Environmental Regulations and Declarations

A total of 191 nations, almost all sovereign states, and the European Union have ratified the Paris Agreement, committing to limit global temperature rise to well below 2.0°C [3.6 °F], with efforts to cap it at 1.5°C [2.7 °F] above pre-industrial levels ⁽¹⁶⁾. As buildings are major contributors to global CO₂ emissions, governments are moving beyond non-binding framework legislations or recommendations to binding directives, adopted codes, and regulations, making CO₂ reduction in buildings mandatory rather than optional.

The EU’s Energy Performance of Buildings Directive (EPBD) sets minimum energy performance standards to achieve a highly efficient, decarbonized building stock by 2050. European countries implement the EPBD by developing and enforcing national regulations. For example, Germany implemented the EPBD through its Gebäudeenergiegesetz (GEG), or Building Energy Act, which encompasses various measures, including a requirement for non-residential buildings with heating and cooling capacities over 290 kW [82.5 tons or 98`9520 BTU/h] to install building automation systems ⁽¹⁷⁾. As of 2030, that capacity limited will be lowered to 70 kW. In some US cities like New York, strict energy codes, such as the Local Law 97, set emissions limits, with penalties starting in 2024. For example, the owner of a 9,000 m² [100,000 sq ft] building, who takes minimal action to reduce emissions, could face fines of up to USD 1 million ⁽¹⁸⁾. China’s “dual carbon” goal of peaking emissions by 2030 and achieving carbon neutrality by 2060 led to the 2022 General Code for Building Energy Conservation and Renewable Energy Utilization, China’s first mandatory regulation for building emissions ^{(19; 20)}. India’s Energy Conservation Sustainable Building Code (ECSBC) introduced energy performance standards for commercial buildings, with several states making it legally binding ^{(21; 22)}. Often, these actions are also supported by financial incentives for building owners.

However, as of 2024, only 88 countries have adopted building energy codes in at least one city. 55% of these codes have remained unchanged since 2015, potentially failing to meet modern high-performance standards ⁽²³⁾.

With increasing pressure to meet decarbonization goals, more countries are expected to move from non-binding framework legislations or recommendations to binding regulations to reduce CO₂ emissions. While many regulations focus on reducing operational emissions, embodied carbon is also increasingly under legislative scrutiny, creating the need to document products’ embodied emissions. Environmental Product Declarations (EPDs) could serve this purpose. EPDs are standardized, independently verified documents that provide transparent, quantifiable data about a product’s environmental impact throughout its life cycle, including, but not limited to, carbon emissions.

As of early 2024, over 120,000 EPDs ⁽²⁴⁾ for construction products exist globally, with widespread development across Europe, the Americas, Asia, Latin America, and the Middle East ⁽²²⁾. Although EPDs are currently mostly voluntary, manufacturers use them to demonstrate carbon transparency, support green claims, and market their products as sustainable. Additionally, many green building certifications, such as LEED, BREEAM, DGNB, and the Living Building Challenge, award credits for using materials covered by an EPD ⁽²⁵⁾. These certifications add significant value, with green buildings in some Asian cities commanding rental premiums of up to 28% ⁽²⁶⁾.

Regulations, however, are tightening. In France and Germany, companies must have an EPD for any construction product with environmental claims. Norway requires at least ten products with EPDs for large public projects, and Italy mandates a minimum percentage of recycled content in public buildings. Similarly, Denmark, Finland, and Sweden require assessments of embodied carbon in buildings, with EPDs serving as evidence for compliance ⁽²²⁾.

Starting in 2028, the Energy Performance of Buildings Directive (EPBD) will require all large buildings over 1,000 m² [10,000 sq ft] in EU member states to be assessed for embodied carbon, extending this mandate to all new buildings by 2030. These upcoming requirements are expected to significantly increase demand for EPD data, solidifying their role in sustainable construction practices ^{(27; 28)}.