How much does real estate contribute to global energy emissions?

The IEA estimates direct building emissions must be reduced by 50% by 2030.

The real estate industry accounts for about 40% of global combustion-related emissions, according to Mckinsey & Company. 

Based on the 2022 UNEP Global Status Report for Buildings and Construction, it was also found that of the 37% energy emissions related to buildings across the globe, 28 percentage points were due to building operations.

“The International Energy Agency estimates direct building emissions will need to be reduced by 50% and indirect emissions by 60% by 2030,” McKinsey noted. “However, the world’s buildings are not currently on track to achieve these goals.”

To aid the industry, McKinsey recommended the application of artificial intelligence to decarbonise buildings faster and at lower costs. 

“By applying machine learning, AI, and physics-based modeling, portfolio owners can quickly identify building decarbonisation opportunities. This includes the current type and estimated capacity of heating and cooling systems, the site-specific potential for solar or geothermal power, and where insulation and efficiency levels are substandard,” Mckinsey said. 

“Advanced evolutionary optimisation algorithms can then determine the optimal set of solutions and sequence of actions for each building—and the portfolio as a whole—to reach net zero on a given timeline.”