Explanatory Memorandum to COM(2021)802 - Energy performance of buildings (recast) - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2021)802 - Energy performance of buildings (recast). |
|---|---|
| source | COM(2021)802  |
| date | 15-12-2021 |
Contents
- CONTEXT OF THE PROPOSAL
- BUDGETARY IMPLICATIONS
- 1.2.Issues around vulnerability, affordability and energy poverty
- 1.3.Availability of financing, EU funds and national support measures
- 1.4.Objectives of the proposal
- 2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
- 2.1. The need for EU action
- 2.2. EU added value
- 3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
- 5. OTHER ELEMENTS
• Reasons for and objectives of the proposal
The revision of the Energy Performance of Buildings Directive (EPBD) is part of the 2021 Commission Work Programme “Fit for 55” package and complements the other components of the package proposed in July 2021 1 , setting the vision for achieving a zero-emission building stock by 2050. As already indicated in the Climate Action Plan 2 , it is a key legislative instrument to deliver on the 2030 and 2050 decarbonisation objectives. It follows up on key components of the three focus areas 3 of the Renovation Wave Strategy 4 , including the intention to propose mandatory minimum energy performance standards, following an impact assessment looking at their scope, timeline, phasing in and accompanying support policies. Given the need for appropriate consultation and impact assessment processes, the proposed revision could only come slightly later than the first set of “Fit for 55” initiatives adopted in July 2021.
The proposal is particularly important because buildings account for 40% of energy consumed and 36% of energy-related direct and indirect greenhouse gas emissions. In the EU, heating, cooling and domestic hot water account for 80% of the energy that households consume. Making Europe more resilient calls for renovation of EU buildings, making them more energy efficient and less dependent on fossil fuels. Renovation is key for reducing the energy consumption of buildings, for bringing down emissions and for reducing energy bills. In addition, renovation generates local jobs and economic growth. Given the long lead-in time required to induce changes in the building sector, a timely revision of the Directive is needed to support achieving the “Fit for 55” objectives.
1.1.Interplay “Fit for 55” package and notably the new ETS
The “Fit for 55” package consists of a set of inter-connected proposals backed by impact assessment analysis taking this into account. The analysis 5 showed that an over-reliance on strengthened regulatory policies would lead to unnecessarily high economic burdens, while carbon pricing alone would not overcome persistent market failures and non-economic barriers. The chosen policy mix therefore carefully balances pricing, targets, standards and support measures. The proposed EPBD revision is set within the same frame. As a consequence, a change in the balance of the overall mix would call for adjusting different parts of policy. A weakening in pricing and targets measures fostering the decarbonisation of the building sector would call for correspondingly more stringent regulatory measures in the EPBD revision, most notably with regard to fossil fuel phase out and mandatory minimum energy performance standards.
The relevant Commission’s impact assessments have shown that the achievement of targets would be less certain and more costly in the absence of a carbon price signal on heating fuels, such as the proposed new emissions trading system (ETS) for buildings and road transport. This works best hand in hand with EU regulatory measures and complementary national measures, as incentivised by the proposed higher ambition in the Effort Sharing Regulation (ESR), the Energy Efficiency Directive (EED) and the Renewable Energy Directive (RED).
The new ETS creates economic incentives for building decarbonisation and generates revenues for public support, targeted in particular to support vulnerable households. The revised EPBD addresses non-economic barriers to renovation 6 . It creates an enabling framework to provide financial support to renovation without directly mobilizing the required funding. A revised EPBD could contribute significantly to achieving the 2030 objectives. The EPBD Impact Assessment 7 shows that, in its absence, the overall emission reductions needed will fall short by roughly half of what is needed in the residential and services sector to achieve the 2030 goal.
Without these revisions, more measures at Member State level would be necessary to make up for this gap, but uncertainty around their effectiveness, timeliness and consistency with the 2050 decarbonisation objective enshrined in the European Climate Law 8 would dull incentives for a rapid scale up in renovation rates. In the absence of strengthened EU or national regulatory measures boosting the rate of renovations, carbon price would need to be higher 9 and ultimately non-economic barriers to renovations would remain unaddressed.
It will be important to preserve consistency across all building-related provisions in the package during negotiations to agree on a coherent and robust framework for buildings to meet the EU’s 2030 and 2050 targets.
A main novelty of the revision is the introduction of minimum energy performance standards to trigger the required transformation of the sector. Building renovation has two widely recognised positive economic impacts: 1. decreasing energy costs, alleviating energy poverty, and 2. increasing the value of more energy performing buildings. Other benefits include better quality of living and shorter average vacancy periods.
The benefits of lower energy bills are even more relevant in a context of high energy prices. People living in worst-performing buildings and those facing energy poverty would benefit from renovated and better buildings and from reduced energy costs, and be buffered from further market price increases and volatility.
On the other hand, landlords may be tempted to pass renovation costs to tenants to cover for their upfront investment. Also, a more pronounced focus on addressing the shortcomings of existing worst-performing buildings could reduce further their prices in market transactions, even if a certain correlation between energy performance classes and value already exists today.
EU-wide minimum energy performance standards have been carefully designed to mitigate possible negative social effects and maximise their social benefits, notably as regards improving living conditions in worst-performing buildings and alleviating or even preventing energy poverty. Member States will be required to support compliance with minimum energy performance standards with an adequate support framework that includes financial support, technical assistance, removal of barriers and monitoring of social impacts, in particular on the most vulnerable.
National building renovation plans will pay attention to monitoring the reduction of people affected by energy poverty and of population living in inadequate housing (e.g. leaking walls or roofs) or with inadequate thermal comfort conditions. The plans will present an overview of national policies and measures empowering and protecting vulnerable households, alleviating energy poverty and ensuring housing affordability.
The measures in this proposal are coherent with policy and measures across EU instruments supporting a socially just transition. These include reporting on progress towards national indicative objectives to reduce the number of households in energy poverty under the National Energy and Climate Plans and planned investments to mitigate distributional effects and to promote structural solutions – notably energy renovation of buildings including energy efficiency improvement measures or integration of energy production from renewable energy sources, decarbonisation of their heating and cooling systems – to reduce fossil fuel reliance in line with the proposed Social Climate Plans, as well as the Energy Poverty Advisory Hub, which supports Member States’ efforts in alleviating and monitoring energy poverty.
The proposal is well coordinated with other relevant instruments, notably as regards EU and national funds. The Recovery and Resilience Facility (RRF) is triggering significant investments into building renovation thanks to the strong ‘Renovate’ flagship components across national recovery and resilience plans. This will continue between now and 2025-2026 paving the way for improvements triggered by the EPBD to come in.
Under the current Multiannual Financial Framework (‘MFF’), there is availability of EU funds across different programmes, which have identified the buildings sector as a priority: regional funds under Cohesion Policy, Just Transition Fund, and Invest EU are key in this regard. They are complemented by the dedicated technical support and assistance from the European Commission to national public administrations in order to facilitate the necessary reforms and the preparations for investments to be effective.
The proposed new ETS’s Social Climate Fund would bridge the gap between the RRF, and the transition between this current MFF and the post-2027 period, and mobilise EUR 72.2 billion for the period 2025-2032 to support households, notably those living in worst-performing buildings. This Fund would cover the upfront costs and ease compliance of low-income households with the minimum energy performance standards proposed in the EPBD. The investments under the national Social Climate Plans will be an integral part of the financing measures contained in the National building renovation plans under the EPBD.
In order to be classified as a sustainable economic activity under the EU Taxonomy Climate Delegated Act, building renovation needs to either achieve 30% energy savings, comply with minimum energy performance requirements for major renovation or consist of specific individual measures classified as sustainable. Renovation to comply with the proposed Union-wide minimum energy performance standards is typically in line with the EU Taxonomy criteria related to building renovation activities.
In addition, the Commission is currently revising the relevant state aid framework and aims to make it more conducive to the needs of the EPBD revision and in particular of the EU-level minimum energy performance standards (MEPS). The resulting state aid provisions would be important to incentivize early compliance with minimum energy performance standards set at EU level in relation to improving the worst-performing buildings.
The main objectives of this revision are reducing buildings’ greenhouse gas (GHG) emissions and final energy consumption by 2030 and setting a long-term vision for buildings towards EU-wide climate neutrality in 2050. In order to meet them, the initiative is grounded in several specific objectives: to increase the rate and depth of buildings renovations, to improve information on energy performance and sustainability of buildings, and to ensure that all buildings will be in line with the 2050 climate neutrality requirements. Strengthened financial support and modernisation and system integration are levers to deliver on these objectives.
• Consistency with existing policy provisions in the policy area
As explained above, the proposed revision aims at fostering both push and pull factors supporting buildings’ decarbonisation in conjunction with the incentives for national action established in the ESR and the carbon pricing impacts of the new emissions trading system for buildings and road transport 10 . The proposal revises an existing legislative tool. As such, it cannot substitute for a target, such as those set under the ESR, but it supports their achievement. It works hand in hand with the proposed new ETS, one fostering the decarbonisation of heating fuels and technologies and the other reducing energy consumption.
The EPBD will set the overall vision for new and existing buildings that applies across building-related provisions of the other “Fit for 55” initiatives 11 . By upscaling actions to reduce energy consumption in the building sector, the EPBD will also contribute to the delivery of the overall energy efficiency targets set in the Energy Efficiency Directive (EED). The higher number of renovations triggered by the EPBD proposal and by the requirement for new buildings to install heating systems with zero direct greenhouse gas emissions and to integrate renewable energies to become zero-emission buildings will enable the indicative 2030 target for the share of renewables in buildings’ final energy consumption in line with the Renewable Energy Directive (RED). The proposal will support the replacement of inefficient fossil-fuel boilers by systems with no direct GHG emissions, such as heat pumps and other renewable based technologies.
The proposal upgrades private recharging infrastructure in car parks in and adjacent to buildings, complementing the updated Alternative Fuel Infrastructure Regulation (AFIR) setting stronger ambitions on the overall targets, including on publicly available recharging infrastructure for electric vehicles. In line with the European Green and the new EU Urban mobility framework also includes provisions for improving bicycle parking infrastructure.
The proposal similarly complements products legislation, e.g. the Energy Labelling Regulation (ELR), which incentivises consumers to purchase best-in-class energy-related products and appliances placed in buildings. The EPBD works in tandem with the Ecodesign Directive (ED), which sets energy performance and other environmental performance requirements on energy-related products, in particular for technical building systems (e.g. boilers, heat pumps or light sources) and equipment used in buildings (e.g. household appliances). The performance of construction products is addressed in the Construction Products Regulation (CPR) and the proposal also contributes to continuous progress towards climate adaptation, through the provisions related to strengthening of the climate resilience of buildings.
In parallel, the strengthened information tools of the EPBD, which will include also a carbon metric, will help financial investors monetise the benefits of buildings decarbonisation and household or commercial actors to better factor in the economic benefits of building renovations and their repayment plans. These aspects are also aligned with the building-related elements of the EU taxonomy for sustainable activities 12 .
• Legal basis
The proposal is based on Article 194(2) of the Treaty on the Functioning of the European Union, the legal basis for Union policy on energy. The proposed measures aim at ‘promot[ing] energy efficiency and energy saving and the development of new and renewable forms of energy’ (Article 194(1)(c) TFEU).
• Subsidiarity (for non-exclusive competence)
Energy policy is a shared competence between the EU and Member States and an area of well-established EU policy. To a large extent the proposed changes in the EPBD reflect the need to update it in order to reflect the increased ambition of the EU climate and energy targets. This is in addition to the fact that the assessment of the EU-wide impact of the National Energy & Climate Plans (‘NECP’) that the Commission published in September 2020 13 showed an ambition gap as regards energy efficiency: 2.8 percentage points for primary energy consumption and 3.1 points for final energy consumption in the EU, as compared to the 2030 goals currently in force. Further EU wide measures in the revised EPBD are thus needed in line with what is foreseen in the Energy Union Governance Regulation 14 .
Buildings are local infrastructures but insufficient renovation rates and depth are a common issue faced by all Member States in the EU. The underlying causes are mostly of non-economic nature and relevant across Member States. Setting a common EU framework for the decarbonisation trajectory of buildings and related requirements while allowing for adaptation to national circumstances would thus bring much needed certainty for all actors across the supply chain of renovation and construction, and predictability and readiness to all stakeholders, from industries, to local and national workforces, private investors and financial institutions. Past experience with the long-term renovation strategies underlines the importance of better ensuring the right mix between flexibility and harmonised requirements to spur sufficient efforts across all Member States for the achievement of EU-level targets.
A strengthened common EU framework will provide the incentives for Member States with different levels of ambition to accelerate, in a coordinated way and at the necessary scale, the energy transition towards more energy efficient and performant buildings.
Sufficiently strong regulatory signals – for both the existing stock and new buildings - will drive investments into building renovation, create jobs, stimulate innovation, increase the benefits of the internal market for construction products and appliances and have a positive impact on the competitiveness of the construction ecosystem and related sectors. This, together with a reinforced ‘shared language’ of common standards and access to information, will also ensure that the buildings sector reduces its GHG emissions in the most cost-effective way, e.g. through economies of scale.
Buildings do not move across borders, but building-related financing as well as the technologies and solutions that are installed therein do, from insulation, to heat pumps, efficient glazing, or photovoltaic panels. EU action leads to a modernisation of national regulations in the building sector to meet the decarbonisation objectives, opening wider markets for innovative products globally and enabling cost reductions when they are most needed, and industrial growth.
Finally, EU action through the revised EPBD brings multiple benefits, from better health and wellbeing for citizens, local job creation supporting recovery, alleviation of energy poverty, social inclusion, improved living conditions, reduced greenhouse gas emissions, climate resilience, to the reduction of energy consumption and energy costs. It is also in accordance with the New European Bauhaus initiative 15 , which invites to combine sustainability of buildings and the built environment with quality of living and social inclusion.
• Proportionality
The measures included in the legislative proposal are considered proportionate and build to the maximum on the existing design of the original 2002 Directive and the 2010 and 2018 revisions. As detailed in section 3 below, the concerns expressed by the Regulatory Scrutiny Board in its negative opinions on the proportionality and the level of EU harmonisation of the preferred option identified in the accompanying impact assessment report have been addressed by modifying the proposal to ensure the respect of the subsidiarity and proportionality principles.
• Choice of the instrument
The proposal entails substantive amendments to the EPBD, which was already amended in 2018 16 . This proposal therefore is for a recast of the existing Directive, in line with the Commission’s commitment under paragraph 46 of the Inter-institutional Agreement on better law-making 17 . The new legal act will replace and repeal the earlier Directive (EU) 2010/31/EU.
• Ex-post evaluations/fitness checks of existing legislation
The EPBD was evaluated in 2016 18 . The measures stemming from the last review of the EPBD (2018) were transposed recently (2020), not allowing to gather sufficient data on their impact to make a new evaluation relevant.
• Stakeholder consultations
Complementary methods have been used to allow for a comprehensive consultation process enabling all stakeholders to have a say.
–An Inception Impact Assessment (Roadmap) was published on the Commission Have Your Say portal on 22 February 2021. It was open for feedback during 4 weeks and received 243 replies;
–A public consultation, based on a structured online questionnaire in the EU Survey tool and in line with the Commission Better Regulation rules was published on the Have Your Say portal from 30 March 2021, for 12 weeks. It covered the scope, type and design of possible policy options, based on multiple-choice and open questions. Like the Roadmap, it was open to all. 535 replies were received. The majority of participants were business associations and companies (52%), followed by EU citizens (15%), NGOs (12%) and local and national public authorities (7%).
–Five dedicated and targeted workshops were organised between 31 March and 3 June 2021. These events were organised thematically to address specific areas for policy options, on “Setting a vision for buildings and a decarbonised building stock”, “Minimum energy performance standards for existing buildings”, “Strengthening buildings information tools (with a focus on energy performance certificates)”, “Fostering the green and digital transition” and “Accessible and affordable financing – energy poverty”. More than 200 participants took part in each workshop on average.
–Additional engagement with stakeholders has taken place on an ad hoc basis.
The Commission also informed national delegations and administrations and collected their views at meetings of the Energy Working Party, the Energy Performance of Buildings Committee and the Concerted Action plenary meetings.
3.1. Summary of stakeholders’ views
A clear majority of respondents to the public consultation expressed support for minimum energy performance standards (75% of respondents in favour). 61% of participants expressed the view that the EPBD provisions on the Long-Term Renovation Strategies should be modified and 89% supported the option to strengthen the monitoring of objectives identified by Member States in their Long-Term Renovation Strategies. 84% were in favour of defining zero-emission buildings in the EPBD. 73% of respondents were of the opinion that the EPBD could contribute to making a wider range of building-related energy performance data available and accessible. Energy performance certificates need to be updated and the quality improved according to a clear majority (65%) and an even stronger one (76%) backed harmonising energy performance certificates.
More than two thirds of respondents (68%) favoured including in the EPBD measures to report on whole life-cycle carbon emissions (manufacturing and construction, use and end of life). On e-mobility, respondents expressed support overall for strengthened requirements. More than three quarters (77%) were in favour of linking renovation funding support to the depth of renovation and 68% were of the view that it would be beneficial to provide a legal definition of “deep renovation”. Finally, on financing, the general view expressed, also in the workshops, was that it should be more accessible, through a combination of direct grants, tax incentives, energy efficiency mortgages and other types of incentive mechanisms, and that it should come together with provisions on access to one-stop-shops. Targeted financial support for lower and middle-income households was identified as being the most important policy measure addressing energy poverty.
The policy workshops concurred with the public consultation in terms of overall direction and provided useful additional insights.
• Collection and use of expertise
This proposal builds on the 2016 evaluation and on data and experiences from the implementation of the EPBD. The JRC provided support on the analysis and assessment of compliance and of national practices. The EPBD Concerted Action initiative produced analysis of the national experiences of implementation of the EPBD. In addition, the Commission bases itself on the growing body of peer-reviewed empirical research and makes use of several support contracts ongoing or recently completed.
The quantitative and qualitative assessment of impacts and administrative costs and the analysis of the input from stakeholders was supported by a specific technical support contract 19 . The analysis within this contract was conducted using a set of modelling tools to represent the building stock and the broader macro-economic and social impacts. The main statistics and data used, also to populate the dataset underlying the models used, refer to the Building Stock Observatory and EUROSTAT indicators. Results from several ongoing research and innovation projects funded under the Horizon2020 programme were also assessed and provided input to the analysis.
This proposal benefits also from the evidence gathered in the impact assessment of the 2030 Climate Target Plan, and relevant evidence compiled in other Green Deal initiatives. As other proposals of the “Fit for 55” policy package, the baseline for assessment considers the updated EU Reference Scenario, a projection of the evolution of EU and national energy systems and greenhouse gas emissions under the current policy framework which includes COVID-19 impacts.
• Impact assessment
The analysis in the impact assessment confirmed that the EPBD framework is insufficient for the achievement of the 2030 climate objectives. In particular, no specific measure is in place to address non-economic barriers limiting energy renovation of buildings.
The draft impact assessment was submitted twice to the Commission’s Regulatory Scrutiny Board. Following a first negative opinion, the Board issued a final second negative opinion 20 , which underlined the need for political guidance on whether, and under which conditions, the proposal for the EPBD review could proceed further. The Board explained that it maintained its negative opinion because the draft impact assessment report failed to (1) clearly identify the additional gap the EPBD revision would have to fill given the rest of the “Fit for 55” proposals; (2) convincingly show the need for harmonised EU level measures given the heterogeneity of the building sector in Member States; and (3) sufficiently clarify the reason for the selection of the various individual components of the preferred package of policy options.
The working methods of the European Commission empower the Vice President for Inter-Institutional Relations and Foresight to approve the continuation of an initiative that has been subject to a second negative opinion by the Regulatory Scrutiny Board.
Because of the political importance of this initiative, its role within the Fit for 55 package of proposals of July 2021, the urgency of action in the field of building renovation and the fact that the need for policy guidance expressed by the Regulatory Scrutiny Board could be satisfactorily met in the adapted legal proposal, the Commission, also in the light of the agreement by the Vice President for Inter-Institutional Relations and Foresight, has considered it opportune to proceed with the EPBD revision.
The Commission considers the Board’s finding with regard to the insufficient clarity on the role of the EPBD within the “Fit for 55” package to reflect its assessment of the quality of the draft impact assessment report rather than a fundamental concern about the overall policy mix of the “Fit for 55” package. It is important to flag also that the opinions of the Regulatory Scrutiny Board are an assessment of the quality of the draft impact assessment and not an assessment of the related legislative proposals. The interplay between regulatory measures, pricing mechanisms and targets was explained in the preceding sections of this explanatory memorandum. It frames the proposed EPBD revision in the same manner as it framed all other proposals of the “Fit for 55” package, which were all supported by individual impact assessment reports positively assessed by the Board.
The Commission has carefully considered the Board’s view that the draft impact assessment report did not provide sufficiently solid evidence supporting the preferred set of policy measures, most notably with regard to the degree of EU harmonisation proposed therein. Against this background, the Commission has deviated from the option indicated in the draft impact assessment to introduce a phased-in and time-bound tightening of EU-level minimum energy performance standards (MEPS) for certain type of buildings coupled with an obligation for Member States to introduce national MEPS for all other buildings. Now, the national MEPS are proposed as voluntary and differences in national building stocks are better taken into consideration by giving greater flexibility to Member States in drawing up their plans to achieve the goal of a zero-emission building stock by 2050.
However, EU-level minimum energy performance standards for the very worst-performing buildings have been retained to ensure sufficient initial effort from all on those buildings where the biggest energy efficiency gains, GHG emissions reductions and societal co-benefits can be achieved. Member States are left free to establish the specific timelines for these buildings to achieve higher energy performance classes by 2040 and 2050. Where Member States establish national MEPS, they should be designed with a view to the national roadmap and the national targets for 2030, 2040 and 2050 that Member States will establish as part of their National building renovation plans to reach the overall decarbonisation objective by 2050.
Crucially, the very worst-performing buildings covered by the EU-level minimum energy performance standards are also the buildings where deeper renovation efforts are required and for which the incentives provided by carbon prices are most likely to fall short, given the pervasive market failures affecting this sub-sector across all Member States. Importantly, as the residential segment of those buildings is also that where the most vulnerable households tend to live, the proposed measure (and its supporting financial framework) is considered crucial for a climate transition that leaves no one behind. In addition, the proposal gives longer timelines for residential buildings to phase-in and comply with the EU-level minimum energy performance standards, as compared to buildings owned by public bodies and to other non-residential buildings.
In addition to the above, the proposal has also been modified making a significant number of elements in the Energy Performance Certificates optional. Compared to the preferred option in the draft impact assessment where most measures were obligatory, the present proposal provides further flexibility to Member States. Existing mechanisms have also been prioritised over the creation of new requirements, notably by slimming down the requirements for National Building Renovation Plans and fully integrating them with the NECPs.
The resulting proposal leaves a large margin for manoeuvre to Member States to adapt their buildings regulatory and financing policies to national and local circumstances with a view to meet a common overall ambition. The contribution of the EPBD revision to the overall “Fit for 55” package is not diminished but the key responsibility for its realisation falls more upon Member States than originally envisaged, with due respect for the principle of subsidiarity. Member States are called to design and implement appropriately ambitious National Building Renovation Plans taking into due account of their ESR targets and of the proposed cap on the emission from the use of heating fuels in the building sector. The Commission will assess the National Building Renovation Plans against this background.
The review clause makes explicit reference to the Commission assessment of whether EU-building related measures, including carbon pricing, will bring sufficient improvements to deliver a fully decarbonised, zero-emission building stock by 2050, or whether further binding measures at Union level, such as strengthened EU-wide minimum energy performance standards, need to be introduced, at the latest by the end of 2027.
More specific comments about the Board’s findings can be found in Annex I to the impact assessment accompanying this proposal. The impact assessment provides an analysis of the problem and identifies possible measures to increase renovation rates and depth, enable decarbonisation of new and existing buildings and increase the modernisation of buildings enabled by digitalisation. It packages them within four main options, representing a progressive increase in the level of ambition: low, moderate, high and higher ambition. Option 3 is identified therein as the preferred one. Following the Regulatory Scrutiny Board’s findings on the latter, the EPBD proposal was revised and is now based on a mix of option 2 (with moderate ambition) for existing buildings and option 3 (with high ambition) for information tools and new buildings.
• Regulatory fitness and simplification
A key objective of the revision of the EPBD in 2018 was to reduce administrative burden. It had been estimated that taken together, the measures of the preferred policy option would reduce administrative burden by almost EUR 100 million per year. 21
The key purpose of this revision together with the building-related aspects of the other “Fit for 55” proposals is to align the building sector with the Union’s enhanced climate ambitions. To ensure effectiveness, new and updated requirements are necessary. Those requirements will mainly impact administrative authorities at national and local level in the Member States and, to a lesser extent, building owners, and will mainly rely on existing procedures and structures already in place. They have the right level of ambition – on the one hand to reach our Green Deal targets and at the same time to give business and end consumers the time to adapt.
As indicated in the impact assessment, the digitalisation of Energy Performance Certificates and the new provisions on data exchange and databases shall nonetheless reduce administrative and compliance costs and facilitate administrative procedures linked to building renovations.
• Fundamental rights
The Proposal is in line with Article 37 of the Charter of Fundamental Rights 22 of the European Union, which requires that a high level of environmental protection and the improvement of the quality of the environment be integrated into the policies of the Union and ensured in accordance with the principle of sustainable development.
It is designed in respect of the right to property laid down in Article 17 of the Charter, and builds on Article 34 of the Charter which “recognises and respects the right to […] housing assistance so as to ensure a decent existence for all those who lack sufficient resources, in accordance with the rules laid down by Union law and national laws and practices.”
This proposal does not have any implication for the EU budget. It amends an existing Directive and largely relies on structures and rules that are already in place.
• Implementation plans and monitoring, evaluation and reporting arrangements
After adoption by the co-legislators of this Recast Directive, the Commission will undertake the following actions to facilitate its transposition:
–Draft a correlation table that serves as transposition check-list for both Member States and the Commission;
–Organise meetings with Member States’ experts in charge of transposing the different parts of the Directive to discuss how to transpose them and solve doubts, either in the context of the Concerted Action for the EPBD (CA-EPBD) or in a committee format;
–Be available for bilateral meetings and calls with Member States in case of specific questions on the transposition of the Directive;
–After the transposition deadline, the Commission will carry out a comprehensive assessment of whether Member States have completely and correctly transposed the Directive.
The proposal complements the Governance Regulation 23 , which ensures that a transparent and reliable planning, reporting and monitoring system is in place, based on the NECPs and streamlined progress reports by Member States. From 2023, Member States must report biennially on the progress made in implementing the plans and in addition, by 30 June 2023 they must notify the Commission of their draft updates of the plans, with the final updates due on 30 June 2024. The submission of building renovation plans will follow the cycles of the national energy and climate plans (NECP), except for the first building renovation plan.
• Explanatory documents (for directives)
Article 32(1) provides that Member States shall communicate their transposition measures together with a correlation table. This is in line with the ruling of the European Court of Justice (case C-543/17), pursuant to which Member States must accompany their notifications of national transposition measures with sufficiently clear and precise information, indicating which provisions of national law transpose which provisions of a directive. This must be provided for each obligation, not only at “article level”. If Member States comply with this obligation, they would not need, in principle, to send explanatory documents on the transposition to the Commission.
• Detailed explanation of the specific provisions of the proposal
Directive 2010/31/EU is amended as follows to align provisions on new and existing buildings, and on information tools, to the European Green Deal, to update its content in light of technical progress and simplify its set-up and to ensure reinforced finance and enforcement mechanisms:
–The subject matter is amended to underline that the proposal for a recast EPBD sets the vision for achieving a zero-emission building stock by 2050 and to reflect a new complementary carbon metric to orient choices towards decarbonised solutions. While the focus of the proposal is the reduction of operational greenhouse gas emissions, first steps are taken to address carbon emissions over the whole life-cycle of a building.
–A new definition of zero-emission building is introduced in Article 2: a building with a very high energy performance in line with the energy efficiency first principle, and where the very low amount of energy still required is fully covered by energy from renewable sources at the building or district or community level where technically feasible (notably those generated on-site, from a renewable energy community or from renewable energy or waste heat from a district heating and cooling system). Zero-emission buildings become the new standard for new buildings, the level to be attained by a deep renovation as of 2030 and the vision for the building stock in 2050. Article 2 also clarifies the definition of “nearly zero-energy building”, which remains the standard for new buildings until the application of the zero-emission building standard, and becomes the level to be attained by a deep renovation until 2030. It newly defines “deep renovation” as a gold standard for building renovation and “staged deep renovation” to ease its delivery. Article 2 introduces a definition of “mortgage portfolio standards”) as a mechanism to incentivise mortgage lenders to improve the energy performance of their portfolio of buildings, and encourage potential clients to make their properties more energy performing.
–Article 3 on National building renovation plans (previously named long-term renovation strategies) is made more operational. The monitoring framework is strengthened by introducing an assessment of the draft national building renovation plans by the Commission and the issuing of recommendations as part of the NECP process. To facilitate the presentation of the information and its assessment by the Commission and improve comparability of national plans, a common template with mandatory and voluntary elements is provided in Annex II. Mandatory elements to report upon encompass district and neighbourhood approaches, including the role of renewable energy communities and citizen energy communities. The building renovation plans shall be submitted as part of the NECPs and their updates; exceptionally, the first draft plan is to be submitted by 30 June 2024 to take into account the time for adoption and entry into force of the revised EPBD. Progress in achieving the national targets and the contribution of the building renovation plans to national and Union targets will be reported as part of the biennial reporting under the Governance Regulation.
–Article 4 (ex-Article 3) on the methodology for calculating the energy performance of buildings in conjunction with Annex I is updated to clarify the possible use of metered energy use to calculate energy performance, and verify the correctness of calculated energy use. The article specifies how to account for the on-site use of energy from renewable sources, such as for recharging points, and for energy supplied from energy communities.
–Article 5 (ex-Article 4) on the setting of minimum energy performance requirements is amended to adapt the previously possible total exemption of protected buildings to technical progress, which allows improving the energy performance of such buildings without altering their technical character and appearance.
–Article 6 (ex-Article 5) on the calculation of cost-optimal levels is aligned to the Green Deal, specifying that the costs of greenhouse gas allowances as well as environmental and health externalities of energy use are to be considered when determining the lowest costs. The Commission will revise the cost-optimal methodology by 30 June 2026.
–Article 7 brings together all provisions on new buildings:
(a)It specifies that as of 2030, new buildings must be zero-emission buildings; new public buildings must be zero-emission as of 2027. The specific requirements for zero-emission buildings are laid down in Annex III;
(b)The life-cycle Global Warming Potential (GWP) of new buildings will have to be calculated as of 2030 in accordance with the Level(s) framework, thus informing on the whole-life cycle emissions of new construction. Whole-life cycle emissions are particularly relevant for large buildings, which is why the obligation to calculate them already applies to large buildings (with a useful floor area larger than 2000 square meters) as of 2027.
(c)Member States shall address for new buildings important dimensions going beyond energy performance, namely healthy indoor climate conditions, adaptation to climate change, fire safety, risks related to intense seismic activity and accessibility for persons with disabilities. They shall also address carbon removals associated to carbon storage in or on buildings.
–Article 8 – 10 and 15 on existing buildings and financial support combine:
(a)The current provisions on major renovation, which offer an opportunity to apply minimum energy performance requirements in place (to ensure minimum renovation depth), and also to address structural improvements, adaptation to climate change, removing hazardous substances including asbestos, and accessibility for persons with disabilities, are complemented with new EU-level minimum energy performance standards (triggering an increase in renovation rates) for the worst-performing public (i.e. buildings and building units owned by public bodies) and non-residential buildings. They require EPC class G buildings to be renovated and improved to at least energy performance class F at the latest by 2027 and to at least energy performance class E at the latest by 2030, and the worst-performing residential buildings to at least class F by 2030 and to at least class E by 2033. The focus on the very lowest performing classes of the building stock ensures that efforts focus on buildings with the highest potential for decarbonisation, energy poverty alleviation and extended social and economic benefits. Member States shall also, as part of the national building renovation plans, establish specific timelines for achieving higher energy performance classes (for buildings falling in the scope of Article 9(1)) by 2040 and 2050, in line with their pathway for transforming the national building stock into zero-emission buildings. In addition to the minimum energy performance standards in accordance with Article 9(1), Member States have the option to introduce national minimum energy performance standards in their national renovation plans. Member States must support compliance with minimum energy performance standards with an enabling framework including financing support, in particular targeting vulnerable households and people affected by energy poverty or living in social housing, technical assistance, and monitoring mechanisms. The proposed provisions allow Member States to exclude several categories of buildings from the obligation to comply with minimum energy performance standards.
(b)The introduction of voluntary renovation passports to equip building owners planning a staged renovation of their building. Member States will have to introduce a scheme of renovation passports based on the common framework to be developed by the Commission by the end of 2024, in order to give their citizens access to the use of this tool.
(c)Stronger provisions on the removal of obstacles and barriers to renovation, and on the mobilisation of financial incentives with one-stop-shops accessible to all building ecosystem’s stakeholders, so that all barriers to building renovation, not only the costs, are addressed and Member States promote appropriate training. Higher financial incentives and technical support measures are directed to deep renovation projects and those targeting a sizeable number of buildings and leading to considerable overall energy savings. With the same objective in mind, since based on standard lifespans a boiler bought in the mid-2020s may still be in use in 2050, Member States should not be allowed to subsidise fossil-fuel boilers as of 2027.
(d)To encourage the swift deployment of heating systems with zero direct emissions, and to avoid that investments in new generations of fossil fuel-based boilers become stranded assets, zero-emission buildings should not generate carbon emissions on-site and Member States may opt for the use of a primary energy factor for electricity aligned with the EU average 24 .
(e)Finally, Member States are required to focus their financial support on the alleviation of energy poverty and to support social housing, and to shield tenants from disproportionate rent levels following renovation.
As a follow up to the opinions of the Regulatory Scrutiny Board, the retained option on Minimum Energy Performance Standards does not directly correspond to any of the four options analysed in the draft impact assessment submitted to the Board. The proposal has carefully been amended in view of subsidiarity and proportionality, taking into account the differences across building stocks in different Member States and giving flexibility to Member States in how they address their specific circumstances and achieve the necessary improvements of their national building stock. It places an EU-wide focus on the 15% worst-performing buildings in the corresponding national building stocks in order to maximise energy savings, cost-effectiveness and energy poverty alleviation impacts as well as more comprehensive social and economic co-benefits associated with achieving the EU’s climate and energy objectives.
–The previous Article 8 is restructured. Article 11 focusses on technical building systems only, and a clear legal basis for national bans of boilers based on fossil fuels is introduced, allowing Member States to set requirements for heat generators based on greenhouse gas emissions or the type of fuel used. Several Member States consider such measures as essential to achieve a decarbonised building stock and to improve air quality and health. This provision addresses the current legal uncertainty on whether such bans are permitted under Article 6(1) of the Ecodesign Directive and free market rules under the Treaties. In recognition of the importance of good indoor air quality to ensure healthy buildings, the installation of measuring and control devices for the monitoring and regulation of indoor air quality is required in new buildings and, where feasible, in existing buildings undergoing major renovations.
–Article 12 on infrastructure for sustainable mobility is aligned with the increased climate ambition, strengthening the current requirements. Pre-cabling becomes the norm for all new buildings and buildings undergoing major renovation, and the roll-out of recharging points in new and renovated office buildings is reinforced in particular. Recharging points need to enable smart charging and Member States shall remove barriers to the installation of recharging points in residential buildings, ensuring a “right to plug” in line with the relevant provisions in the proposal for an Alternative Fuels Infrastructure Regulation. In addition, mandatory bicycle parking spaces in new buildings and buildings undergoing major renovation are introduced in order to remove barriers to cycling as a central element of sustainable, zero-emission mobility.
–Articles 13 reinforces the Smart Readiness Indicator for large non-residential buildings as of 2026. To facilitate development of new services related to buildings, a new Article 14 specific to building data ensures that the building owner, tenant and manager or third parties can have access to building systems’ data. New rules on data interoperability and access to data are to be laid down by the Commission by means of an implementing act.
–Articles 16 to 19 improve the already existing provisions on energy performance certificates, their issuing and display, and their databases:
(a)To ensure comparability across the Union, by 2025 all energy performance certificates must be based on a harmonised scale of energy performance classes and comply with the template laid down in Annex V.
(b)The energy performance classes will be rescaled with a view to the common vision for a zero-emission building stock by 2050, while taking into account national differences of building stocks: the highest class A represents a zero-emission building, while the lowest class G shall include the 15% worst-performing buildings in the national building stock. This rescaling will ensure comparable efforts across Member States to comply with the Union-wide minimum energy performance standards pursuant to Article 9. The indicator on the basis of which buildings are to be rated (primary energy use in kWh/(m2.y)) remains unchanged, and is complemented by an indicator on operational greenhouse gas emissions and renewable energy. Other indicators remain voluntary for Member States to choose from, offering a toolbox approach that can be adjusted to national conditions.
(c)The validity of energy performance certificates of the lower D to G classes is reduced to five years in order to ensure that they contain up-to-date information that helps citizens reduce their consumption. Simplified procedures must be available for the updates of energy performance certificates in certain simple cases and energy performance certificates must be issued in a digital format. Measures to increase reliability of the issued certificates are introduced (on-site visit and quality control).
(d)Better coverage of the building stock with EPCs is a precondition for its improvement, but at the same time Member States would need to ensure that they are affordable. The obligation to have an energy performance certificate is extended to buildings undergoing major renovation, buildings for which a rental contract is renewed and all public buildings. Buildings or building units which are offered for sale or rent must have an energy performance certificate, and the energy performance class and indicator should be stated in all advertisements, ensuring the relevance of energy performance on the market for sale and rental. All buildings occupied by public authorities and frequently visited by the public must display their energy performance certificate, irrespective of their size.
(e)Member States shall set up national databases for energy performance certificates of buildings, which also allow to gather data related to building renovation passports and smart readiness indicators. Information from the national databases shall be transferred to the Building Stock Observatory, based on a template to be developed by the Commission.
–Current provisions on inspections are grouped together and clarified to facilitate their implementation, whilst including ventilation systems as part of the EPBD measures aimed at addressing indoor air quality. To ensure the quality and reliability of renovations or of new construction works, it is foreseen that national inspection schemes or alternative tools shall be set up to verify that delivered construction and renovation works meet the designed energy performance and improve citizens’ satisfaction and trust. In the same vein, providers of integrated renovation works must have access to certification or qualification schemes to ensure reliable quality of those works. The threshold for the mandatory installation of building automation and control systems should be lowered for non-residential buildings as of 2030, and new residential buildings and residential buildings undergoing major renovations must be equipped with certain monitoring and control functionalities to improve and optimise their management and operation.
–Enforcement of buildings policy is key to ensure that it makes real progress on the ground. Current independent control systems are extended to include renovation passports and smart readiness indicators. Monitoring and enforcement, including through penalties, will focus in particular on minimum energy performance standards and the improvement of the existing building stock.
Final provisions and review clause: with a view to the review of the EPBD in 2021 in the context of delivering on the Green Deal, the date for the next review pursuant to Article 25 is set to the end of 2027, at the latest. The review clause makes explicit reference to the Commission assessment of whether building-related measures in EU legislation, including carbon pricing, will bring sufficient improvements to deliver a fully decarbonised, zero-emission building stock by 2050, or whether further binding measures at Union level such as strengthened minimum energy performance need to be introduced. Article 32 on transposition clarifies that Member States shall provide a correlation table together with their transposition measures.
2010/31/EU