards. (Roundtable Weekly, Feb 2.)
EPA is acting on requests to update Portfolio Manager, CRE’s standard tool to measure metrics for building efficiency and emissions. Portfolio Manager upgrades announced at last month’s SPAC meeting will help real estate companies strive for NextGen or ZEB status. (Coalition letter, Sept. 14, 2023)
This spring, the influential GHG Protocol—an international framework heavily relied upon by the SEC, EPA, DOE, and institutional investors—will undertake its first revisions since 2015 to its guidance for companies to account for emissions from electricity use. RER will participate in the upcoming Scope 2 guidance public comment process.
Tax Incentives
Roundtable Sustainability Policy Advisory Committee Chair Tony Malkin, right, and Vice Chair Ben Myers
The Internal Revenue Service (IRS) has issued dozens of proposed rules and notices to implement clean energy tax incentives available to real estate and other sectors since Congress passed the Inflation Reduction Act (IRA) in 2022. (RER fact sheet)
The IRS is expected to release final rules before November on topics such as the ability of REITs to transfer certain tax credits, proposed rules on non-urban census tracts eligible for EV charging station credits, and the 179D deduction for building retrofits.
RER has submitted comments on these and other topics in response to initial IRS notices and will continue to provide feedback as opportunities arise. (RER letters Oct. 30 and July 28, 2023; Nov. 4 and Dec. 2, 2022)
SPAC members also attended a special session with EPA staff where Roundtable members provided detailed industry feedback about the first major enhancements in a decade that are under consideration for EPA’s ENERGY STAR Portfolio Manager benchmarking tool.
The Roundtable’s HSTF and RMWG joint meeting on Jan. 24 addressed China’s espionage efforts impacting American corporations; the emerging use of Artificial Intelligence as a new risk vector; and the current dynamic in pricing and coverage in commercial insurance markets. (HSTF & RMWG joint agenda | Roundtable 2024 Homeland Security Priorities)
Next on The Roundtable’s 2024 meeting calendar is the Spring Meeting on April 15-16. This upcoming meeting is restricted to Roundtable-level members only.
This week, the White House’s climate policy chief announced the imminent release of voluntary, uniform federal-level criteria for “Zero Emissions Buildings.” The “ZEB” definition could bring much-needed consistency to help CRE owners and investors establish long-term goals for buildings that align with varying climate programs adopted across numerous jurisdictions and international frameworks. (Washington Post, Sept. 28)
A CRE coalition of real estate organizations including The Roundtable sent a Sept. 14 letter to US-EPA supporting development of standard methods and metrics for buildings and tenants to quantify their emissions.
Federal standards, definitions, and tools “are the North Star though which local governments can inform their law-making, and this helps bring some sense and order to the otherwise conflicting patchwork of climate laws and frameworks developed by states, cities, and NGOs,” said Roundtable Sustainability Policy Advisory Committee (SPAC) Chair Tony Malkin (Chairman, President, and CEO, Empire State Realty Trust). (Roundtable Weekly, Sept. 15)
A Climate Priority for CRE
Roundtable Senior VP and Counsel Duane Desiderio was quoted yesterday in the Washington Post and Popular Science about how CRE executives welcome the idea of a single federal standard. “A workable, usable federal definition of zero-emission buildings can bring some desperately needed uniformity and consistency to a chaotic regulatory landscape,” Desiderio said. (Roundtable Weekly, Sept. 15)
Yesterday, The White House also released a National Climate Resilience Framework in anticipation of an eventual White House Climate Resilience Summit. The Framework identifies climate resilience principles and specific actions to expand and accelerate progress towards six objectives that includes, “Expand adoption of the latest consensus-based building and energy codes and high-performance standards.” (White House Fact Sheet, Sept. 28)
The Roundtable will continue to work with our partner organizations and develop comments on the ZEB definition upon its anticipated release next month.
# # #
Not all real estate assets will be able to reach a level of “zero emissions.” But an overarching and workable term—developed with feedback from industry and other stakeholders—can bring greater uniformity and consistency to:
Related federal programs like EPA’s anticipated “NextGen” building label – to serve as a transition point toward ultimate zero emissions (Roundtable Weekly, March 3);
A CRE coalition of real estate organizations including The Roundtable sent a Sept. 14 letter to US-EPA supporting development of standard methods and metrics for buildings and tenants to quantify their emissions.
Federal standards, definitions, and tools “are the North Star though which local governments can inform their law-making, and this helps bring some sense and order to the otherwise conflicting patchwork of climate laws and frameworks developed by states, cities, and NGOs,” said Roundtable Sustainability Policy Advisory Committee (SPAC) Chair Tony Malkin (Chairman, President, and CEO, Empire State Realty Trust). (Roundtable Weekly, Sept. 15)
A Climate Priority for CRE
Roundtable Senior VP and Counsel Duane Desiderio was quoted yesterday in the Washington Post and Popular Science about how CRE executives welcome the idea of a single federal standard. “A workable, usable federal definition of zero-emission buildings can bring some desperately needed uniformity and consistency to a chaotic regulatory landscape,” Desiderio said. (Roundtable Weekly, Sept. 15)
Yesterday, The White House also released a National Climate Resilience Framework in anticipation of an eventual White House Climate Resilience Summit. The Framework identifies climate resilience principles and specific actions to expand and accelerate progress towards six objectives that includes, “Expand adoption of the latest consensus-based building and energy codes and high-performance standards.” (White House Fact Sheet, Sept. 28)
The Roundtable will continue to work with our partner organizations and develop comments on the ZEB definition upon its anticipated release next month.
# # #
Not all real estate assets will be able to reach a level of “zero emissions.” But an overarching and workable term—developed with feedback from industry and other stakeholders—can bring greater uniformity and consistency to:
Related federal programs like EPA’s anticipated “NextGen” building label – to serve as a transition point toward ultimate zero emissions (Roundtable Weekly, March 3);
A CRE coalition of real estate organizations including The Roundtable sent a Sept. 14 letter to US-EPA supporting development of standard methods and metrics for buildings and tenants to quantify their emissions.
Federal standards, definitions, and tools “are the North Star though which local governments can inform their law-making, and this helps bring some sense and order to the otherwise conflicting patchwork of climate laws and frameworks developed by states, cities, and NGOs,” said Roundtable Sustainability Policy Advisory Committee (SPAC) Chair Tony Malkin (Chairman, President, and CEO, Empire State Realty Trust). (Roundtable Weekly, Sept. 15)
A Climate Priority for CRE
Roundtable Senior VP and Counsel Duane Desiderio was quoted yesterday in the Washington Post and Popular Science about how CRE executives welcome the idea of a single federal standard. “A workable, usable federal definition of zero-emission buildings can bring some desperately needed uniformity and consistency to a chaotic regulatory landscape,” Desiderio said. (Roundtable Weekly, Sept. 15)
Yesterday, The White House also released a National Climate Resilience Framework in anticipation of an eventual White House Climate Resilience Summit. The Framework identifies climate resilience principles and specific actions to expand and accelerate progress towards six objectives that includes, “Expand adoption of the latest consensus-based building and energy codes and high-performance standards.” (White House Fact Sheet, Sept. 28)
The Roundtable will continue to work with our partner organizations and develop comments on the ZEB definition upon its anticipated release next month.
# # #
National Climate Advisor, Ali Zaidi, stated in yesterday’s keynote address at the Greenbuild 2023 conference in Washington, D.C. that the proposed federal ZEB definition will be released next month.
Zaidi noted The Real Estate Roundtable in his comments as an important group for addressing the need to transform buildings at scale.
When the U.S. Department of Energy (DOE) announces the proposed ZEB definition it will kick-off an anticipated 30-day public comment period. The Environmental Protection Agency (EPA) ENERGY STAR program is coordinating closely with DOE. A final ZEB definition could be published by the end of this year.
Federal Consistency is Essential
DOE’s ZEB definition would not be mandatory on the private sector. It will be a voluntary, aspirational guideline at the federal level.
However, a definition from the U.S. government can finally build a uniform understanding of what it takes for a building to achieve “zero emissions” over time, along a realistic and achievable pathway.
Not all real estate assets will be able to reach a level of “zero emissions.” But an overarching and workable term—developed with feedback from industry and other stakeholders—can bring greater uniformity and consistency to:
Related federal programs like EPA’s anticipated “NextGen” building label – to serve as a transition point toward ultimate zero emissions (Roundtable Weekly, March 3);
A CRE coalition of real estate organizations including The Roundtable sent a Sept. 14 letter to US-EPA supporting development of standard methods and metrics for buildings and tenants to quantify their emissions.
Federal standards, definitions, and tools “are the North Star though which local governments can inform their law-making, and this helps bring some sense and order to the otherwise conflicting patchwork of climate laws and frameworks developed by states, cities, and NGOs,” said Roundtable Sustainability Policy Advisory Committee (SPAC) Chair Tony Malkin (Chairman, President, and CEO, Empire State Realty Trust). (Roundtable Weekly, Sept. 15)
A Climate Priority for CRE
Roundtable Senior VP and Counsel Duane Desiderio was quoted yesterday in the Washington Post and Popular Science about how CRE executives welcome the idea of a single federal standard. “A workable, usable federal definition of zero-emission buildings can bring some desperately needed uniformity and consistency to a chaotic regulatory landscape,” Desiderio said. (Roundtable Weekly, Sept. 15)
Yesterday, The White House also released a National Climate Resilience Framework in anticipation of an eventual White House Climate Resilience Summit. The Framework identifies climate resilience principles and specific actions to expand and accelerate progress towards six objectives that includes, “Expand adoption of the latest consensus-based building and energy codes and high-performance standards.” (White House Fact Sheet, Sept. 28)
The Roundtable will continue to work with our partner organizations and develop comments on the ZEB definition upon its anticipated release next month.
The Real Estate Roundtable and industry partners encouraged the U.S. Environmental Protection Agency (EPA) on Sept. 14 to enhance its set of effective, standardized, and voluntary federal tools that can assist real estate companies meet climate targets imposed by city and state laws. (Real estate coalition letter, Sept. 14)
EPA Standards to Quantify Emissions
The coalition endorsed EPA’s planned improvements to its free, online Portfolio Manager benchmarking tool, announced in an ENERGY STAR July 2023 policy brief. Nearly 25% of U.S. CRE space measures energy and water use, waste disposal, and GHG emissions using Portfolio Manager.
Portfolio Manager and other EPA resources can help real estate owners, developers, and lenders with common tools to comply with numerous building performance standards (“BPS”) enacted at the state and local level, and similar non-governmental frameworks like the one proposed by the Science Based Targets Initiative (“SBTi”). (Roundtable Weekly, July 14 and Jan. 20).
Without EPA’s voluntary resources to support uniform emissions measurement, compliance with local mandates is “exceedingly difficult, impracticable, and in some cases, impossible,” the letter states.
“We value greatly our longstanding collaboration with the US-EPA’s ENERGY STAR program. It is the gold standard of resources which help our industry report on energy efficiency and the financial impacts from the increase of renewable energy supplies,” said Roundtable Sustainability Policy Advisory Committee Chair, Tony Malkin (Chairman, President, and CEO, Empire State Realty Trust), below.
Malkin added, “Non-binding federal guidelines from the EPA’s strong and best-in-class analytical frameworks are the North Star through which local governments can inform their law-making, and this helps to bring some sense and order to the otherwise conflicting patchwork of climate laws and frameworks developed by states, cities, and NGOs. The future is hard facts and data, and our industry is fortunate to have a constructive and productive relationship with the EPA that focuses on points on the board, the how to address the what.”
The American Hotel & Lodging Association; Building Owners and Managers Association (BOMA) International; CRE Finance Council; ICSC; Mortgage Bankers Association; NAIOP, Commercial Real Estate Development Association; and Nareit® joined The Roundtable on the coalition letter.
Anticipated SEC Climate Rules
The Roundtable’s call for uniform methods to calculate and report emissions anticipates overdue rules this fall from the U.S. Securities and Exchange Commission (SEC). The SEC’s rules are expected to compel registered companies to disclose in investor filings material financial impacts related to climate change. (See Roundtable Weekly, June 10, 2022 and RER comments).
The Biden administration’s emphasis on climate policy will continue this fall, when it is expected to propose a uniform federal definition on the long-term concept of “zero emissions buildings.” The Roundtable’s SPAC will convene a working group to analyze the definition upon its release for public comments.
The Department of Energy (DOE) this week presented its latest data on energy use in U.S. commercial buildings. The nationwide information released by DOE’s Energy Information Administration (EIA) is the basis for ENERGY STAR building scores from the Environmental Protection Agency (EPA). (EIA final results and reports)
CBECS Results
The latest Commercial Buildings Energy Consumption Survey (CBECS) reflects information collected in 2018. Although this is EIA’s newest building data, it is a “snapshot” in time—and does not account for occupancy rates or energy usage during or after the COVID-19 pandemic.
According to the 2018 CBECS, there are an estimated 5.9 million public and private commercial buildings in the U.S. across non-residential asset classes—75% of which were constructed before the year 2000. (CBECS “building characteristics” highlights)
Building energy efficiency improved compared to the 2012 survey. Total floor space in commercial buildings increased yet energy consumption did not. Commercial buildings overall consumed 12% less energy per square foot of floor space in 2018 than in 2012.
Electricity and natural gas accounted for about 94% of energy consumed. Electricity accounted for 60% of energy consumed (mostly for cooling) and natural gas for 34% (mostly for heating).
Large buildings were fewer but consumed over one-third of energy. Buildings over 100,000 square feet accounted for 2% of all commercial buildings—yet covered 34% of total commercial floor space. The newest buildings were the most energy intensive.
Commercial buildings spent $141 billion on energy in 2018, averaging $1.46 per square foot. Commercial buildings spent $119 billion on electricity, or 84% of their total energy expenditures. Natural gas accounted for 12% of total commercial building energy expenditures ($16 billion).
Space heating accounted for close to one-third of end-use consumption. Space heating was the most energy-intensive end use, especially in colder climates. Office equipment and computing were the least intensive end uses.
EPA’s successful ENERGY STAR score—an efficiency rating for buildings—is generally based on CBECS data.
EPA is expected to update its models for calculating ENERGY STAR ratings in 2025, under the newly-released 2018 CBECS data. The anticipated update could greatly alter a building’s current ENERGY STAR score (presently based on 2012 CBECS data).
EPA recently proposed a new voluntary label for low-carbon buildings. The NextGen label would expand upon ENERGY STAR and recognize buildings that use significant percentages of solar and other forms of renewable energy.
The Real Estate Roundtable submitted comments to the U.S. Environmental Protection Agency (EPA) yesterday on the agency’s proposed voluntary label for low-carbon buildings. (Roundtable letter, March 2)
The NextGen label would allow companies to highlight buildings that go beyond top efficiency performance—and further rely on renewable energy use and reduce their greenhouse gas (GHG) emissions. (EPA’s proposal and Roundtable Weekly, Jan. 27)
NextGen recognition has great potential for widespread market acceptance, The Roundtable stated in its comments.
EPA’s proposed program could create a uniform, voluntary federal guideline to simplify the confusing patchwork of city and state climate-related building mandates that exists across the country. (EPA Policy Brief, Jan. 19; Roundtable Weekly, Jan. 20)
EPA staff discussed its NextGen proposal with The Roundtable’s Sustainability Policy Advisory Committee (SPAC) at the “State of the Industry” meeting in January.(SPAC slide presentation)
Roundtable Recommendations
The Roundtable’s SPAC, chaired by Tony Malkin, above left, (Empire State Realty Trust Chairman President and CEO) and vice-chaired by Ben Myers, right, (BXP Senior Vice President, Sustainability), convened a working group to develop the comments submitted to EPA.
The Roundtable stated that NextGen recognition criteria “must be grounded in financial performance that offer building owners reasonable returns on their investments.”
Efficiency:
Significant and demonstrated reductions in a building’s energy use should be eligible for the NextGen label (as an alternate, additional criterion to EPA’s proposal that only ENERGY STAR certified buildings could qualify).
Renewable Energy: The NextGen proposal would require that 30% of a building’s energy use must derive from renewables.The Roundtable recommends that the level should start at 20% and adjust over time to reflect the changing status of the electric grid as it decarbonizes through increased reliance on solar, wind, and other clean power sources.
GHG Reductions: The Roundtable supports EPA’s proposal for a GHG “intensity target” that reflects a building’s unique weather conditions by a factor known as heating degree days (HDD). The Roundtable worked closely with EPA in the pre-pandemic era to consider HDD as a key variable in the underlying ENERGY STAR building score process. (Roundtable Weekly, July 19, 2019)
Renewable Energy Certificates (RECs): The Roundtable explained that voluntary NextGen recognition can provide much-needed guidance on corporate accounting for REC purchases and enhance credible claims on the environmental benefits from offsite clean power procurement.
The Roundtable further advised EPA that it should conduct a pilot of the low-carbon label with private and public building owners before broad release to U.S. real estate markets. EPA intends to make the NextGen label available in 2024.
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