EU Energy Performance

Buildings directive: a huge deal for local governments

When the European Commission published its proposal for a recast of the EU Energy Performance of Buildings Directive more than a year ago, few anticipated the scope and breadth of its revamp on citizens and local governments.

Now that the directive has been endorsed by the European Parliament, what can we expect from it? And what impact will it have on local governments? We’ve looked into these questions of major importance to municipalities, cities and regions.

The European Green Deal moving forward

The revision of the directive – also known as the EPBD – takes place in the context of the ‘European Green Deal’, which aims to put the EU firmly on the path towards climate neutrality by 2050.

To this end, in 2021, the von der Leyen Commission put on the table its so-called ‘Fit for 55’ package, a mammoth law package of energy and climate laws aimed at reducing net greenhouse gas emissions by at least 55% by 2030.

It is against this backdrop that the European Commission decided to revise upwards the Union’s energy performance of buildings targets. As stated by the Commission, buildings in the EU are responsible for 40% of our energy consumption and 36% of greenhouse gas emissions. And almost 75% of the building stock is energy inefficient… The renovation awaiting it is immense given the millions of old buildings across Europe.

The transition to zero-emissions buildings

The introduction of the ‘zero-emission building’ (ZEB) definition in the revised EPBD is of key importance, as it refers to the new ‘A’ energy performance class. From 2028 onwards, all new buildings will have to be zero emission. According to the adopted text, new buildings must achieve the highest level of energy performance, thanks to moderate consumption and heating powered by decarbonised energy.

CEMR believes that, while it is important to focus on the energy performance of buildings, reconfiguring the whole energy system is also needed for a net zero future.

Minimum energy performance standards

According to the text, public buildings will have to achieve at least energy performance class E by 2027, and D by 2030 (Commission proposed F and E). In addition, all new buildings occupied, operated or owned by public authorities should be zero-emission from 2026.

This is a big blow for local and regional governments who will now have to renovate in droves. CEMR considers these targets too ambitious and unrealistic, even for the most advanced municipalities and regions.

While increasing the rate of renovations of energy-inefficient buildings is essential, CEMR believes it is unlikely that all class “E”, “F” and “G” buildings will be renovated by 2030.

All measures needed to achieve these targets will be established by each Member State in national renovation plans. To take into account EU countries’ diverse building stocks, the letter G will correspond to the 15% worst-performing buildings in the national stock.

For CEMR, this proposal is questionable since the EU’s energy efficiency classification system is made regardless of the initial situation concerning the quality of the buildings. In the Nordic countries, for example, a large proportion of the building stock scores high on the EU’s energy efficiency scale due to the climatic conditions.

However, in light of the heated exchanges taking place in EU capitals, it is not clear whether the minimum energy performance standards will survive mounting opposition from the Member States.

The ‘neighbourhood’ approach

The ‘neighbourhood’ approach, as opposed to individual buildings, is only mentioned twice in the proposal and therefore falls far short of its potential. This novel approach to buildings sees them as part of a broader neighbourhood rather than isolated units. By doing so, substantial economies of scale can be generated.

In CEMR’s view, the ‘neighbourhood’ approach should be reinforced in the legislation. CEMR however welcomes the possibility for Member States to grant regional and local authorities the possibility to identify “neighbourhoods” for the implementation of integrated renovation programmes.

Next steps

While the Parliament adopted its position by 343 votes to 216, with 78 abstentions, MEPs will now enter into negotiations with the Council to agree on the final shape of the bill.

CEMR will keep on monitoring developments, exchanging with its members and engaging with the EU institutions to ensure a smooth implementation of the directive on the ground. While in the short term, considerable resources will be required, in the medium and long term, the energy performance of buildings will greatly reduce energy bills.