By Chirstian Cianfrone

In June 2022, Canada released its first-ever Emissions Reduction Plan, indicating a building sector-specific GHG emissions reduction target of 37 per cent relative to 2005 levels (or 42 per cent relative to 2019) and net-zero by 2050. Similar targets have been echoed by levels of government and corporations across Canada. Following closely behind these commitments are regulations; the City of Vancouver will start regulating emissions in existing buildings in 2026. The City of Toronto is expected to follow a similar path if it heeds its council-approved Net-Zero Existing Buildings Strategy recommendations.

Even in the absence of imminent regulation, investors are becoming increasingly concerned with the possibility of climate related stranded assets. While the drivers are clear, the path to success is still murky. Canada’s building sector emissions have increased by 10 per cent since 1990—we have no historical context for the speed, scale, and persistence needed to reduce emissions; we must deploy new, creative strategies.

One approach is strategic decarbonization, which recognizes a building’s ongoing renewal cycles as opportunities or triggers to implement solutions to deliver a zero carbon over time. Buildings must develop a Decarbonization Transition Plan (DTP) to seize these opportunities successfully. A DTP will initially benchmark a building’s performance and propose an emissions reduction timeline based on internal goals and external factors. Then, based on a review of the building’s equipment and systems, will propose a capital plan that strategically leverages the timing and investment for planned renewal projects to implement solutions that align with low carbon outcomes over time.

This approach contrasts with major retrofits which may simultaneously replace or renew building systems as part of one major project, typically as part of an asset renewal, change in use, or repositioning for sale. Major retrofit projects are difficult to scale as a decarbonization strategy since their primary drivers are financial decisions rather than emissions reductions. On the other hand, strategic decarbonization is integrated into existing asset management processes, consolidating organizational sustainability goals, capital and life cycle plans, facility management practices, and overall asset or portfolio financial metrics—a much more scalable solution.

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A DTP must also consider the implementation of recommended projects to minimize a building owner’s risk. Existing buildings bring along many constraints and nuances that, without proper consideration, can lead to grossly inaccurate budgeting and logistics. This can derail the project’s financial viability and negatively impact tenants during construction. Consider a typical decarbonization solution to understand the possible complexity of the recommended solutions. Most buildings will follow an electrification pathway to zero carbon, which converts emissions-intensive, fossil fuel-based heating and hot water systems, to lower carbon, electricity-based solutions. The government has committed to a net-zero electricity grid by 2035 to align with the electrification of the economy, including buildings, so that electrified buildings can achieve zero emissions without future upgrades.

While it may sound simple to replace fossil fuel boilers with electric heat pumps and electric boilers, there are further considerations. Electrified mechanical systems may require more space, increase electrical capacity, and cost more to operate unless the proper technology and smart, effective operations are employed. For older, inefficient buildings, these constraints can quickly derail an electrification strategy without implementing key energy efficiency improvements. Building envelope upgrades and lighting efficiencies may be implemented to reduce the size of electrified mechanical equipment and free up room on the electrical panel. Intelligent building infrastructure will also support measurement and verification for progress reporting and optimized operations to maintain low carbon outcomes. Seemingly unconnected capital improvement projects and building operation strategies will transform into a coordinated series of projects towards a common goal.

The rapid decarbonization of buildings can feel daunting. Successful and integrated planning with a DTP can remove uncertainty and provide a clear roadmap to success. The only current risk is delaying that plan—every future action in an existing building should embody net-zero if we are to have a chance to meet our emissions reduction goals.

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[This article originally appeared in the November/December 2022 edition of ReNew Canada.]

Christian Cianfrone director of decarbonization, leads EllisDon’s initiative for existing building decarbonization.

Featured image: Major retrofit projects are difficult to scale as a decarbonization strategy since their primary drivers are financial decisions rather than emissions reductions. (Getty)

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