Green Building Market

An Expert's View about Sales in Belgium

Last updated: 20 Apr 2011

Introduction
Belgium is situated in Western Europe, bordering the North Sea, France, Luxembourg, Germany and Netherlands, and has a population of about 10.8 million people. Belgium GDP ranks among the world’s highest with an estimated total of $396.9 billion in 20101. The country, which has the size of Maryland, is divided into three regions: the Dutch-speaking region, the French-speaking region, the Brussels-Capital region. The three official languages are French, Dutch and German. Due to its situation, Belgium is a gateway to Europe. Indeed, the headquarters of the European Union and NATO lie in Brussels. This contributes to make Belgium America's 12th-largest export market.

Market Summary
Before considering the green building market, it is important to have a broad understanding of the general construction market in Belgium. The construction market is one of Belgium’s largest industry sectors, employing nearly 250,000 workers in about 80,000 companies, generating an annual turnover of $32 billion and contributing to 5% of the Belgian GDP. The building sector has shown enormous growth in the past years — an increase of 5 percent in 2008 from 2007. Residential and non-residential construction outperformed all other economic sectors in 2008. Building trade turnover also increased by more than 7 percent from 2007 to 2008. Unfortunately, because of the world economic crises that struck Belgium in September 2008 the building sector activity fell by 4.5% in 2009. Thanks to reflation plan measures taken by the Federal government, this decrease was not as important as predicted. According to a report published in June 2010 by the Construction Confederation, the reflate of the construction sector should occur in 2011.

This report points out that the number of construction companies is more than twice higher in Flanders than in Wallonia. The same comment can be made on the number of employees in the construction industry.

In recent years, green technology and sustainable development has seen an increased interest and attention across Europe. Ambitious goals have been set by national governments to improve energy efficiency in buildings and the need for environmental conservation has been growing in popularity among the population. Green building is becoming more appealing as it reduces energy consumption, creates jobs, decreases the impact on the environment, and improves future sustainability. There is a strong need for green building in Belgium, as its energy efficiency is one of the lowest in Europe. The average residential energy consumption was among the highest in Europe and was 72 % higher than the EU-27
average. Such large consumption is due to the old age of buildings, higher percentage of single families, and relatively few energy efficiency features.

Strong public opinion for change is backed by federal government actions, such as the EU striving to reduce its greenhouse gas emissions by at least 20 % below 1990 levels, and by 30 % in the event of an international agreement being reached. The EU is working as a whole to establish a common energy policy that will result in renewable energy accounting for 20% of the total energy by 2020. In 2008, the EU’s energy consumption from renewable sources proportion was 10.3% (and is estimated to reach 12% in 2010), which must increase to 20% in order to achieve its goal. Belgium must increase its renewable energy consumption, which was 3.3% in 2008 (and is estimated to reach 4% in 2010), to 13% in order to
comply with the EU expectations.

Market Overview/Structure
Belgium’s residential and commercial buildings account for 35 percent of primary energy demand. Of this primary energy demand, residential buildings are responsible for 73 percent, with commercial buildings accounting for the remaining 27 percent. Energy in buildings is consumed primarily in heating, lightening and cooling. Demand for energy efficient products such as heating ventilation, air conditioning, and lighting have grown due to government initiatives and regulations. In addition, demand is expected to rise further due to federal tax incentives, eco-loans, and positive media coverage. However, it is important to notice that, unlike the American buildings, the buildings in Belgium do not use as much air conditioning systems.

As the economic situation continues to be uncertain, Belgians are increasingly investing in real estate and renovation of aging buildings. Since 2007, there is more demand for renovation - in both the residential and non-residential building sector – reflecting a trend and a genuine need for more development in renovation. About 80 % of Belgian homes were built before 1980 and are environmentally inefficient. These homes are in need of renovation with new insulation materials, windows, and heating systems. It is estimated that only 36 percent of Belgian homes have full double-glazed windows. American companies may take advantage of this opportunity to enter the Belgian green building market, paying close attention to the unique characteristics of the Belgian population. The high standard of living in most of the country represents a multitude of export opportunities for high quality building products. It is important to note that the cost of housing and renovation in Belgium has increased significantly and is expected to continue to rise. The scarcity of land in Belgium results in increased real estate prices, as well as the cost of building/homes. The demand for greater comfort in homes has also increased average building prices.

Market Trends
The expansion of the renovation sector has been the most important trend in residential construction in recent years. In 2008, 63 percent more residential renovation projects were started than was the case in 1998. In contrast, there was a 15 percent decline in 2008 in the number of new housing construction projects compared to 2007 because of the economic crisis. The renovation sector’s turnover began to grow again in 2010 after a negative growth in 2009. Residential renovation projects increases demand for energy efficient products and construction materials. Several new EU Directives, aimed to reduce energy consumption and pollution, have resulted in a strong demand for economic water systems, double glazing, and an increased interest in solar panels, heating systems, and green roofs/rainwater usage. Energy-efficient construction materials are also tax deductible—a feature which creates further incentives for green construction.

The EU Directive on the Energy Performance of Buildings (EPBD) came into full effect in Belgium on January 4th, 2006. Its main objective is to promote improved energy performance of buildings within the EU through cost-effective measures and also the convergence of building energy standards. Almost half of the energy-related CO2 emissions derive from energy use in buildings. In fact, EU research has indicated that CO2 emissions from buildings could be reduced by as much as 22% through improved energy efficiency. The Directive also applies a minimum standard of energy performance for new buildings, and existing buildings with a total surface area over 1000 square meters, when they are
renovated.On May 19 2010 the European Parliament and Council published Directive 2010/31/EU containing amendments to the EPBD stating that “All buildings built after December 2018 will have to produce their own renewable energy on-site” according to the European Parliament’s industry committee.

The Energy Performance Directive mandates certification requirements in the country – such energy certificates (EPASS: Energy Efficiency Passports) are designed to promote high visibility and should have a large impact on the property sector, both residential and non-residential, and new buildings and existing stock. Although not being specific to green building, the Belgian Construction Certification Association
(www.bcca.be) is a specialized certification body in the construction sector for products and construction systems, processes, and management systems.

Rising prices in renovation and new building construction reveal a Belgian preference for high quality and luxury products as well as innovative green building materials. With increasing real estate investment, there is even greater demand for superior quality building and renovation. There is also a growing interest in smaller pieces of property, such as duplexes. Duplex housing construction tends to apply more sustainable and durable building materials and utilizes exterior spaces very well (small gardens, courtyards, terraces, bike shelters, parking spots). Townhouses, like duplexes, are also becoming quite popular in Belgium. These houses, often divided into two or more separate housing units, can be
extremely cost-efficient for group housing residents.

Increasing energy prices are encouraging many Belgians to install more efficient HVAC (Heating, Ventilation, and Air Conditioning) and water heating systems. Much of the shift is from electric water heating to solar and high-efficiency gas and oil heaters. High labor costs in Belgium also indicate a strong demand for cost-efficient materials that are easy to install—such as pre-fabricated walls. For the past few years, there has been a growing interest in wood construction. Several Belgian companies specialize in the wood construction sector in Wallonia.

Import Market
Belgium has a robust building industry and boasts a labor force of approximately 238,000 workers. Generally, the building market in Belgium is highly competitive among the domestic producers and other European suppliers. However, there are opportunities for exporters to Belgium in specific market niches in the Belgian construction materials market. The Belgian Construction Products Distributors Federation (FEMA) is interested in opening the Belgian market to competitive foreign building materials, including green building products.

The Belgian construction market also values high-quality materials and products that are often only imported from abroad. Belgium’s principal importing countries for building construction include: Germany, Luxembourg, Spain, and France. In the building sector, products and materials that demonstrate a high level of innovation and quality do quite well. The market being so small, it is imperative to grant exclusive distribution to importers. Most large companies and traders cater to both the industrial and residential markets.

Read the full market research report


Posted: 20 April 2011, last updated 20 April 2011

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