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Background

Context

In 2015 the population of Mexico amounted to 120 million, by 2050 the rate of population will be approx. 150 million (CONEVAL 2014). The population growth of the country is accompanied by a rapid process of urbanization; in 2010, 71.60% of the population lived in cities and is estimated to rise by 2030 to 83.20 % (SEDATU).

Given these indicators, the building sector is of vital importance. In 2010 there were approx. 28 million residential units inhabited (INEGI) of which almost one third is in need of rehabilitation; also, well into 2020 approx. 500,000 new homes will be constructed annually to combat the large housing deficit (CONAVI). Until 2050 the housing stock could grow to 48 million residential units.

Apart from the residential sector, also other building sectors are of relevance: in 2010 the number of educational buildings (kindergarten, elementary, middle, high school and universities) amounted to approx. 260 thousand units and is expected to reach 275,000 units in 2030 (INEGI). The health sector amounts to approx. 4,436 hospitals in 2015 (OECD) and the commercial sector to 10,969 commercial complexes in 2009: shopping centres and malls, transport terminals, industrial complexes, public markets and other (INEGI).

The building sector accounted for 18.40 % of the energy consumption of the country in 2014 (BUR to UNFCCC, 2015) while the residential, commercial and public sector represent approx. 31% of the electricity consumption. The contribution of the residential and commercial sectors to GHG emissions amounted to 3.90% in 2013, representing almost 5.00% of the total CO2 emissions in Mexico in 2013.

Amongst the most important public stakeholders in the Country concerning sustainability in the building sector are: the Secretary of Energy (SENER) responsible for the national energy policies, supported by the National Commission for the Efficient Use of Energy (CONUEE), the Secretary of Environment and Natural Resources (SEMARNAT), the Secretary of Agrarian and Territorial Development (SEDATU), the National Housing Commission (CONAVI), the Institute of the National Housing Fund for Workers (INFONAVIT) and the Mexican housing development bank Sociedad Hipotecaria Federal (SHF).

Between 1990 and 2009 the Mexican Government had implemented different programmes focussing on the application of individual energy efficiency measures in buildings (e.g. lighting, insulation, exchange of refrigerators).

During the preparation phase of the COP 16 the Mexican Government initiated the political climate dialogue with many different international cooperation agencies. For Mexico, the COP 16 in 2010 in Cancun can be seen as the occasion and initial point for its strong political commitment to take initiative at national level to combat climate change by actions in the building sector supported by the German government and other countries.

Mexican-German Cooperation in Energy Efficiency in Buildings

Technical Assistance

Programme Sustainable Energy for Mexico - Buildings Component (€ 7 / 2.5 million, 2009 – 2019, implemented by GIZ on behalf of the German BMZ)

This programme aims at improving the framework conditions for increasing the energy efficiency and expanding the use of renewable energy. The Buildings Component cooperates with CONUEE and INFONAVIT on the energetic optimization of residential buildings, analysis of building regulations, building certification, development and implementation of the energy and environmental qualification system for residential buildings (SISEVIVE), the development of a benchmarking system for administrative buildings, capacity building in sustainable housing to local authorities and the introduction of EE building regulations. The programme supports the application of renewable energies in buildings in two ways: advisory to SENER and CONUEE on the application of solar water heaters through the PROCALSOL programme (2007-2012) and the promotion of photovoltaic systems through the PROSOLAR programme (2012).

Energy and Environmental Qualification System for Residential Buildings in Mexico (Sisevive-Ecocasa). Source: INFONAVIT

25,000 Solar Roofs Project (€ 3 'million, 2009 – 2014, implemented by INFONAVIT and GIZ on behalf of the German 'BMUB)

The project contributed to the reduction of GHG emissions from Mexican households by promoting the use of solar collectors for warm water. An investment cost subsidy programme – similar to the German market incentive programme – it was operated via INFONAVIT's 'Green Mortgage' housing fund for the installation of up to 22,000 solar collectors. The project conducted training programmes to increase the know-how on the installation and maintenance of solar collectors.

Mexican-German Programme for NAMAs - Housing Component (€ 7/ 2 million, 2011-2015, implemented by GIZ on behalf of the German BMUB)

The NAMA Programme provided technical assistance to the Mexican Government on developing Mexican NAMAs for large scale implementation, the procurement of international co-financing as well as preparing the initial implementation of these NAMAs. The Housing Component in particular supported CONAVI on the developed of two NAMAs for new and existing residential buildings. Pilot projects have been implemented to apply and consolidate the technical design of the new housing NAMA.

The Mexican New Housing NAMA takes a holistic view of buildings (‘whole house approach’). The focus is not on applying individual energy efficiency measures or using renewable energy in residential buildings, but on a building’s overall energy performance.

ProNAMA Pilot Projects in Hermosillo, Morelia and Guadalajara

Mexican-German triangular cooperation between Mexico, Colombia and Germany: Fostering sustainable urban development and housing construction (€ 300,000, 2013 – 2016, implemented by GIZ on behalf of the German BMZ)

The aim of this cooperation is to support Colombia’s efforts to promote sustainable housing by learning from Mexico’s experiences with energy-efficient housing. Mexico for its part can benefit from Colombia’s experience in the field of urban development and spatial planning. In both of these areas, Germany provides technical advice based on the experience gained from its long-standing bilateral cooperation with the two countries. This project clearly demonstrates the principle of reciprocal learning in different sectors as a special feature of triangular cooperation.

NAMA Facility Mexico, Implementation of the New Housing NAMA (€ 14 million - TA € 4 million 2013-2017 implemented by CONAVI and GIZ; FC € 10 million 2013-2020 implemented by SHF and KfW), Commissioned by the German BMUB and the British BEIS

This first NAMA Support Project (NSP) combines technical assistance by GIZ to CONAVI (technical cooperation component) as well as financial incentives and project-related technical support by KfW in cooperation with the Mexican development bank SHF (financial cooperation component) to path the way from the initial NAMA development towards a broad sector-wide implementation of sustainable housing.

This is a ‘supported NAMA’, which means that it aims at acquiring international climate financing for its implementation. The overarching goal is to implement the New Housing NAMA, which promotes cost-effective, energy-efficient building concepts across the housing sector with a particular focus on low-income housing.

Particular objectives:

To promote the penetration of basic efficiency standards in the entire new housing market in Mexico (TA and financial incentives for SME and financial intermediaries).
To promote the upgrading of energy efficiency standards to more ambitious levels.

Financial Cooperation

ECOCASA Programme (approx. € 168 million, 2012- 2019, implemented by KfW and SHF with co-financing by CTF, IDB and LAIF of the European Commission)

The ECOCASA Programme contributes to the reduction of GHG emissions in the residential sector by providing financial incentives for energy efficiency investments and low carbon houses. The programme applies the technical design of the Housing NAMA to target emission reductions through different technologies. The Programme offers bridge loans through financial intermediaries as financial incentives for project developers, green mortgages for not affiliated workers who cannot access to mortgage programmes of INFONAVIT and FOVISSSTE, grant funds to cover additional investment for home owners to meet more ambitious efficient standards, funding through EU-LAIF for low energy houses and a technical assistance facility. In 2016 the Mexican and German Government announced the financing of the second phase of the ECOCASA Programme with € 50 million.

Other International Cooperation Initiatives

NET ZERO Project of the Canadian Government and Building Science (CA $ 4 million, 2012-2013), supported by the Canadian Government and Environment Canada

The project provided technical support for planning, financing and monitoring of new housing units with energy efficiency standards based on the Housing NAMA design in cooperation with INFONAVIT, the local housing institute IVSOP in Aguascalientes as well as private housing developers.

French Government

In cooperation with the Secretariat of Social Development (SEDESOL) and the National Housing Commission (CONAVI), the French Government coordinates several activities such as workshops, seminars and study tours on sustainable urban development based on the French experience of territorial consolidation.

British Government

The British Government supports diverse projects mitigating climate change, for example supporting the development of the Green Housing Evaluation System SISEVIVE through the Prosperity Fund, co-financing the Mexican NAMA Facility Project, and other minor activities.

New Energy Efficiency Initiatives

CTS Embarq Mexico

CTS EMBARQ Mexico and the Building Efficiency Initiative of WRI Ross Center for Sustainable Cities worked with many organizations and agencies in Mexico, including Casedi, SENER and CONUEE, to support the adoption of energy efficiency aspects for the construction regulations in cities. They also contributed to the development of the national Energy Conservation Code for Mexico, which is a solid foundation for Mexico City’s Complementary Technical Standards. These activities were supported by the UK Prosperity Fund and the Danish Energy Agency.

Danish Cooperation

Preparing their new activities, the Danish Cooperation collaborated with GIZ and CONAVI on working with specific municipalities to improve the regulation of energy efficiency in new buildings, for example, by agreeing on using training materials developed by the Energy Programme Mexico/ Buildings Component.

Sustainable Energy for All (SE4ALL), Building Efficiency Accelerator (World Bank)

As part of the design and implementation of integrated country actions that strategically transform their energy systems, the goals of the building efficiency accelerator in Mexico are:

Create real market shifts and scale up efficiency
Establish Mexico and Mexico City as leader in SE4All
Demonstrate policy and project action in Buildings under SE4All Building Efficiency Accelerator
Market development: pilot retrofits in Federal, City and Commercial buildings
Leadership: modify procurement approaches to create deeper energy and technology investments
Implementation of local building energy code
Track progress toward carbon/other goals

Clean Energy Solution Centre

The Clean Energy Solutions Centre assisted the National Commission for Energy Efficiency (CONUEE) on developing a country specific webinar training that provides information on incentives, outreach activities, and education directed to the Mexican government to develop programs similar to EnergyStar and LEED. A subsequent request for assistance on cool surface policies established Solutions Centre experts providing information on current and projected international cool surface codes and standards, and incentive programmes designed to accelerate the deployment of cool surface technologies.

In Preparation (projected start in 2017):

Programme for the integral improvement of existing housing '(€ 50-80 million - TA € 3 million approx. implemented by FIDE; FC € 50-80 million implemented by NAFIN, 4 years) supported by French Development Agency AFD and the European Union

This programme intends to implement large-scale improvement actions for existing social housing based on the NAMA for Sustainable Retrofit developed by CONAVI with support by GIZ. The intention is to design different ambitious NAMA packages for housing retrofit measures based on the technical design of the NAMA and the simulation tool Sisevive-Ecocasa. The Programme combines TA to FIDE with financial incentives in cooperation with NAFIN to pave the way from the initial NAMA development to large-scale implementation in existing housing.

Outcomes

Mexico´s national efforts and initiatives to foster energy efficiency and sustainability in the building sector, supported by the international community, created a strong conscience and commitment amongst the diverse public and private key actors of the sector. Today, Mexico is on a good track to gradually transform its building sector towards a low carbon sector, contributing significantly to its mitigation goals at national and international level. Amongst some of the most important outcomes are the following:

Awareness and International Climate Negotiations:

The NAMA development and initial implementation helped Mexico to achieve a high level of visibility within the international climate community and strengthened its position as partner in the international climate negotiations.

Capacity Development:

The building sector has more capabilities in energy efficiency in buildings, particularly in the housing sector. More than 1,200 people have been trained in energy simulations and sustainable housing.

Mitigation Potential:

The implementation of the Mexican Housing NAMA so far resulted in almost 80,000 newly constructed NAMA housing units. The mitigation potential of these units is being estimated as follows:

Estimation of GHF mitigation potencial.jpg

Estimation of GHG mitigation potencial of New Housing NAMA (Statuts 2016). Source: Antonio Pelaez (GIZ) with data of CONAVI/SHF/GIZ

Innovation:

Mexico disposes of an energy and environmental certification system for new and existing residential buildings (Sisevive-Ecocasa) being operated (initial phase) by the National Housing Register (RUV).
The application of renewable energy in the residential and other building sectors is initiating (large-scale use of solar water heaters, preparation of photovoltaic systems).

Policy and Financing:

Through the Housing NAMA international co-financing has been mobilized (e.g. extension of ECOCASA, NAMA Facility).
The New Housing NAMA is partially public policy initially being implemented by financing programmes (subsidy CONAVI, mortgage ECOCASA). For the existing housing initial implementation is being prepared (AFD-CONAVI-FIDE-NAFIN and INFONAVIT).
New financing schemes and instruments for the private sector towards a low carbon economy are being explored (e.g. Green Bonds with CONAVI).
A benchmarking system for administrative buildings (APF) has been developed with CONUEE.

Norms and Regulations:

Codes of Construction have been developed and are being implemented by local authorities as pilot project, demonstrating the application potential for other local authorities.
The regulation on energy efficient building envelopes NOM-20-ENER-2011 (residential buildings) and NOM-008-ENER-2011 have been developed. Adoption and application by the Mexican government is currently being debated.
Different regulations for appliances (lighting, air conditioning, gas boiler, freezers) have been developed and are being implemented.

Stakeholder Coordination:

The coordination of policies and initiatives within the housing sector lead by SEDATU-CONAVI and CONUEE has improved significantly.

Why is the International Cooperation on Energy Efficiency in Buildings in Mexico successful?

The Mexican government started to take action in the beginning of the 1990ties by initiating first programmes, for example, on applying building insulation for residential buildings (Fipaterm) and the promotion of efficient household appliances (FIDE). In 2004, FIDE initiated an energy saving programme.

Concerning the housing sector, a large step at national level was the creation and piloting of the Green Mortgage Programme (Hipoteca Verde) by INFONAVIT in 2007. From 2009 on the Mexican government accompanied by different institutions, experts and international assistance developed step by step the housing strategy.

New Housing NAMA Cronology. Source: GIZ and CONAVI

The New Housing NAMA, developed in 2011 and 2012, provided the diverse stakeholders with a clear and transparent concept and technical design to understand the importance and potential of energy-saving and mitigation of GHG emissions through a sustainable housing sector. The NAMA provides financial incentives to the private sector and enables the National Government in the mid and long term to decrease its national budget spent on energy subsidies in favour to incentivise energy-saving and sustainable construction and retrofit of residential buildings and to improve the quality, living comfort and energy expenses of the end-users.

Policy wise, the initial implementation success of the Mexican Housing NAMA within a relatively short time is due to the complementation of financial means of the national budget and the private housing developers with international climate financing. One key success factor surely is to be seen in having analysed well already existing financing mechanisms and instruments of the Mexican government (e.g. subsidies to end users by CONAVI, bridge loans to housing developers by SHF) and linking them gradually to the technical design of the NAMA instead of designing new financing instruments.

From the international community´s point of view, the German government, for example, achieved to successfully advise the Mexican government in a holistic and integrated manner based on its 35 years of experience shaping and implementing technical energy efficiency concepts, norms and regulations as well as incentive programmes at home.

Opportunities for Mexico

Despite the achievements, there are many opportunities for Mexico to continue its sustainable path towards transforming the building sector; in particular are the following ones:

Advisory on the gradual reform of the electricity tariff system which due to its extensive subsidy scheme to private households represents one of the major barriers.
Technical accompaniment on the consolidation and implementation of the New Housing NAMA as public policy including scaling-up (2^nd phase) pursuing more ambitious levels.
Technical accompaniment on the initial implementation of the Supported NAMA for Sustainable Retrofit (existing buildings).
Development of concepts and programmes for energy efficiency for other building sectors, such as educational, health, commercial, public administration and industrial buildings.
Development of an energy and environmental certification system for other building sectors.
Improvement and application of more ambitious energy efficient building codes and regulations.
Development of sustainable housing programmes for higher income sectors (new and existing, property and rental).
Development of a green industry for local technologies and construction materials.
Advise to local authorities on implementation of mandatory national energy efficiency policies and regulations.
Development of integrated urban development and housing concepts (new and existing buildings) at district and city level.
Improvement of coordination in the energy efficiency building sector, including different ministries to develop mechanism to force and mobilize public and private stakeholders.
Accompaniment of Mexico on transferring its knowledge and experience on energy efficiency in buildings and climate change to other countries of the region and beyond.

Opportunities for Global Alliances

Concerning opportunities for alliances at global level, there are significant differences approaching emerging or developing countries. It is important to analyse and understand the particular local situations to be able to shape a common agenda as well addressing individual issues of each country.

Developing Countries

Most developing countries are confronted with a high population growth rate and therefore are focussing on meeting their strong demand for basic housing. Urbanization is usually happening much faster in comparison to emerging countries. In this context two general strategies may be pursued:

Cities and Urban areas:

The introduction of codes and regulations as well as initial programmes for improved thermal building envelops (material, insulation, windows, shading) and more efficient household appliances in order to achieve noticeable impacts as well as creating awareness and visibility within a short period of time. Programmes to introduce renewable energies in buildings such as solar water heaters might follow.

In parallel, countries are most likely to need the development of a national urban development strategy, combining housing and transport issues as well as reducing uncontrolled, often informal, urban sprawl. Based on these national strategies, sustainable building strategies need to be initiated.

Rural areas:

According to UN-Habitat, in 2013 around 860 million people were living in slums, up from 725 million in 2000. Thus, despite significant efforts, the net growth of informal housing continues to outpace any improvement measures. Within this context, improving local construction systems, providing access to clean energy and fostering local green job development could be initial strategies towards improving the energy efficiency and living conditions of the inhabitants.

Emerging Countries

In emerging countries, usually basic building and housing policies are in place, though perhaps not consequently adhered to. A strategic approach might consist in analysing relevant data on building codes and regulations, construction quality, energy supply and consumption in buildings as well as GHG emissions by the building sector.

Based on the results and stage of development, data bases could be systematically created to define base lines for construction and energy issues, paving the way for developing short, mid and long term urban development and energy efficiency strategies for different building sectors. Strategies should focus on climate mitigation and adaptation policies, creating GHG inventories; urban issues like re-densification policies for cities, clean energy supply, water provision and consumption and, at building level, on defining energy qualities for construction, a CO2 life cycle approach for buildings including consideration of embedded CO2 in the building material as well as steps towards low energy and net zero energy buildings.

The building sector, representing one of the sectors with the highest resistance to change, achieving a change of paradigm and creating innovation at local level might be the biggest challenges. Usually there is a lack of professionalism within public and private institutions and the construction sector is led by the highest perspectives of commercial profit. In addition, the end-users (households) do know little about the benefits and fear any change of lifestyle habits. To provide incentives and achieve ownership amongst the private actors might be one of the most important challenges for the national governments.