Visualizing Future Emissions: New EPA Tool Helps Real Estate Reduce Carbon Risks

The United States Environmental Protection Agency (EPA) has developed a new tool to help real estate companies estimate past, current, and future carbon emissions from their buildings and portfolios, which promises to facilitate easier tracking and reporting on progress towards net zero.

Market drivers pushing real estate to measure and reduce its contribution to climate change are becoming increasingly clear: newly proposed climate disclosure rules from the Securities and Exchange Commission, increasing adoption of the Task Force on Climate-Related Financial Disclosures, and multiplying building performance standards in US cities will all accelerate the trend towards enhanced reporting of carbon emissions throughout the value chain.

Unsurprisingly, real estate companies both large and small are searching for tools to understand the carbon intensity of their assets and portfolios, and chart a path towards net zero emissions, but there have been limitations for US-based properties and some real estate sectors.

Enter the EPA’s ENERGY STAR Portfolio Manager® Building Emissions Calculator, which promises an industry-approved platform and a single, standardized method to measure and track past and future emissions, facilitating the setting of data-driven goals for reducing carbon intensity. As a free tool, the calculator can provide this service accessibly to companies of varying sustainability budgets.

“Building owners and managers are taking aggressive steps toward decarbonization,” said Cindy Jacobs, chief of the ENERGY STAR Program for Commercial Buildings and Industrial Plants. “EPA’s Building Emissions Calculator empowers them to chart a course that will deliver the greatest results for both the environment and their bottom line.”

How does it work?

The calculator is a standalone web tool that builds directly from the EPA’s ENERGY STAR Portfolio Manager platform, already used by roughly 25 percent of commercial real estate in the US and the national benchmarking tool used in Canada (the calculator is currently available for US buildings only ). Owners and building managers can upload building information directly from Portfolio Manager (or manually), capturing characteristics about onsite and offsite energy use to see an estimate of related past, current, and future carbon emissions.

Data appears as a chart and in a table, allowing for visualization and further analysis. The tool covers emissions from Scope 1 (direct on-site emissions from use of fossil fuels) and Scope 2 (indirect off-site emissions from purchased electricity and district energy) greenhouse gas accounting categories, at the whole building level. Emissions can be toggled between the asset and portfolio level, allowing granular or high-level insight.

The calculator visualizes emissions at the building and portfolio level, and can be toggled between direct / Scope 1 emissions, indirect / Scope 2 emissions (location- or market-based method), or combinations thereof.

The calculator pulls in information about energy use and then applies industry standard ’emissions factors’, which measure the carbon output of different energy sources like coal, natural gas, or fuel oil, to determine emissions for a given period and utility grid. Users can also enter custom emissions factors based on information provided by energy suppliers.

Importantly, the whole-building focus incorporates emissions from tenant-controlled spaces, aligning with the goal of building performance standards to reduce emissions at the building level. Owners that want to separate tenant-related emissions can enter their data manually or create properties in Portfolio Manager that exclude tenant spaces.

How can it be used, and why does it matter?

The calculator has several use cases for both real estate and local government that represent important new steps towards operationalizing net zero goals for the industry.

The easiest use of the tool is for companies to quickly develop historic and current inventories of their carbon emissions. Setting this baseline is the necessary first step for tracking progress on carbon reductions.

More noteworthy, however, is the tool’s forecasting capabilities. The calculator allows users to pick target years, out to 2050 and beyond, and input assumptions on building characteristics such as its anticipated level of electrification (percent of energy coming from electricity rather than on-site fossil fuel combustion), improvements in energy efficiency, use of onsite and offsite renewable energy, and even custom emissions factors.

After setting assumptions for changes to a building’s or portfolio’s improvements in energy efficiency, addition of new renewable power, or level of electrification, the calculator forecasts emissions out to a target year, like 2050 (teal line).

By adjusting these variables and seeing the impact on emissions for a target year, companies can observe the impact of different decarbonization steps (like achieving a 30 percent reduction in energy usage in ten years, or sourcing all electricity from renewables by 2030 – both common interim goals), and learn how much of a reduction that will earn in emissions.

Doing so iteratively for every year between now and 2030 or 2050, for example, establishes a pathway towards meeting a net zero commitment or a building performance standard that sets carbon intensity limits by building type, like New York City’s Local Law 97. This takes net zero commitments from the realm of an abstract goal to concrete, measurable targets.

Further, if companies grow comfortable sharing information on the predicted and actual carbon impact of various decarbonization measures, like adding renewables or electrifying an asset, a dataset can be created identifying the most financially efficient actions to reduce the building sector’s carbon footprint.

Additionally, the ability to input varying emissions factors and mix of sources of energy generation (eg, coal or solar) is an important nuance. This feature a) allows real estate and other stakeholders to visualize the impact of developing a cleaner utility grid; b) helps companies represent the impact of cleaner energy they source from renewable power, through purchase agreements or renewable energy credits (RECs); and c) supports companies with assets in multiple cities in navigating an array of building performance standards by allowing comparisons between cities’ differing standards.

“The new building emissions calculator offers the ability to apply city-specific carbon limits to different buildings already in your ENERGY STAR Portfolio Manager account. This allows for a seamless understanding of how your buildings perform under various decarbonization policies without having to use excel or individual city-level tools. A fantastic addition to the ENERGY STAR toolkit, ”said Jonathan Flaherty, global head of sustainability and building technology innovation at Tishman Speyer.

Lastly, the tool is also useful for local governments interested in creating policies like building performance standards. Policymakers can create varying emissions scenarios based on the variables of electrification, increased energy efficiency or use of renewable power, and set goals for carbon intensities for varying building types based on what may be achievable (or a reach goal) for their local market.

Real estate needs to decarbonize, and quickly. To do so, the industry needs accessible, and data-driven tools to measure and share impact. The Building Emissions Calculator is an important step towards comparisons and carbon benchmarking across regions and portfolios. The new, free forecasting ability may also prove to be a gamechanger for many companies hoping to meet ambitious city policies or their own internal sustainability goals. Although there are no crystal balls in the world of decarbonization, having a tool to plot out a path to net zero is perhaps as close as can be asked for.

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