The underestimated twin

Long faces in Dubai. The recent climate summit was a disappointment for many because there was no call for a complete phase-out of fossil fuels. However, the global community has set itself important other goals – including using energy much more efficiently. The global efficiency rate is to double to four percent on average by 2030. Buildings are an important lever to get there. In a joint interview, Covestro CEO Markus Steilemann and Christian Noll, Managing Director of the German Corporate Energy Efficiency Initiative (DENEFF) share their view on this.

Why do we must pay attention to improving energy efficiency if we want to make progress on climate protection?

Christian Noll: You must be aware of the fact that almost three quarters of global greenhouse gas emissions stem directly or indirectly from energy consumption. To reduce the emissions, which are far too high, the transition from coal, oil, and other fossil resources to renewable sources such as sun and wind must gain massive momentum. But the world will not become climate neutral if we do not also use energy much more effectively. According to the International Energy Agency (IEA), energy efficiency can contribute more than a third to reducing energy-related greenhouse gas emissions.

This aspect has always been somewhat in the shadows, just as with an unequal pair of twins. With the declared intention to double the efficiency rate, the UN climate conference COP 28 has now highlighted energy efficiency as an essential part of climate protection – an overdue paradigm shift. Saving energy and making energy green: Both must be promoted equally.

And buildings are a big influencing factor for this paradigm shift?

Christian Noll: Exactly. In Germany for example, the operation of buildings causes around 35 percent of final energy consumption and about 30 percent of CO₂ emissions. Although significant efficiency gains have been made in new buildings over the past few decades, there is still a lot to be done in the construction sector, especially with millions of old buildings. The renovation rate is historically low at less than 0.8 percent.

What is important to reduce the energy demand of buildings?

Markus Steilemann: It’s the combination of many different measures that matters. This particularly includes insulation against cold and heat to save energy for heating and cooling systems. At Covestro, we develop the ingredients for a particularly efficient insulating material: polyurethane foam. Compared to other conventional insulation materials used in house construction, it has the lowest thermal conductivity. And what's more: We can now produce the components for this, such as the chemical MDI, in a climate-neutral manner. In addition to good insulation, energy-efficient buildings also require economical lighting, digital building technology and the use of green energy.

How do we ensure that such products and technologies are used more widely?

Christian Noll: Especially through good political impulses. An important step in this direction is that the EU institutions recently agreed on the directive for more energy efficiency in buildings. However, this decision is far from enough to achieve the EU's climate goals. But I at least very much hope that the federal government will now implement the Brussels guidelines decisively and ambitiously for Germany. The new regulation of the national Building Energy Act that has now come into force is only focused on the provision of heat.

There is another new requirement – the Energy Efficiency Act, which has been in force in Germany since November 2023 and is aimed, among others, at industry.

Christian Noll: In Germany, industry alone accounts for 29 percent of total final energy consumption. While some companies practice consistent energy management, others still have great potential. Many technologies and ideas for using energy more productively in offices and businesses already exist. In concrete terms, this means that energy savings of around 20 percent are required in industry so that Germany can economically save about half of the final energy to achieve its climate goals by 2045. And these savings can also be implemented.

What is the state of the chemical industry as a major energy consumer?

Markus Steilemann: The sector has so far been able to decouple production from resource consumption. From 1990 to 2022, the specific energy use has been halved, primarily through the switch to combined heat and power. But in the future, it will become increasingly difficult to exploit potential. Especially since the chemical industry will need huge amounts of green electricity in the coming years. The sector can only become climate neutral by 2045 if companies electrify as many processes as possible.

What is Covestro doing in this regard?

Markus Steilemann: We are aiming at operational climate neutrality by 2035. On the one hand, we are systematically converting production worldwide to renewable energies. On the other hand, we are of course also increasing our efficiency. According to the figures published so far, Covestro has already been able to increase energy efficiency by almost 39 percent between 2022 and the reference year 2005. A main contributor to this is an energy efficiency system called Structese, which we are rolling out throughout the group. We developed it ourselves. But that doesn't mean that companies and industries may have blinders on, on the contrary.

Cross-industry cooperation between pioneering companies is needed when it comes to the crucial issue of energy efficiency. Fortunately, this approach is gaining momentum in Germany. For example, the wind industry and the chemical sector recently issued a joint position paper to help advance the sluggish expansion of renewables. And the waste management and chemical industries also want to work closer together. Tackling things jointly and remaining optimistic – this is how we can achieve the green transformation.