EU Sets Ambitious Goals for Building Energy Efficiency
In a decisive move to combat climate change, the European Commission has adopted the Energy Performance of Buildings Directives, mandating significant upgrades to the energy efficiency of existing buildings. This sweeping legislation aims to reduce emissions and energy consumption within the European Union’s building sector, which includes a diverse array of structures from homes and offices to schools and hospitals.
Under the new directives, member states are tasked with crafting their own national trajectory to lower the average primary energy use of residential buildings by 16 percent by 2030, with further reductions expected by 2035. Non-residential buildings are also targeted, with renovations required for 16 percent of the worst-performing buildings by 2030 and 26 percent by 2033.
While the directives offer a degree of flexibility, allowing exemptions for certain building categories such as historical landmarks or holiday homes, they underscore the EU’s commitment to transitioning towards a greener future. The Commission has highlighted the critical role buildings play in energy consumption, accounting for approximately 40 percent of the EU’s total usage and over half of its gas consumption through heating and cooling processes.
With a significant portion of the EU’s buildings aged over 50 years and lacking in energy efficiency, there is an urgent need for renovation. The Commission has identified that only about 1 percent of buildings undergo energy renovations annually—a rate that must be increased to meet the new targets.
To aid in this transition, the EU is offering funding for incentives to renovate buildings and is simplifying the process for obtaining ‘green mortgages.’ This financial support is crucial for homeowners, particularly the elderly, who may find it challenging to finance renovations without immediate returns on investment.
Former Finance Minister Constantinos Petrides has emphasized that without upgrades, energy-inefficient buildings could depreciate in value. While subsidies from the ministry of energy will provide some relief, Petrides acknowledges that they will not fully cover the extensive energy upgrades required.
The directive also mandates the establishment of one-stop shops to offer renovation advice and outlines provisions for public and private financing to make renovations more accessible. However, there is concern about a potential shortage of skilled construction workers to meet the demands of this ‘renovation wave.’
Looking ahead, all new residential and non-residential buildings must have zero on-site emissions from fossil fuels by specific dates, with publicly-owned buildings leading the way in 2028 and other new buildings following by 2030. Additionally, the directive includes measures to phase out fossil fuels for heating and promote solar power installations, with a ban on subsidies for new stand-alone fossil fuel boilers starting next year and a complete phase-out by 2040.
