Beijing draws up energy efficiency framework

PUBLISHED : Wednesday, 05 December, 2007, 12:00am
UPDATED : Wednesday, 05 December, 2007, 12:00am

Construction sector faces environmental challenge

Beijing is establishing a legal compliance framework to enforce energy efficiency requirements for all construction projects and reverse the dire environmental situation in the mainland.

Property consultants said enforcing the construction of energy-efficient buildings would reduce energy consumption and costs for end-users occupying the buildings, but would also increase construction costs and therefore bring financial pressure to bear on developers, especially smaller players.

The central government plans to introduce the new rules before the end of the year, according to a report from Xinhua.

Under the proposed framework, developers will be required to use materials that enhance the energy efficiency of their buildings.

'Those who fail to follow the requirements will face a penalty equivalent to between 2 and 4 per cent of total construction costs,' Xu Zhongwei, deputy chief of the Ministry of Construction's policy and legal department, was quoted as saying last week.

Ben Christensen, research manager at Jones Lang LaSalle's Beijing office, said the government was stepping up efforts to push forward the sustainable building movement as the city was facing a deteriorating environment, exacerbated by the building boom and a proliferation of infrastructure work.

About 70 per cent of mainland power is generated from coal, which is the cheapest way for it to produce power, but also the most polluting.

'The connection between energy, building and pollution is extremely strong in China,' said Mr Christensen.

Ahead of the legal enforcement now due, the Ministry of Construction implemented a set of guidelines, effective from the end of last month, aimed at bringing sustainable buildings up to international standards.

The guidelines create sustainability requirements that cover energy use, water conservation, air quality and site planning, and developers were left to voluntarily apply the system to their projects.

Prior to the release of the guidelines, the central government created a framework of minimum requirements on energy efficiency for all buildings, said Mr Christensen. These requirements were benchmarked on the average energy efficiency of mainland buildings in 1980 and aimed at decreasing energy use in all new construction by 50 per cent before 2010 and 65 per cent before 2020.

Philip Wu Kong-man, general manager of City Integrated Residential Services, a member of property consultant DTZ, said local governments of some major cities like Shanghai had already adopted their own requirements for sustainable buildings.

'Developers' building plans will not be approved if they do not meet energy efficiency requirements,' said Mr Wu.

Property consultants said once the measures became mandatory, the total cost of constructing sustainable buildings would surge, especially in the initial stages.

David Chan Tsan-fai, divisional director of Knight Frank's building consultancy and facility management, estimated that construction costs initially could be 10 to 15 per cent higher than with non-sustainable buildings. This would increase financial pressures for smaller developers, he said.

'[Developers] view it as part of their marketing strategy to differentiate their developments. They aim to achieve a selling price of completed products 10 to 20 per cent higher than other properties,' he said.

China Vanke, for example, adopted an environmental policy of using pre-cast units for its properties such as Everest Town in Shanghai. The use of such materials was aimed at conserving energy, water, materials and land, said Mr Chan.

But Mr Christensen said it would take a fundamental shift in attitudes from most developers for a sustainable building movement to succeed, and this is something that would take time.

In addition to the government initiative, he said, market demand would need to be developed. Once clear demand from buyers for energy-efficient buildings became apparent, developers would become quicker to react.