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Embodied Carbon is a Pesky Real Estate Decarbonization Challenge

Day-to-day building operations have been the main focus in the race to decarbonize the commercial real estate sector. That means reducing energy usage, particularly from carbon-emitting sources, of mechanical building systems like HVAC and lighting have so far seen the most investment and innovation. But one factor in building emissions that has been largely ignored until recently is embodied carbon, the emissions associated with building materials and construction.

That’s starting to change. We have all heard the statistic by now that buildings account for at least 39 percent of global carbon emissions on an annual basis. What some of us may not know, however, is that at least one-quarter of those emissions come from embodied carbon. The World Green Building Council estimates embodied carbon will account for about half of the entire carbon footprint of new buildings between now and 2050. This is leading to the growing realization in the real estate industry that unless embodied carbon is addressed, the built environment won’t be able to reach the lofty net-zero goals that are being set for it.

Embodied carbon is a pesky problem that, until recently, hasn’t been widely studied in the U.S. The Rocky Mountain Institute (RMI) just released a report last year on best practices for reducing embodied carbon emissions in the real estate sector. Now the industry has to take note that as operating emissions decrease, a larger share of emissions comes from embodied carbon. “There’s been more momentum for addressing embodied carbon in the past five or six years,” said Anish Tilak, Manager of the Carbon-Free Buildings program at RMI. Tilak told me that the shift started in the past few years since a LEED lifecycle credit was added to the green building certification.

Reducing operational carbon emissions in buildings is pretty straightforward. Use less energy, and the energy you do use, you try to procure from renewable sources. But it’s more complicated with embodied carbon. Embodied carbon is already locked into existing buildings, and it’s almost impossible to build a new building without creating a carbon footprint. But now, there are a lot more low-carbon options for builders, ones that can help make embodied carbon less of an inevitability.  

A (lower carbon) materials world

Embodied carbon refers to both the emissions emitted for construction as well as ‘end-of-life’ emissions when a structure is demolished. What makes embodied carbon a complicated problem is that the vast majority comes from the production of building materials, such as raw material extraction, manufacturing the finished products, and delivering them to the job site. This can be viewed as supply-chain carbon, which can be seen as somewhat out of the control of the building owner and developer.

One way to address the problem of embodied carbon is through design choices at the construction and development stages. It means using alternative materials and processes that have a lower carbon footprint. For example, materials with high carbon footprints include aluminum, plastics, and foam insulation, so thoughtful use of these materials is essential. Architects and builders often use aluminum to complement the aesthetics of a building project, but they’re realizing that judicious use of it is vital because of its significant carbon footprint.

Developers and owners can also specify low-carbon concrete mixes. Concrete’s weight and prevalence generally means it accounts for the most significant source of embodied carbon in almost any building project. The solution for some developers has been to procure lower-carbon concrete mixes that use fly ash, slag, or even lower-strength concrete where possible. Access to these materials varies nationwide, but there are increasing options, so there is almost always something available to reduce concrete’s carbon impact.

Another solution for mitigating embodied carbon is using recycled materials during the building construction phase and also during interior renovations. Commercial building interiors alone account for as much as 25 percent of America’s construction and design waste stream. These materials turn into 32 million tons of landfill waste every year, according to research from All for Reuse, a network of commercial building professionals committed to the reuse of building materials. 

All for Reuse claims building owners can reduce embodied carbon emissions by as much as 50 percent during retrofits by using recycled building materials. An example of this is the emissions associated with manufacturing a standard commercial door system comprised of wood, metal frame, and hardware. Manufacturing a new door system can emit an average of 155 kg of carbon emissions, while salvaging the same door system results in less than 1 kg of carbon emissions, according to All for Reuse.

The focus on embodied carbon has also increased interest in mass timber as a building material. Cross-laminated timber, laminated veneer lumber, and laminated glue timber can be used for wood panels and beams and sometimes entire structures, replacing more carbon-intensive concrete, steel, and masonry as building materials. Wood stores carbon dioxide captured from the atmosphere, so mass timber construction can also function as a carbon removal technique. The world’s tallest mass timber structure was recently built in Norway and stands 18 stories and more than 280 feet, and an 80-story timber tower has also been proposed in Chicago.

Another advantage of mass timber for building construction is that the material is lighter than concrete and steel, so foundations for buildings can be smaller. Mass-timber products are also modular and can be produced in a factory, leading to faster construction and fewer trucks delivering materials to the job site. Highly engineered mass timber materials like cross-laminated timber typically cost more per unit than concrete and steel, but in most cases, lower labor and construction costs make up for the additional cost. 

An example of the quick construction times is the mass timber T3 tower in Minneapolis, Minnesota, which took just two and a half months to build. The seven-story high-rise office building was the tallest mass timber structure in the U.S. at the time it was built in 2016. T3’s structure also weighs about one-fifth of that of a comparable concrete building, which reduces the foundation size and seismic loads of the building significantly.

Tracking down emissions

It’s hard to know which materials are the most environmentally-friendly without tracking down all the embodied carbon emissions that they are responsible for. For example, two building materials may look identical and cost the same amount, but they could have entirely different embodied carbon characteristics. Until we find a reliable way to quantify the carbon footprint of each material and design choice, determining the embodied carbon of building material will be nearly impossible. 

Getting to a point where there is reliable data requires process transparency from the manufacturer. The building sector is trying to tackle this challenge through software and data. A nonprofit consortium of construction industry companies formed to recently develop what’s known as the Embodied Carbon in Construction Calculator (EC3), a free, cloud-based software tool that uses data to power better materials procurement choices and address embodied carbon challenges in the built world.

Building owners and developers use EC3 to access and view emissions data for building products manufactured within a defined geography. Without the software, figuring out this information would typically take days but can now be accomplished in mere minutes. Developers are integrating the software with building information modeling tools to extend its usefulness further, enabling them to visualize embodied carbon footprints from all materials choices.

The use of building materials passports is also helping to address embodied carbon impacts. Building material passports are documents that show all the materials included in the product or construction. They consist of a set of data that describes the characteristics of the materials in the building products, giving them value in recycling and re-use. The goal of using these materials passports, also known as cradle-to-cradle passports, is maximizing the potential for re-use of the products and reducing waste when a building is demolished or the materials get replaced. 

Material passports are part of the broader push for a more circular economy in which materials are recycled, recovered, and reused in an open-traded building materials market. The material passports concept is mainly being used in European countries right now, and different types of these passports have been developed by manufacturers with varying approaches. The document can be anything that includes material information, such as an Excel sheet, a detailed 3D building model, or a blockchain-based ledger that secures the data. A materials passport can also be an online platform or simply a book with a pen-and-paper record of materials and emissions impacts. 

The documents act like nutritional labels on a cereal box at the supermarket, providing information on the building or product. They need to show the materials that make up a building, the journey they’ve been on through the supply chain, where they originated, who supplied them, and their associated carbon emissions impact.

Despite the promise of materials passports, a disadvantage is no one quite knows how intensive the work of updating and maintaining the applicable information is throughout a material’s and building’s life. The value of all that work may only be realized at the end of the useful life of a building, which could be several decades away, lessening the chance that the updates get made. Also, the infrastructure, mainly in IT, still needs to be developed for materials passports, and there’s no industry standardization for them yet.

Materials passports and software tools for procuring less carbon-intensive building materials are all relatively new to the commercial real estate industry, and it will take time for the practices to sink in if they actually happen at all on a wide-scale basis. Tilak of RMI said a few leading real estate firms are thinking about embodied carbon and using best practices, but it’s not nearly market-wide yet. Nevertheless, some in the industry are realizing that embodied carbon needs to be addressed. “Momentum is definitely developing to tackle embodied carbon in real estate,” Tilak said. “More big building projects from companies like Microsoft are addressing the issue, and there’s momentum in the private sector.”

A changing landscape

Real estate owners and developers must also be aware of the changing regulatory landscape regarding embodied carbon. More states and municipalities are passing and considering regulations and energy codes that address embodied carbon, such as California’s Buy Clean, a statewide procurement policy passed in 2017. The policy sets Global Warming Potential limits on steel, rebar, flat glass, and mineral wool insulation products purchased for state-funded building projects. Other North American cities and states to pass embodied carbon policies include Portland, Oregon, Vancouver, and Hawaii. 

More building code changes that address the issue are likely to pass in the U.S., and policies such as California’s Buy Clean can actually be beneficial for real estate owners and developers because they create a vast demand for lower-carbon building materials and bring prices down.

The pace of innovation for addressing embodied carbon is increasing, but the speed at which these new processes are adopted in commercial real estate will come down to how quickly local legislation is developed and corporate policies change. The recently passed Inflation Reduction Act also addresses embodied carbon through incentive measures, such as funding for building materials manufacturers to create eco-labels and product declarations similar to Energy Star for appliances. Building owners and corporate occupiers looking to achieve net-zero goals to meet ESG requirements or even for a good marketing opportunity may focus more on embodied carbon.

Trevor Langdon, President of Green Standards, a Toronto-based office decommissioning firm, told me more of his clients are asking about embodied carbon as the issue becomes more mainstream. “Embodied carbon is not something in the shadows anymore,” Langdon said. “This is a great example of where business as usual is being called into question. We’re talking to more companies who want to dust off and modernize their construction and development playbooks.”

But addressing embodied carbon in the built sector is still in its nascent phase, and there are various hurdles in the way before it becomes a new normal in commercial real estate. For example, materials passports sound like a great idea, but the amount of work that would go into keeping them updated over the long lifecycle of a commercial building seems very arduous for most building owners. Mass timber commercial buildings also sound promising for addressing embodied carbon, but that movement, too, is still in its early stages. 

As of June 2022, there are just 1,502 mass timber buildings constructed in the U.S. in multifamily, commercial, or institutional categories, according to WoodWorks, a company that provides educational resources for commercial mass timber projects. More than 1,500 mass timber buildings is a good start, but it’s a tiny percentage of the estimated 5.9 million commercial buildings in the United States.

Taking embodied carbon into account during commercial building construction and development will require a major change in thinking, and it may only happen if building owners’ and construction companies’ hands are forced by regulatory action or ESG goals, as is usually the case regarding climate change action in real estate. Developers looking more closely at their carbon budget the way they look at financial budgets would be a big step forward, and so would more developers, building owners, and occupiers publishing embodied carbon numbers. The real estate sector has made progress in curtailing operational energy use and carbon emissions, so reducing embodied carbon emissions is the next frontier. But if the real estate sector expects to move the needle further in its decarbonization efforts and meet the ambitious net-zero commitments some companies have made, embodied carbon will have to become an increasing focus.

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