Buildings key to achieving Europe’s climate goals

There are fears the revised directive on energy performance due from the European Commission will not be adequate to the task.

The revision of the Energy Performance of Buildings Directive (EPBD), expected from the European Commission today, as part of the Fit for 55 package, is a legislative milestone which cannot go under the radar.

In the bloc’s effort to achieve climate neutrality and fulfil its international climate commitments, the building sector has a systemic role to play. The EPBD is the main policy instrument regulating buildings across the European Union.

Since its first adoption in 2002, the legislation has been key to improving the energy performance of the European building stock, by fostering energy efficiency and aiming at long-term decarbonisation. But given the need to take decisive action in this decade to tackle the climate emergency, the time has come for a comprehensive revision, to fill gaps and raise ambition.  

Profound transformations are urgently needed to decarbonise buildings, ensuring that the sector contributes to the efforts to limit temperature rise to 1.5C. Indeed, the homes and offices which surround us today are among the main culprits of the climate crisis, accounting for around 40 per cent of all energy consumed and 36 per cent of energy-related greenhouse-gas emissions in the EU.

More than seven out of ten buildings are still extremely wasteful—mainly due to poor thermal insulation and inefficient, fossil fuel-based heating systems—having been built before most energy-performance regulations emerged in the 1990s. It is estimated that up to 90 per cent of existing buildings will still be in use in 2050, when the EU aims to be climate-neutral.

Deep renovation

The failure to harness the vast energy-saving potential of this sector is mainly due to the lack of measures triggering retrofitting at the rate and depth needed. Energy savings in buildings are maximised through deep renovation, which improves thermal integrity and thus lowers energy need and the size of heating equipment required. Yet most refurbishments in the EU do not lead to any energy savings at all, while only around 0.2 per cent result in a substantial cut in final energy demand.

It’s not much better, however, with new buildings. Current construction rules are far from perfect, based on inadequate performance levels and allowing for continued installation of fossil-fuel-based heating. Moreover, the legal framework lacks requirements to promote sustainable materials, resource efficiency and a more circular approach, with a view to decarbonising buildings across the whole life-cycle.

Accelerating the transformation of EU buildings is not only a matter of environmental urgency but would also bring substantial social benefits. Inefficient and polluting homes are a root cause of energy poverty, a social emergency looming over more than 96 million people in the EU.

With inadequate housing linked to 100,000 premature deaths annually, and generating an economic burden of over €194 billion per year in public-health costs, securing better and healthier living conditions for all households must be top of any meaningful political agenda. At this moment of soaring energy prices across the EU, deep building renovation coupled with fully renewable heating is also the safest strategy to limit households’ exposure to price volatility and counteract future spikes.

Being highly labour-intensive, construction and renovation could enable the creation of countless new jobs, favouring recovery and facilitating the transition towards green, sustainable employment. By 2030 an additional 160,000 jobs could be created across the EU by investing in energy efficiency. Depending on the level of investment, enhanced building renovation could generate up to 1,480,000 employment opportunities.

No time to lose

There is thus no time to lose in crafting a buildings directive matching the climate ambition needed, notably via measures to ramp up deep renovation rates to at least 3 per cent per year ahead of 2030.

As a first step, this implies coming up with a common legal definition of deep renovation, absent from the EU framework. In line with a recent experts’ analysis, an ambitious definition should look at minimising buildings’ energy needs—implying at least 75 per cent energy savings—while ensuring that residual low-energy demand is covered entirely by renewables at the end of the process.

Following the example of an increasing number of member states, mandatory minimum energy performance standards (MEPS) for all existing buildings—with a timeline of milestones for energy-performance levels to be achieved by the whole stock—would trigger the required wave of building renovation. The goal should be to achieve a highly energy-efficient, sustainable and fully renewable-based building sector to help reach climate neutrality in line with the Paris Agreement.

Linking MEPS to deep renovation would allow prioritisation of refurbishments in one stage, reducing hurdles for buildings’ occupants as well as overall final costs. Through improvement of the worst-performing buildings first MEPS would help lift households out of energy poverty, together with a supportive framework that provides appropriate funding and assistance to all those in need with a view to preserving housing affordability.

Reliable data

Such policies would need to be underpinned by up-to-date, reliable and complete data on the performance of the EU building stock. A major challenge in this regard is the low diffusion of Energy Performance Certificates (EPCs) across member states.

EPCs are one of the most distinctive tools introduced by the current EPBD, providing information on the energy performance of a building, alongside recommendations on how to improve it. But these certificates are only issued when a building is built or put up for sale or rent and in many countries less than 10 per cent of the stock is covered. Having EPCs for all buildings would ensure an accurate overview of the status of the EU building sector in its entirety.

Future-proofing construction is equally important. The buildings constructed today will stand for many decades, so it is imperative they are built in line with a climate-neutral future. This means buildings that are highly energy-efficient and supplied exclusively by renewables. A wide array of renewable-energy sources are already available and should be made integral to all constructions—including renewable electricity that powers electric heat pumps, capturing ambient and geothermal heat, as well as solar thermal heat and renewable district-heating systems.

At the same time, overall environmental impact should be minimised through sustainable use of materials and construction practices to reduce ‘embodied’ emissions. Promoting low carbon, nature-based or secondary raw materials should be the rule, not the exception.

Political will

The EPBD revision is the opportunity we have to turn all these nice words into action. The solutions are there and the objective is clear—clean, sustainable and healthy buildings for all.

Political will is needed to kickstart the transformation of the building sector. It must not be found wanting.