Nowadays, being “Paris Proof” is a hot topic in the real estate industry. But what does that actually mean and how can real estate owners in the Netherlands comply? It seems that the Dutch Green Building Council (DGBC) and the Carbon Risk Real Estate Monitor (CRREM) use different metrics, which can cause confusion. Let's take a closer look at this complex issue.

The DGBC and CRREM Measurements

For offices DGBC prescribes an energy consumption of 70 kWh/sq m per year to be considered "Paris Proof", while CRREM mandates 85 kWh/sq m per year from 2034[1]. Where do these figures come from and why do they differ?

DGBC's figure of 70 kWh/sq m is based on detailed reasoning. It is briefly summarised below:

1. It is estimated that the Netherlands will have 610 petajoules (PJ) of renewable energy by 2050. DGBC assumes that this is the entire amount of available energy.
2. Buildings, including homes, currently consume 36% of all energy.
3. This means that 220 PJ is available for the built environment.
4. To entirely rely on renewable energy, the current energy consumption of buildings must be reduced by two-thirds.
5. Dividing the available 220 PJ across all buildings in the Netherlands and taking into account current consumption by building type and use, one arrives at the following maximum consumption levels:

[2]

CRREM, on the other hand, assumes a total residual carbon budget that can be emitted to limit global warming to 1.5 or 2 degrees Celsius. They have focused this specifically on the real estate sector, also differentiating by country and use type. Based on this, the calculation was made in terms of energy intensity.

CRREM thus takes a similar approach but uses different variables and parameters, resulting in the difference in prescribed figures. However, neither of the measurements are legally required.

The Current Situation

There is currently no mandatory standard for "Paris Proof" real estate in the Netherlands. However, there is a voluntary guideline called the renovation standard. This standard aims to provide property owners with guidelines on energy performance of non-residential buildings. For offices, for example, the standard is A+++, which means consumption of up to 80 kWh/sq m per year. "A building that meets the renovation standard will be energy efficient enough until 2050," says the Netherlands Enterprise Agency. Nonetheless, this standard does not apply to housing.

The Future: Final standard in 2050

Currently, the final standard is still being evaluated. The government had planned to make a decision on this before the end of this year, however this has been delayed. In all likelihood, the final standard will not officially take effect until after 2030. Until then, the renovation standard serves as a guideline to help real estate owners take the necessary steps towards sustainability.

Conclusion

The concept of "Paris Proof" real estate in the Netherlands is currently still evolving and can be confusing due to different standards. DGBC and CRREM offer both approaches to help property owners understand what it takes to be energy efficient and sustainable. While we wait for a mandatory final standard in 2050, the renovation standard serves as a guide to prepare properties for a greener future.

It is important for real estate owners to be aware of these developments and consider which standards best fit their goals and future sustainability ambitions. "Paris Proof" real estate is the way forward, and it is up to us to make the effort.

[1] Source: Decarbonisation Pathways – CRREM Global

[2] Source: Dutch Green Building Council, Paris Proof