China: the world's largest single market in new construction

Peter Graham's picture
31-10-2019 | Peter Graham | China
Categories: Buildings Energy Efficiency Codes

China’s Five-Year Plan, set over the next two years, and the actions that follow, will determine the emissions trajectory of the country in the critical decade ahead. China is the largest single market for growth in the building sector. Though overall trends in the rest of Asia and continental Africa are even higher, no single country’s growth projections come anywhere close to those of China.

Beijing Aerial View from CCTV Tower - ©sj liew/Flickr

Beijing Aerial View from CCTV Tower - ©sj liew/Flickr

China has the largest new construction market globally, adding an average of 1.8 – 2.0 billion m2 (19 – 21 billion ft2) annually. The total floor area of buildings in China will reach around 69 billion m2 (742 billion ft2) by 2020 and is projected to be 80 billion m2 (861 billion ft2) by 2030. China is also currently experiencing the fastest growth in energy demand for space cooling globally, driven by increasing household income and higher demands for thermal comfort. 

Emission increase despite a range of strong policies and green building initiatives

The Chinese buildings sector accounts for around 20% of annual national energy consumption, producing 1.96 billion tons of CO2 emissions annually. Growth in new floor area and associated energy use and emissions is projected to continue to increase over the coming decades. Between 1991 and 2010, CO2 emissions from buildings and construction grew by an average of 5.7% per year—releasing more than 922 MtCO2 cumulative emissions to the atmosphere.

Fuel use is transitioning from traditional biomass fuels in rural residential buildings toward greater electrification in urban buildings. The majority of the increase in electricity supply is expected to be generated by coal-fired power stations between now and 2030. This will continue to lock in high emissions and to exacerbate poor urban air-quality.

China has a well-developed system for developing and implementing building energy codes, covering public, commercial, and residential buildings in most of its climatic zones. Its enforcement system is rigorous with detailed requirements and penalties for non-compliance, particularly in large and medium-sized cities. Effective implementation of current codes has the potential of reducing energy use and CO2 emissions by between 14-22% compared to business as usual. However, the capacity and infrastructure for enforcement in smaller cities, towns, and rural areas is limited. Building products are subject to testing and the building energy code provides manufacturers with incentives to have their products tested and rated. China has also introduced a range of financial incentive programs to encourage uptake of green buildings administered by national, provincial, and municipal governments.

The State Council Green Building Action Plan, launched in 2014, mandates that public buildings and any single building area over 20,000 square meters must meet the green building standards of China’s 3-Star Rating System GBEL (Green Building Evaluation Label). The Green Building Action Plan also provides for the refurbishment of 400 million square meters of existing urban housing in northern China. A total of 400,000 rural dwellings will be subject to major thermal rehabilitation works. Complementing the national action plan are provincial green building development regulations implemented by Jiangsu, Guizhou, and Guangxi, and municipal green building regulations in place in Beijing, Shanghai, Fujian, Hebei, and Shenzhen.

China accounts for about 19% of global investment in energy efficient buildings. In 2014, investment in EEB programs in China exceeded US$18Bn, with investment in EEB growing more rapidly than overall growth of building and construction. The combined pressures of urbanization and urban air pollution are driving this investment.

Growing impact of building codes and product standards 

The increased stringency of building energy codes has grown the market for energy efficient technologies and insulation. However, there are safety concerns about the fire risk of some insulation products on the market. This has become a key concern for policy makers considering further increases in code stringency. Markets for more energy efficient building products and technologies, such as windows and doors, are becoming more profitable than traditional technologies and are increasingly supported by product efficiency labeling programs.
China is one of the few countries that have set out specific buildings sector climate actions in its Nationally Determined Contribution submitted under the Paris Agreement. Changing global trade frameworks and initiatives, including BRI, is also likely to be influential because Indonesia, Thailand, Vietnam, and Malaysia—countries with among the fastest growth in demand for building air conditioning (Indonesia being the world’s largest contributor to growth in building electricity demand)—are participating.

International exchange of policy best practices & expertise is essential 

Supporting exchange in policy best practices and expertise will enable exchange of Chinese expertise within a global community of practice while helping to avoid product dumping and lock-in effects of sub-optimal or poorly adapted building energy and emissions policies. Like many countries, China has a significant and poorly researched performance gap between regulated performance and actual performance of buildings in operation. More, therefore, needs to be done to bridge the gap to decarbonization.

Measures to further support priority decarbonization actions:

  • Establishing policy pathways to near-zero or net-zero energy emission buildings and construction, setting targets for integrated renewable energy, integrated urban land-use planning, and urban design that promotes zero-emissions districts.
  • Improving building design and energy codes to address thermal comfort and cooling through passive design, adaptive comfort standards, and integrated renewable technologies.
  • Significant capacity building and technical assistance is required to ensure public sector and private sector stakeholders are able to effectively implement, monitor, and improve such policies.
  • Building capacity through education and training, particularly in smaller towns and rural areas.
  • Developing building products that meet not only energy efficiency goals but also fire and safety goals.
  • Reducing the cost of implementing energy efficiency building codes.

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