Lise Hvid Horup Sørensen, PhD Researcher

February 28, 2024

Financial benefits of building renovation

Danish study reveals the environmental and economic benefits of renovating properties compared to building new properties

A Danish study on the environmental and economic consequences of construction has revealed that renovating is a more climate friendly and financially sound choice compared to constructing new buildings.
Renovating homes and buildings is often a highly complex task with unforeseen hurdles. Demolition and building something new is often easier. But is new-build also wiser? No, says a study conducted by Ramboll for ‘Renovering på Dagsordenen’, a Danish partnership organisation working to put renovations on the agenda.
Given that ‘easiness’ is not the key metric for a low-carbon economy, the sector needs to increase the use of renovation as this has a lower carbon impact and lower material consumption compared to new construction. In addition, renovations are typically cheaper than new builds.
Four key insights
Using life cycle analyses (LCA) and life cycle cost analyses (LCC), Ramboll experts performed a comprehensive assessment of 16 cases ranging from family homes and terraced houses to tower blocks, commercial buildings and public buildings. The buildings also represent a wide range of building functions, choice of materials and locations. The main findings were:
  • Renovation is both greener and cheaper than new-build
  • Carbon emission in new construction depends on the materials used
  • The level of renovation determines the extent to which carbon impacts from operational energy can be reduced
  • Carbon impacts occur at different life cycle stages for new and mature buildings

"There is a huge potential to globally reduce carbon emissions if relevant stakeholders adapt these insights and rethink the way that we currently work within the sector."

Lise Hvid Horup Sørensen
PhD Researcher, Ramboll

Renovation is both greener and cheaper than new-build
All 16 cases in this analysis show that renovation is most advantageous both financially and in terms of climate impact.
Whole life cycle calculations of the scenarios reveal that it in five of the cases it will be more than twice as expensive to build new than to carry out extensive renovations over a period of 50 years. This goes against the common assumption that it is not worthwhile to preserve and renovate buildings because they will be more expensive to operate.
In addition, CO2 emissions from demolishing and building a new replacement building of the same size are on average around 35% greater than if a significant renovation of the building is carried out instead.
But why are renovations more environmentally-friendly? According to Lise Hvid Horup Sørensen, the life-cycle-perspective is a chief instrument for both the environmental and economic logic: “The reason for the significant difference can be found in the amount of greenhouse gasses that are released during the entire life cycle of the materials - from extraction, transportation, the actual construction and the demolition of the old building. Many more virgin materials go into new builds making them far more damaging than renovation.”
Carbon emissions in new constructions depends on the materials used
When assessing whether to build new or renovate, it is important to consider which materials are to be used. Some materials cause more carbon emissions than others.
The report shows that wooden constructions cause less emissions compared to conventional building materials, such as steel, concrete and bricks.
Carbon impacts occur at different life cycle stages for new and mature buildings
For older buildings, most carbon emissions are typically related to excessive consumption of heat, water, and electricity, due to inadequate insulation and potential leaks.
In contrast, the environmental impact of new construction is primarily caused by the materials used, whilst energy consumption remains relatively low.
The 50-year life cycle analysis shows that there is a remarkable difference as to when carbon emission occurs in the processes of renovation and new construction.
For renovation scenarios, carbon emission is relatively high in the first half of the period of observation. Later, the curve evens out.
In comparison, carbon emissions from new-build is shown to be notably higher than those from renovation in the first 30 years.
An increased focus on renovations rather than new-build will therefore make a positive contribution to efforts to reduce carbon emissions.
Specific actions towards the reduction of carbon emissions
The insights generated from the report provide the industry with guidelines as to how they can contribute to a solution to a central theme on the political agenda – namely the ambition to reduce Denmark’s carbon emissions by 70% no later than 2030.
Despite the national focus, the findings have global potential:
“The analysis is based on Danish cases, but it can easily be transferred to other countries as well. There is a huge potential to globally reduce carbon emissions if relevant stakeholders adapt these insights and rethink the way that we currently work within the sector,” concludes Lise Hvid Horup Sørensen.

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