National Standards for Zero Emissions Buildings
The focus on net zero in real estate has surged in recent years, yet a lack of consensus on what "net zero" means in practice has hindered progress. Differing definitions from various organizations and standards-setting bodies have led to confusion and potential greenwashing among investors, occupants, and real estate firms.
What Constitutes a Zero Emissions Building?
The new national definition establishes a standardized, verifiable set of minimum criteria for defining a zero emissions building. To qualify, a building must be:
Highly Energy-Efficient: Existing buildings must rank in the top 25% of energy performance for similar buildings (ENERGY STAR score of 75 or higher). New buildings must use at least 10% less energy than the latest model code and aim for the top 10% in energy performance (ENERGY STAR score of 90 or higher).
Free of On-Site Emissions from Energy Use: Buildings must have zero direct greenhouse gas emissions from energy use, meaning no on-site combustion of natural gas or oil—all-electric is the requirement.
Powered Solely by Clean Energy: All energy must come from carbon-free sources, including on-site and off-site sources and market instruments like renewable energy certificates under specific conditions.
Notably, carbon offsets are not permitted. This focus is on reducing emissions, electrifying building equipment, and procuring clean energy, avoiding controversies about carbon offset claims that have previously disrupted the market. The definition also does not include embodied carbon emissions from construction or refrigerant emissions, which can have a high global warming potential.
Real-World Example: The NetWork Building
An example of this approach is the NetWork Building by Entegrity Energy Partners in Fayetteville, Arkansas. This mixed-use development combines Entegrity’s office space with 28 market-rate apartments. Using simple design and off-the-shelf technologies, Entegrity enhanced the building’s efficiency and achieved net zero energy through thoughtful passive design and on-site solar panels.
Despite achieving net-zero energy and offering abundant amenities, both the residential and commercial spaces at The Network Building remain competitively priced at market-rate rent. Chris Ladner, Partner at Entegrity, highlighted this milestone: “We have reached a tipping point with the combination of better technology and lower cost that allows building owners, developers, and businesses to achieve a true triple bottom line: people, profits, and the planet. When I founded Entegrity in 2007, our clients were paying a premium to meet their sustainability goals. Today, we can achieve these goals without the surcharge by using integrated design techniques.”
Reinforcing ULI's Commitment to Net Zero
The DOE announcement aligns with the Urban Land Institute's (ULI) commitment to net zero. ULI supports real estate's transition to net zero as a Mission Priority and through its Greenprint Community’s Net Zero by 2050 Goal. More than 34 real estate members have aligned with this goal, indicating a strong commitment to decarbonization.
Moving Towards a Consistent Net Zero Standard
The new national definition sends a strong market signal about the importance of decarbonization. Organizations like the U.S. Green Building Council are responding, incorporating the national definition into the newest version of LEED certification, the world’s most widely used green building rating system. The Green Building Initiative’s Green Globes certification is likely to follow suit.
Potential Policy Impacts
While the definition is not currently a regulatory standard, its incorporation into policy could lead to incentives like grants, tax credits, and building performance standards tied to these criteria. This could drive greater market transformation towards net zero buildings, providing confidence to investors, lenders, and tenants with an appetite for low-carbon buildings.
The push for a standardized definition may help the real estate market embrace net zero as a clear, achievable goal, driving significant market transformation and supporting the broader goal of a sustainable future.
