The EU introduced the Energy Performance Certificate (EPC) system in 2002 for buildings for sale or rental. A is the highest and G is the lowest. Large public buildings that are not sold or rented must be accompanied by an energy certificate (DEC) that shows how much electricity they actually use.
There’s an important point here. A building’s rating (modeled in an ideal environment) can differ significantly from its actual use during occupancy. You probably need both EPC and DEC, especially for larger buildings. Buildings are often over-cooled and over-lit, with lights often left on in unoccupied rooms.
Recently, the EU decided to revise its Building Energy Performance Directive, requiring all new buildings to be net zero by 2030 and setting a timescale for the decarbonization of existing buildings. Is it time for Hong Kong to follow suit?
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Hong Kong fire kills 5 people, injures dozens in commercial and residential buildings in Kowloon
Hong Kong fire kills 5 people, injures dozens in commercial and residential buildings in Kowloon
This includes taxing the worst buildings more and the better ones less, as well as subsidy schemes for retrofits (in Europe, energy efficient retrofits are paid for by electricity and gas companies). It serves as the basis for other policies such as This label can also be used to indicate that a worst-case building cannot be rented or sold unless it meets energy efficiency standards.
Simply put, without mandatory energy labels for buildings, there would be no market for efficiency and little progress towards the Paris climate goals.
Second, tax incentives (which can be designed to be taxpayer-neutral) should lead to more informed conversations between commercial building owners and occupiers. This means, in addition to performance evaluation and asset valuation, a “green” leasing framework where parties benefiting from energy efficiency are encouraged to drive energy efficiency improvements through investment and behavior change.
Fifth, buildings also generate greenhouse gas emissions during construction. This represents 11% of global emissions. In Hong Kong, that percentage could be even higher given the speed and scale of construction. The basic model of construction has remained unchanged for decades. The time is now to account for carbon emissions in construction and create market incentives such as information, financial incentives and regulations to reduce carbon emissions.
Hong Kong cannot leave improvements to the market; it needs the right mix of information, incentives and regulation to transform the market. The EU’s recent revision of the Energy Performance of Buildings Directive is a good model. We must comply with the energy efficiency commitments strengthened by Cop28, or we will not be able to comply with the Paris Agreement.
Dr Mark Hinnels is Strategic Director at Climate Finance Asia
