BUILDING materials and construction companies are jockeying to cash in on the government's go-green policies, but they are finding the doors in the commercial sector easier to open than those in the residential end of the market.

"Green buildings will create a market with an estimated annual output of 1.5 trillion yuan (US$224 billion) in the next decade," said Qiu Baoxing, vice minister of the Ministry for Housing and Urban-Rural Development.

Under the 12th Five-Year Plan that begins next year, China plans to invest 3.1 trillion yuan in the development of advanced technologies to cut energy consumption and reduce emissions. That's an increase of 121 percent from the commitment in the current five-year plan period.

Points of focus

Buildings are one of the latest points of focus. Their day-to-day demand for lighting, air-conditioning, heating and appliances account for one-fourth of the country's total energy use, the Boston Consulting Group and the New York-based Natural Resources Defense Council wrote in a report.

In fact, residential and commercial buildings in China use more energy than the country's iron, steel and cement industries combined, the report said.

"If all Vanke new property projects met the highest standard of the national building-energy-rating system, we would contribute 0.12 percent to China's goal of reducing carbon dioxide intensity, or carbon dioxide emissions per unit of GDP, by 40 to 45 percent by 2020," said Wang Shi, chairman of China Vanke Co, the country's largest residential property developer.

"If all property developers stick to the standards, the contribution would be 12.6 percent," Wang added.

China now requires new buildings to reduce their energy consumption by up to 65 percent.

That opens a lot of new avenues for businesses engaged in production of energy-saving materials and for businesses involved in constructing the buildings that use them.

Ecological buildings involve comprehensive solutions, including high-efficiency insulation, heating, ventilation, glazing, lighting, in-house appliances and renewable energy sources, such as geothermal heat and sunlight.

"The just-finished World Expo in Shanghai was a good marketing campaign to promote green buildings and will serve as a catalyst to opening the eyes of relevant industries," said Wang Mingxu, an analyst with Orient Securities Co.

The SGL Group, a German carbon-based products producer, is among those seizing the new opportunities. Its ECOPHIT material made from expanded graphite ensures optimum distribution of heat and, if properly incorporated, can greatly improve the performance of existing systems.

"We are at the beginning of commercializing the product in China," said Johan Borrey, managing director of SGL Group China. "It may take time for the Chinese market to accept such a new material. China's rapid development, especially in mega cities, is quite exciting and already has a good start in its low-carbon economy development."

Bayer MaterialScience is taking a more targeted and active approach.

It showcased a range of green solutions at the K-Show, the world's largest trade fair for plastics and rubber, which was held in Duesseldorf, Germany, in late October. That included polyurethane insulating panels for roofs, walls and floors, photovoltaic elements in a polyurethane frame and Makrolon polycarbonate sheets, which allow light to pass through yet reflect heat.

The company is bringing its "eco-commercial building program" to China aimed at buildings such as banks, supermarket chains and hotels.

The company said it will gather suppliers together to develop integrated energy and material solutions for buildings, including insulation systems, lighting, air-conditioning, heating and information technology. Architects, planners, building firms and other manufacturers are all part of the team.

Bayer MaterialScience said it is having no trouble finding partners in China.

The commercial side of the green trend has been proceeding apace. The residential side has proven more problematic.

Industry insiders said greening residential buildings will lift construction cost by no more than 10 percent. Still, few developers are willing to bet that buyers will be eager to pay more, especially with housing prices now sky-high. Consumer enthusiasm for energy-efficiency starts and stops at the pocketbook.

Huang Ming, chairman of solar water heaters producer China Himin Solar Co, said he was forced to become a property developer because he wasn't having much luck selling solar water heaters to residential buildings. "The promotion of solar products lags behind commercial development," he said.

Huang decided to develop the Utopia Garden in Dezhou, Shandong Province. The residential project features a solar swimming pool, geothermal air-conditioning and a solar water heating system.

The apartments, almost all bigger than 100 square meters, are priced starting from 7,000 yuan per square meter, more than double the average housing price in Dezhou. Despite this, reports said the 200 houses in the first phase of construction were sold out.

Fashionably green

While a limited number of wealthy people who want to be "fashionably green" can afford the higher cost of energy-efficient houses, property developers, architects and industry analysts all agree that more economical solutions will be needed before the idea of environment-friendly homes catches on with the broad public.

"Only by promoting lower-cost green housing can we carry the idea of ecological buildings forward," Vanke's Wang said. "After all, China's household income doesn't compare with the average US$30,000 per capita in many rich countries."

Luo Zhewen, an archeologist and student of Liang Sicheng, the father of modern Chinese architecture, said modern construction could take a few pointers from traditional Chinese buildings.

The old style featured thick walls, keeping summer heat out yet storing heat for night-time. Traditional windows were small to prevent heat loss, and the inner-courtyard style of architecture provided homes ventilation and natural lighting. Modern buildings, by contrast, prefer bigger windows just for the views and thinner walls to cut construction costs.

If China could shift to broader application of low-carbon initiatives, it would involve wider public participation, said David Tyfield, a lecturer at Lancaster University in the UK and author of "Game-Changing China: Lessons from China on Disruptive Low Carbon Innovation."

Shanghai will implement new rules on construction of green buildings in January. The rules set forth requirements for better ventilation, natural lighting, window sunshades and other techniques instead of relying solely on high-cost technologies.