France Green Building Market
Over the past few years there has been an increased interest for sustainable development and green building programs. Every year since 2001, a full week has been dedicated to promoting sustainable development and educating the public on environmental issues and solutions. Consensus around a need for change has steadily been growing culminating in a strong public opinion favoring government action.
In response, the French Grenelle Environment Policy, developed in October 2007, created a long-term policy plan for tackling environmental issues and promoting sustainable development. Grenelle established the use of renewable energy and green building construction as a priority for France.
The Grenelle Environment Policy found that reducing residential and commercial buildings energy consumption must be a priority for environmental policy because they are the biggest energy consumers in France. Grenelle’s goals are to make all new buildings consume less than 50 kWk/m2/year by 2012 and become energy neutral or positive by 2020. This includes a 20% reduction in energy consumption by commercial buildings and a 12% reduction in residential buildings within the next 5 years. The report found that energy use in new houses is increasing by 250 kWk/m2/year. But Grenelle proposes that by 2010, all new homes will have to consume less than 50 kWk/m2/year.
In response to Grenelle, the Ministry of Environment has set aside 350 million euros (555.45 million dollars) to finance new government construction ensuring that at least half meets "Green" Standards by
the end of 2008. To promote the development of the renewable energy and green building industry, the French government has implemented tax incentives. For example high energetic performance buildings
built before the 31st of December 2009, could be exonerated of real estate taxes for 30 years.
Other tax incentives include tax credits (from 15% to 50% of total cost, max 12,000 dollars) for renewable energy equipment, energy efficient heating systems, heating pumps, heating system regulators, and insulation materials. The French public’s interest in renewable energy is growing: 8 out of 10 French households say "they are ready to invest in renewable energy if they had to change their heating system."
Many government officials and experts see the 3.5 billion square meters of heated space in France (1.78 billion m2 in individual houses, 884 million in government buildings, and 850 million in commercial real estate) as the biggest opportunity for energy savings. Studies have found that the average energy consumption in France is 240 kWh per square meter per year, four times the goal set by Grenelle for 2010. The government has been leading the reforms by improving the thermal efficiency of government housing projects (HLM in France) currently estimated at 170 kWh/ m2 /year.
Market Expansion & Best Prospects
Between 2000 and 2007, almost 2 million individual private homes and 1.2 million residential buildings were built in France. Industry experts believe that over 31 million private housing (homes and residential) need to be renovated in order to improve their energy and thermal efficiency, representing a market of 600 billions euros (952.05 billions dollars). About 85% of French homes were built before 1975 and are environmentally inefficient. These homes need renovation with new insulation materials, windows, heating systems, etc. According to the French Building Federation the French building industry accounted for 117 billions euros (185.65 billions dollars) in 2006.
Although the proportion of green building is currently small, industry experts predict that most new construction and renovation projects would be either "green" or HQE (Haute Qualité Environnementale) certified. The HQE label is the French equivalent of the American LEED certification. The French government is leading the way; almost 90% of green buildings built in 2006 were public constructions.
There are currently 150 HQE certified buildings, and over 450 projects are going through the certification process. There is an increasing demand for low energy, compact and multifunctional systems/equipment in areas
such as, heating, ventilation, air conditioning, lighting. Similarly, technical equipment for building such as control or diagnostic systems maintenance book etc.) as well as management tools to regulate energy sources will be in demand.
Therefore, American companies providing products or equipments with a competitive advantage in terms of technology, energy savings, or price will find good opportunities in the following areas:
- Heating Ventilation and Air Conditioning (HVAC):
- Heating Pumps:
- Photovoltaic (PV):
- Wood Energy Equipment:
- Insulation Materials & Glass and Window:
- Architectural services:
Market Issues & Obstacles
To enter the European market, American building products manufacturers need to be CE-certified. CE certification is not a mark of quality, but a proof that a product has met performance requirements. A product marked ‘CE’ is authorized for sale on the EU market. The length and cost of the procedure varies according to the product, it may take from six months to a year and cost around 10,000 euros (~16,000 dollars).
The majority of construction products sold on the EU market are subject to the construction products directive (CPD) 89/106/EEC. To comply with this directive, manufacturers of components for incorporation in buildings have to use mandatory harmonized standards. Where relevant, these mandatory EU wide standards already address energy performance, for instance with windows ("U-values"). The performance is rated and mentioned along with the CE marking.
Construction products, which are not permanently installed, such as ventilation vents or boilers, are not covered by the CPD. They may be covered by other CE marking directives that may address energy efficiency. For most products, there are EU wide voluntary standards. In the absence of an EU wide product standard, manufacturers will have to evaluate safety, including energy efficiency.
U.S. architects and building contractors promoting and selling their projects in the EU would have to include detailed calculations on energy performance in accordance with the requirements of the European directive on energy performance of buildings taking into account national differences (2002/91/EC). U.S. manufacturers of log home kits for instance would have to calculate and demonstrate energy performance of their chalets in addition to showing compliance with the CPD.
American building products manufacturers, who wants to enter only the French Market, can get a technical assessment or "avis technique" instead of been CE-certified. It takes about one year to get an "avis technique" and the price is approximately 14,000 euros (~22,000 dollars) and is issued by the CSTB (Centre Scientifique et Technique du Bâtiment, Center of Sciences and Techniques in Construction).