英文为建筑行业释放碳中和新机遇

UnlockingNewOpportunities

forCarbonNeutralityinChina’sBuildingSector

ExecutiveSummary

ES/September2024

hRMl

AboutRMI

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UnlockingNewOpportunitiesforCarbonNeutralityinChina’sBuildingSector/2

AuthorsandAcknowledgments

Authors

TingLiWeiLi

DengfengLiaoGuangxuWangMengWang

OtherContributors

YihanHao

Authorslistedalphabetically.AllauthorsfromRMIunlessotherwisenoted.

Contacts

WeiLi,wli@

MengWang,mwang@

CopyrightsandCitation

WeiLi,MengWang,andGuangxuWang,UnlockingNewOpportunitiesforCarbonNeutralityinChina’sBuildingSector,RMI,2024,

/insight/unlocking-new-opportunities-for-carbon

-

neutrality-in-chinas-building-sector/

RMIvaluescollaborationandaimstoacceleratetheenergytransitionthroughsharingknowledgeand

insights.Wethereforeallowinterestedpartiestoreference,share,andciteourworkthroughtheCreativeCommonsCCBY-SA4.0license.

/licenses/by-sa/4.0/

.

AllimagesusedarefromiSunlessotherwisenoted.

Acknowledgement

Wewouldliketoexpresssincerethankstothefollowingexpertsfortheirinsightandcomments:

CongxiaoLi,DeputyDirector,DualCarbonLeadershipOffice,ChinaStateConstructionGroupBorongLin,ProfessorandViceDean,SchoolofArchitecture,TsinghuaUniversity

BinHao,DeputyChiefEngineer,ShenzhenAcademyofBuildingResearch

HaixiaShi,DeputySecretaryGeneral,ChinaConcreteandCementProductsAssociation

SpecialthankstotheQuadratureClimateFoundation’ssupportofthisreport.

Thecontentincludedinthisreportdoesnotrepresenttheviewsoftheaboveexperts,theirinstitutions,andprojectsupporters.

UnlockingNewOpportunitiesforCarbonNeutralityinChina’sBuildingSector/3

TowardaSystematicandEquitableEnergyTransition:The

BuildingSectorasaPillarofChina’sCarbonNeutralityGoals

SinceChinaproposedits“dualcarbon”goalsin2020,whichaimtopeakcarbonemissionsby2030and

achievecarbonneutralityby2060,thebuildingsectorhasbeenaprimaryfocusarea.Thesector’stotalCO2emissionsreached3.7billiontonsin2022,accountingfor32%ofthenation’stotal.iOfthis,about2.2billiontonswereemittedduringbuildingoperations,whereas1.5billiontonswereemittedduringtheproduction

andtransportationofbuildingmaterialsandduringconstruction,whicharereferredtoasembodied

carbon(seeExhibit1).Since2014,totalCO2emissionsfromChina’sbuildingsectorhaveplateaued(seeExhibit2).However,aslivingstandardsimprove,Chinastillhasroomforgrowthinbuildingfloorareaand

residentialenergyconsumptiononapercapitabasis.Therefore,anurgenttaskistodecouplethisgrowthfrombuildingemissions.

Exhibit1CO2emissionsbreakdownfromChina’sbuildingsectorin2022

RMIGraphic.Source:InternationalEnergyAgency(IEA),

/reports/co2-emissions-in-2023/

;BuildingEnergyResearchCenterTsinghuaUniversity,AnnualReportonBuildingEnergyEfficiencyDevelopmentinChina2024;BuildingEnergyResearchCenterTsinghuaUniversity,ChinaAssociationofBuildingEnergyEfficiency,2023ChinaBuildingandUrbanInfrastructureCarbonEmissionsReport

iIn2022,China’snationalCO2emissionstotaled11.48billiontons,accordingtodatafromtheInternationalEnergyAgency(IEA)

/reports/co2-emissions-in-2023/

.

UnlockingNewOpportunitiesforCarbonNeutralityinChina’sBuildingSector/4

Exhibit2CO2emissionsfromChina’sbuildingsectorfrom2010to2022

RMIGraphic.Source:BuildingEnergyResearchCenterTsinghuaUniversity,AnnualReportonBuildingEnergyEfficiencyDevelopmentinChina2024

Becausebuildingsdemandsignificantenergy,anet-zerobuildingsectoriscriticaltoChina’senergy

transition.Ononehand,buildingsaccountfor21%oftotalfinalenergyconsumptionandaquarterof

electricityconsumptioninChina.Moreover,thebuildingsector’selectrificationratehasreached44.9%,thehighestamongenergy-usingsectors.Thismeansbuildingscanserveasanimportantflexibleresourceinthenewenergysystem.Ontheotherhand,buildingsarethebiggestuserofindustrialrawmaterials,

accountingfor37%oftotalsteelconsumptionand55%oftotalcementconsumptioninChina.Reducingembodiedcarboninthebuildingsectorwillleadtoemissionsreductionsinupstreamindustrialsectorsandnurtureamarketforlow-carbonproducts.

Anet-zerobuildingsectorisalsocriticaltopeople’squalityoflifeandanequitableenergytransition.Decarbonizationmeasuresinthissectorcanbringmoreefficient,smarter,andhealthierliving

environmentstoabroaderpopulation.Chinaalreadyhasalargeaffordablehousingprogram,thelargeststockofexistingbuildingsofanycountryintheworld,andasignificantnumberofruralbuildings,totalingnearly35billionsquaremeters(m2)andhousingapproximately750millionpeople.Implementingcarbon-neutraltechnologiesinthesebuildingswillimproveenergyaccessandqualityoflifeforvulnerable

populationsandpromotesocialequity.

Thenext5–10yearswillbecriticalforguidingChina’sbuildingsectortowardcarbonneutrality.The

buildingsectormustrealizehigh-qualitycarbonpeakingandcontrolandstabilizeitscurrentemissionsplateauevenasmorebuildingsarebuilt.Atthesametime,itisnecessarytolaythefoundationforanet-zerobuildingsectorbypromotingtheapplicationandintegrationofcarbon-neutraltechnologiesassoonaspossibleandsolvingkeyissuesrelatedtothesupplychain,cost,andmarketacceptance.

UnlockingNewOpportunitiesforCarbonNeutralityinChina’sBuildingSector/5

DecarbonizingBuildingOperations:EnergyFlexibilityandZero-CarbonHeating

Buildingoperationsaccountforapproximately59%ofthelife-cycleCO2emissionsofbuildingsinChina.

Theseemissionscomefromtwomainsources:directemissionsfromburningfossilfuelsforheating,

hotwater,andcooking,andindirectemissionsfromelectricityuseanddistrictheating.In2022,China’sbuildingsconsumed34.25exajoules(EJ),accountingfor21%ofthecountry’stotalenergyconsumption

and19.1%ofChina’stotalCO2emissions.

Withcontinuedeconomicdevelopmentandimprovinglivingstandards,thedemandforbuildingenergyisexpectedtocontinuetorise.Electricityconsumptioninbuildingshasbeenincreasingrapidly,withthe2021levelbeingnearly2.5timesthe2010level(seeExhibit3).Meanwhile,theshareofbuildingelectricityloadduringpeakdemandhasbeenincreasing,withair-conditioningloadsaccountingfor40%to50%

ofthepeakelectricitydemandincertainprovinces,includingZhejiang,Hubei,andSichuan.Althoughbuildingfossilenergyconsumptionhaspeaked,iidirectfossilfueluseinurbanresidentialbuildingsanddistrictheatingcontinuestogrow.

Exhibit3Buildingelectricityandfossilenergyconsumptionduringtheoperationalphase

RMIGraphic.Source:ChinaAssociationofBuildingEnergyEfficiency,ChinaBuildingEnergyandEmissionsDatabase,

/#/database

ii"Buildingfossilenergyconsumption"doesnotincludethefossilenergyconsumptionassociatedwithelectricityusedinbuildings.

UnlockingNewOpportunitiesforCarbonNeutralityinChina’sBuildingSector/6

ChallengestoDecarbonizingBuildingOperations

Theincreasingelectricityconsumptionandpeakloadsofbuildingsareputtingpressureonthepowersystemsupplyandpeakshaving,butbuildings’potentialasflexibleresourceshasnotyetbeenfully

tapped.Mostbuildingshavelimitedflexibilitytomanagetheirenergydemandandgeneration.Duringpeakdemandperiods,powergenerationstillresortstofossilfuels,delayingthedecarbonizationofthepowersystem.Thisalsoaffectsindustrialactivities,leadingtocertaineconomiclosses.

Theheavyrelianceonfossilfuel–basedheatingpresentsadecarbonizationchallengeduetothehigh

costofreplacingexistingsystems.Northerndistrictheatingreliesoncoal/gascombinedheatandpower(CHP)plantsandboilers.Thankstoitswell-establishedinfrastructureandcostefficiency,districtheatinglackseconomicallyviableandtechnicallymatureheatsourcereplacementsolutions.Insouthernregionswithhotsummersandcoldwinters,demandforhomeheatinghasbeenincreasingduetorisingliving

standards.ManyresidentsinregionssuchastheYangtzeRiverDeltausegasboilersforheating.Withoutadditionaleconomicincentivestoreplaceexistingheatingequipment,thescaleupoflow-carbonheatingalternativessuchasheatpumpswillcontinuetobedelayedbecauseoftheso-calledlock-ineffect.

DevelopingBuildingsasFlexibleResourcesintheNewPowerSystem

Thenewpowersystemrequiresmoreflexibilitytoensurefunctioninggridswithahighshareofrenewableenergy.Giventhelimitedavailabilityofflexibleresourcesonthegenerationside,thedevelopmentof

flexibleresourcesonthedemandside,especiallyinbuildings,hasbecomeanimperative.Buildingloadsofferhighflexibility,economicefficiency,andamplespacefordistributedenergyresources.Enhancing

buildingenergyflexibilityinvolvesimprovingefficiency,distributedgeneration,andshiftingload.Effectivecombinationofthesemeasureswithsmartcontrolcansignificantlyboostbuildingenergyflexibility

(seeExhibit4).Improvingbuildingenergyflexibilityhassignificantpotentialforcarbonreductionand

economicbenefitsinChina.RMIestimatesthatfullyharnessingthepotentialofbuildingloads'flexibilitycouldreducepeakgridloadbyatleast10%nationwide.ThiswouldhelpChinaavoidapproximately500billionyuaninadditionalinvestmentinpowersysteminfrastructureandachieveatleast200milliontonsofannualCO2reductions.

UnlockingNewOpportunitiesforCarbonNeutralityinChina’sBuildingSector/7

Exhibit4Changesinbuildingelectricalloadresultingfromflexibilitytechnologies

PowerDemand

PowerDemand

PowerDemand

Efficiency+Generate+Shed/ShiftNetLoad

HouroftheDay

Efficiency

Efficiency+Generate

EfficiencyNetLoad

HouroftheDay

HouroftheDay

Shed/Shift

Generate

SolarPV

Baseline

MeasuresAdopted

BuildingEnvelopeEnhancement

HeatRecoveryTechnology

EquipmentEfficiencyImprovement

BuildingEnvelopeEnhancement

HeatRecoveryTechnology

EquipmentEfficiencyImprovement

DistributedPhotovoltaics(PV)

BuildingEnvelopeEnhancement

HeatRecoveryTechnology

EquipmentEfficiencyImprovement

DistributedPhotovoltaics(PV)

Energy/ThermalStorage

IncreasingDemandforSmartControl

RMIGraphic.Source:USDepartmentofEnergy,Grid-interactiveEfficientBuildingsTechnicalReportSeries,

https://www.energy

.gov/eere/buildings/articles/grid-interactive-efficient-buildings-technical-report-series-overview

UsingWasteHeat+HeatPumpstoAchieveZero-CarbonHeating

DecarbonizingdistrictheatinginnorthernChinaliesprimarilyintheuseofwasteheatresources.More

than200EJofusablewasteheatisavailablefromsourcessuchasCHPplants,nuclearpower,industrial

processes,datacenters,andwastewatertreatmentplants.Theheatingdemandforurbanbuildingsin

northernChinaisabout54EJ,andmostnorthernChinesecitiesalreadyhavewell-developeddistrict

heatingnetworks.Thedecarbonizationstrategyincludesreplacingcoal-firedboilerswithCHPintheshorttermandtransitioningtobiomassCHPandwasteheatrecoveryinthelongterm,aswellasdeploying

technologiessuchasseasonalthermalstorage,long-distanceheattransmission,andheatpumpstoachieveazero-carbontransition(seeExhibit5).

Heatpumpsofferthebestopportunityfordecarbonizingheatinginsouthernregionswithhotsummers

andcoldwinterswheredistrictheatinginfrastructureislackingduetotheshortwinterseasonand

intermittentheatingdemand.Thedemandforheatingintheseregionshasincreasedsignificantlyinrecentyears.By2030,morethan20millionresidentsintheYangtzeRiverDeltawillhavenewheatingsystems,

increasingheatingdemandbyabout40%comparedwith2020.Heatpumpsareidealfordeploymentin

theseregionsbecausetheyarehigh-efficiency,low-emissions,andcost-savingdualheating-and-coolingequipment.Inthenearterm(before2030),heatpumpsshouldbeusedinnewbuildings,whileinthelongterm,effortsshouldfocusonlow-carbonretrofitsofexistingbuildingsandtheeventualphaseoutofgasinresidentialheatingsystems.

UnlockingNewOpportunitiesforCarbonNeutralityinChina’sBuildingSector/8

Exhibit5Zero-carbontransitionpathwaysfornortherndistrictheating

systemsandhotsummerandcoldwinterclimatezones

RMIGraphic.Source:RMIanalysis

UnlockingNewOpportunitiesforCarbonNeutralityinChina’sBuildingSector/9

TacklingEmbodiedCarbon:Low-CarbonProcurementandBio-BasedMaterials

EmbodiedCO2emissionsareanothercriticalfocusfordecarbonizingthebuildingsector,accounting

forapproximately41%ofabuilding’slife-cycleCO2emissions.In2022,totalembodiedCO2emissionsinChina’sbuildingsectorwereapproximately1.5billiontonsofCO₂,accountingfor13%ofthecountry’s

total.Structuralmaterialscontributemorethan60%oftheembodiedcarboninbuildingsandmorethan

12%ofthetotalCO2emissionsinthebuildingsector.

Optimizingdesignandstructuralsystemsiscriticaltoreducingembodiedcarbon.InChina,reinforced

concretestructuresarethemostcommonbuildingtype,accountingforover80%ofcivilbuildings'

structure,whilewoodandsteelstructuresarelesscommon,withsteelstructuresaccountingforonly

about5%ofbuildings(seeExhibit6).Amongallbuildingmaterials,steelandcementaccountfor36%and53%ofCO2emissions,respectively,makingthemthemostsignificantsourcesofembodiedcarbon(seeExhibit7).

Exhibit6ComparisonofbuildingstructuretypesinChinaandinothercountries

RMIGraphic.Source:DatafromChinaBuildingMaterialFederation

UnlockingNewOpportunitiesforCarbonNeutralityinChina’sBuildingSector/10

Exhibit7CO2emissionsfrommajorbuildingmaterialsindustriesin2020

RMIGraphic.Source:DatafromChinaBuildingMaterialsFederation

ChallengestoDecarbonizingEmbodiedCarboninBuildings

Thesteelandcementindustriesfacechallengesinreducingemissionsduetotechnologicalmaturity,cost,andlackofinvestment.Atthesametime,steelandcementremainthemostimportantbuildingmaterials.ThedominanceofreinforcedconcretestructuresinChinaislikelytocontinueduetofactorssuchashighbuildingandpopulationdensity,structuralrequirements,technicalmaturity,fireresistance,anddurabilityrequirements.Thispresentsthreechallengesthatneedtobeaddressedtoreduceembodiedcarbonin

buildings:improvingthedurabilityandextendingthelifeofexistingstructures,increasinginvestmentindecarbonizingindustrialsectorssuchassteelandcement,andpromotingtheuseoflow-carbonconcreteandsteelinconstruction.

Bio-basedmaterialssuchasbambooandwoodareunderdevelopedaszero-carbonbuildingmaterials.

Bambooandwoodoffernear-zeroemissionsaswellasfasterconstructiontimesthantraditionalbuildingmaterials.However,theirstrength,durability,andfireresistancestillneedtobeimprovedthroughmodernprocesses.Thereislimitedawarenessandacceptanceofbambooandwoodstructuresintheconstructionsector,andtheiruseisgenerallylimitedtosmallbuildings.Issuessuchasthelimitationsofmodern

bamboocomponentsinlarge-span,large-sectionbuildingsandconcernsabouttheirdurabilityandfireresistanceneedtobeaddressed.

ScalingUpLow-CarbonMaterialswithPublicandPrivateGreenProcurementPrograms

Greenpublicprocurementandprivateprocurementprogramsareimportantdriverstopromotethe

useoflow-carbonbuildingmaterialssuchaslow-carbonsteelandconcrete.In2024,China’snational

governmentlaunchedthethirdbatchofpilotcitiesinitsGreenBuildingMaterialPromotionProgram,

covering100citiesand100productcategories,anditlaunchedanothernationalprogramtoexpanduseofgreenbuildingmaterialsinruralareas.Leadingconstructionandrealestatecompaniesarejoiningforcestoformagreenprocurementalliancetosupportgreensupplychains.

UnlockingNewOpportunitiesforCarbonNeutralityinChina’sBuildingSector/11

However,itisimportantforthesegreenprocurementschemestoincludeemissionsmetricsintheir

definitionsof“green.”ItisalsoimportanttodevelopCO2emissionsaccountingrulesandemissions

databasestoquantifylowcarboninprocurementpractices.ThisareaisbecomingincreasinglyurgentasChinaacceleratestheestablishmentofaproductCO2emissionsmanagementsystem,ascalledforinpolicyfromlate2023,andplanstoestablishaccountingrulesfor200keyproductsby2030.

Leveragingthebuildingindustrytopromotelow-carbonmaterialscanleadtohugecarbonreduction

potentialandnurtureamarketforfirstmoversoflow-carbonindustrialmaterials.RMIestimatesthat

China’sbuildingindustryconsumesapproximately350milliontonsofsteeland960milliontonsofcementannually.Considerlow-carbonconcrete:Iflow-carbonconcretewithsupplementarycementitious

materialsofnolessthan30%werewidelyusedingovernmentconstructionprojects,thecarbonintensityofconcretecouldbereducedby22.5%,resultinginanannualreductionof190milliontonsofCO₂

emissions.Inaddition,nationwidepromotionoflow-carbonconcretecouldpotentiallyreduceannualCO₂emissionsby590milliontonsby2035.

PromotingModernBambooandWoodStructurestoDiversifyApplications

Bambooandwoodstructureshavesignificantlylowerlife-cycleCO2emissionsandenvironmentalimpactsthansteelandconcretestructures.ModernwoodstructurescanreducematerialCO2emissionsby48.9%to94.7%andlife-cycleCO2emissionsby8.6%to13.7%comparedwithsimilarstructuresusingsteelandconcrete.Chinahaspublishednationalandindustrystandardsforengineeredwoodproducts,includingglulamandcross-laminatedtimbercomponentsuseddomesticallyandinternationallyinwoodstructures.

However,inChina,mostwoodbuildingsaresmalltouristbuildings,andthewoodstructurebuildingmarketislessthan20billionyuan.Bycontrast,theglobalwoodstructurebuildingmarketreached

150billionyuanin2022.ThisislargelyduetoChina’sunderdevelopedstandardsystemsforlarge-spanbuildingsandtheneedformoreinnovationsandtestingtoexpandmodernbio-basedstructures.

Inthefuture,bambooandwoodstructuresareexpectedtobecomemorepopularinnewruralhouses,culturalandtourismbuildings,commercialcomplexes,andhigh-endresidences.Theconstruction

offacilitiesinthefivemajornationalparksisexpectedtocreatesignificantopportunitiesforwood

structures,withanestimatednewconstructionfloorareaofabout4millionm2.Approximately760,000villagesand5millionruralhomesarebuiltorrebuilteachyearinChina.RMIestimatesthatif10%ofthenewruralhousesbuilteachyearweremodernwoodstructures,itwouldcreateamarketofabout150

billionyuanforwoodbuildingmaterial.Inaddition,usingwoodstructuresforthesehousescouldreduceembodiedcarbonbyapproximately18.24tonsperhouse,potentiallyavoiding4.56milliontonsofCO₂emissionsannuallyacrossthecountry.

UnlockingNewOpportunitiesforCarbonNeutralityinChina’sBuildingSector/12

DrivingaNewGrowthModel:TechnologyIntegrationandBusinessModelInnovation

Overthenextdecade,China’sbuildingindustrywillbedrivenbybothnewgreenbuildingsandlow-carbonretrofitsofexistingbuildingsaspartofitscarbonneutralitygoals.RMIestimatesthatnewconstruction

willgrowatarateof3%peryear,reachingapproximately1.38billionm2by2035.Allnewbuildingswill

meet100%greenbuildingstandards,85%ofwhichwillbeprefabricatedbuildingsand20%ofwhich

areexpectedtobeultra-low-energybuildings.Existingbuildings,especiallythosebuiltbefore2015,willrequireenergy-savingandlow-carbonrenovations,estimatedat1billionm2peryearby2035.Overall,the

totalfloorareaofnewandrenovatedbuildingsinChinawillreachnearly2.4billionm2annuallyby2035,withtheshareofexistingbuildingrenovationsincreasingto42%,highlightingthegrowingimportanceofretrofittinginthebuildingsector(seeExhibit8).

Exhibit8Buildingfloorareasunderconstructionperyear,newbuildingsandretrofits,2015–35

RMIGraphic.Source:RMIanalysis

ScalingandIntegratingDecarbonizationTechnologiesBecomesaNewGrowthDriver

Decarbonizingthebuildingsectorrequiresthewidespreaduseoflow-carbontechnologiesandproducts.RMIhasidentifiedeightkeytechnologycategoriestodecarbonizetheentirebuildingsector:building

materials,construction,passiveenergy-saving,equipmentenergy-saving,renewableandenergystorage,digitization,recycling,andcarbonsequestration.RMIanalysisshowsthatwithintheseeightcategories,

the76mostrepresentativebuildingtechnologieshaveanaveragetechnologyreadinesslevel(TRL)of4.8

UnlockingNewOpportunitiesforCarbonNeutralityinChina’sBuildingSector/13

sectorinChina

Exhibit9Maturityanalysisofcarbonreductiontechnologiesinthebuilding

Note:Thetechnologyreadinesslevels(TRLs)aresimplifiedbasedontheIEA’sclassificationforcleanenergytechnology

maturity,dividedintosixlevels:(1)concept,(2)smallscaleprototype,(3)largescaleprototype,(4)demonstration,(5)earlycommercialization,and(6)fullcommercialization.

RMIGraphic.Source:RMIanalysis

UnlockingNewOpportunitiesforCarbonNeutralityinChina’sBuildingSector/14

outof6(seeExhibit9).Morethanhalfofthesetechnologiesarealreadyincommercialuse,andover90%havereachedtheearlycommercializationlevelorhigher.Therefore,thestrategyfordecarbonizationtechnologydeploymentinthebuildingsectorshouldfocusbothonscalinguptechnologiesatcommercialscaleandonintegratingtechnologiesasasystem,whichwillrequirebothmarketpowerandpublicsupport.

Exhibit10Projectedmarketgrowthoffourkeylow-carbontechnologies,2023–35

RMIGraphic.Source:RMIanalysis

RMIalsoanalyzedthemarketpotentialforfourkeytechnologies:low-carbonbuildingmaterials,energy-efficientwindows,high-efficiencyairconditionersandheatpumps,andbuildingphotovoltaics(see

Exhibit10).Themainopportunitiesforscalinguplow-carbonsteelandconcreteremainincertification

andmarketschemes,suchaslargegreenprocurementprograms.Themarketforhigh-efficiencyair

conditionersandheatpumpswillbemainlydrivenbythetrade-inpolicythatreplacesoldequipmentwithnew,moreefficientequipment,asexplicitlymentionedinthe2024NationalMeasurestoPromoteLarge-ScaleEquipmentReplacementandTrade-inofConsumerGoods,aswellastheincreasingdemandfor

residentialheatinginsouthernChina.Buildingphotovoltaictechnologieswillbedrivenmainlybyprogressinnationwidephotovoltaicpoliciesandcontinuedcostreductionsinbuildingphotovoltaicproduction.

BusinessModelandInstitutionalInnovation:ValueChainIntegration,SmartManagement,Standardization,andBeyond

Thedevelopmentofnewbusinessmodelsandinstitutionalmechanismsiscriticalforthelarge-scale

deploymentoflow-carbonproductsandtechnologies.Valuechainintegration,smartmanagement,

andstandardizationacrossindustriesarekeytrendsthatarepowerfulenablersforreducingemissions

acrosstheentirebuildingindustryvaluechain.Valuechainintegrationinvolvesconnectingsupplychainplayersforconsistentactionandimplementinglife-cycledesignandmanagementapproaches.Smart

management,enhancedbydigitalizationandartificialintelligence,willsupportoptimalandreal-time

energymanagementandimproveprocessefficiency.Buildingstandardizationistheprovisionofmodularcomponentstoimproveconstructionefficiencyandreducewaste,aswellasproduct,design,andrating

UnlockingNewOpportunitiesforCarbonNeutralityinChina’sBuildingSector/15

systemstandardization.Inthecontextofcarbonneutrality,newbusinessmodelsforthebuildingsectorwillrequirethesynergisticactionofvariousactorsalongthevaluechain,includingbuildingmaterial

manufacturers,designers,constructioncompanies,developers,operationandmaintenanceserviceproviders,retrofitters,andbuildingwasterecyclers(seeExhibit11).

Exhibit11Stakeholderactionsinthebuildingindustryvaluechain

RMIGraphic

Atthesametime,innovativemarketmechanismscaneffectivelymobilizecorporateactionsbyleveragingcapitalandinvestment.Chinaisgraduallyexploringtheopeningupofthecarbontradingmarketinthebuildingindustry,internalizingthecostofCO2emissionsbytradingCO2emissionsrights,andprovidingincentivesforconstructionenterprisestoaccelerateemissionsreduction.Innovativegreenfinancing

systems,suchasgreencredit,greenbonds,greenfunds,greeninsuranc