Proposed Change 2003

Approximately 13% of Canada's total greenhouse gas (GHG) emissions can be attributed to houses and buildings. This is primarily a result of using fossil fuels for space and water heating. Additionally, the combined impact of electricity consumption for cooling, lighting and running other appliances raises the overall contribution of buildings to GHG emissions to approximately 18%.^[1] The 2020 GHG emissions from residential and building sectors are outlined in Table 1, which shows the sources and their percentage of electricity consumption.

Note to Table 1:

(1) https://oee.nrcan.gc.ca/corporate/statistics/neud/dpa/menus/trends/comprehensive_tables/list.cfm

There has been a growing recognition of the importance of addressing climate change and reducing GHG emissions from all sectors, including the built environment. However, the National Model Codes (the Codes) do not presently consider the type or quality of energy sources used by buildings and houses, nor do they address or regulate embodied and operational GHG emissions. As the industry moves towards higher energy efficiencies, the differences between energy sources must be examined because they contribute to GHG emissions differently. Historically, the Codes focused on design and construction requirements related to safety, structural integrity, accessibility and energy efficiency. With the latter, the emphasis was on reducing energy consumption during the construction and operational phases, but did not explicitly address operational GHG emissions. Furthermore, Canada is a large and diverse country with different climatic regions and building practices. This reality has led to regional variations in building codes and regulations, making it challenging to establish a unified approach to address operational GHG emissions at the national level.

The Codes currently contain an energy-efficiency objective and related requirements for the design and construction of new buildings and houses. In the 2020 editions of the National Energy Code of Canada for Buildings (NECB) and National Building Code of Canada (NBC), energy-efficiency tiers were introduced, containing measures that progressively increase energy efficiency and reduce the amount of energy needed to operate a building. These requirements play a crucial role in reducing GHG emissions by focusing on the amount of energy used. However, the Canadian Board for Harmonized Construction Codes (CBHCC) recognizes that energy savings alone will not lead to reducing emissions to meet the national goals stated in the Pan-Canadian Framework.

GHG emissions across Canadian provinces and territories exhibit substantial variations, influenced by factors such as population density, climate, energy sources and economic considerations.^[2] Provinces and territories with larger populations, resource-based economies or heavy reliance on fossil fuels for electricity generation generally register higher emissions levels. This demonstrates a greatly varied energy landscape across Canada.

Ultimately, the goal is to reduce operational GHG emissions to zero or near zero across provinces and territories by 2050. Consequently, authorities having jurisdiction require a flexible framework to regulate GHG emissions due to building operation by using "levels" that move towards lower operational GHG emissions.

References

[1] https://www.canada.ca/en/services/environment/weather/climatechange/climate-plan/climate-plan-overview/healthy-environment-healthy-economy/annex-homes-buildings.html

[2] https://www.canada.ca/en/environment-climate-change/services/environmental-indicators/greenhouse-gas-emissions.html

Since 2010, the NBC and NECB have included requirements to prevent excessive use of energy. Though these requirements have improved the energy efficiency of new houses and buildings, the Codes remain silent on the type of energy used and the emissions associated with production, distribution and use. As a result, many new Code-compliant buildings contribute GHG emissions through their year-over-year operation. Reducing these emissions is an important step to enable action towards climate goals. Climate change is the biggest challenge facing humanity today, consequently, it is vital that the Codes address this gap to support Canada in reaching its emissions reduction target of 40% below 2005 levels by 2030 and net-zero emissions by 2050. Furthermore, achieving long-term climate goals requires early action on operational GHG emissions. Failure to address this pivotal issue could impede Canada's progress towards its emissions-reduction targets, jeopardizing the ability to effectively combat climate change and protect the future well-being of the country. The commitment to a sustainable future demands that these emissions be addressed comprehensively and urgently.

If these emissions are to be regulated, designers, builders and enforcement officials need a consistent and accurate means to convert expected energy use into expected GHG emissions. For years, governments and industry have relied on emissions factors (also referred to as emissions intensity factors) for this task. Emissions factors describe the amount of GHG emissions (in kg CO­₂ equivalent) per unit of energy consumed, for instance, of electricity (in kWh), of natural gas (in m³), and of heating oil (in L). Environment and Climate Change Canada compiles this data annually and publishes estimates as part of Canada’s national greenhouse gas inventory report. Emissions factors reflect the carbon intensity of different fuels, as well as regional differences in energy production and distribution. Data is generally published after two years; factors reflecting 2021 data were published in April 2023.

If Canada’s energy sector were unchanging, this data would suffice for building design and Code-administration purposes. But provincial, territorial and regional utilities are presently undergoing unprecedented transition. Electric utilities are shifting away from coal power generation, while gas utilities are experimenting with new technologies to lower emissions through use of hydrogen and renewable biogas sources. These changes are expected to occur rapidly; some provincial utilities expect to reduce electric emissions by 60% or more by 2030. In this environment, referencing the most recent (2021) emissions data currently available in the Codes could encourage the construction of buildings with higher-than-expected emissions. For this reason, this proposed change is based on the best available future-looking forecasts for utility emissions, averaged for the years 2031 to 2035. Emissions factor forecasts for electricity are sourced from Environment and Climate Change Canada’s most recent (2023) projections. While no similar projections are currently available for natural gas utilities, such projections are expected in future years and could be incorporated into the Codes at a later date.

This section describes the approach that was adopted for performing an impact analysis of the proposed tiered operational GHG emissions requirements for the NECB. A similar approach was used to establish the reference GHG emissions factors values of 265 g CO₂e/kWh and 240 g CO₂e/kWh for determining the GHG emissions targets for space heating and for service water heating, respectively, in the proposed change. The GHG emissions factors for provinces and territories in Table 11.1.1.5.-A in the proposed change were used in the analysis.

The following section shows that buildings compliant with the NECB 2020 can reach different operational GHG emissions performance levels without any additional costs, depending on the primary heating type and the GHG emissions intensity of the electricity grid to which they are connected.

GHG emissions performance of NECB 2020 compliant buildings (baseline scenario)

Table 1 shows the percentage of natural-gas-heated buildings that comply with the different GHG emissions performance levels. Note that all the cases presented in Table 1 correspond to buildings that meet the minimum requirements established in the NECB 2020, so they are considered to have no incremental costs. As can be seen from Table 1, most natural-gas-heated buildings complying with the NECB 2020 will reach Level E (i.e., percent improvement ≥ 10%) or Level F (i.e., percent improvement ≥ 0%) without any incremental costs. A small number of natural-gas-heated buildings will not comply with the GHG emission requirements in certain locations, corresponding to full-service restaurants that have heating equipment with the lowest efficiencies. In most locations, the percentage of buildings that can reach Level E is higher than the percentage of buildings that can reach Level F, except for buildings located in high GHG emissions intensity grids, where the opposite is true.

Table 2 shows the percentage of electrically heated buildings that comply with the different GHG emissions performance levels. Note that all the cases presented in Table 2 correspond to buildings that meet the minimum requirements established in the NECB 2020, so they are considered to have no incremental costs. As can be seen from Table 2, the lowest level that can be achieved by electrically heated buildings complying with the NECB 2020 is Level E (i.e., percent improvement ≥ 10%). The only exceptions are cases in Nunavut, where all electrically heated buildings will not comply with the operational GHG requirements (the projected emissions factor for electricity is higher than the emissions factor for natural gas). However, this proposed change includes Sentence 11.1.1.4.(5) to provide a relaxation. Table 2 also shows that the majority of buildings connected to low GHG emissions intensity electrical grids (i.e., located in British Columbia, Manitoba, Newfoundland and Labrador, Northwest Territories or Quebec) can achieve the highest GHG emissions performance level (i.e., Level A: percent improvement ≥ 90%) with no incremental costs. On the other hand, most buildings connected to high GHG emissions intensity grids (i.e., located in Alberta or Nova Scotia) can only reach Level E, with some cases reaching Level D (especially in Saskatchewan). Finally, Table 2 shows that most buildings connected to mid GHG emissions intensity grids (i.e., located in New Brunswick, Ontario or Prince Edward Island) can reach Level C (i.e., percent improvement ≥ 50%) with no incremental costs, with some cases even reaching Level B (i.e., percent improvement ≥ 75%) in Yukon.

From the results shown in Tables 1 and 2, it is evident that buildings compliant with the NECB 2020 can reach different operational GHG emissions performance levels without any additional costs, depending on the primary heating type and the GHG emissions intensity of the electricity grid to which they are connected. For this reason, the impact analysis requires incremental costs to be evaluated individually, since the costs associated with reaching each GHG emissions performance level cannot be generalized to all cases.

Incremental costs of GHG emissions performance levels

This section focuses on estimating the costs associated with implementing measures that will enable buildings to reduce operational GHG emissions and thereby improve their GHG emissions performance level. Table 3 shows the measures that were considered for reducing operational GHG emissions in all evaluated building types and locations. The following sections show the GHG emissions performance levels that all buildings can reach after the implementation of each of these measures, with the associated incremental costs.

High-efficiency furnace (natural gas)

This measure focuses on buildings that use natural gas as the primary heating fuel, which according to Table 1 can only reach Level E (i.e., percent improvement ≥ 10%) of the GHG emissions performance levels. Table 4 shows the percentage of natural-gas-heated buildings with a high-efficiency furnace (thermal efficiency of 95%) that comply with the different GHG emissions performance levels. As can be seen in Table 4, the implementation of this measure helps all cases to meet the GHG emissions requirements (there are no non-compliant cases). In addition, this measure helps to increase the percentage of buildings that achieve Level E (i.e., percent improvement ≥ 10%), while reducing the percentage of buildings that are at Level F (i.e., percent improvement ≥ 0%).

The incremental costs of replacing 80% efficiency gas furnaces (i.e., typical efficiency of the baseline prototype models complying with the NECB 2020) with high-efficiency (96% efficiency) furnaces was estimated to be about $1.29/m², based on an incremental cost analysis performed by the New Buildings Institute (NBI) (see Table 7).

Building envelope improvements and high-efficiency furnace (natural gas)

In addition to applying the previous measure (high-efficiency furnace), a set of building envelope improvement measures (see Table 5) were implemented in all building prototypes to obtain further operational GHG emissions reductions. Table 6 shows the percentage of natural-gas-heated buildings with a high-efficiency furnace (thermal efficiency of 95%) and improved building envelope that comply with the different GHG emissions performance levels. As can be seen in Table 6, the majority of buildings will reach Level E in all locations. Table 6 also shows that the implementation of these measures helps to substantially reduce the percentage of buildings that are at Level F (i.e., percent improvement ≥ 0%), while increasing the percentage (up to 40% in Newfoundland and Labrador) of buildings that can reach Level D (i.e., percent improvement ≥ 25%).

The costs of the improvement measures for the building envelope are summarized in Table 7, with the corresponding source of data that was used in the incremental cost analysis.

Notes to Table 7:

(1) Cost is per m² of product (insulation or windows).

(2) RSMeans data from Gordian (2023). “2023 Building Construction Costs with RSMeans data.” 81st annual edition.

(3) New Buildings Institute (NBI) (2022). “Cost Study of the Building Decarbonization Code – An analysis of the incremental first cost and life cycle cost of two common building types,” April 2022.

(4) Pacific Northwest National Laboratory (PNNL) (2019). “Double or Triple? – Factors Influencing the Window Purchasing Decisions of High-Performance Home Builders,” June 2019.

Figure 1 shows the incremental costs of installing a high-efficiency furnace and implementing improvement measures for the building envelope in locations representing the six Canadian climate zones (CZs) covered in the NECB. As shown in Figure 1, the incremental costs of increasing the efficiency of furnaces and implementing building envelope improvement measures is estimated to be around $13/m² to $35/m². As expected, the incremental costs of the building envelope improvement measures are lowest for buildings located in climate zone 8 because the target U-values are the values that are already mandated for buildings located in this climate zone (i.e., there are no incremental costs associated with additional insulation for walls and roofs or the installation of high-performance windows). The only costs for buildings located in climate zone 8 (Yellowknife) correspond to air-sealing costs and the incremental costs of a high-efficiency furnace.

Building envelope improvements (electricity)

The same improvement measures for the building envelope that were applied to natural gas cases in the previous section were applied to cases that use electricity as the primary heating type. Table 8 shows the percentage of electrically heated buildings with improved building envelopes that comply with the different GHG emissions performance levels. As can be seen in Table 8, the results indicate that the GHG emissions performance of the evaluated cases is highly dependent on the carbon intensity of the electrical grid to which the buildings are connected. The building envelope improvement measures do not have a major effect on buildings connected to low GHG emissions intensity grids, as the majority of these cases already achieve the highest GHG emissions performance level (Level A: percent improvement ≥ 90%). In mid GHG emissions intensity grids, building envelope improvement measures help to increase the percentage of buildings that comply with Level C (i.e., percent improvement ≥ 50%), while reducing the percentage of buildings that comply with Level D (i.e., percent improvement ≥ 25%). Table 8 also shows that in Ontario, building envelope improvement measures can help a small percentage of buildings to reach Level B (i.e., percent improvement ≥ 75%), while eliminating the percentage of buildings that comply with Level D (i.e., percent improvement ≥ 25%). In high GHG emissions intensity grids, building envelope improvement measures help to increase the percentage of buildings that comply with Level D (i.e., percent improvement ≥ 25%), while reducing the percentage of buildings that comply with Level E (i.e., percent improvement ≥ 10%).

The incremental costs of the building envelope improvement measures for buildings with electric heating are similar to those estimated for buildings with natural gas heating (previous section) without the costs associated with the high-efficiency furnace ($1.29/m²).

The enforcement of the proposed technical requirements to minimize the excessive emission of operational greenhouse gases would require additional effort by authorities having jurisdiction.

A consistent set of technical requirements to minimize the excessive emission of operational greenhouse gases across Canada would contribute to meeting provincial, territorial and federal GHG emissions reduction targets and climate action plans, including Canada’s goal to reduce its total GHG emissions to 40% to 45% below 2005 levels by 2030 and to reach net-zero GHG emissions by 2050.

Designers, engineers, architects, builders and building officials.