Tertiary Decree: a brief guide for warehouse owners and tenants

In the building sector, it is a small revolution. For the first time, lawmakers are not simply imposing standards on new construction, but intend to bring existing buildings into line with their requirements. This renowned Tertiary Decree is therefore attracting a great deal of attention. Derived from the 2018 Elan Act and enacted in 2019, it requires all tertiary-sector buildings exceeding 1,000 m2 to reduce their energy consumption by 40% by 2030, 50% by 2040, and 60% by 2050. All relative to a reference consumption year between 2010 and 2019.

The law applies to buildings as varied as shopping centers, office buildings, public buildings… and, of course, logistics warehouses. To meet this target, lawmakers allow broad latitude in the measures to be implemented : encouraging occupants to adopt environmentally responsible practices, installing an intelligent control system, replacing boilers and air-conditioning units, or improving the building’s insulation. While this freedom is valuable in enabling each company to define the strategy best suited to its resources, it could also perpetuate a degree of uncertainty that may undermine the relationship between the owner and its tenant.

“ Responsibilities between warehouse owners and tenants are poorly defined when it comes to determining who must do what,” notes Pierre Orsatti, CEO of NG Concept, a company responsible for building logistics platforms. Before establishing responsibility between tenants and landlords for allocating the work, perhaps it is best to draw inspiration from the spirit of the text.

This is what Benoît Dubois-Taine, partner and co-founder of ECH Energie and Systenza, two consulting firms specializing in energy for tertiary-sector buildings, and warehouses in particular, suggests : “ The Tertiary Decree requires a reduction in energy consumption only if the cost of implementing the measure, spread over the depreciation period, does not exceed the savings it generates ; the implementation of the measures required by the decree therefore translates, in principle and overall, into a benefit.” Since sharing a benefit is always more pleasant than sharing an expense, warehouse owners and tenants should be able to reach an agreement. Provided they do things properly.

“ The difficulties that may arise can be summed up in one sentence : who pays?,” predicts Pierre Orsatti. For example, installing photovoltaic panels benefits both parties by reducing the tenant’s energy consumption and increasing the value of the owner’s asset. But for other work, the potential benefits are less clear .” Similarly, in the case of short leases or an old, very poorly insulated building, the tenant may be less inclined to contribute to the work.

“ There will be healthy tensions around these issues,” Benoît Dubois-Taine qualifies, because there are inherent risks for both parties. For example, there is the risk for owners of vacancy between two leases, during which no one contributes to the work. For tenants, fluctuations in energy prices may make replacing a boiler less attractive, for example if gas prices collapse .” To persuade the various stakeholders, they must keep in mind that greater building efficiency will only be more beneficial, both financially and in terms of image. And everything will rest on the strength and transparency of the contracts between the two parties.

For new buildings placed on the market or when a lease is renewed between an owner and landlords, the allocation of the work to be carried out can be incorporated directly into the new contract. But for existing leases, an amendment will need to be drafted to define the financing arrangements. “ It is necessary to define very precisely how costs and benefits will be shared between tenants and landlords,” says Benoît Dubois-Taine. Above all, a rigorous definition is needed of how to calculate the energy savings resulting from the work, entrusted if necessary to a trusted third party such as an engineering firm .”

To perform this calculation, systems must be put in place to reliably monitor the building’s energy consumption, as provided for by the BACS Decree published on July 21, 2020, which requires tertiary-sector buildings to be equipped with automation and control systems by January 1, 2025, in order to improve their energy performance. Implementing reliable tools together with a calculation methodology clearly defined for both parties will thus make it possible to establish the necessary relationship of trust between owners and landlords in order to allocate the costs of the work as effectively as possible. “ This Tertiary Decree is a good thing,” concludes Benoît Dubois-Taine, because it forces us to behave as rational economic actors, with a long-term perspective to reduce costs .” A mantra that warehouse owners and tenants must keep in mind at all times.