Brussels will mobilize more than 200,000 million in the decarbonization of buildings

The European Commission has presented the second part of the ‘Fit for 55’ climate package, which includes a series of proposals to reduce net greenhouse gas emissions by at least 55% by 2030 and make Europe the world’s first climate-neutral continent by 2050. Do not miss the new edition of elEconomista Energía

One of the initiatives presented aims to achieve the decarbonisation of the building stock in the EU and boost the rate of energy renewal of the same in 2050, especially if we take into account that more than 85% of current buildings will still stand in 2050. The legislative proposal, which is being examined by the Council and the European Parliament, involves the revision of the Energy Performance of Buildings Directive (EPBD), announced in the ‘Renovation Wave’ Strategy adopted in October 2020.

Buildings are Europe’s largest consumer of energy. They use 40% of the energy and generate 36% of GHG emissions. Specifically, heating, cooling and domestic hot water account for 80% of the energy consumed by citizens. This is because most buildings in Europe still run on fossil fuels. Currently, around 35% of buildings in the EU are over 50 years old and around 75% are energy inefficient. Only 1% of the building stock is renewed every year.

Overall, the proposed measures will facilitate the renovation of buildings, particularly those with the worst results; modernize the building stock making it more resilient and accessible; reduce energy bills; help reduce energy poverty; create new job opportunities; and help improve air quality, digitize energy systems for buildings, as well as deploy infrastructure for sustainable mobility.

The Commission proposes that, from 2030, all new buildings should be zero emissions. In the case of public buildings, the date is brought forward from 2027. With this revision, the EPBD intends that, from these dates and whenever technically feasible, 100% of the energy consumption of new buildings is covered by renewables.

Member States should also plan national policies and plans with a view to phasing out the use of fossil fuels in heating and cooling in buildings by 2040, which will be integrated into the Energy and Climate plans. Nor will economic incentives be granted for the installation of fossil fuel boilers from 2027. In addition, Member States have the possibility to ban the use of fossil fuels in buildings.

Energy Performance Certificates

The EPBD review also provides greater visibility into the integration of renewables into Energy Performance Certificates (EPCs), which are those that provide public information on energy consumption. With the Commission’s proposals, THE EPCs will be clearer and contain improved information, as the new template for such certificates includes the requirement to clearly show renewable energy production, how much it represents compared to the needs of the building and how much it improves its overall emissions.

The obligation to have an energy performance certificate extends to all public buildings, for which a rental contract is renewed, those that are in the process of major rehabilitation, as well as for buildings that are for sale and rent. The latter shall indicate the energy performance class in all advertisements. By 2025, all certificates must be based on a harmonised scale from A to G.

Regarding renovations, new minimum energy performance standards (MEPS) are proposed for the 15% of the least efficient buildings, that is, those with a Class G Energy Performance Certificate. All non-residential or public buildings will have to reach at least class F on the EU energy efficiency scale in 2027 and class E in 2030, while residential buildings will have to reach class F in 2030 and class E in 2033. Upgrading buildings to energy class F, which would apply to some 30 million buildings – which are currently consuming at least more than 2.5 times more energy than the average – will generate between 4.6 and 6.2 Mtoe per year in energy savings across the EU.

Increasing the intensity of renovations must be supported by adequate capacity and skilled labor. That is why the Commission has also published a staff working document, which outlines possible scenarios for a transition route towards a more resilient, green and digital building ecosystem.

Necessary investment

Lack of funding is one of the main barriers to building renovation. The Commission is helping to mobilise funding for the initial investment costs of these 30 million buildings, with up to €150 billion from the EU budget available to implement minimum energy performance standards by 2030. Such funding comes from a number of sources, including the European Regional and Regional Development Fund, the Cohesion Fund and the Recovery and Resilience Facility.

The proposed new Social Climate Fund will also mobilise €72.2 billion from the EU budget for the period 2025-2032 to support households, particularly those living in worse performing buildings. Member States are also encouraged to deploy financing and enabling tools to make private investments more attractive and geared towards renewal needs. To enable an effective mix of public and private funding, the Commission is also working to make the State aid framework more conducive to the needs of minimum energy performance standards at EU level.

Member States should set specific deadlines for achieving higher energy performance classes through new national building renovation plans. According to the Commission, focusing on the least efficient buildings will maximise the potential for decarbonisation and alleviate energy poverty, benefiting households with fewer resources that cannot afford to renovate their homes, as buildings with the lowest energy rating consume 10 times more than those with the highest energy class.

The Commission’s proposal also includes the so-called ‘renovation passport’ of the building, a tool to make it easier for owners to plan and renovate step by step towards zero emissions. It also defines ‘mortgage portfolio standards’ as a mechanism to incentivise lenders to improve the energy performance of their building portfolio and encourage potential customers to make their properties more energy efficient. The Commission also invites Member States to include renewal considerations in public and private financing rules, and to establish appropriate instruments, in particular for low-income households.

The new rules also encourage the use of Information and Communication Technologies (ICTs) and smart technologies to ensure that buildings operate efficiently, and calls for the establishment of digital building databases. The EPBD supports high indoor environmental standards by requiring new zero-emission buildings and those undergoing major renovations to be equipped with measurement and control devices to monitor and regulate indoor air quality. With regard to mobility, the proposal supports the deployment of charging infrastructure for electric vehicles in residential and commercial buildings, and makes available more parking space dedicated to bicycles.

Source: The Economist