How Europe’s warehouses are helping to deliver a low carbon future
Carbon-neutral warehouses are starting to appear in countries like Belgium and Germany.
Europe’s warehouses are heading towards a low carbon future as developers, investors and occupiers increasingly focus their attention on renewable power and energy efficiency.
Major corporate occupiers such as Danone, Nestlé and Unilever are among those to have set targets to improve their energy performance and cut electricity use.
At the same time, developers and investors building new warehouses have been looking to deliver more energy efficient buildings to attract and retain increasingly environmentally-conscious tenants. Global warehousing investor Prologis, for example, aims to cut energy use at its forthcoming speculative development in Budapest.
"The pursuit of energy efficiency is being led quite equally by both investors and occupiers,” explains Ann Vanderwegen, industrial & logistics research director for JLL Belux. “Carbon-free warehouses are becoming increasingly important – for investors looking to future-proof, and for occupiers aiming for improved green credentials and a better reputation.”
Setting new standards
While the likes of warehousing specialist Gazeley was an early mover in the sustainability stakes back in 2003, a new generation of green facilities are now emerging.
Cosmetics firm L'Oréal this year opened the company's largest logistics centre in Muggensturm, Germany. The site, developed by Prologis, is completely carbon-neutral. Around 7,400 solar panels supply electricity, while rainwater is used to irrigate green areas, for cleaning and for sanitation. Habitats for reptiles and birds are also part of the 100,000 square metre site.
Meanwhile, sports giant Nike is aiming for its Belgian distribution operations to be carbon-free by 2025. Its 195,000-square-metre European Logistics Campus in Ham runs on 100 percent clean energy, sourced from wind, solar, geothermal, hydroelectric and biomass sources.
In Antwerp, warehousing company Luik Natie will source 90 percent of its electricity from green energy as from next year. Energy firm Engie Electrabel is installing a large battery and 3,800 solar panels at the site.
“Cutting energy usage in the warehouse is one thing,” says Vanderwegen. “Proactively addressing the question of energy generation is a new ball-game and one that requires some bold decision-making.”
For today’s warehouse investors, making sustainability a selling point of new and existing facilities is a growing priority.
“Having strong sustainability credentials is important when buildings come to the market for leasing or reletting,” explains Walter Goossens, JLL head of industrial & logistics leasing for Belgium and Luxemburg. “Investors are realising the potential for longer-term problems, such as higher vacancy rates, if their buildings are not up to scratch.”
Belgian REITs and logistics specialists Montea and WDP are investing in Belgium’s first carbon-free logistics facilities. Montea’s new development in Lummen will feature solar panels and high-tech water pumps, with higher construction costs offset by the very low energy costs in future years. Meanwhile, WDP is developing an energy neutral global distribution centre for chocolate producer Barry Callebaut in Lokeren. The building, which will have BREEAM Outstanding certification, will be completed in the third quarter of 2021.
Yet it’s not just thinking about what meets the needs of today’s occupiers; facilities that deliver long-term value are already gearing up for what tomorrow’s occupiers will be looking for. For instance, growing numbers of electric vehicles mean car parks will need sufficient charging points. These will also drive up electricity usage in years to come.
"Warehouses have a long lifespan - of up to as much as 30 years,” Goossens says. "As we enter a new decade where the environment is firmly front-page news, 2050 - the target year set by the Paris Agreement for net-zero emissions - does not seem that far away.
“There’s undoubtedly more awareness on both the investor and occupier side that the clock is ticking.”
Regulation ramped up
Increased regulation around carbon emissions is also applying pressure.
In Belgium, steps are being taken to clean up warehousing, as a direct consequence of legislative changes. The country is aiming for 13 percent renewable energy by next year and 18.3 percent by 2030.
In the neighbouring Netherlands, all new buildings, including distribution centres, must be energy neutral for heating, cooling, hot water and lighting by next year under assessment method, BREEAM-NL.
A number of Dutch and Belgian distribution centres for shippers, logistics service providers and online retailers have already, or are expected, to fulfill the criteria and receive BREEAM Outstanding ratings, including Aldi’s new DC in Turnhout, Lidl’s Waddinxveen site and Bol.com’s Waalwijk warehouse.
As sustainability becomes even more closely tied with corporate reputation, regulations tighten and investors and developers reassess the resilience of their portfolios in a fast-changing environment, carbon-neutral warehouses and facilities running on clean energy will become mainstream in years to come.
As Vanderwegen says: “Eco-friendly warehousing has unquestionably moved on from simply changing the lightbulbs.”