ET25SWE0031 - Embodied Carbon One-for-One Material Substitution Market Characterization

Historically, energy efficiency (“EE”) programs have focused on addressing operational energy use and emissions. As California successfully reduces carbon from operational emissions through increased renewable energy sourcing, EE, and electrification, embodied carbon (“EC”) will become an increasing share of the remaining carbon emissions in buildings. The materials used to construct and maintain buildings contribute significant greenhouse gas (“GHG”) emissions over the lifetime of a building and this concept is referred to as EC, defined by the California Energy Commission (“CEC”) as the GHG “resulting from the extraction, manufacturing, transportation, installation, maintenance, and disposal of building materials.  

EC is a developing policy area which is increasing in focus on a statewide and national level. Utilities and jurisdictions across the country are developing voluntary and mandatory building codes and standards, incentive programs, and other policies to address carbon more holistically including a focus on EC. These include Massachusetts, Colorado, Washington, Minnesota, Oregon, and the cities of Vancouver, BC, San Francisco, Chicago, Los Angeles, New York, Boston, as well as others. Additionally, Mass Save has recently proposed in its 2025-2027 Energy Efficiency and Decarbonization Plan, the first EC incentive program in the country which compliments its existing EE and Building Decarbonization (“BD”) offerings such as heat pumps (See https://www.masssave.com/-/media/Files/PDFs/Mass-2025-2027-Energy-Efficiency-Decarbonization-Plan.pdf). This program outlines a programmatic pathway for harmonizing EE, BD and EC activities. Likewise, California has introduced legislation to address EC in SB 596 for cement production and AB 2446 and AB 43 to develop EC strategies and trading mechanisms while CALGreen continues to develop mandatorystandards to mitigate EC through procurement policies for public buildings. Yet, research on EC remains relatively limited, especially for California.

EC can be a complimentary policy and program pathway to EE and BD especially since it represents 13% of carbon in buildings. In order to address the state’s goal to achieve carbon neutrality by 2045 and net neutrality thereafter per AB 1279, EC will be a critical area to address. EC also shares a similar stakeholder base in new construction and major building rehabilitation projects as EE and BD stakeholders including architects, builders, general contractors and local jurisdictions. Additionally, stakeholders including the CEC, PG&E, SDG&E and the California Energy Design Assistance’s (CEDA’s) new construction program have expressed interest in EC and EC has also been an increasing topic among EE conferences including ACEEE, Getting to Zero, Energy Transition Coordinating Council (ETCC) Emerging Technology (ET) Summit and the US Green Building Council. 

Some low-EC building products may also provide similar EE savings benefits as standard building products. For these reasons, EC is an important area to study in order to inform EE and BD measure and code development. Examples of products providing EE and EC co-benefits include appliances (such as Heating, Ventilation, and Air Conditioning, “HVAC”, equipment) and products and materials such as furniture and flooring which are replaced over the course of their effective useful lives (“EULs”). Anecdotal evidence also indicates that some market actors are incorporating these practices, called “one-for-one material substitution,” to reduce their buildings’ total carbon footprint. Additional evidence gathered by Energy Solutions’ Voice of the Customer (“VOC”) research identified that certain EC market actors may not incorporate EE when pursuing EC activities. This study will attempt to document these opportunities to harmonize EE and EC through the selection of building materials and/or incorporating EE during the EC design and/or building materials procurement stages via interviews with EC stakeholders. The study will also seek to answer whether low-EC building materials have an incremental price difference than standard procured materials.