Half of mega projects can be decarbonized at 'zero to no cost'

20 September 2023 Consultancy-me.com 3 min. read

Developers of mega projects in the Middle East can cut huge amounts of greenhouse gas (GHG) emissions at “zero to no cost” by embedding decarbonization policies in the design stage of the project lifecycle. Newly emerging technologies are expected to make sustainability even more attractive in the near future.

Most Middle Eastern real estate developers still tend to see sustainability as economically unattractive and a potential liability. But according to an analysis from consulting firm Boston Consulting Group, around 48% of decarbonization in the construction sector would cost virtually nothing for developers.

In addition to that, businesses that use green energy stand to win lucrative contracts and even potentially gain profit through carbon offsetting and selling credits on the voluntary carbon market.

Half of mega projects can be decarbonized at 'zero to no cost'

Highlighting one such example, the authors point to UAE aluminum producer Emirates Global Aluminum. In recent years, the company’s solar-powered aluminum smelting process won the company multiple contracts, including a 2021 deal from BMW Group for 40k tons of the green aluminum.

Boston Consulting Group’s analysis found that buildings contribute to the majority of emissions, accounting for approximately 66%. Landscaping and water contribute around 20% of emissions. Over the entire lifecycle of a project, the manufacturing of construction materials contributes to approximately 25% of emissions, while operations and maintenance contribute to about 65%.

Implementing green construction options like LED lighting, smart thermostats, and other measures to save on power consumption, mega projects can generate significant cost savings over a life cycle of around 50 years, according to the analysis. Other cost-saving methods include increased use of solar energy or leasing out land for solar plant operators, an obvious source of value for a sun-soaked region like the Middle East.

Half of mega projects can be decarbonized at 'zero to no cost'

Beyond the 48% decarbonization that would “cost nearly nothing”, further reductions in GHG emissions are attainable, but would begin to cost. The report indicates that the next 22% of GHG reductions cost an average of around $118 per ton of CO2 (or equivalent GHGs) by using environmentally friendly technologies and construction materials. These technologies include carbon capture, utilization, and storage (CCUS) as well as recycled steel.

The Middle East is going through significant changes as governments in the region are determined to shift their economies away from dependence on oil. Numerous ambitious mega-projects are underway and industries like finance, tech, and tourism are on the rise. This presents a unique opportunity for the region to lead the way in sustainable development.

“Governments, developers, and the entire real estate industry should prioritize sustainable development principles from the start, setting clear goals and implementing actionable plans,” said the authors of the Boston Consulting Group report.

“Embracing this approach at such a crucial moment is not only the right thing to do for the environment, but it is also the most effective way to ensure the long-term success of these projects.”