Decarbonization Pathway for Commercial Real Estate: A Strategic Proposal

The decarbonization of the building sector plays a crucial role in achieving climate targets, both in Germany and globally. In Germany, buildings account for approximately 35 % of final energy consumption and around 30 % of CO₂ emissions. For Europe, these figures are even higher, with buildings responsible for an estimated 40 % of final energy consumption and 36 % of CO₂ emissions.

However, to meet the requirements of the CRREM (Carbon Risk Real Estate Monitor) in existing buildings, simply switching to green electricity is far from sufficient. Without fundamentally reducing energy consumption and addressing the underlying causes, value stability cannot be achieved. So, which steps should be prioritized, and which are the most effective?

The Path to Net-Zero Buildings: Regulatory and Economic Drivers

The German government has set an ambitious target for building owners and operators with the goal of achieving climate neutrality by 2045. However, it is not only ecological factors that require a proactive decarbonization roadmap towards "net zero." The value retention of real estate portfolios is also at stake if the buildings do not contribute to the goals of the Federal Climate Change Act and the European Green Deal. Particularly affected are the nearly 1.98 million heated and cooled non-residential buildings in Germany. Without a clear strategy, many of these properties could soon become "stranded assets."

Decarbonization: A Three-Step Strategic Approach

By implementing a three-step decarbonization plan, property owners not only contribute to achieving climate targets but also ensure the long-term value stability of their assets while reducing operating costs. Tenants also stand to benefit significantly from these measures.

1. Optimization of Existing Systems

The first step in saving energy should be to optimize what already exists. By 2050, an estimated 80 % of the building stock will consist of structures that have already been built. The core inefficiencies lie primarily within a building’s “inner workings”—its technical building systems.

Key factors for eliminating inefficiencies are technical monitoring and AI-based optimization of operating processes, such as heating, ventilation and cooling (HVAC). By implementing a cloud platform in the technical building equipment (TBE), a holistic data view can be centrally accessed. This database is the key to identifying and eliminating malfunctions and operating errors in real time. Operation can be optimized in two ways:

• ‍Reactive optimization: Correction of improperly configured HVAC systems, as well as incorrectly controlled building management technology, based on prioritized action recommendations
• ‍Proactive optimization: Intelligent system control from the cloud for predictive, AI-based control of TBE systems, considering factors such as demand, weather forecasts, or real-time electricity prices

According to a study commissioned by the digital association “Bitkom”, building automation alone could save up to 14.7 million tons of CO₂ by 2030. This means that digital technologies could contribute to achieving Germany's climate goals by approximately one-third.

2. Renovation of TBE and Building Envelope

In the second step, digital operational optimization can be supplemented with targeted technical and structural renovation measures to maximize efficiency gains. The foundation for this is always the analysis of operational data collected in the first phase of the decarbonization process. Strategic renovation planning can be based on the following points, among others:

• Supplementing the TBE with additional sensors, extended control loops, and actuators ensures even more precise operational management
• Circulation pumps and variable air volume flows enable further optimization of the technical building equipment
• In the area of building physics, thermal and cold bridges that are responsible for high energy loss should be eliminated
• Additional insulation of the roof and facade improves the building's thermal envelope and reduces heating costs
• Replacing old glazing and installing shading systems prevents overheating and reduces the need for air conditioning

3. Decarbonization of Remaining Energy Consumption

In the final step of the strategic proposal, the remaining energy consumption should ideally be aligned with sustainable standards. This can include, for example, transitioning to heat pumps and installing photovoltaic systems for self-generated electricity.

Additionally, grid-interactive building control through demand side management can bring further benefits: By selectively reducing or increasing electricity consumption based on market signals and through intelligent energy storage, buildings can react flexibly to supply and demand while also benefiting from dynamic tariffs for electricity from renewable energy sources.

How aedifion Can Support Decarbonization Efforts

aedifion improves the energy balance of building portfolios through a simple digital upgrade of the technical building equipment:

Optimization of Existing Systems

Starting with a comprehensive portfolio analysis, aedifion helps assess the status quo of properties and identify potential energy savings and CO₂ reductions in existing systems. The software then pinpoints these savings opportunities and optimizes building operations based on actual demand through the use of AI. In addition to heating, cooling, and ventilation data, the predictive control system also considers external factors such as weather forecasts, outdoor temperatures, and room occupancy. This enables an average reduction in energy consumption and CO₂ emissions of 22 %, and in many cases, even up to 40 %, while ensuring optimal indoor air quality and significantly lower operating costs. Furthermore, the collected data serves as an essential foundation for generating KPI reports.

Data Foundation for Further Renovation Measures

Further renovation measures can be effectively assessed and planned based on the collected data. Especially for existing buildings, aedifion offers tailored complete solutions to optimize building efficiency without requiring extensive new investments. This includes planning support, for example, in the integration of additional sensors or the retrofitting of building automation systems. Through technical monitoring, owners and operational teams always have a clear overview of whether energy performance, technical functionality, and maximum user comfort are ensured.

Decarbonization of the Remaining Energy Consumption

In addition to the measures described above, the aedifion cloud platform provides the foundation for operating buildings in a grid-supportive manner through demand side management, i.e. optimizing energy consumption by shifting demand proactively or avoiding peak loads through peak shaving. Successful use cases have already demonstrated the significant potential of leveraging dynamic electricity tariffs and transitioning to renewable energy sources.

Get in touch with us and take an active role in decarbonizing your assets!