Zhejiang province has taken the lead in China with legislation requiring the construction of environmentally friendly real estate as part of the government-led initiative to save energy and reduce construction waste.

The regulation on green buildings, which took effect on May 1, requires construction projects in the province to save as much energy, land, water and materials as possible throughout their life cycle to protect the environment and reduce pollution.

The regulation divides buildings into a three-tier grading system based on their energy-consumption levels. Residents who purchase real estate in the second and third tier will be able to obtain larger loans from provident funds, which generally means lower rates of interest.