Building Smarter: How Energy Codes Can Shape a Low-Carbon Future, If Enforced

The World Bank’s 2025 report reveals that while building energy codes are essential for cutting emissions and saving costs, adoption and enforcement remain inconsistent globally. Rapid construction without regulation risks locking in decades of inefficiency, especially in fast-urbanizing regions.

In its 2025 flagship report Unlocking Efficiency: The Global Landscape of Building Energy Regulations and Their Enforcement, the World Bank, through its Global Indicators Group (DECIG), in collaboration with the Building Green initiative and supported by the City Climate Finance Gap Fund, delivers an urgent and comprehensive overview of the global state of building energy regulations. Drawing on data from 88 cities across all income groups and climate zones, the report outlines how building energy codes (BECs) can significantly reduce emissions, cut energy costs, and accelerate sustainable development. Yet it also highlights glaring gaps in adoption, enforcement, and implementation, particularly in regions that are urbanizing rapidly and most vulnerable to climate change.

New Construction, Old Mistakes: Billions of Square Meters Built Without Regulation

One of the report’s most alarming findings is the scale of construction taking place without any mandatory energy performance standards. In 2023 alone, 2.55 billion square meters of new floor space, more than half of global construction, were built without regulatory oversight. This expansion is largely occurring in emerging economies, particularly across Asia and Africa, where urban populations are booming but regulatory frameworks remain weak or non-existent. Without codes in place, these buildings are likely to remain energy-inefficient for decades, locking in high emissions and operating costs.

The implications are staggering. Buildings are currently responsible for 37 percent of global CO₂ emissions, and with 70 percent of the building stock for 2050 yet to be constructed, decisions made today will shape the planet’s energy future. Energy-efficient buildings are not only better for the climate, but they also save money. The International Energy Agency (IEA) estimates over $1 trillion in potential savings from efficiency improvements by 2050. Yet, as the World Bank notes, these gains will not be realized unless codes are adopted and actively enforced.

A Tale of Two Worlds: Who Has Building Codes and Who Doesn’t

Out of the 88 countries surveyed, 71 have adopted some form of mandatory building energy codes, but only 52 demonstrate consistent enforcement. Europe and Central Asia lead globally, bolstered by EU directives that harmonize regulations across borders. High-income countries dominate adoption, with Rwanda being the only low-income country in the dataset with a comprehensive and enforced code. Its approach, focusing first on commercial buildings in urban areas, offers a model from which other developing economies can build.

In contrast, enforcement remains weak in lower-income regions, particularly in Sub-Saharan Africa and South Asia, where technical capacity and institutional support are limited. Some countries rely on voluntary codes or green building certifications, but without legal mandates, compliance rates are low. The report also notes a concerning pattern: while many countries have adopted building codes in principle, implementation mechanisms such as qualified inspectors, clear compliance pathways, and post-construction audits are either missing or insufficiently resourced.

Incentives are a promising tool, with 43 percent of cities in the study offering tax breaks, subsidies, or green loans for code-compliant construction. Singapore’s Green Mark scheme and Germany’s KfW financing initiative stand out for pairing financial support with strict enforcement. However, incentives alone cannot replace regulatory oversight.

Passive Design, Active Impact: The Power of Smart Building Envelopes

Passive design strategies that use architecture and materials to reduce energy use emerges as one of the most cost-effective and underused tools in the BEC toolkit. By optimizing building orientation, natural ventilation, insulation, and glazing, energy demand can be slashed before a single HVAC system is switched on. The report finds that most countries regulate at least one aspect of passive design, especially roofs and walls, which are critical for thermal performance. However, coverage is uneven: windows, doors, and solar heat gain control are often overlooked, particularly in warmer regions where cooling demand is rising fastest.

Globally, only 62 countries set thermal standards for roofs, and just 41 have requirements for doors and fenestration. Climate-responsive design is essential, yet in many hot and tropical zones, these standards are either absent or far less stringent than in colder regions. This disparity reflects a missed opportunity to control energy use in buildings where air conditioning is quickly becoming a major energy burden.

Enforcement: The Missing Link Between Policy and Practice

Enforcement is where even the best-written codes often fail. Only 33 of the 88 countries studied have systems in place to certify, train, and oversee building inspectors. Without qualified professionals, codes remain unenforced, especially during post-construction phases when compliance verification is critical. Third-party audits, energy labeling, and mandatory reporting remain rare in most regions, and retrofit regulations are virtually non-existent.

Singapore, again, provides a notable example of integrated enforcement embedding energy codes into broader permitting and building control processes. Germany and several Nordic countries also align financial incentives with enforcement. These systems prove that robust verification does not require limitless resources, only clear procedures, coordination, and political will.

Retrofit Revolution Still Missing: Existing Buildings Left Behind

Perhaps the report’s most sobering insight is the neglect of existing buildings. Despite accounting for the majority of global energy use in the sector, only 16 countries require energy efficiency improvements when buildings are renovated or repurposed. Most BECs focus solely on new construction, leaving hundreds of millions of older, inefficient buildings untouched.

Leading nations like France, Denmark, and the Netherlands have begun phasing out fossil fuel heating systems in both new and existing buildings. Yet globally, few have followed suit. Retrofitting the existing stock remains the single greatest opportunity for emissions reduction in the building sector, especially in high-income countries where new construction is relatively modest.

The report ends with a clear call to action. Countries at all stages of development must adopt tailored, phased approaches that align with local economic capacity, climate conditions, and market readiness. Low-income nations can begin with passive design and minimal-cost standards, while wealthier ones must focus on enforcement, retrofitting, and full lifecycle energy performance. The clock is ticking: with construction equivalent to the footprint of Paris added every week, the window to shape a low-carbon building future is rapidly closing. The world must build better starting now.