What you need to know
The material handling industry, like many others, has been in the midst of a push to be more ecologically friendly over the past few years. In the 2009 Distributor Forecast on page 62 of this magazine, 19 percent of interviewees indicated that the push toward green building and equipment would still be a major industry trend in ten years.
And it’s no wonder, given the impact the built environment has on the natural environment, not to mention its effects on the economy, productivity and public health. According to the U.S. Green Building Council, buildings in the United States account for:
- 72 percent of electricity consumption
- 39 percent of energy use
- 38 percent of all carbon dioxide (CO2) emissions
- 40 percent of raw materials use
- 30 percent of waste output (136 million tons annually) and
- 14 percent of potable water consumption.
As climate change and energy consumption continue to frame political discourse in the United States and abroad, the push to sustainable building will continue to grow. Companies large and small are implementing sustainability initiatives. Wal-Mart, for example, announced in 2007 that it intends to reduce greenhouse gases at existing stores, clubs and distribution centers by 20 percent over the next six years.
To address some of the issues mentioned above, the U.S. Green Building Council established its Leadership in Energy and Environmental Design (LEED) certification in 2000. According to www.usgbc.org, LEED is a “third-party certification program and the nationally accepted benchmark for the design, construction and operation of high-performance green buildings. LEED certification offers third-party validation of a project’s green features and verifies that the building is operating exactly the way it was designed to.”
Since 2000, the LEED program has expanded to cover new construction, existing structures, schools, commercial interiors and even residential buildings. To date, there are more than three billion sq. ft. of warehouse space covered by LEED. LEED has implemented a new rating system for 2009 that gives different weights and credits to certain criteria.
In addition, the financial rescue bill passed in October included the Tax Extenders and Alternative Minimum Tax Relief Act of 2008 (TEAMTRA). Among the tax extenders in the bill is a five-year extension of the tax incentives for “green” commercial buildings, which had been set to expire at the end of 2008.
Internal Revenue Code Section 179D provides a tax break to owners of commercial real estate by permitting them to deduct the cost of certain energy-efficient property for both new construction and retrofits of existing construction. This tax break (equal to the product of $1.80 times the square footage of the building) now applies to property placed into service on or prior to December 31, 2013, giving property owners sufficient time to design, construct and complete qualified projects.
What It Means for You
What this all means for material handling distributors is that real estate owners will be looking to capitalize on this trend, both for existing buildings and for new construction. Although there are no LEED guidelines specific to warehouses, they are included under the general green building requirements. These requirements cover a host of criteria, including water efficiency, site sustainability, energy performance, materials used, air quality, emissions, design innovation and more. For a complete checklist of what’s required, visit this page.