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 200,000 workers with an annual turnover of $32 billion. The building sector activity 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. This high rate of growth was due to a favorable economic conjuncture of the Belgian market (the Belgian economy grew by 2 percent in 2006 from 2005), low interest rates on housing loans since 2003, and a mix of government tax deduction measures. Despite the recent upsurge in growth, the construction market in Belgium is quite mature, and general growth in this sector, with the exception of renovation, has fallen in 2008, not exceeding a growth of 1%. Euroconstruct, Europe’s leading construction business research group, forecasts a stabilization of the decrease of the activity in the sector for 2009.
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 general 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-25 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 20 to 30 % by 2020. 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 was less than 10%, a proportion which must double in order to achieve its goal. Belgium must increase its renewable energy consumption, which was 2.67% in 2007, to 13% in order to comply with the EU expectations.
Sub-Sector Best Prospects
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, cooling, and lighting. 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.
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, compared to 71 percent of homes in the UK; and 58 percent of Belgian homes have roof insulation compared to 73 percent of homes in the UK.
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 all three regions of Belgium has led to rising costs in the building and construction sector.
Read the complete commercial guide to Doing Business in Belgium