GBI - Info-Economic Benefits - TJ - 240610

6/22/2010
Benefits of a Green Economy
THE GREEN BUILDING INDEX WAY TO

A GREEN CONSTRUCTION INDUSTRY FOR MALAYSIA
24 June 2010 iGreet SessionPAM Cyberjaya
Presented by
Ir. Thirukumaran Jallendran

GREENBUILDINGINDEX SDN BHD | www.greenbuildingindex.org
What are the LOCAL issues for Malaysia?

• HYPER URBANIZATION - Urban Population expected to
grow by between 40% to 50% by 2030 from 70% to 80% of
Total Population. The way we plan our Cities will be a Key
component of a sustainable future
• Malaysia will become a Net Importer of Energy by 2015.
How we design our buildings will reflect how much energy
they require to run.
• Malaysia has the HIGHEST per capita Energy Consumption
among ASEAN countries
• No control over import of energy inefficient equipment as
there are no proper standards – WTO requirement
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What are the major issues?
Malaysia as Net Energy Importer
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What are the GLOBAL issues for Malaysia?
• CLIMATE CHANGE - Malaysia is a signatory to the

Kyoto Protocol
• HEAVY DEPENDENCE ON NON RENEWABLE ENERGY –

Malaysia’s Electric Power stations are increasingly dependent
on imported coal.
• Our NON renewable energy is Heavily subsided but NOT our

renewable energy
• HYPER URBANIZATION – Asian Urban Population expected

to grow to 80% of Total Population. Cities will be a Key
component of a sustainable future
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Climate Change
C Arctic is melting
+ 1°C
Coral Reefs dying

+ 2°C
Amazon rainforest drying out
+ 3°C
Many coastal cities could be
flooded
+ 4°C
Increase in climate refugees

+ 5°C
Global Wipe Out

+ 6°C
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THE WAY FORWARD
How Energy Efficient are Malaysian Buildings?
100%
80%
Cumulative percentile
BEI of office
60% buildings in
Malaysia
40%
Source: PTM
20%
0%
0 50 100 150 200 250 300 350 400 450
Building Energy Index (kWh/m2 year)

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Normal buildings
(Kuala Lumpur)
Malaysian Office Buildings

Energy Indexes
300 LEO building
Solar energy
(Putrajaya)
Electricity consumption kWh/m²/year
Electricity consumption
250
200
150
100
50
0 ZEO building
(Bangi)
-50
-100 Normal LEO GEO

buildings Building Building
0-energy
(Green Energy Office)
Why Have GREEN or SUSTAINABLE Buildings?
• Save energy and resources, recycle materials and

minimise the emission of toxic substances throughout
its life cycle,
• Harmonise with the local climate, traditions, culture

and the surrounding environment, and
• Able to sustain and improve the quality of human life

whilst maintaining the capacity of the ecosystem at
local and global levels
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MS1525 the Cornerstone of Malaysian Energy Efficiency
MS 1525:2007
• All buildings exceeding
4,000 m2 of air
conditioned space shall
be provided with an
EMS system and
• OTTV shall not exceed
50 W/m2
• RTTV shall not exceed
25 W/m2 GREENBUILDINGINDEX SDN BHD | www.greenbuildingindex.org
Energy Efficiency Guidelines & Buildings

MALAYSIAN ASEAN ENERGY
AWARD WINNERS
2001
2006
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Why Have GREEN BUILDING INDEX?
• Allows for easy public evaluation of what

are REAL green buildings,
• Serves as key design principles for

Architects and Engineers to design green
buildings, and
• Performance parameters are set for better

TOTAL BUILDING PERFORMANCE
Development of the
Green Building Index Malaysia
Due to the need to identify OUR

PRIORITIES and to suit our
•local climate
•culture
•building codes and
•practice
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GBI CHALLENGES & OPPORTUNITIES
Opportunities & Challenges to Going Green
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Challenges to Green Building Index
•Adoption of other Green Tools

•Capital Cost Barrier
•NOT in Local building codes
•Lack of Local Professionals
Opportunities for Green Building
• National Energy & Green Technology

Policy
• Budget 2010 Green Incentives
• Support of BIPC
• UBBL under amendment to include MS
1525
• Existing Green Codes & Practices
• GBI Training Green Professionals
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ECONOMIC BENEFITS OF
GREEN BUILDINGS
So What are the

Economic Benefits
of
GREEN BUILDINGS
?
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Economic Benefits of Green Buildings
A Green or Sustainable building is one which is

designed:
9 To save energy and resources, recycle materials and
minimise the emission of toxic substances throughout
its life cycle,
9 To harmonise with the local climate, traditions, culture
and the surrounding environment, and
9 To be able to sustain and improve the quality of human
life while maintaining the capacity of the ecosystem at
the local and global levels
• Green buildings have many benefits, such as better

use of building resources, significant operational
savings, and increased workplace productivity
• Building green sends the right message about a
company or organization - it’s well run, responsible,
and committed to the future
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LIFE CYCLE COSTS OF GREEN BUILDING

30 year cost of a building
90
80
70
60
50
40 % COST
30
20
10
0
Design & Maintenance Personnel
Construction Salaries
Source: Sustainable Building Technical Manual / Joseph
J. Romm, Lean and Clean Management, 1994.
There is not any one single technique for

designing and building a green building, but
green buildings often:
• Preserve natural vegetation

• Contain non-toxic or recycled-content
building materials
• Maintain good indoor air-quality
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• Use water and energy efficiently

• Conserve natural resources
• Feature natural lighting
• Include recycling facilities throughout
• Include access to public transportation
• Feature flexible interiors; and
• Recycle construction and demolition
waste.
Financial Benefits of Green Building
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Capital Benefits of Green Buildings
Changing to Green Economy
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BUDGET 2010 : GREEN BUILDING INCENTIVES
To expand the use of green technology, the Government launched the Green
Building Index (GBI) on 21 May 2009. GBI is a green rating index on
environmentally friendly buildings. Green buildings save utility costs and preserve
the quality of the environment. To promote green technology, the Government
proposes that:
First: Building owners obtaining GBI Certificates from 24 October 2009 until 31
December 2014 be given income tax exemption equivalent to the additional
capital expenditure in obtaining such Certificates; and
Second: Buyers purchasing buildings with GBI Certificates from developers be

given stamp duty exemption on instruments of transfer of ownership. The
exemption amount is equivalent to the additional cost incurred in
obtaining the GBI Certificates. This exemption is given to buyers who execute
sales and purchase agreements from 24 October 2009 until 31 December 2014.
Does GREEN pay off? (USA)
LEED CERTIFIED SILVER GOLD PLATINUM
LEED POINTS 23 - 27 28 - 33 34 - 44 45 - 61
ENERGY SAVINGS 25 – 35% 35 – 50% 50 – 60% > 60%
ANNUAL UTILITY
US$ 0.40 / sqft US$ 0.60 / sqft US$ 0.80 / sqft US$ 1.00 / sqft
SAVINGS
PAYBACK PERIOD Under 3 yrs 3 – 5 yrs 5 – 10 yrs 10+ yrs
INCREMENTAL CONSTRUCTION COST
SMALL BUILDINGS 3% 7% 10% 15%
LARGE BUILDINGS 1% 3% 5% 8%
Source: Enermodal Engineering, Denver, USA
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Does GREEN pay off? (Singapore)
Green Certified Gold Gold Plus Platinum

Mark
Points 50 - 74 75 - 84 85 - 89 90 - 100
Cost 0.3 - 1% 1 - 2% 1 - 3% 2 - 8%
Premium
Payback 2 - 5 yrs 2 - 6 yrs 2 - 6 yrs 2 - 8 yrs
Period
Source: BCA Singapore 2008
Does GREEN pay off? (Malaysia)
Green Average Meets GBI GBI GBI GBI

Building M’sian MS1525 Certified Silver Gold Platinum
Index Rating Bldg
BEI 250 200 - 220 150 - 180 120 - 150 100- 120 <100
kWh/m2.year
Energy Base 10 - 20 30 - 40 40 -50 50 – 60 > 60
Savings %
Incremental
construction Base 1-3 5-8 8 - 12 12 - 15 >15
cost %
Non-Residential Buildings -
projected data by Ir TL Chen (not verified)
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GOVERNMENT INCENTIVES FOR

GREEN BUILDINGS
BUDGET 2010 : GREEN BUILDING INCENTIVES
Source : G Lalchand PTM 16-Nov 2009

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GREEN BUILDING INCENTIVES : PASSIVE DESIGN

GREEN BUILDING INCENTIVES : ACTIVE DESIGN

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GREEN BUILDING INCENTIVES

GREEN BUILDING INCENTIVES : ITA
INVESTMENT TAX ALLOWANCE (ITA)
Introduction of income tax exemption equivalent to 100% of

additional capital expenditure incurred to obtain Green Building
Index certificate.
To encourage the construction of buildings using green technology,
it is proposed that :
i.) Owners of buildings awarded the Green Building Index (“GBI”)
certificate be given tax exemption equivalent to 100% of the
additional capital expenditure incurred to obtain the GBI certificate.
The exemption is allowed to be set-off against 100% of the statutory
income for each YA. The incentive is applicable for new buildings
and upgrading of existing buildings. The incentive is given only for
the first GBI certificate issued in respect of the building.
The proposal is effective for buildings awarded with GBI certificates
from 24 October 2009 until 31 December 2014.
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INVESTMENT TAX ALLOWANCE (ITA) FOR GBI CERTIFICATION

PRE-REQUISITES AND PROCESS
1. GBI CERTIFICATION (ANY LEVEL – CERTIFIED, SILVER, GOLD
OR PLATINUM)
2. GBI GREEN COST SUM TO BE VALUED BY QUANTITY SURVEYOR
AND ARCHITECT – THIS IS THE COST TO ACHIEVE THE GBI
CERTIFICATION AND IS BASED ON THE LIST OF APPROVED GBI GREEN
COST ITEMS
3. THIS GBI GREEN COST SUM IS SUBMITTED AS PART OF THE CVA AND
WILL BE CHECKED BY THE GBI CERTIFIER AND THE APPROVED
GBI GREEN COST SUM WILL BE LISTED IN THE FINAL GBI CERTIFICATION
4. COPY OF GBI CERTIFICATION IS GIVEN TO APPLICANT, MAINTAINED BY
GBIAP AND ALSO LODGED WITH LAM
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EXAMPLE
1. BASIC BUILDING COST = RM100mil
2. BUILDING COST TO ACHIEVE GBI CERTIFICATION = RM108mil
3. GBI GREEN COST COMPONENT = RM8mil
(This sum to be valued by Quantity Surveyor and certified by
Architect based on the list of GBI Green Cost items. This is submitted
as part of the CVA and checked by the GBI Certifier)
4. THE GBI GREEN COST IS LISTED IN THE FINAL GBI CERTIFICATION
GREEN BUILDING INCENTIVES : STAMP DUTY
STAMP DUTY EXEMPTION

ii.) Buyers of buildings and residential properties awarded GBI
certificates bought from real property developers are eligible for
stamp duty exemption on instruments on transfer of ownership
of such buildings. The amount of stamp duty exemption is on
the additional cost incurred to obtain the GBI certificate. The
incentive is given only once to the first owner of the building.
The proposal is effective for sale and purchase agreements
executed from 24 October 2009 until 31 December 2014.
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PRE-REQUISITES AND PROCESS

1. GBI CERTIFICATION (ANY LEVEL – CERTIFIED, SILVER, GOLD
OR PLATINUM)
2. GBI GREEN COST SUM TO BE VALUED BY QUANTITY SURVEYOR
AND ARCHITECT – THIS IS THE COST TO ACHIEVE THE GBI
CERTIFICATION AND IS BASED ON THE LIST OF APPROVED GBI
GREEN COST ITEMS
3. THIS GBI GREEN COST SUM IS SUBMITTED AS PART OF THE CVA
AND WILL BE CHECKED BY THE GBI CERTIFIER AND THE
APPROVED GBI GREEN COST SUM WILL BE LISTED IN THE FINAL
GBI CERTIFICATION
4. COPY OF GBI CERTIFICATION IS GIVEN TO APPLICANT,
MAINTAINED BY GBIAP AND ALSO LODGED WITH LAM STAMP DUTY
EXEMPTION FOR GBI CERTIFICATION
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6/22/2010
EXAMPLE
1. BASIC BUILDING (OR UNIT OF BUILDING) COST = RM100,000
2. BUILDING COST TO ACHIEVE GBI CERTIFICATION = RM120,000
3. GBI GREEN COST COMPONENT = RM20,000

(This sum to be valued by Quantity Surveyor and certified by
Architect based on the list of GBI Green Cost items. This is
submitted as part of the CVA and checked by the GBI Certifier)
4. THE GBI GREEN COST IS LISTED IN THE FINAL GBI

CERTIFICATION
5. SALE PRICE ON SPA = RM200,000. STAMP DUTY WILL BE

EXEMPTED FOR RM20,000.
When & What to submit…

• When?
Design Assessment (DA)
Completion & Verification Assessment (CVA)
• What documents to submit?

Preliminary/Final Green Building Index Green Cost Sum
Certificate
Breakdown of the Green Cost Sum (base vs current
adopted design) c/w with qty, rate, BoQ ref no., etc.
Supporting documents (extract from BoQs, Final Accounts,
quotations)
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THANK YOU
www.greenbuildingindex.org
www.mgbc.org.my
28

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6/22/2010

Benefits of a Green Economy

THE GREEN BUILDING INDEX WAY TO

Ir. Thirukumaran Jallendran

What are the LOCAL issues for Malaysia?

GREENBUILDINGINDEX SDN BHD | www.greenbuildingindex.org

What are the major issues?

GREENBUILDINGINDEX SDN BHD | www.greenbuildingindex.org

What are the major issues?

Malaysia as Net Energy Importer

GREENBUILDINGINDEX SDN BHD | www.greenbuildingindex.org

GREENBUILDINGINDEX SDN BHD | www.greenbuildingindex.org

What are the GLOBAL issues for Malaysia?

• CLIMATE CHANGE - Malaysia is a signatory to the

• HEAVY DEPENDENCE ON NON RENEWABLE ENERGY –

• Our NON renewable energy is Heavily subsided but NOT our

• HYPER URBANIZATION – Asian Urban Population expected

GREENBUILDINGINDEX SDN BHD | www.greenbuildingindex.org

Coral Reefs dying

Amazon rainforest drying out

Increase in climate refugees

Global Wipe Out

GREENBUILDINGINDEX SDN BHD | www.greenbuildingindex.org

What are the major issues?

GREENBUILDINGINDEX SDN BHD | www.greenbuildingindex.org

THE WAY FORWARD

GREENBUILDINGINDEX SDN BHD | www.greenbuildingindex.org

How Energy Efficient are Malaysian Buildings?

Building Energy Index (kWh/m2 year)

Malaysian Office Buildings

-100 Normal LEO GEO

Why Have GREEN or SUSTAINABLE Buildings?

• Save energy and resources, recycle materials and

• Harmonise with the local climate, traditions, culture

• Able to sustain and improve the quality of human life

GREENBUILDINGINDEX SDN BHD | www.greenbuildingindex.org

MS1525 the Cornerstone of Malaysian Energy Efficiency

Energy Efficiency Guidelines & Buildings

GREENBUILDINGINDEX SDN BHD | www.greenbuildingindex.org

Why Have GREEN BUILDING INDEX?

• Allows for easy public evaluation of what

• Serves as key design principles for

• Performance parameters are set for better

GREENBUILDINGINDEX SDN BHD | www.greenbuildingindex.org

Due to the need to identify OUR

GREENBUILDINGINDEX SDN BHD | www.greenbuildingindex.org

GBI CHALLENGES & OPPORTUNITIES

GREENBUILDINGINDEX SDN BHD | www.greenbuildingindex.org

Opportunities & Challenges to Going Green

GREENBUILDINGINDEX SDN BHD | www.greenbuildingindex.org

Challenges to Green Building Index

•Adoption of other Green Tools

GREENBUILDINGINDEX SDN BHD | www.greenbuildingindex.org

Opportunities for Green Building

• National Energy & Green Technology

GREENBUILDINGINDEX SDN BHD | www.greenbuildingindex.org

GREENBUILDINGINDEX SDN BHD | www.greenbuildingindex.org

So What are the

Economic Benefits of Green Buildings

A Green or Sustainable building is one which is

Economic Benefits of Green Buildings

• Green buildings have many benefits, such as better