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The US Market for Sustainable Building

The green building market is anticipated to be among the fastest growing industries worldwide. In recent years, the United States has experienced a continual shift from traditional building methods towards green building. While the concept of green building revolves around the energy efficiency of buildings, this evolving approach also encompasses water efficiency, the use of sustainable materials, and access to public transportation grids. Green building initiatives by the US government, namely the EPA’s Energy Star for commercial buildings and the USGBC’s Leadership in Energy and Environmental Design (LEED) certificate, have increasingly moved to the forefront of urban planning and now cover a total of 38% of the entire square-foot area of buildings in the US (slight increase from 37% in 2015 up to 38% according to the National Green Building Adoption Index 2017). According to Statista, the number of LEED-certified projects in the United States rose from 296 certifications in 2006 to over 65,000 in 2017.
According to a study released by the USGBC, Illinois is one of the leading states when it comes to the implementation of LEED-certified projects, with 135 projects accounting for 43.36 million sq. ft. in 2017 (top 10 states LEED).

In 2013, Chicago introduced its Sustainable Action Plan along with the Energy Benchmarking regulation, which aims at enhancing energy efficiency through increased transparency. Buildings that are larger than 50,000 ft2 (≈4,650 m2) are required to submit their energy efficiency data to the city annually and every three years these data sets are analyzed. 

Chicago claimed first place in the 2017 National Green Building Adoption Index away from San Francisco, last year’s leader and this year’s runner up (adoption index shows the growth of ENERGY STAR and/or LEED certified space for the 30 largest U.S. office markets). Chicago increased their green stock by 6.5% to a yearend total of 66%, a very impressive feat considering the size of this market. Chicago boasts the highest percentage of buildings holding a LEED certification, a distinction also held the prior year. This clearly demonstrates the importance this market has placed on the environmental performance of buildings. 

In 2013, Chicago introduced its Sustainable Action Plan along with the Energy Benchmarking regulation, which aims at enhancing energy efficiency through increased transparency. Buildings that are larger than 50,000 ft2 (≈4,650 m2) are required to submit their energy efficiency data to the city annually and every three years these data sets are analyzed. According to local market experts, this will raise the demand for energy efficiency technology within the commercial building sector.

Important Market Data, Trends and Developments

  • According to the USGBC, the green building sector is outpacing overall construction growth in the United States and will continue to rise. By 2018, green construction will directly contribute 1.1 million jobs and $75.6 billion in wages in the United States.
  • The building sector has the largest potential for significantly reducing greenhouse gas emissions compared to other major emitting sectors.  This emissions savings potential is said to be as much as 84 gigatons of CO2 (GtCO2) by 2050, through direct measures in buildings such as energy efficiency, fuel switching and the use of renewable energy (according to the USGBC).
  • According to the OECD Environmental Outlook to 2050, the building sector has the potential to generate energy savings of 50% or more in 2050, in support of limiting global temperature rise to 2°C (above pre-industrial levels).
  • According to the EIA, energy use in US buildings (residential and commercial) accounts for 41% of total energy consumption and causes approximately 40% of all CO2-emissions in the US. On the metropolitan level, this number is even higher; in Chicago, for instance, buildings account for approximately 70% of overall greenhouse gas emissions.
  • Between 2015 and 2018, LEED-certified buildings in the United States are estimated to have $1.2 billion in energy savings, $149.5 million in water savings, $715.2 million in maintenance savings and $54.2 million in waste savings according to the USGBC.
  • More than half of the energy used by commercial buildings goes towards heating and lighting.

Market Opportunities for German Companies

Market opportunities are present in the product areas of recycled concrete, permeable pavement, EnergyStar compliant HVAC Systems, energy-efficient windows and green roofing materials. The so-called Variable Refrigerant Flow HVAC Systems, although very common in Japan and Europe, are relatively new to the US market. Additionally, the demand for thermal insulation materials is also growing. Eco-friendly certified products that were manufactured in environmentally friendly ways and originate from sustainably managed silviculture sites are also gaining traction in the US market.

In recent years, there has been a trend towards smart building technology that automatically controls the building’s operations (heating, ventilation, air conditioning, lighting and other systems). The benefits range from energy savings to productivity gains to sustainability. Particularly, German companies that focus on IoT-, data-capturing- and monitoring-technology stand to benefit from market opportunities.

Organizations & Links

Contact

Svenja Schroeder
Manager, Market Entry Programs, Delegations & Events
Tel.: +1 (312) 561-9791
E-Mail: schroeder(at)gaccmidwest.org

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