COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT REPORT Accompanying the Proposal for a Directive of the European Parliament and of the Council on the energy performance of buildings (recast)

EN EN
EUROPEAN
COMMISSION
Brussels, 15.12.2021
SWD(2021) 453 final
PART 1/4
COMMISSION STAFF WORKING DOCUMENT
IMPACT ASSESSMENT REPORT
Accompanying the
Proposal for a Directive of the European Parliament and of the Council
on the energy performance of buildings (recast)
{COM(2021) 802 final} - {SEC(2021) 430 final} - {SWD(2021) 454 final}
Offentligt
KOM (2021) 0802 - SWD-dokument
Europaudvalget 2021
Table of contents
1. INTRODUCTION: POLITICAL AND LEGAL CONTEXT.........................................4
1.1 From the European Green Deal to the Fit for 55 package.....................................4
1.2 The revision of the EPBD in the Renovation Wave strategy..............................10
1.3 The Energy Performance of Buildings Directive ................................................11
2. PROBLEM DEFINITION.............................................................................................15
2.1 Introduction .........................................................................................................15
2.2 Barriers to energy renovations ............................................................................15
2.3 What are the key problems? ................................................................................19
3. WHY SHOULD THE EU ACT? ..................................................................................32
3.1 Legal basis...........................................................................................................32
3.2 Subsidiarity: Necessity of EU action...................................................................32
3.3 Subsidiarity: Added value of EU action..............................................................34
4. OBJECTIVES: WHAT IS TO BE ACHIEVED? .........................................................35
4.1 General objectives ...............................................................................................35
4.2 Specific objectives...............................................................................................36
4.3 Intervention logic ................................................................................................40
5. WHAT ARE THE AVAILABLE POLICY OPTIONS? ..............................................40
5.1 What is the baseline from which options are assessed? ......................................40
5.2 Description of the policy options ........................................................................42
5.3 Options discarded at an early stage .....................................................................60
6. WHAT ARE THE IMPACTS OF THE POLICY OPTIONS?.....................................61
6.1 How the measures are grouped and assessed ......................................................61
6.2 Impacts of the EPBD revision as part of scenarios delivering the
increased climate target ...................................................................................63
6.3 Environmental impacts........................................................................................71
6.4 Socio-economic impacts......................................................................................81
6.5 Impacts of e-mobility options............................................................................104
7. HOW DO THE OPTIONS COMPARE?....................................................................104
7.1 Comparison of options ......................................................................................105
8. PREFERRED OPTION...............................................................................................119
8.1 Introduction .......................................................................................................119
8.2 Conclusions of the analysis and preferred option..............................................119
8.3 Meeting the challenges of the proposed measures ............................................121
8.4 REFIT (simplification and improved efficiency)..............................................128
9. HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED? .........129
2
Glossary
Term or acronym Meaning or definition
AFID Alternative Fuels Infrastructure Directive
AFIR Alternative Fuels Infrastructure Regulation
BACS Building Automation and Control System
BSO Building Stock Observatory
BRP Building renovation passport
CPR Construction Products Regulation
CTP Climate Target Plan
DHW Domestic hot water
EEAG Energy and Environmental State Aid Guidelines
EED Energy Efficiency Directive
EGD European Green Deal
EPBD Energy Performance of Building Directive
EPC Energy performance certificate
ESR Effort Sharing Regulation
ETD Energy Taxation Directive
ETS Emissions Trading System
EU SILC European Union Statistics on Income and Living Conditions
EV Electric vehicle
GBER General Block Exemption Regulation
GHG Greenhouse gases
HVAC Heating, ventilation and air conditioning systems
LMFH Large multi-family house
LTRS Long-term renovation strategies
MEPS Minimum energy performance standards
MSs EU Member States
Mtoe Million tonnes of oil equivalent
NECP National Energy and Climate Plans
NZEB Nearly zero-energy building
RED Renewable Energy Directive
RRF Recovery and Resilience Facility
RRPs National Recovery and Resilience Plans
3
SCF Social Climate Fund
SFH Single family house
SRI Smart readiness indicator
ZEB Zero emission building
4
1. INTRODUCTION: POLITICAL AND LEGAL CONTEXT
1.1 From the European Green Deal to the Fit for 55 package
1.1.1 Introduction
In December 2019, the Commission presented the European Green Deal1
. The Green
Deal sets out a strategy that aims to transform the EU into a fair and prosperous society,
with a modern, resource-efficient and competitive economy where there are no net
emissions of greenhouse gases in 2050 and where economic growth is decoupled from
resource use. The European Climate Law2
, as agreed with the co-legislators, makes the
EU’s climate neutrality target legally binding, and raises the 2030 ambition by setting a
target of at least 55% net emission reductions by 2030 compared to 1990.
The building sector has a crucial role in achieving this goal. Buildings are the largest
energy consumer in the EU, where they are responsible for approximately 40% of energy
use and 36% of energy-related greenhouse gas emissions3
. The renovation of buildings
has also a significant relevant economic dimension, as the construction industry
ecosystem (buildings and infrastructure) generates about 9.6% of EU value added and
employs almost 25 million people in 5.3 million firms4
.
Based on the European Green Deal strategy and a comprehensive impact assessment, the
Commission’s Communication of September 2020 on Stepping up Europe’s 2030
climate ambition (the ‘2030 Climate Target Plan’)5
proposed to raise the EU’s ambition
and put forward a comprehensive plan to increase the EU’s binding target for 2030
towards at least a 55% net emission reduction, to be met in a responsible way.
Raising the 2030 ambition now helps give certainty to policymakers and investors, so
that decisions made in the coming years do not lock in emission levels inconsistent with
the EU’s objective to be climate-neutral by 2050. The 2030 target is in line with the Paris
Agreement objective to keep the global temperature increase to well below 2°C and
pursue efforts to keep it to 1.5°C. The Climate Target Plan (CTP) 2030 identifies
buildings as a major area where common EU decarbonisation efforts can be strongly
increased. The analysis underpinning the CTP concluded that a mix of instruments from
climate, energy and transport policies is needed. Moreover, the EPBD’s regulatory tools
need to be strengthened to address the non-economic barriers that leave the renovation
rate at a level which is too low and incompatible with achieving the enhanced climate
1
https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal_en
2
Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing
the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU)
2018/1999 (‘European Climate Law’) (OJ L 243, 9.7.2021, p. 1).
3 Including direct emissions from buildings and indirect emissions stemming from electricity and heat
consumed in buildings.
4
SWD(2021) 351 final.
5
Stepping up Europe’s 2030 climate ambition Communication COM (2020) 562 final.
5
and energy goals. Building renovation and improvement of their energy performance
reduces energy needs and energy bills: better insulated buildings are therefore a
safeguard against the volatility of energy prices and their increase, especially for more
vulnerable consumers, and contribute to the goal of security of supply. In addition, the
EPBD is expected to contribute to the reduction of emissions in the transport sector,
specifically by enabling the charging of e-vehicles in private buildings and supporting
sustainable mobility.
The ‘Fit for 55 package’ was therefore conceived by the Commission as a comprehensive
policy package to enable action to meet this increased ambition; the revision of the
Energy Performance of Buildings Directive (EPBD) is part of the intended policy tools.
The revision of the EPBD was in fact included in the 2021 Commission work programme
listing all legislative acts to be reviewed under the heading ‘Fit for 55’.
The analysis from the CTP was repeated in preparation of the ‘Fit for 55 package’ and
the above findings and policy conclusions of the CTP were confirmed. Without a
revision of the EPBD driving higher energy renovations, the net 55% greenhouse gas
emissions reduction target for 2030 will not be achieved. In particular, without the policy
drivers from a revised and strengthened EPBD, we will be facing a gap representing 49%
of the efforts to decarbonise the building sector. This impact assessment fulfils the role of
developing and assessing policy options to strengthen existing measures and tools to
make them ‘Fit for 55’, and align them with climate neutrality in the long term, based on
the policy conclusions of the Climate Target Plan and focusing on the areas identified in
the Renovation Wave strategy.
This initiative is part of a policy mix with strong interlinkages among instruments,
similar to the assessment made when preparing legislative proposals for the revised
Energy Efficiency Directive (EED), Emissions Trading System (ETS), the recast
Renewable Energy Directive (RED II), Effort Sharing Regulation (ESR) and Alternative
Fuels Infrastructure Regulation (AFIR). As such, the initiative takes into account the
interplay with the other proposals, in order to maximise its complementary role.
Significantly scaling up efforts in reducing emissions and increasing energy performance
and renewable deployment in the building sector is imperative to achieve the EU
decarbonisation goal. Nevertheless, the efforts to be made come with substantial
challenges, which accompany the green transition. Lack of skilled workforce in the
construction sector across its value chain, potential materials shortages and product
supply-chain bottlenecks can hamper the upscaling of renovations across Europe and call
for a wider policy response. In addition, with new buildings being constructed and
existing buildings renovated, greenhouse gases are emitted during the extraction and
manufacturing of construction materials, and during transport and construction. To
address those challenges, it is essential that this initiative is accompanied by appropriate
measures supporting the green transition. The Renovation Wave strategy has identified a
series of measures which are being implemented, and buildings and construction
6
activities also feature in the other strategies following the Green Deal, including the Pact
for Skills, the Industrial Ecosystem Strategy, the Zero Pollution Action Plan, the Circular
Economy Action Plan, the Biodiversity Strategy and the Climate Adaptation Strategy.
Buildings also have a strong societal dimension and their use reflects behavioural trends
and dynamics in society. The COVID-19 pandemic has had an impact on building use
patterns, such as working more from home, which are likely to last beyond the recovery
period and require adaptations of the building stock, both for residential and non-
residential buildings. The revision of the EPBD is timely as it can contribute to ensuring
improved building performance in this dynamic phase and is thus an important measure
alongside the Recovery and Resilience Facility.
1.1.2 Alignment with the 2030 Climate Target Plan policy conclusions
The Climate Target Plan (CTP) 2030 states that EU buildings by 2030 should reduce
their overall greenhouse gas emissions by around 60%6
, their final energy consumption
by 14% and energy consumption for heating and cooling by 18%7
in comparison to 2015.
The analysis in the CTP also found that greenhouse gas emissions can only be lowered
cost-effectively to a level compatible with achieving the goal of -55% by duplicating the
floor area renovated every year to improve its energy performance, decarbonising heating
and considerably increasing the energy savings achieved through renovations.
The impact assessment of the 2030 Climate Target Plan provided an indication of what
effects a combined policy mix could have on reaching the new climate target and
subsequent climate neutrality by 2050. However, the impact assessment required further
clarifications and additional analysis to reach the level of details needed to support the
individual sectoral legislative proposals. As regards the EPBD revision, which focuses on
sectoral building policy, the MIX scenario in the CTP impact assessment representing the
most cost-effective mix of policies between regulatory and carbon pricing mechanisms,
made revising the EPBD the driver of increased energy renovation through standards and
strengthened regulations. Without the policy driver of the EPBD revision assumed in the
MIX scenario, the renovations rate will not increase sufficiently. This would result in the
target for reducing GHG emissions being missed by around 49% and the 2030 target for
reducing final energy consumption attributed to the buildings sector in the Climate
Target Plan being missed by 40% (see Section 6.2).
The CTP analysis also confirmed the finding from other assessments that energy
efficiency is an essential component of action towards increased climate ambition across
sectors including in buildings, and also via systematic application of the ‘energy
6
In this impact assessment, in line with the approach of the Climate Target Plan for the building sector,
when referring to GHG emissions, reference is made to operational emissions from energy use. When
emissions refer to the embodied carbon content of buildings, this is clearly indicated.
7
SWD(2020) 176 final.
7
efficiency first’ principle. Reducing first the energy needs of buildings is a more
sustainable and cost-effective way to reduce emissions than investing in additional clean
energy generation to compensate buildings’ low energy performance8
. Even in an
increasingly and progressively decarbonised energy sector, improving the energy
performance of existing buildings is necessary to avoid unnecessary investments in
energy infrastructure and to improve the living conditions of the EU public9
. For
buildings, a combination of the ‘energy efficiency first’ principle and expansion of
renewable energy is needed because renewables are not available indefinitely and can
only contribute a limited amount of the greenhouse gas emission reductions in the
buildings sector10
. Combining the green and digital transitions, smart buildings can
enable efficient production and use of renewables at building, district and city level, help
decarbonise the transport sector and promote the circular economy.
The CTP identified specific measures to ensure the appropriate pace at which to improve
the building stock. These include the potential introduction of mandatory standards for
the worst-performing buildings and the gradual tightening of the minimum energy
performance requirements11
. Additionally the CTP flagged up long-term renovation
strategies within the context of the EPBD as a key policy vehicle. Their aim would be to
introduce additional measures to remove barriers to building renovation and strengthen
pull factors for faster and deeper energy renovation.
1.1.3 Coherence within the ‘Fit for 55’ package and the role of the EPBD revision
To follow the pathway proposed in the European Climate Law and deliver this increased
level of ambition for 2030, the Commission has reviewed the climate and energy
legislation currently in place. These are expected to only reduce greenhouse gas
emissions by 40% by 2030 and by 60% by 2050. The ‘Fit for 55’ legislative package, as
announced in the 2030 Climate Target Plan, is the most comprehensive building block in
the efforts to implement the ambitious new 2030 climate target, and all economic sectors
and policies will need to make their contribution. The majority of the proposals in the
‘Fit for 55’ legislative package were adopted by the Commission on 14 July 2021, while
the revision of the EPBD is scheduled for a slightly later date to take into account the
analysis and steer coming from the Renovation Wave strategy adopted in October 2020.
8
Net Zero by 2050 Scenario - Data product - IEA
9
Building codes with specific regulation on thermal insulation of the building envelope started appearing
after the 1970s in Europe. This means that a large share of today’s EU building stock was built without any
energy performance requirement: one third (35%) of the EU building stock is over 50 years old, while
more than 40% of the building stock was built before 1960. Almost 75% of it is energy inefficient
according to current building standards. Source: JRC report Achieving the cost-effective energy
transformation of Europe’s buildings.
10
ENEFIRST, 2021 http://enefirst.eu
11
See also Annex J: 2030 Climate Target Plan Policy Conclusions.
8
The ‘Fit for 55’ legislative package is a set of a comprehensive and interconnected
proposals which will enable an acceleration of greenhouse gas emission reductions in the
next decade. They combine the following initiatives: (i) application of emissions trading
to new sectors and a tightening of the existing EU Emissions Trading System; (ii)
increased use of renewable energy; (iii) greater energy efficiency; (iv) faster roll-out of
low emission transport modes and the infrastructure and fuels to support them; (v)
alignment of taxation policies with the European Green Deal objectives; (vi) measures to
prevent carbon leakage; and (vii) tools to preserve and grow our natural carbon sinks.
The proposals were accompanied by a ‘Fit for 55’: delivering the EU’s 2030 Climate
Target on the way to climate neutrality12
Communication, which explain the logic of the
policy mix chosen to deliver on the target of -55%, which is a careful balance between
pricing, targets, standards and support measures in a whole-of-the-economy approach.
The Communication clearly highlights the revision of the EPBD as parts of the efforts to
deliver the EU’s 2030 Climate Target.
Figure 1.1: EPBD Interactions with other key legislation affecting the energy performance of buildings
The proposals adopted in July 2021 include measures targeting the buildings sector; the
EPBD revision is consistent with and ensures complementarity with these. Without a
strengthening of the EPBD, the -55% goal will not be achieved, making it necessary to
strengthen other measures or to move to a higher carbon price.
12
COM(2021) 550 final.
9
The above figure illustrates the main measures addressing buildings in the ‘Fit for 55’
package. See Chapter 7 for more details on these and the interactions with the revision of
the EPBD.
1.1.4 The scope of greenhouse gas emissions covered in the EPBD revision and
coherence with other initiatives addressing whole-life cycle carbon emissions
In line with the CTP, the scope of this initiative is to improve energy performance and
reduce GHG emissions during the use phase of buildings. The emissions covered are
direct emissions from energy use in buildings13
(e.g. from a gas boiler in the building
used for space heating) and indirect emissions from the use of electricity and heating and
cooling supplied to the building (e.g. through electric heating or a district heating
network)14
.
For clarity, all GHG emissions mentioned in this document refer to operational GHG
emissions, unless otherwise stated.
In addition to emissions during the use phase, there are emissions that occur during other
parts of the building life cycle. These include the extraction and processing of the raw
materials, manufacturing of materials and equipment, transport to the site, the
construction process of the building, the installations of equipment as well as the end-of
life (e.g. deconstruction or demolition) process and transport and reuse, recycling or
disposal of waste15,16,17
. The revision of the EPBD contributes to the policy efforts at EU
level to address these emissions with a specific measure, which is the mandatory
calculation and display of life-cycle emissions for new buildings (see Annex H, Section
3). Addressing the whole-life carbon impact issue was widely underlined by stakeholders
during the open consultation, who suggested including measures in the EPBD to account
for carbon emissions over the entire life cycle of buildings (68%).
The measure proposed in the EPBD revision can complement other EU policies aimed at
reducing lifecycle emissions in buildings. In particular, there will be no overlap between
the measure in the EPBD revision and the Construction Product Regulation (CPR). The
CPR provides a common technical language to assess the performance of construction
products. The CPR ensures that reliable information is available to professionals, public
authorities, and consumers, so they can compare the performance of products from
different manufacturers in different countries.
13
The energy use regulated through the EPBD is heating, cooling, ventilation, domestic hot water, built-in
lighting and other technical building systems. See EPBD Annex 1.
14
This corresponds to the emissions in the residential and service sector and part of the emissions in the
power sector and heating and cooling sector in the CTP.
15
Röck, M. et al. (2020) Embodied GHG emissions of buildings – The hidden challenge for effective
climate change mitigation.
16
LCA applied to buildings aims to assess the potential environmental of buildings over the complete life
cycle, from materials production to the end-of-life and management of waste disposal.
17
https://www.bpie.eu/wp-content/uploads/2021/05/BPIE_WLC_Summary-report_final.pdf
10
The calculation of life-cycle emissions on building level in one of the proposed measures
under the EPBD18
will be made using the European Level(s) framework or equivalent (as
also referenced in the EU Sustainable Finance Taxonomy). In the Level(s) framework,
the life cycle analysis of buildings uses product data calculated on the basis of existing
assessment methods under European standards or under the CPR when available.
The EPBD is also in line with initiatives such as the forthcoming Communication on
restoring sustainable carbon cycles19
and the proposal for a regulatory framework for
carbon removal certification20
and the findings of the study on Circular Economy
Principles for Buildings’ Design21
. The study analysed case studies of circular economy
policies in construction at national and regional level across the EU and other OECD
countries, and suggested policy options at EU level. It found possible opportunities in the
Construction Products Regulation, the Energy Performance of Buildings Directive, in
green public procurement, and in guidance for local and regional planning authorities.
The proposed measure in the EPBD complements well the provisions in these policies.
1.2 The revision of the EPBD in the Renovation Wave strategy
In line with the Green Deal, on 14 October 2020 the Commission adopted the strategic
Communication A Renovation Wave for Europe – greening our buildings, creating jobs,
improving lives. The Renovation Wave communication integrates climate, energy and
environmental objectives, industrial strategy and circularity objectives, as well as skills,
consumer welfare and fair and social transition goals. It contains an action plan with
concrete regulatory, financing and enabling measures for the years to come and pursues
the aim to at least double the annual energy renovation rate of buildings by 2030 and to
foster deep renovations. It is expected that mobilising forces at all levels towards the
objectives of the Renovation Wave will result in at least 35 million building units
renovated by 2030.
The Renovation Wave links with ongoing work on green finance and sustainable
investments and includes targeted actions at EU, national and local level. It focuses
especially on tackling energy poverty and the worst-performing buildings, on renovating
public buildings and social infrastructure and on decarbonising heating and cooling. It
also flags that research must spur innovation in the construction industry ecosystem for
this transformation, in line with the twin green and digital transitions. Energy renovation
of the existing building stock can open up numerous possibilities and generate far-
reaching social, environmental and economic benefits. With the same intervention,
buildings can be made healthier, greener, interconnected within a neighbourhood district,
more accessible, resilient to extreme natural events, and equipped with interoperable,
18
See Chapter 5.2, in particular the description of ZEBs on life-cycle reporting. See also Annex H.
19
Planned for adoption in December 2021.
20
Planned for late 2022.
21
Study on circular economy principles for buildings’ design, Publications Office of the EU (europa.eu).
11
standardised smart charging points for e-mobility and bike parking. The construction
industry ecosystem is expected to play a key role in the implementation of the
Renovation Wave and in transforming buildings in line with climate objectives, in
particular with integrated design and execution, enhanced quality controls and
compliance checks, high resource efficiency in line with circularity principles, and
uptake of skills in construction in line with the twin green and digital transitions.
The 23 implementation action points identified in the strategy include regulatory
measures, with a strengthening of the EU legislative framework of the Energy Efficiency
Directive (EED), the Renewable Energies Directive (RED), the Ecodesign Directive and
the EPBD22
. They also include the possible extension of emissions trading to the
buildings and the road transport sectors, which would introduce a carbon price for fossil
fuel use in those sectors. The strategy was also accompanied by the establishment of the
New European Bauhaus23
. The extensive preparatory work and stakeholder consultation
on the key aspects to be addressed in the Renovation Wave strategy24
identified key
measures and instruments, either to be strengthened or newly designed in the EPBD
revision. These include the introduction of mandatory minimum energy performance
standards for all types of buildings, the revision of the energy performance certificates
framework, and building renovation passports. The current EPBD revision addresses 3 of
the 23 key Commission actions to implement the Renovation Wave and some of its main
regulatory measures.
1.3 The Energy Performance of Buildings Directive
1.3.1 The current EPBD framework
Over the last years, due to a well-established regulatory framework for the energy
performance of buildings and higher standards for equipment and appliances, the EU
building stock has become more efficient. This is particularly the case for new buildings.
The market diffusion and lowering of price of renewables has increased their uptake by
buildings owners.
The EPBD Directive (2010/31) is the main legislative instrument for promoting energy
performance improvements in buildings in the EU. The EPBD is the cornerstone of EU
legislation on energy efficiency for buildings. It was first adopted in 2002 by means of
Directive 2002/91/EC. This Directive was then replaced and also substantially reinforced
22
See Annex K for an overview of the EPBD revision in the context of the Renovation Wave action plan.
23
Established to ideate, incubate, accelerate and realise innovative projects demonstrating the right balance
of sustainability (comprising circularity), quality of life (comprising aesthetic) and inclusion (comprising
accessibility and affordability), the New European Bauhaus is called to support the objectives of the
Renovation Wave while going beyond buildings. Form will follow planet, making the necessary beautiful
too in a more sustainable and just built environment.
24
Stakeholder consultation on the Renovation Wave initiative,
https://ec.europa.eu/energy/sites/ener/files/stakeholder_consultation_on_the_renovation_wave_initiative.pd
f
12
in 2010 by Directive 2010/31/EU. That was a recast Directive, which was amended in
2018 by Directive (EU) 2018/844 as part of the Clean Energy Package for All Europeans.
The objective was to modernise the building stock in the light of the latest technological
developments by promoting an optional smart readiness indicator scheme, facilitating the
deployment of infrastructure for electro-mobility in buildings, and the better integration
of automation systems and renewable solutions25
. The amending Directive entered into
force in July 2018 and Member States had to transpose it into national law by 10 March
2020.
The EPBD (2010/31/EU), as revised by Directive (EU) 2018/844), aims to transform the
EU building stock into a highly energy efficient and decarbonised building stock by
2050, moving towards nearly zero-energy building standards. The Directive works
through two complementary mechanisms: (i) minimum performance requirements for
new and existing buildings (raising the depth of any upgrades and the standards for new-
builds); and (ii) information for the public and companies through energy performance
certificates for buildings to enable them to choose the efficiency level that is right for
them. The Directive sets specific energy performance requirements for new and
renovated buildings and on technical building systems (which include renewable energy
and heating and cooling systems). The cost-optimal methodology helps Member States
set their ambition levels right and keep them under review. Taken together, these
mechanisms contribute to setting the right energy performance standards for different
buildings, and facilitate information on more energy-efficient housing.
The most important measures in the current EPBD are:
 long-term renovation strategies aiming to decarbonise national building stocks
by 2050, with indicative milestones for 2030, 2040 and 2050;
 cost-optimal minimum energy performance requirements for new buildings,
for existing buildings undergoing major renovation, and for the replacement
or renovation of building elements like heating and cooling systems, roofs and
walls26
;
25
In the area of building automation and control systems, the EPBD introduced in 2018 a definition for
such systems and a requirement for all non-residential buildings over 290 kW to have Building Automation
and Control Systems (BACS) installed. In addition, there were provisions to support the installation of
devices to enhance monitoring and control functionalities in residential buildings. New provisions were
introduced to Article 8 of the EPBD with regard to technical building systems, in particular concerning the
installation of thermal regulating devices in each room and the recording of information related to the
energy performance of systems upon completion of works.
26
Article 4(1) (EPBD) requires Member States to take the necessary measures to ensure that minimum
energy performance requirements for buildings or building units are set with a view to achieving cost-
optimal levels. Article 5 of the EPBD requires Member States to calculate cost-optimal levels of minimum
energy performance requirements for buildings and building elements using a comparative methodology
framework to be established by the Commission.
13
 requiring, since 31 December 2020, all new buildings to be nearly zero-
energy buildings (NZEBs); new public buildings already had to be NZEBs
since 31 December 2018;
 energy performance certificates (EPCs) to be issued when a building is sold or
rented and requiring their rating to be visible in the advertising media;
 inspection schemes for heating and air conditioning systems;
 electro-mobility is supported by minimum requirements for charging points
and ducting infrastructure car parks over a certain size;
 an optional European scheme for rating the ‘smart readiness’ of buildings
(SRI);
 the promotion of smart technologies, including through requirements on the
installation of building automation and control systems (BACS), and on
devices that regulate temperature at room level;
 addressing the health and well-being of building users, for instance by
considering the air quality and ventilation that Member states should take into
account when defining energy needs.
The EPBD requires Member States to establish a long-term renovation strategy to
support the renovation of their national building stock, so that by 2050 the building stock
is highly energy-efficient and decarbonised. The long-term renovation strategies must
include: (i) an overview of the national building stock policies and actions to stimulate
cost-effective deep renovation of buildings, (ii) policies and actions to target the worst-
performing buildings, split-incentive dilemmas, market failures, energy poverty and
public buildings; and (iii) an overview of national initiatives to promote smart
technologies and skills and education in the construction and energy efficiency sectors.
The strategies must also include a roadmap with measures and measurable progress
indicators indicative milestones for 2030, 2040 and 2050, an estimate of the expected
energy savings and wider benefits, and the contribution of the renovation of buildings to
the EU’s energy efficiency target. The 2020 long-term renovation strategies27
(LTRS)
adopted by Member States have been assessed by the Commission28
. These strategies fed
into the preparation and assessment of national resilience and recovery plans and this
impact assessment.
In addition, the Directive is accompanied by secondary legislation. The Commission
published in October 2020 two regulations (an implementing act29
and a delegated act) on
27
https://ec.europa.eu/energy/topics/energy-efficiency/energy-efficient-buildings/long-term-renovation-
strategies_en
28
Commission staff working document on Preliminary analysis of the long-term renovation strategies of 13
Member States, SWD(2021) 69 final. An update of the assessment covering the remaining LTRS will be
published in December 2021.
29
Implementing Regulation detailing the technical modalities for the effective implementation of an
optional common Union scheme for rating the smart readiness of buildings, C(2020) 6929 final,
https://ec.europa.eu/energy/sites/ener/files/smart_readiness_buildings_implementing_act_c2020_6929.pdf
14
establishing an optional common EU scheme for rating the smart readiness (SRI) of
buildings, accompanied by associated annexes (based on the empowerment given by
Article 8 EPBD, introduced by Directive (EU) 2018/844). The delegated act on cost-
optimality (Delegated Regulation No 244/2012)30
and the accompanying guidelines31
support Member States in calculating cost-optimal levels of minimum energy
performance requirements for buildings and building elements, using the comparative
methodology framework established by the Commission.
The Commission has also published a series of recommendations on building renovation
((EU)2019/786) and building modernisation ((EU)2019/1019) aspects. These are linked
to the new rules introduced in 2018 in the EPBD.
1.3.2 The progress achieved
While the evaluation of the EPBD in 2016 revealed some weaknesses, notably
inefficiencies in national implementation, the EPBD is overall a successful regulatory
instrument that has led to significant energy savings in the buildings sector (about 49
Mtoe of energy savings from 2007 to 201332
) and has grown over time in ambition and
scope. It has spurred significant changes in the national buildings codes and standards for
minimum energy performance requirements, in relation to major renovations of existing
buildings and in relation to new buildings, and has introduced the energy performance
certificate, an information tool which is present and used in each country and by the
financial sector. The nearly zero-energy building requirements for new buildings
provided the necessary longer-term predictability for investors, offered stakeholders a
common vision for the sector, and mobilised industry to deliver business models and
technologies.
One of the main reasons why the current EPBD does not yet deliver on the required push
for building renovation is that it does not contain any obligations directly triggering
building renovation.
30
Commission Delegated Regulation (EU) No 244/2012 of January 2012 supplementing Directive
2010/31/EU of the European Parliament and of the Council establishing a comparative methodology
framework for calculating cost-optimal levels of minimum energy performance requirements for buildings
and building elements.
31
Guidelines accompanying Commission Delegated Regulation (EU) No 244/2012 of 16 January 2012
supplementing Directive 2010/31/EU.
32
This is equivalent to the gross inland consumption of both Austria (34.7 Mtoe) and Ireland (14.96 Mtoe)
together in 2019 (49.66 Mtoe). Over 2007-2013, direct GHG emissions were reduced by 63 Mt CO2 (i.e.
8% of the 1990 emissions of the household and service sector).
15
2. PROBLEM DEFINITION
2.1 Introduction
This section provides first an overview of the barriers preventing higher levels of
renovations, which are complex and multi-layered. Not all are addressed by the revision
of the Energy Performance of Buildings Directive (EPBD). Annex N provides key
information related to the characteristics of the building stock and the ownership
structure of buildings, which are relevant to understand the origin of the problems
addressed. Such an overview helps identify key drivers of the problems addressed in this
initiative and also assess the interplay of the EPBD revision with other measures of the
‘Fit for 55’ package, in particular carbon pricing. This section finishes by outlining the
two key problems addressed by the EPBD revision and their drivers, concluding with
their expected evolution.
2.2 Barriers to energy renovations
The strategic Communication on the Renovation Wave addressed the need to
significantly increase energy renovations in the EU by setting the objective to at least
double the annual energy renovation rate of residential and non-residential buildings by
2030.
While preparing both the Renovation Wave Communication and the impact assessment,
a number of stakeholder consultations, in-depth literature reviews and targeted studies
were undertaken to identify the different sets of barriers to energy efficiency renovation
in buildings in EU countries. Some of these barriers are more or less relevant depending
on the Member States, and sometimes on regions within them. However, albeit with a
different weight across Europe, all of these barriers taken together account for the
insufficient annual renovation rates in the EU and the existing gap towards the 2030
decarbonisation target for the building sector.
The barriers to energy renovations can be divided in six main categories:
(1) Economic and financial barriers associated with building renovations – from the high
upfront costs and affordability of renovation, access to finance, the issue of split
incentives (which are also and organisational barrier), to the relevant opportunity and
transaction costs and high discount rates;
(2) Behavioural barriers related to consumer support for the uptake of energy renovations
– from the lack of knowledge and conflicting information on the energy performance of
buildings and multiple benefits of energy renovations, to a general lack of acceptance of
the need to step up decarbonisation efforts, including in buildings, the inertia (bounded
rationality), the perceived hassle of renovations, and the aversion to indebtedness and
financial risk;
16
(3) Information barriers associated with the lack of accessible, transparent and
comparable information across the board and in EU countries on the decarbonisation
trajectory for buildings, lack of comparable and standardised information tools on the
energy performance of buildings across the EU, as well as the lack of information on
available funding for energy renovation investments and on the potential lower credit risk
associated with energy efficiency investments33
;
(4) Administrative barriers related to both insufficient technical expertise and capacities
among local and regional authorities to support building renovation programmes, lengthy
administrative processes and permit procedures;
(5) Technical barriers related to the possible shortage of skilled workforce for energy
renovation, lack of standardised practices and industrialised solutions in the building
renovation market, as well as the lack of skills and accessible advisory and quality
assurance support for non-professional building owners;
(6) Organisational barriers associated with the complexity of building ownership and use,
where co-ownership and collective decisions are often the norm, and where the
commercial lease of buildings and building units add to the complexity and split
incentives.
On top of these six categories of stable barriers, some temporary and periodic barriers
might arise that affect energy renovations across EU countries. These are often of a
macro-economic nature and related to market cycles, market interventions and market
adjustments. In the last 2 years, a number of consequences that stem from the COVID-19
pandemic have affected the market of energy renovations. The interruption of global
shipping routes has had a cascade effect on the availability of construction materials. At
the same time, the high number of public subsidies in EU countries for energy renovation
released on the market, in particular by the Recovery and Resilience Facility, has
generated a temporary shortage of skilled workforce for energy renovations and made
renovations more expensive. While the demand for energy renovations in buildings is
expected to grow in the next year, these initial shocks are expected to recede and the
market is expected to adjust.
The following table outlines the barriers to building renovations, with Annex E
(Intervention logic and common barriers to building renovations) explaining them in
more detail.
33
Based on initial evidence from the EEFIG SR8 working group. A special report on this and other assets
and activities related to environmental objectives, including energy efficiency and building renovations
investments, is expected from the European Banking Authority in 2023 https://ec.europa.eu/eefig/eefig-
working-group-risk-assessment_en
17
Table 2.1: Barriers to building renovations
Type of barrier Barrier
Financial
barriers
Upfront costs and affordability of energy renovations
Weak economic signal
Split incentives
Lack of access to public and private financial support for affordable
renovations
Limited public funds, public financial support not sufficiently targeted
towards deep renovations
Lack of clear property value differential
Transaction costs, high discount rates
Behavioural/consumer
barriers
Lack of knowledge, conflicting or lack of information on energy
performance of buildings and multiple benefits of energy renovations
Time and hassle factor, inertia and bounded rationality
Perceived risk, attachment to incumbent technologies
Lack of acceptance of need to step up decarbonisation efforts, including in
buildings
Aversion to financial risk and indebtedness for energy efficiency
investments
Information barriers
Lack of well-communicated decarbonisation trajectory
Lack of standardised information tools on energy performance
Lack of information on available funding opportunities (public and private)
for energy renovations on buildings, and on the potential lower credit risks
of energy efficiency investments
Administrative barriers
Regulatory & planning (e.g. limitation in façade intervention, approval
process for renewable installation and renovation permits)
Lack of technical expertise and capacities in regional and local
administration for energy efficiency renovation programmes
Burdensome administrative processes (multiple permit procedures, no
single entry point)
Technical barriers
Lack of skilled workforce for energy efficiency renovations, lack of low-
carbon renovation skills
Lack of standardised practices and industrialised fast-track solutions for
energy renovations in buildings
Lack of quality assurance for complex renovation
Organisational/building
complexity barriers
Collective decision problems for co-owned properties
Commercial lease barriers
18
The barriers identified in the above table are largely common across EU countries,
although their weight in the overall decision-making process to embark on energy
renovations can be different depending on specific national circumstances. Two of the
most common barriers are the issue of split incentives and access to finance to bridge the
upfront cost and affordability of energy renovations. In their long-term renovation
strategies34
, 16 Member States clearly underline the issue of split incentives as one of the
most relevant barriers to energy renovations. Although the issue of split incentives is
common across Europe, some of its most striking features are affected by national
differences35
. While the issue of split-incentive is included into ‘economic and financial
barriers’ as it relates to the mismatch of economic incentives, it cannot be alleviated by
economic incentives alone, and it combines with organisational barriers. As outlined in
Annex N, the owner-tenant ratio presents some differences across Member States, with
the number of people living in rented accommodation much higher in Germany (49%),
Austria (45%), Denmark (39%), and France (36%), compared to an EU average of 30%.
The owner-tenant ratio has a direct impact on the relevance of the split incentive issues in
designing policy for energy renovations of national building stock. In southern Europe,
south-east and north-east Europe, people own rather than rent housing, with countries in
south-east Europe having a high ownership ratio. Similarly, the possibility to increase
rents following energy renovations is regulated differently across EU countries, with
northern and western European countries having more regulatory social safeguards. The
difficulties in finding appropriate measures that properly address the issue of split
incentives was also highlighted, especially by non-governmental organisations (NGOs),
in the consultation on the inception impact assessment. While tenant associations largely
favoured the need for measures that introduce obligations for building owners, the
renovation hassle and risks of ‘renovictions’ was also mentioned as a possible negative
consequence of renovations.
Access to finance to bridge the upfront costs of energy renovations is also a very
common barrier across all EU countries. This was underlined by multiple stakeholders
during the targeted EPBD revision and Renovation Wave consultations (Annex B).
Moreover, private financing products for energy efficiency renovations are not
sufficiently developed and marketed across EU countries, which reduces access to
favourable financial offers. Moreover, insufficient cost-effective use of EU and national
financing to leverage additional private investments and the lack of appropriate
information tools to better target financing towards deep renovation and the worst
34
Long-term renovation strategies 2020, https://ec.europa.eu/energy/topics/energy-efficiency/energy-
efficient-buildings/long-term-renovation-strategies_en#national-long-term-renovation-strategies-2020
35
Castellazzi (2017); Overcoming the split incentive barrier in the building sector.
19
performing buildings is often underlined across the board as part of public resources
spending36
.
Across the EU, technical barriers experience similar trends to administrative and
information barriers. Overall, they are more relevant in Member States where the uptake
of energy renovations appears to be less strong. In addition, a number of Member States
identify a close link between the administrative burden barriers of renovation, the
behavioural barriers related to the hassle of renovations, and organisational barriers
linked to building ownership status and the collective decision-making of co-owned
immovable goods.
2.3 What are the key problems?
While the previous sections focus on the overall barriers to renovating buildings, this
section focuses on the barriers that can be addressed by the revision of the EPBD.
2.3.1 The first key problem: The EPBD framework is insufficient to achieve the 2030
climate objectives. No specific measure is in place to address non-economic barriers that
limit the energy renovation of buildings.
As previously indicated, the main aspect currently hampering the progressive
decarbonisation of the building stock in the EU is the low renovation rates across EU
countries. The EPBD framework is incapable of overcoming this problem because it does
not contain measures to trigger building renovations. The EPBD defines the energy
performance levels that have to be reached when a new building is built or when an
existing building undergoes a major renovation, but it does not trigger additional
renovations. Stakeholders also recognised that the EPBD framework was inadequate. In
the consultation on the inception impact assessment, several stakeholders across all
categories indicated the need for the EPBD to include additional measures to (radically)
increase the rate of renovations in order to help achieve the decarbonisation objectives.
The energy performance trend in buildings depends on the combination of the quantity of
building renovations (renovation rates) in EU countries and the quality of the energy
efficiency improvements achieved by single renovations (renovation depth)37
.
Based on the latest available data, 11% of the existing building stock in the EU
undergoes some level of renovation each year38
. This means that in terms of floor area
affected, the annual renovation rate appears to be at a satisfactory level. However,
36
This was identified in particular across many Member States by an European Court of Auditors’ special
2020 report on ‘Energy efficiency in buildings: greater focus on cost-effectiveness still needed’ in relation
to an audit on cohesion policy spending on energy efficiency renovations in buildings,
https://www.eca.europa.eu/Lists/ECADocuments/SR20_11/SR_Energy_efficiency_in_buildings_EN.pdf
37
Energy efficiency improvements during renovation can be realised either in the building envelope (walls,
roof, windows, etc.) or in the technical building systems (hot water production, space heating/cooling, etc.).
38
https://ec.europa.eu/energy/sites/ener/files/documents/2.annex_to_final_report.pdf
20
renovation works seldom address the energy performance of buildings, and the weighted
annual energy renovation rate39
at EU level is only around 1%. This applies to residential
and non-residential buildings, including public buildings, with only marginal differences.
This rate, if maintained, is not compatible with the achievement of the 2030 energy and
climate goals, as illustrated in the Climate Target Plan analysis40
.
Figure 2.1 illustrates that the current level of annual renovation rates tends to favour
building renovation with small primary energy-saving impacts overall (light
renovations), while a wide range of technologies that would allow for much deeper
renovations are available. Only a residual share of building interventions therefore target
medium and deep energy renovations, which are able to achieve more than 40% and 60%
primary energy savings respectively.
Figure 2.1: Annual energy renovation rates and corresponding average primary energy savings per
intervention in the EU (2012-2016 average)41
For households, renovation is ultimately a private decision that is driven by several
considerations. These often do not relate primarily to energy efficiency improvements
but rather to the comfort, functionality, aesthetic and structural resilience of a building.
For professional operators, the decisions can be based on more commercial
considerations. Without appropriate regulations and increased awareness of the numerous
benefits of energy renovations (indoor comfort, reduced energy needs, higher property
value), several opportunities to greatly improve buildings will be missed. Similarly,
financial institutions often express difficulties with navigating the technical aspects of
39
The term ‘weighted annual energy renovation rate’ refers to the annual reduction of primary energy
consumption in the total building stock achieved through the sum of energy renovations at all depths (light,
medium and deep).
40
The low renovation rate was a significant concern highlighted during the consultation on the inception
impact assessment. In 62 responses, stakeholders called for an increased renovation rate of at least 2% or
3%. Most of this feedback came from business associations/companies, followed by NGOs.
41
Esser, Anne; Dunne, Allison; Meeusen, Tim; Quaschning, Simon; Wegge, Denis; Hermelink, Andreas et
al. (2019b): Comprehensive study of building energy renovation activities and the uptake of nearly zero-
energy buildings in the EU. Final report - Infographics. Research report prepared for European
Commission, DG Energy. (Ipsos); (Navigant).
21
renovations and their financial benefits. As a result, there is a lack of understanding,
which would be necessary to offer targeted instruments such as favourable loans to
building owners that plan to undertake renovations that also cover energy improvements.
Across the building stock in the EU, the worst performing buildings, i.e. buildings in the
lower energy performance classes, are responsible for a large share of energy
consumption and GHG emissions. However, despite this relatively high impact, the
number of renovations among the worst performing buildings is lower than the average.
There are several reasons for this: on the one hand, the lack of upfront capital and
targeted funding and technical assistance tailored to buildings that require a more
complex package of renovation measures, while investments in building renovations tend
to prioritise single measures with relative short payback. On the other, worst performing
buildings, both in the residential and service sector, are often rented out, meaning that the
barrier of split incentives between owners and tenants to renovate buildings applies42
.
2.3.2 The drivers of the first key-problem.
Based on the general analysis of barriers to energy renovation in buildings in Section 2.2,
the EPBD can address several but not all barriers to energy renovation. The problem
drivers related to the first key problem that the EPBD revision will address are as follows
(also detailed in Annex E):
 Split incentives
 Lack of information on the energy performance of buildings and multiple benefits
of energy renovations
 Lack of standardised information tools on energy performance
 Lack of well-communicated decarbonisation trajectory
 Public financial support not sufficiently targeted towards deep renovations
 Behavioural barriers.
The issue of split incentives, or ‘owner-tenant dilemma’, is a very well-known barrier to
the uptake of energy renovations in buildings. On the one hand, this affects the financial
case for the energy renovation of rented buildings and the possibility to stimulate enough
interest in energy renovations of such buildings by splitting its two main economic
benefits: increase in property values and reduction of energy costs. Building owners
would be required to pay for efficiency investments, while building occupants would
42
The concept refers to the situation where the building owner pays for energy retrofits, but cannot recover
savings from reduced energy use because they accrue to the tenant (who pays a lower heating bill). Unless
the heating is included in the rent, in which case the property owner has an incentive to renovate worst
performing buildings.
22
reap the benefits of lower energy costs. In parallel, the advantage for building owners in
terms of property values would be directly accessible only through the increase in rents.
This would not be possible in the short term and/or would have relevant economic and
social impacts in terms of rent increases for tenants. This is why, in the absence of
mandatory obligations and dedicated support to building renovations, the issue of split
incentives probably remains one of the most relevant barriers to the uptake of energy
renovations in buildings through market measures. The EPBD currently does not include
any specific measures to address the lack of incentives for landlords to renovate.
There is a significant lack of information and awareness from both private, public (such
as municipalities, the public health sector, social housing) and professional owners or
tenants of buildings on the overall energy performance of the buildings they own or live
in, possible energy efficiency improvements, costs and benefits, carbon performance and
options to decarbonise. Although energy performance certificates (EPCs) regulated by
the EPBD are well-recognised tools and provide some of this information, which is also
valued by the market43
, the coverage, diffusion and proper advertisement of EPCs is
relatively low.44
65% of the respondents to the public consultation indicated that EPCs
should be updated and their quality improved. Stakeholders criticised the current EPCs
for appearing inadequate, with sub-optimal rating methodologies and poor
recommendations for improving cost-effective energy performance. They also
highlighted the low reliability of the data provided by EPCs, questioning the quality of
the calculation methods or of the audits. EPCs are only required at specific moments in
the lifetime of a building (sale or rent for the majority of buildings, while public
buildings of a certain size should always have a valid EPC and display it). This never
happens for many buildings during their life cycle. In addition, the information on EPCs
remains limited and is not sufficient to illustrate all the qualities and technologies of
buildings nor the full range of benefits that improvements could bring. Carbon
performance is for instance not a compulsory element in EPCs. The content of EPCs and
the EPC classes attributed to buildings also vary significantly across countries. This
limits their value to investors and financial players that operate in multiple markets. In
this respect, 75% of the respondents to the public consultation acknowledged the issue.
Closely linked with the information and technical barriers, public financial support for
energy renovations are currently also not sufficiently targeted towards deep renovations.
In particular, there is a clear link between the lack of appropriate and standardised
information tools for building renovations and the difficulty in targeting public financial
support towards deep energy renovations able to deliver large benefits in terms of energy
43
Several studies indicate that a price premium is applied to the most energy-efficient properties, for
instance https://doi.org/10.1016/j.apenergy.2016.07.076
44
See Annex G on EPCs.
23
consumption and GHG emission reductions45
. At the same time, regulatory measures are
needed to provide the necessary legal certainty, clarity and direction to better guide
financial investors and public support schemes. In that respect, the current framework
lacks clear definitions of deep and staged renovations46
.
Behavioural barriers, including risk aversion and inertia, are also key drivers behind low
renovation rates, at a level that fails to exploit the techno-economic energy efficiency
potential of buildings.
2.3.3 The complementary role of regulatory measures and carbon pricing to address the
barriers to energy renovations
As illustrated in the previous section, multiple factors hamper the roll-out of energy
renovations, and not all of them can be addressed by the EPBD. The policy mix of
measures included in the ‘Fit for 55’ package includes elements able to address the
different drivers, in particular carbon pricing, non-regulatory signals (such as targets),
regulatory measures, information tools, standards and support measures.
The strengthening of the EPBD and its revision will address measures that are mainly
regulatory, including information tools and planning. Current experiences with the EPBD
show that the regulatory approach is effective in increasing the energy performance of
buildings and in scaling up construction activities and the market uptake of materials,
products and highly performing technologies necessary to meet the regulatory levels. The
review will deepen the successful policies, leading to higher energy performance levels
for new buildings and extending them to existing buildings.
One key complementarity exists in the legal framework between carbon pricing
mechanisms and regulatory instruments in the building sector. While the carbon price
acts as a key tool in delivering rapid decarbonisation both in the buildings and transport
sector, market failures and barriers affecting the building sector would remain
unaddressed without regulatory measures and investment support.
The EU Emissions Trading System (EU ETS) currently covers around 30% of building
emissions from heating47
. This is related to the system’s coverage of district heating and
electricity used for heating purposes. These are direct emissions from larger fossil fuel
45
This aspect was in particular underlined by the European Court of Auditors’ recommendations as part of
their special report on ‘Energy efficiency in buildings: greater focus on cost-effectiveness still needed’,
https://www.eca.europa.eu/Lists/ECADocuments/SR20_11/SR_Energy_efficiency_in_buildings_EN.pdf
46
Staged renovation is a deep renovation delivered in steps, in several packages of measures and over a
period of time (e.g. replacing windows in a year, insulating walls a few years later, replacing the boiler
after another few years). In this way, the investment costs are distributed over a period of several years,
when building owners also benefit from the corresponding energy cost savings from the implemented
measure. This makes deep renovations more feasible and affordable. Staged renovations are facilitated by
the introduction of the building renovation passport.
47
This percentage refers to both direct and indirect emissions.
24
district heating system installations included in the EU ETS (> 20 MW) and indirect
emissions from electricity use in appliances, heating and cooling equipment such as heat
pumps and lighting. The carbon price from the existing EU ETS is largely passed onto
consumers via their electricity bill and heating costs. However, its price signal is limited
as not all fuels are covered.
With the proposed extension of ETS to heating fuels as part of the ‘Fit for 55’ package,
all heating fuels will be subject to a carbon price. Consumer heating bills will therefore
internalise carbon costs, indirectly incentivising the shift towards low-carbon heating and
investments in solutions that reduce energy consumption and exploit the existing energy
efficiency potential in the building sector.
Adding to heating costs derived from fossil fuels, the carbon price acts as an economic
incentive and makes investments in low-carbon heat and energy efficiency more cost-
effective. An ETS extension and higher costs for heating buildings with fossil fuels
would result in an additional economic incentive for the energy efficiency measures
promoted by the EPBD and the EED, provided that the carbon price signal is sufficiently
high. If the price is set at a sufficiently high level, energy efficiency measures would
likely become more cost-effective and have a shorter payback period.
The non-rational response of economic agents and the effects of non-economic barriers
and market failures, which prevent the markets alone from delivering cost-effective
emission abatement solutions, are illustrated by price elasticities – ‘the higher, the
bigger’ being the response48
. Price elasticities vary from short-term (reflecting the fact
that behavioural responses to changes in prices are small as space heating is a necessity)
to long-term ones (reflecting the factors that constrain investment).
Price elasticities of consumers to the costs of heating in the residential and service sector
are not well documented, but are considered to be low based on the studies available. In
the building sector, the information available from the literature is very limited.
However, the results indicate that buildings’ total energy consumption has a long-term
price elasticity of -0.23 on average at EU level49
. The presence of low elasticities indicate
that even if there is a significant carbon price, an abatement decision will not be taken,
and that a very high price is needed in the absence of complementary regulatory
measures. These constraints may prevent energy consumption from responding to a
carbon price signal quickly and strongly enough. Especially in case of low price signals,
48
Estimates of the price elasticity of demand represent the factor by which the demand for a good or
service changes in response to a 1% change in its price. Price inelastic goods have a price elasticity
between -1 and 0, with goods being classified as more inelastic the closer their elasticity estimate is to zero.
49
ICF (2021) ETS Clima study. Other studies show that empirical estimates of the short-run price elasticity
of demand for heating fuels in Europe range from -0.025 to -0.26, with long-run estimates ranging from -
0.05 to -0.32 for fossil gas and -0.025 to -0.50 for electricity.
25
carbon pricing alone would be insufficient to drive the uptake of the cost-effective carbon
abatement actions in the building sector.
The following tables present the abatement (MtCO2) and energy savings (Mtoe) potential
respectively in the residential sector in 2030 for the EU-27, at different carbon prices.
Table 2.2 Marginal energy savings (Mtoe) for residential building sector within EU-27 in 203050
2030 ENERGY
CONSUMPTION
(MTOE)
ENERGY SAVINGS
POTENTIAL (MTOE)
% SAVINGS
POTENTIAL
Carbon price 0 (EUR/tC02) 16.1 8%
Carbon price 30 (EUR/tC02) 16.9 9%
Carbon price 50 (EUR/tC02) 17.1 9%
Carbon price 90 (EUR/tC02) 20.6 11%
Carbon price 150 (EUR/tC02) 21.2 11%
Table 2.3 Mitigation measures implemented at each carbon price51
CARBON PRICE 0
(EUR/TC02)
ADAPTIVE THERMOSTATS
ADVANCED POWER STRIPS RET
ADVANCED POWER STRIPS
AIR INFILTRATION
CENTRAL AIR CONDITIONER TUNE-UP
CENTRAL FURNACE EFFICIENT FAN MOTOR
CENTRAL HEAT PUMP TUNE-UP
CONDENSING GAS BOILERS AND WATER HEATERS
INSULATION (DRAFT PROOFING, DUCT SEALING, PIPING)
EFFICIENT APPLIANCES (REFRIGERATOR, CEILING FANS, DEHUMIDIFIERS,
CLOTHES WASHER AND DRYER, TELEVISION, WINDOW AIR CONDITIONER)
HEAT PUMPS (ELECTRIC AIR-SOURCE COLD CLIMATE, GROUND SOURCE)
ENERGY EFFICIENT HOMES (20% ABOVE CODE)
ENERGY EFFICIENT POOL PUMPS
LIGHTING EFFICIENCY (EXTERIOR, CFL, INCANDESCENT)
WATER APPLIANCES (FAUCET AERATORS, LOW FLOW SHOWER HEAD)
WATER HEATER (HIGH EFFICIENCY GAS STORAGE WATER HEATER,
HYDRONIC HEATING, TANKLESS)
HIGH EFFICIENCY WINDOWS
SOCIAL BENCHMARKING AND HOME ENERGY MONITORING
Carbon price 30
(EUR/tC02)
Crawlspace insulation
Early furnace replacement - 70% AFUE - 90% AFUE
Carbon price 50
(EUR/tC02)
Integrated heating and domestic hot water (forced air heating)
Carbon price 90
(EUR/tC02)
Insulation (attic/ceiling, basement wall (R-12), slab (unfinished basement)
High efficiency heat recovery ventilators (HRVs)
Water heater replacement
Carbon price 150
(EUR/tC02)
95% or higher efficiency furnaces
Active solar water heating systems
50
Source: ICF Consulting.
51
Source: ICF Consulting.
26
The analysis in the above tables shows that at higher carbon price levels, more expensive
measures – but also more rewarding ones in the longer term – will be adopted. This is
also illustrated in the modelling scenarios underpinning the ‘Fit for 55’ package. With
carbon price alone, at the level estimated in the MIX scenario of EUR 48/tonne in 2030,
several measures necessary to exploit the energy efficiency potential will not take place,
leaving untapped potential.
The ‘Fit for 55’ package therefore envisages a mix of instruments to address economic
and non-economic barriers in a complementary way, together with financial support. In
this framework, regulatory measures are crucial to driving demand for decarbonisation
solutions and to addressing structural barriers. The EPBD revision aims to strengthen the
current measures and introduce new ones to address the persistent barriers to energy
renovation, in complementarity with carbon price signals, other regulatory instruments
envisaged in the Energy Efficiency Directive, Renewable Energy Directive and the
mechanism in the Effort Sharing Regulation.
Standards are needed to direct renovations towards buildings with the highest potential
and at the same time with the highest structural barriers of risk aversion, split incentives
and information asymmetry, and to stimulate more complex deeper renovations. The
carbon price is in fact expected to be effective in driving light renovation, but it would
have limited effects on medium to deep ones. According to the analysis made in the
Climate Target Plan and confirmed in the scenarios underpinning the ‘Fit for 55’
legislative proposals, it would need to increase six times from the level estimated of 0.1%
each year in the REF baseline scenario.
2.3.4 The second key problem: The EPBD framework is insufficient for the 2050 climate
objectives and to foster energy system integration
Net zero emission buildings have been identified as a key enabling pathway needed to
deliver on climate neutrality52
. While the EPBD, through national long-term renovation
strategies, already requires planning towards decarbonisation, there is a lack of a clear
pathway to deliver on climate neutrality. There is currently a lack of a coherent
framework to allow Member States to develop and plan their building decarbonisation
pathway in more detail, with clear milestones and targets towards 2030 and 2040. While
around 85 million m² of residential buildings and 40 million m² of service buildings are
built each year in Europe53
, the current EPBD requirements for new buildings do not
ensure that buildings are built in a way that makes them fully decarbonised (‘2050-
ready’).
52
‘A Clean Planet for all: A European strategic long-term vision for a prosperous, modern, competitive
and climate neutral economy’, COM(2018) 773 final.
53
Estimates based on the Odyssee database: https://www.indicators.odyssee-mure.eu/energy-efficiency-
database.html
27
With reference to the pathway towards climate neutrality, existing buildings with poor
energy performance are characterised by high energy consumption, high GHG emissions
and often relatively poor integration in the energy system. In the majority of cases, worst
performing buildings are usually the ones that rely more heavily on fossil fuels for
heating and cooling, and where the uptake of renewable energy sources is more difficult
because of the poor quality of the technical building system. Even if the building’s
energy demand could be fully covered by renewable energy, the low energy efficiency of
the building would lead to a waste of energy resources.
As a consequence, the current building stock is not always ‘technically fit’ for the energy
transition and ready to be integrated into a decarbonised and digitalised energy system.
This is a major barrier to the decarbonisation of heating and cooling and to increasing the
uptake of energy from renewables (i.e. geothermal heat) in households. A more energy-
efficient building stock is often a prerequisite for the energy switch for heating and
cooling from fossil fuels to renewable energy sources. In addition, there are also similar
technical and administrative barriers in the existing building stock. This hampers the
uptake of e-mobility solutions because of the lack of charging points in residential and
private buildings.
2.3.5 The problem drivers of the second key problem
 Lack of standards and requirements for new and existing buildings in line with
decarbonisation goal.
The current definition for nearly zero-energy buildings (NZEB) in the EPBD was
developed over 10 years ago and does not reflect the goal of decarbonisation and zero
carbon buildings enough. In addition, NZEB energy consumption levels differ across
Member States54
and do not address whole-life carbon nor the readiness of buildings to
provide flexibility and play an active part in the energy system by integrating smart
solutions for storage and demand response/management services to the grid. On these
aspects, 57% of the respondents to the public consultation indicated that NZEBs are not
ambitious enough.
 Insufficient measures to facilitate the integration of digitalisation and smart
solutions in new construction and building renovations.
Digitalisation is a key enabler in the decarbonisation of the building stock. Digital
technologies that can be used across the life cycle of buildings, from design and
construction to operation, are still not appropriately established in the EPBD framework
and in the renovation processes.
First, it has great potential to increase the quality and scalability of energy efficiency
solutions, with optimal design and collaboration (for example, building information
54
See Annex H.
28
modelling), execution (for example, automated construction techniques), and use of
buildings (for example, automated management systems, controllable devices and smart
appliances, and data collection). Second, in line with the energy system integration
strategy, it gives building users smart and flexible energy services, allowing the
development of demand-side management strategies that help further integrate variable
and decentralised renewable energy sources into the energy system, as well as energy
storage technology. However, the appropriate framework is still not in place for the
energy demand side to increasingly contribute to the smart energy grid flexibility effort.
Third, digitalisation can enable better resource efficiency and facilitate circular
approaches during design as well as construction and renovation. These are essential for
lowering embodied emissions and achieving climate neutrality in buildings.
Digitisation is a topic that was often highlighted by stakeholders as requiring targeted
measures in the EPBD. Stakeholders underlined its contribution to greater efficiency,
transparency of information, flexibility of the energy system and therefore reduction of
emissions. To complement this, in the public consultation conducted between 30 March
and 22 June 202155
, 72% of the respondents expressed the view that the EPBD can
contribute to making available and accessible a wider range of building-related data on
the energy performance of buildings and its related construction and renovation works
across its life cycle.
 Insufficient measures to support the uptake of electro mobility in private
buildings.
Current requirement for new buildings do not seem adequate to address existing barriers
and support the uptake of sustainable mobility and to contribute to transport
decarbonisation. With currently up to 90% of electric vehicles56
, recharging taking place
at home or at the workplace, the role of buildings in providing recharging infrastructure
is crucial, alongside publicly accessible infrastructure, which is regulated in the
Alternative Fuels Infrastructure Regulation (AFIR). The share of recharging at publicly
accessible points is expected to increase after 2030, but between 60% and 85% of all
recharging will still take place at private recharging points57
. According to a recent study,
the lack of deployment of smart private recharging infrastructure is a barrier58
to the
development of the market for EVs. Lengthy and complex approval procedures can be a
55
The public consultation attracted a total of 535 participants. The majority of people are from the EU (81
responses). Two respondents declared to be non-EU citizens. Most of the responses came from
companies/business organisations and business associations (278 responses, 52%), followed by academic
institutions (16 responses, 3%). 39 responses were from public authorities (7%), NGOs (12%), trade unions
(5 responses, 2%), environmental organisations (1%) and consumer organisations (1%). 35 declared to be
other stakeholder type (7%).
56
“Electric vehicles” (EV) are meant to include the range of vehicles of different sizes and concepts,
including also electrically assisted bicycles, as long as they are powered by electricity.
57
https://ec.europa.eu/info/sites/default/files/revision_of_the_directive_on_deployment_of_the_alternative_
fuels_infrastructure_with_annex_0.pdf
58
Study ENER-B3-2020-332.
29
major barrier to owners and tenants installing recharging points in existing multi-tenant
residential and non-residential buildings. Obtaining the necessary approvals can create
delays or prevent their installation.
2.4 How will the problem evolve?
2.4.1 The building sector in the Reference scenario
The magnitude of the challenge ahead, caused by the current inefficiency and low rate of
renovation and decarbonisation of Europe’s building stock, is illustrated by the CTP’s
impact assessment and the updated scenarios drawn up in other proposals of the ‘Fit for
55’ package. The current decrease of CO2eq emissions from the use of buildings is
estimated to be maximum 1%/year. This is three or four times lower than what would be
necessary to sufficiently contribute to the ‘-55% by 2030’ target.
In the baseline of the ‘Fit for 55’ package (REF), which describes ‘business as usual’
conditions and evolution based on current policies, primary energy consumption
decreases by 32.7% in 2030, but this is insufficient for the net -55% climate target. For
final energy consumption, REF projects 823 Mtoe, which is 29.6% below the trajectory
of the 2007 baseline and therefore below the agreed 2030 energy efficiency target of at
least 32.5%59
.
Figure 2.2: Final energy consumption by fuel in buildings (residential and services)60
The use of buildings is responsible for more than 40% of final energy consumption61
.
Residential and service buildings consume 333 Mtoe together each year, with residential
59
The 2030 energy efficiency target has been realigned with the values of the 2020 reference scenario. On
this basis, the current 2030 target can be expressed as a reduction of 9% of final energy consumption in
comparison to the level in 2020 reference scenario (REF).
60
Eurostat and PRIMES model.
61
This figure refers to the use and operation of buildings, including indirect emissions in the power and
heat sector, but not their full life cycle. The embodied carbon in construction is estimated to account for
around 10% of total yearly greenhouse gas emissions worldwide, see IRP, Resource Efficiency and
Climate Change, 2020, and the UN Environment Emissions Gap Report.
0
50
100
150
200
250
300
350
400
450
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Mtoe
Electricity
Geothermal
Solar energy
Heat distributed
Biomass
Gas
Liquids
Solids
30
buildings representing almost 65% of the total. Figure 2.2 displays the combined
consumption of residential and services in buildings in REF by fuel type.
Figure 2.3: GHG emissions from the use of buildings62
In the REF scenario, energy consumption for the use of buildings already falls
significantly thanks to policies already in place and better performance and lower costs of
technologies (such as heat pumps). However, their effects are partially offset by
increased consumption to satisfy higher comfort levels and increased demand also for
cooling needs. Looking towards 2050, the importance of fossil fuels decreases and
electricity expands its already significant share further. However, solar energy and
distributed heat remain marginal. Figure 2.3 displays the projected decline in GHG
emissions.
Both residential and service sectors need to reduce their emissions. Due to their share in
energy consumption, residential buildings in terms of absolute amounts have to make a
bigger effort to reduce emissions than service buildings. The EU’s total GHG emissions
in the REF in 2030 (including all domestic emissions & intra-EU aviation and maritime)
will be 43.8% below the 1990 level. Climate neutrality will not be achieved in the
baseline, falling short of the European Climate Law objective.
2.4.2 The need for a more efficient building stock in a progressively decarbonised energy
system
In the CTP and the ‘Fit for 55’ package, REG and MIX ‘core’ scenarios63
illustrate the
need to step up efforts in comparison to current trends across all sectors. Depending on
the policy mix, ‘core’ scenarios achieve a significant decarbonisation of building stock
62
Eurostat and PRIMES model.
63
See the discussion in Chapter 6 and description of core scenarios here: https://ec.europa.eu/energy/data-
analysis/energy-modelling/policy-scenarios-delivering-european-green-deal_en as well as Annex 4 in the
impact assessment accompanying the amendment to the Renewable Energy Directive, SWD(2021)621
final.
0
100
200
300
400
500
600
700
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Mt/CO2
Residential
Services
31
through a fuel switch combined with energy efficiency progress thanks to renovations
and the use of more efficiency appliances.
For the decarbonisation of buildings, the reductions needed by 2030 range between -54%
and -61% (compared to 2015) in the scenarios for achieving -55% GHG. This is a step
change in comparison to the reference scenario in which the level of GHG reductions is -
33% in 2030.
The reasoning behind the significantly higher cost-effective emission reductions for
buildings (and the power sector) compared to other sectors in modelling is that buildings
have greater potential for abatement at a lower cost and therefore compensate for other
‘hard to decarbonise’ sectors. Those sectors are unlikely to level off their expansion and
growth trends by 2030 with the increased speed of decarbonisation (e.g. transport, heavy
industry that needs technologies such as hydrogen) or to simply achieve a similar level of
emission reductions technically (e.g. agriculture, which has very few abatement options).
The power sector also has greater potential and needs to significantly cut its direct
emissions too. In the long term, it will be one of the first to decarbonise completely.
Furthermore, a strong link exists with the building sector due to the significant trend
towards electrification of heating via heat pumps. To some extent (given that heat pumps
are very efficient in electricity consumption and electricity is the sector that decarbonises
the fastest), with the electrification of heating, direct emissions from buildings are
‘moved’ into the power sector, e.g. by replacing fossil fuel boilers with heat pumps
(which run on electricity).
Importantly, core scenarios show that in the absence of energy efficiency, the effort in
terms of fuel switch needs to be bigger. This effect would exacerbate climate neutrality
pathways, leading to a strain on scarce resources (biomass-based fuels for heating or
hydrogen-based innovative synthetic fuels).
To avoid a certain sectoral shift of emissions from buildings to power generation in the
medium term or too high demand for low-carbon H&C in the long term, energy needs
therefore need to be reduced, together with phasing out the remaining fossil fuel
consumption.
Analysis and projections converge, indicating that a cost-effective and feasible pathway
towards decarbonisation should rely partly on the decarbonisation of power generation,
partly on low-carbon fuels, including the direct use of renewables in buildings (on-site),
and partly on reducing the energy needs in key energy consumption sectors. The optimal
pathways towards decarbonisation balance renewable deployment and energy efficiency
improvements across the energy sectors. In long-term EU scenarios, achieving carbon
neutrality64
, demand-side solutions and, in particular, high-performance buildings plays a
critical role in reducing the demand for electrical heating in winter, addressing the
64
In-depth analysis in support of Commission Communication COM(2018).
32
seasonal supply-demand mismatch. In particular, the temporal mismatch between the
non-dispatchable renewable supply and peaks in electricity demand is in fact one of the
key challenges to achieving high percentages of renewable electricity supply. Minimising
the space heating requirements through the building envelope and its air tightness
performance while covering the remaining energy demand by renewable sources,
especially electrification, has been identified as an optimal strategy to ensure grid
balancing and to find the cost-optimal pathway towards decarbonising the energy
sector65
. While this is true at aggregate level, also at the level of single buildings,
analysis shows that while comparing new constructions implementing the NZEB
requirement in order to minimise life cycle costs and the environmental impacts across
their life cycle, buildings with higher energy performance outperformed those for which
electricity production was maximised66
. Such analysis suggests that the focus should be
placed on (i) minimising the space heating requirements through a building envelope
with high thermal and air tightness performance; and (ii) covering the remaining energy
demand, to a significant extent, by renewable sources that compensate for buildings’
specific energy source during their operational phase.
3. WHY SHOULD THE EU ACT?
3.1 Legal basis
The legal basis is Article 194(2) TFEU, the legal basis for Union policy to promote
energy efficiency and energy savings. Energy policy is a shared competence between the
EU and Member States. As this initiative concerns amendments to an existing Directive,
only the EU can effectively address the issues.
3.2 Subsidiarity: Necessity of EU action
Climate change being a transboundary problem, Member States’ action alone on
buildings’ emissions would lead to suboptimal outcomes.
To decarbonise the buildings stock, its annual rate of refurbishment must be scaled up.
Low renovation rates are also linked to the underachievement of the energy efficiency
goals in 2020, as energy consumption in the buildings sector has not decreased along a
pathway compatible with it. The issue of insufficient rates and depths of renovation to
achieve the GHG reduction objectives is a common one in the EU. As mentioned in the
Renovation Wave Communication, across the EU, deep renovations that reduce energy
consumption by at least 60% are carried out only in 0.2% of the building stock per year
and in some regions, energy renovation rates are virtually absent. No Member State
achieves a yearly deep renovation rate of 1% or more. Similarly, yearly rates of medium
renovation (30% or more of primary energy savings) are below 5% in all Member States
when looking at both residential and non-residential buildings. Those consistently low
65
See for instance https://doi.org/10.1016/j.enpol.2021.112565
66
https://doi.org/10.1016/j.enbuild.2017.01.029
33
renovation rates show that a step change towards stronger requirements at EU level is
needed.
In addition, as laid down in Chapter 2 and in Annex E, the underlying problem drivers
and relevant barriers to building renovations, such as market failures (notably split
incentives owner-tenant-dilemma), information barriers, organisation and behavioural
barriers, lack of targeted finance and technical capacities and skills, prove to be similar in
all EU Member States. These economic and non-economic barriers are largely present in
all Member States and cannot be overcome solely with economic or monetary incentives.
This is acknowledged in the set-up of the ‘Fit for 55’ package which includes a reasoned
policy mix of targets and non-regulatory signals, carbon price mechanisms, regulatory
standards and financial incentives.
If buildings were not to be decarbonised in an effective and coordinated manner across
the EU, this would lead to an unfair distribution of burden and a spillover effect of higher
energy consumption and greenhouse gas abatement costs for the EU as a whole. A key
underlying reason is the increasing marginal cost of GHG emission abatement, including
for investments targeting buildings’ energy performance. The more a building or building
stock is already energy performant (because of high insulation and low-carbon heating
already installed), the more difficult and thus costly it becomes to tap into additional
energy and GHG savings. The fragmentation of the buildings’ energy performance,
leading to shares of inefficient buildings in certain Member States not being targeted
(low-hanging fruits) could therefore lead ultimately to a possible failure in meeting the
long-term EU decarbonisation objective, but also reduced energy security due to higher
energy consumption
More ambitious and more prescriptive EU level action is therefore necessary to ensure
policy alignment towards decarbonisation of buildings across the EU. The role of the EU
is crucial to make sure that the regulatory framework reaches comparable ambition levels
and is consistently enforced. The revision of the EPBD follows the need to update it to
reflect the increased ambition of the EU climate and energy targets. This is on top of the
fact that the assessment of the EU-wide impact of the National Energy & Climate Plans
that the Commission published in September 202067
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 would thus be needed in any case in line
with what foreseen in the Energy Union Governance Regulation68
.
67
https://ec.europa.eu/info/news/commission-publishes-assessment-national-energy-climate-plans-2020-
sep-17_en
68
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32018R1999&from=EN
34
3.3 Subsidiarity: Added value of EU action
Setting a common framework for the enhanced decarbonisation of buildings at EU level
will ensure that the buildings sector reduces its GHG emissions at the required scale to
achieve the EU’s energy and climate targets and in the most cost effective way.
Since the adoption of the first EPBD in 2002, the EU legislative framework on buildings’
energy performance has prudently expanded, setting a common minimum framework at
EU level and leaving significant flexibility for implementation and adaptation to Member
States. The experience with joint EU ambition for all new buildings to be nearly zero-
energy by 2020 shows the significant impact of mobilising the buildings sector around a
common objective and language69
. Nonetheless, so far similar market signals have been
missing for the existing building stock, which represents the largest share of the cost-
effective potential70
. Action at EU level offers a better leverage in mobilising the sector
around a common ambition and leads to higher expected market outcomes. The
development of industrialised fast-track solutions for the uptake deep energy renovations
and zero-emission buildings would benefit from a closer integration of the EU market for
energy renovations and sustainable constructions. In order to achieve these objectives,
common framework and methodologies on the evaluation of energy performance of
buildings and renovation practices have to be established at EU level. The experience
from the implementation of the current EPBD shows that a common EU framework
allows national policy-makers to build on each other’s’ best practices, stimulates
innovation and increases the benefits of the internal market for construction products and
appliances. Additionally, differences in the current national frameworks for monitoring
and evaluation of energy performance of buildings prevents the possibility to exploit
synergies and economy of scale for cross-border professional and financial investors in
energy efficiency renovations of buildings. Today, the absence of a common EU
framework methodology and of national databases on energy performance frameworks is
identified as relevant to the uptake of private financing for energy renovations.
Construction products and services, heating, cooling, air-conditioning and lighting
devices, as well as on-building renewable systems, smart controls, building automation
systems, smart meters, and other products are an important part of the internal market.
The construction sector overall contributes to 9% of the EU’s GDP. A joint EU
framework for building renovation will send strong market signals that promote the
development of these markets and will lead to economies of scale. In relatively new areas
such as industrialised solutions for building renovation, strengthening the common
69
See Annex H and ongoing Horizon 2020 projects (e.g. RenoZEB, HEART, REZBUILD, ReCO2ST).
70
This is assessed in various studies, including: (ICF et al.; 2021); Technical assistance services to assess
the energy savings potentials at national and European Level. See also Annex H of the Impact Assessment
supporting the revision of the EED:
https://ec.europa.eu/info/sites/default/files/proposal_for_a_directive_on_energy_efficiency_recast.pdf .
35
language and requirements will help the EU industry expand. Consulted stakeholders
underlined the importance of common standards and access to information for the
scalability of innovative projects (e.g. turnkey renovations, which benefit from
transparent access to information on permits and financing sources). On financing
specifically, having a common definition of ‘deep renovations’ will allow investors to
aggregate funding to be channelled to projects which meet the deep renovation criteria.
Action to upgrade the energy performance of the existing building stock will also
generate other common EU benefits. As an example, the reduced energy demand from
buildings and higher reliance on renewable energy, which is overwhelmingly generated
within the EU, will contribute to the security of energy supply for all EU Member States.
Changes to the current EPBD framework do not mean that no margin for manoeuver will
be left to Member States. Building typologies, ownership structures, climatic conditions
and energy poverty levels vary across Europe. Therefore, while the direction of travel
and a common ambition level need to be set at EU level, sufficient flexibility is given to
Member States in order to adapt their buildings regulatory and financing policies to
national and local circumstances.
4. OBJECTIVES: WHAT IS TO BE ACHIEVED?
4.1 General objectives
Together with the other actions from the Renovation Wave action plan and the other
elements of the ‘Fit for 55’ package, the revision of the EPBD aims to strengthen the
legal framework for the energy performance of buildings to ensure a higher contribution
to the achievement of the EU’s energy and climate objectives for 2030 and the climate
neutrality objective for 2050, in particular through a higher renovation rate.
The revision will also aim to modernise buildings and strengthen their role as an active
part in the energy system, for instance through smart charging of EVs. The following
figure provides an overview of the problems, drivers and objectives of the EPBD
revision. In particular, two general objectives have been identified for this EPBD
revision:
 2030 objective: Contribute to reducing buildings’ greenhouse gas emissions and
final energy consumption by 2030, to a level commensurate with the CTP goals.
 2050 objective: Provide a long-term vision and ensure that buildings make an
adequate contribution to achieving climate neutrality in 2050.
Figure 4.1: Drivers, problems and objectives of the EPBD revision
36
In order to achieve the general objective and to tackle the key problems and problem
drivers identified, four specific objectives that pave the way to the policy options
(described in Chapter 5) have been identified. The specific objectives identified aim in
particular to address, among the several additional drivers of a broader nature, those that
can be directly tackled by the EPBD and contribute to the identified key problems.
As set out in Article 1 EPBD, the EPBD promotes the improvement of the energy
performance of buildings within the EU. Several key elements of the Renovation Wave
strategy, such as finance, adequately skilled workforce, seismic safety of buildings and
safety of workers, fall outside the EPBD scope and cannot, or only to a limited extent, be
addressed by the EPBD revision.
4.2 Specific objectives
4.2.1 Increase the rate and depth of building renovations.
The first specific objective addresses the first key problem and related problem drivers,
namely the barriers identified to the increase of annual energy renovation rates and deep
energy renovations. Increasing the renovation rates and the depth of building renovations
is necessary to put the building sector on track towards achieving the 2030 energy and
climate targets and the specific target contribution for decarbonisation efforts in
buildings. To improve the energy performance of the EU building stock in the most cost-
effective way, the scale of building renovations (renovation rates) in EU countries need
to increase in parallel with the quality of the energy efficiency improvements achieved by
the single renovation (renovation depth). Increasing the renovation rate and thereby
realising the energy savings potential in existing buildings is important to cut carbon
37
emissions, improve well-being and reduce energy poverty. The increased rate and depth
of renovation should be commensurate with the decarbonisation efforts required to
achieve the increased climate target and will have to be maintained also post-2030 in
order to achieve EU-wide climate neutrality by 2050. Doing this with circularity in mind
will reduce waste and keep embodied carbon low. Several stakeholders71
supported this
and called for ‘greener’ renovations that integrate circular economy principles.
The aim is to trigger, with updated policy measures, energy renovations at certain
moments in the buildings’ life cycle, or by addressing split incentives and the
organisational barriers to energy renovations72
, also bearing in mind that by addressing
the worst performing buildings the benefits are maximised. Improved information and
comparability of the energy performance of individual buildings will also increase
awareness and contribute to greater renovation efforts. This will also be addressed by
strengthening the links between the depth of renovations and the aid intensity accessible
through public budget support.
For this objective, there are synergies with the energy-saving goals, policies on the public
sector, public building renovation and split incentives73
in the EED and with the
introduction of emissions trading in the building sector. It is supported by the ESR,
which sets binding GHG emission reduction targets for Member States that cover several
sectors, including buildings.
4.2.2 Improve information on the energy performance and sustainability of
buildings, with the use of digital tools.
Improving information on the energy performance of buildings addresses multiple
barriers to achieving decarbonisation of the building stock and the climate neutrality goal
by 2050. This specific objective aims to address both key problems identified and the
information barriers to the uptake of energy renovations and of a clear decarbonisation
trajectory for buildings. It specifically addresses the problem drivers linked to the lack of
information on the energy performance of buildings and multiple benefits of energy
renovations and linked to a lack of standardised information tools on energy
performance. By strengthening the reliability of the tools already available to measure the
energy performance of buildings, the awareness of the general public as well as
professionals of the multiple benefits that could be achieved thanks to deeper renovations
would be improved and property values would reflect this.
Overall, the objective is to increase the number of buildings with an EPC, as well as their
quality and comparability across Member States, and to further EPC mainstreaming and
71
In the consultation on the inception impact assessment, 87 feedback responses covered the topic of
circularity. These returns mainly came from professional associations/companies, NGOs and public
authorities.
72
doi:10.2790/912494, JRC101251
73
doi:10.2760/070440, JRC115314
38
accessibility to consumers and investors. This increased coverage should go hand in hand
with the higher quality of EPCs as fully digital tools. By increasing the quality and
comparability of EPCs as fully digital tools, the aim is also to reduce the administrative
burden for building renovations.
By increasing the scope, range of information and coverage of EPCs and other building
information tools such as building renovation passports, the objective is also to ensure
that public support such as EU funding can be better targeted towards high-impact
projects and qualitative investments. This will also facilitate follow-up in terms of
reporting and monitoring and the long-term impact of public support to building
renovation. Digitalised EPCs and digital tools could reduce the administrative burden and
simplify procedures.
Stakeholders stressed that improving the quality is key as only high-quality EPCs will be
trusted by owners/occupiers and the finance sector. In particular, 77% of the respondents
to the public consultation pointed out that funding support to renovations should be
linked to the depth of renovations. They also underlined that EPCs are the key tool for
assessing energy efficiency improvements for financing purposes. Alongside EPCs,
stakeholders74
largely supported the inclusion of the building renovation passport in the
revision of the Directive to address the information gap of owners and investors by
providing documentation on the renovation roadmap of buildings.
4.2.3 Ensure that new buildings are in line with the 2050 climate neutrality
objective.
This objective addresses the second key problem and the related problem drivers of the
lack of standards and requirements for new and existing buildings in line with
decarbonisation goals. For new buildings and for the transformation of existing
buildings, a new vision going beyond nearly zero-energy buildings is needed. This will
ensure that new builds are fully compatible with carbon neutrality goals and that lock-in
to technologies with a long lifetime, which rely on fossil fuels for heating and cooling, is
avoided. To achieve this objective, an update the current nearly zero-energy buildings
requirements towards zero-emissions buildings requirements is necessary. The concept of
zero-emissions buildings received support from 84% of the respondents to the public
consultation.
For new buildings, this will mean designing building performance requirements that
ensure much lower energy needs and phasing out fossil fuels for heating and cooling
thanks to the deployment of renewables technologies. These include direct renewable-
based electrification and modern low-temperature district heating and cooling that
harness local renewable energy and waste heat resources. By addressing whole life
74
66 responses to the inception impact assessment encouraged the inclusion of building renovation
passports in the revision of the EPBD. Most of these responses came from associations/business
organisations as well as NGOs.
39
carbon and resilience75
, such a new vision would maximise decarbonisation and make
new construction future-proof.
For this objective and the previous one there are synergies with the RED for heating and
cooling target, the planned introduction of emissions trading for buildings, EED on heat
planning and Ecodesign requirements and energy labelling of heating and cooling
appliances.
4.2.4 Integrate buildings into decarbonised and digitalised energy systems.
This specific objective targets key enabling conditions to address the second key problem
of putting building decarbonisation efforts on the right trajectory towards climate
neutrality, as buildings today are not technically fit for the energy transition and for
increased renewables deployment. However, this objective also addresses the first key
problem and the need to step up energy renovations towards 2030, in particular with
regard to the increased benchmarks for RES uptake in buildings as well as the benefits to
energy performance through a deeper integration of buildings into a digitalised energy
system.
The expected increase in the integration of renewable energy needed to achieve energy
and climate goals and pave the way to carbon neutrality will require buildings fit for
renewables with high thermal integrity and modern technical building systems. Given
that part of the renewable energy will come from intermittent sources, buildings should
also be able to provide flexibility and play an active part in the energy system by
integrating storage and demand response/management services into the grid thanks to the
smartness of their technical building systems. The more flexibility that buildings can
offer to ‘serve the energy infrastructure system’ (mainly the power system) through
storage, own power production and connected EVs, the more valuable they will be in the
future energy system.
Under this objective, the EPBD revision aims to further modernise buildings and their
systems (for heating, cooling, ventilation, renewables, flexibility and storage) across their
whole lifetime, with digitalisation as the key enabler. In this regard, policy measures and
options will explore the possibility to ensure building preparedness and to strengthen and
improve the integration of the smart readiness indicator with new tools like digital
logbooks and building renovation passports, in synergy with the forthcoming
Digitalisation of Energy Action Plan76
.
75
By taking into account in the design of the building the likely evolution of local climate conditions and
their possible effects on energy performance and the building’s physical integrity during the estimated
lifetime of the building.
76
Action plan on the digitalisation of the energy sector – roadmap launched | European Commission
(europa.eu)
40
Another specific aspect to address under this objective is the problem of lack of charging
points in residential and work parking spaces and administrative barriers for the owners
of electric vehicles that need access to charging points. According to stakeholders, there
is a need to strengthen the existing provisions on e-mobility, in particular for new
buildings, and to introduce a ‘right to plug’ in multi-dwelling buildings. From this
perspective, specific policy measures and options are proposed to ensure that new and
existing buildings are being prepared for the introduction of e-vehicles and introduce the
‘right to plug’. This will also complement the requirements on the deployment of
publicly accessible infrastructure in the Alternative Fuels Infrastructure Regulation and is
closely linked to the recast Renewable Energy Directive.
4.3 Intervention logic
The intervention logic to the EPBD revision is developed in Chapter 2 – Problem
definition, Chapter 4 – Objectives, and Chapter 5 – Policy options. The three chapters are
developed in a coherent and interlinked way feeding one into another – from the
identification of key problems and problem drivers, general objectives and specific
objectives, to policy areas of interventions and policy options. At the beginning of Annex
E, the overall intervention logic, from problem drivers to policy options, is presented in a
dedicated figure.
5. WHAT ARE THE AVAILABLE POLICY OPTIONS?
5.1 What is the baseline from which options are assessed?
5.1.1 The baseline for assessment
All the ‘Fit for 55’ initiatives share a common baseline, the EU Reference Scenario 2020
(REF). It is the common starting point for energy system modelling in the respective
impact assessments for all the proposals adopted in July 202177
.
The EU Reference Scenario 2020 reflects current and planned policies, notably as stated
in Member States’ national energy and climate plans, and takes account of COVID-19
impacts. It models the policies already adopted, but not the target of net-zero emissions
by 2050. As a result, there are no additional policies driving decarbonisation after 2030.
The same baseline approach is followed in this impact assessment and the key parameters
77
Details can be found in the respective Impact Assessments, for example Annex D of the Impact
Assessment Report Accompanying the document “Proposal for a Directive of the European Parliament and
of the Council amending Directive 2012/27/EU on energy efficiency”. Furthermore, a separate publication
dedicated to the Reference scenario contains complete information about preparation process, assumptions
and results: EU Reference Scenario 2020 | Energy (europa.eu).
41
used are aligned to REF. From a methodological point of view, this ensures coherence
across the ‘Fit for 55’ initiatives78
.
The effects of the legislative proposal adopted by the Commission in the July 2021 ‘Fit
for 55’ package are therefore not included in the baseline for this impact assessment. The
impacts of the revised EED, RED II, AFIR, ESR and of the introduction of a separate
ETS on heating in buildings are assessed from the point of view of coherence and
complementarity, in particularly in section 7.2.
In addition, the interplay between the ‘Fit for 55’ proposals is modelled by specific
policy scenarios. This is done by the central policy scenario (MIX) and by a dedicated
scenario (MIX-without-EPBD) which with a certain level of approximation disentangle
the EPBD policy drivers (See section 6.2).
Figure 5.1: Floor area development in billion m², renovation and new construction levels, EU, Baseline
Scenario (BSL)79
Source: Guidehouse et al.
The specific baseline used in this impact assessment focuses on the buildings stock only
(and not to the overall energy system) and the impacts of the policy options are assessed
78
Differently, the ‘Gas decarbonisation package’ which is also part of ‘Fit for 55’ follows a different
approach and includes the expected impacts of the proposals adopted in July 2021 in the baseline of its
impact assessment. For this reason, it adopts the MIX scenario as a starting point/baseline. The “Gas
decarbonisation package” proposal focuses on policies related to infrastructure solutions, which are not
dependent from the policy choices related to the policy mix driving energy demand for decarbonised fuels.
In addition, the “Gas decarbonisation package” is not expected to have in itself impacts on the size of
energy demand. The policy options under in the “Gas decarbonisation package” and their relations with the
MIX and REF scenario are therefore fundamentally different from those in the EPBD revision.
79
Source: Guidehouse et al. (2021). In this impact assessment, this reference identifies the following study,
to be published: Technical assistance for policy development and implementation on buildings policy and
renovation. Support for the ex-ante impact assessment and revision of Directive 2010/31/EU on energy
performance of buildings Service request 2020/28 – ENER/CV/FV2020-608/07; DG Climate Action
CLIMA.A4/FRA/2019/0011.
42
bottom-up. Given the long lifecycle of buildings, to illustrate the expected evolution of
its energy performance and overall consumption, and the consequent CO2 emissions, it is
therefore important to look at the renovation of floor area over time. Figure 5.1 illustrates
the expected renovation of the EU floor area (both residential and non-residential
buildings) in the coming decades based on current policies and technology trends.
Approximately 80% of the 2050 building stock already exists today. Thanks to existing
policies, technological drive and autonomous trends, the floor area renovated will slightly
but progressively increase in the coming decades. It is estimated that more than half the
existing building stock (13.3 billion m2
out of a total of 24 billion m2
) has not been
renovated since construction, while the remaining part has been renovated to a certain
extent. The figure above shows that at current renovation levels the non-renovated share
will progressively decrease. However, in 2050 about 40% of the stock will still remain in
its original state, while in 2030 and 2050 respectively 17.6% and up to 60% of the stock
will be subject to renovation to average levels, locking-in a significant amount of
potential energy and emissions savings that could be achieved with higher rates of
renovation.
The development of the EU floor area also illustrates that new construction more than
compensate for demolition by 2050. In line with current renovation rates and trends, it
also shows that most energy renovations are shallow (‘reno-average’) while deeper
renovations (e.g. ‘reno-ZEB’) happen at a much lower rate. It is also assumed that until
2050 a small share of new buildings will go beyond the current NZEB standard80
.
Without accounting for new builds, in the baseline scenario the total final energy
consumption of the building stock will decrease by 1.4%-1.7% every year81
in the
coming decades.
5.2 Description of the policy options
Based on existing studies, on the inputs from stakeholders and on internal analysis, a
range of policy options and measures were screened to respond to the problems
identified. The selection of options also builds on the analysis and stakeholder
consultation made in preparation of the Renovation Wave strategy, which already
identified key policy measures to be considered in the revision of the EPBD.
The measures identified were examined in detail and various options for their design
were considered. Stakeholders were consulted specifically on each area and the available
information was examined. The options are grouped into three areas (A, B, C)
80
The energy performance associated to the different renovation types (e.g. ‘reno-average’, ‘reno-ZEB’) is
described in Annex D.
81
New buildings constructed between 2020 and 2050 are not included in this figure. Therefore, the total
final energy consumption of the building stock would in reality be slightly higher.
43
responding to the specific objectives as described in Chapter 4 and addressing specific
barriers identified in Chapter 2. The above figure visualises which are the policy
measures contributing to each of the specific objectives identified.
Figure 5.2: Overview of objectives and policy options
Area A. Measures to increase the number of buildings being renovated and renovation
depth.
Area A is at the core of the EPBD revision and contributes to the main objective of
reducing buildings’ greenhouse gas emissions and final energy consumption by 2030, to
a level commensurate with the CTP goals. As regards the specific objectives of this
initiative, the measures proposed in Area A aim at an increase of the number of buildings
being renovated, especially those with a very low energy performance.
In relation to the problems identified in Chapter 2, area A addresses the first key-problem
which is that the EPBD framework is insufficient to the achievement of the 2030 climate
objectives and lacks measures to address the non-economic barriers limiting energy
renovations. The underlying problem drivers are illustrated in the below table.
Table 5.1: Problems drivers addressed by the measures in Area A.
Problem drivers/barriers MEP BRPS EPCQ DEEP LTRS
44
S
Split incentives ++
Public financial support not sufficiently targeted toward deep
renovations
+ + ++ +
Lack of information on energy performance of buildings and
multiple benefits of energy renovations
+ +
Lack of well-communicated decarbonisation trajectory + +
Lack of standardised information tools on energy
performance
+
Behavioural barriers ++ + +
Lack of standards and requirements for new and existing
buildings in line with decarbonisation goal
+ +
Insufficient measures to facilitate the integration of
digitalisation and smart solutions in new construction and
building renovations
+
Insufficient measures to support the uptake of
electromobility in private buildings
This area addresses as well the second specific objective of the EPBD revision, which is
to improve information on energy performance and sustainability of buildings with the
use of digital tools. It contributes in particular to the improvement of the quality and
comparability of information tools on energy performance of buildings across the EU.
Respondents to the open public consultation have shown a key interest in strengthening
some of the EPBD tools and provision under this policy area. In particular, 75% of
respondents supported the introduction of minimum energy performance standards
(MEPS) for buildings in the revision of the EPBD82
, 68% were in favour of the
introduction of a legal definition of “deep renovation”, and 89% confirmed the need to
strengthen the monitoring of the objectives identified in the Long-Term Renovation
Strategies. Some stakeholders have spoken against the introduction of MEPS, arguing
that their set up should be handled at Member State level. They also stated that Member
States are still implementing the Clean Energy Package and that excessive regulation
should be avoided. Rather, indicative guidance should be provided with technical and
financial support. The large majority however expressed the need for a EU framework
giving sufficient flexibility to Member States to adapt to local conditions. Few
respondents indicate that the MEPS would not be necessary if the EU ETS is extended to
the building sector. Few also consider that such minimum requirements will have a too
strong impact on property rights that cannot be justified even in light of the need to act
against climate change.
82
The view of stakeholders on MEPS, collected in the different consultation activities supporting the
EPBD revision is presented in Annex G.
45
The measures in area A are:
- A.1 Minimum energy performance standards (MEPS): MEPS1, MEPS2, MEPS3,
MEPS4
- A.2 Buildings renovation passport (BRP): BRP1, BRP2, BRP3
- A.3 Energy performance certificates (EPCs) – strengthening quality and
comparability: EPCQ1, EPCQ2, EPCQ3
- A.4 Deep renovation standard: DEEP1, DEEP2
- A.5 Long Term Renovation Strategies (LTRS): LTRS1, LTRS2, LTRS3
A.1 Minimum energy performance standards (MEPS)
MEPS are addressing the first key problem related to the non-economic barriers limiting
energy renovations, in particular the split of incentives, the lack of a well-communicated
decarbonisation trajectory and behavioural barriers leading to market failures. MEPS are
policy instruments which require buildings to be renovated and improved to meet a
specified energy performance standard at a chosen trigger point or date and can include
standards that tighten over time. As such, MEPS drive an increase of rate of renovations
which is necessary according to the analysis underpinning the CTP in order to reduce
GHG in buildings by around 60% by 2030 as compared to 2015.
MEPS are already in use both in the EU and worldwide. The experiences from France,
Belgium, Netherlands, Germany, Greece, England, Wales, and Scotland have been
examined to identify the best policy design and success factors. Examples from regions
where MEPS have been rolled out show that MEPS contribute to improved energy
standards across the targeted stock and that high levels of compliance can be achieved if
MEPS are accompanied by adequate enforcement framework and a policy-signalling
effect on the markets. MEPS are also effective in addressing one of the most critical
barriers to energy renovations, which is the split of incentives and benefits to renovations
occurring for buildings which are rented and not owner-occupied. A detailed overview of
MEPS applications is available in Annex F.
The set of options identified build on the success factors and lessons from the existing
MEPS. The key criteria taken into account are also the consistency with the current
EPBD architecture, to maximise the synergy with its existing tools to increase
effectiveness, while respecting subsidiarity. As regards subsidiarity, the options
identified distinguish between MEPS based on a common EU framework, MEPS based
on national plans and voluntary MEPS.
Several designs are possible, as illustrated by the varied experiences worldwide. The
modulation of options has been made on the basis of the following three key design
features: (a) identification of targeted buildings, (b) metric of the energy performance
standard, and (c) trigger point for the implementation of MEPS. Each design feature can
be modulated in a way to match increasing ambition levels.
46
By combining the above design criteria and features, the following specific options were
identified. In MEPS1 the standards are established at EU level but they will only cover
limited amount of buildings, to ensure minimum common efforts. The trigger point is the
moment of transaction of the buildings (rented or sold). Buildings will be bought or
rented only under the condition to achieve an energy performance at a level at least
equivalent to a certain EPC class, or subject to an upgrade of their energy performance
within a certain time span. The minimum EPC class (expressed as primary energy
demand and measured in kWh/(m2.
y)) to be applied for buildings transactions will be
progressively increased, for instance from class E in 2027 to Class D in 2030 and Class C
in 2033, following a trajectory compatible to the long-term goal of decarbonisation of the
building stock. This option can be implemented by specific requirements in the EPBD, to
be based on national EPC schemes which are already in place in all MSs but which
would have to be updated to ensure that similar efforts are made across the EU, while
taking into account national and regional specificities. While specific compliance
measures will be necessary, enforcement will be supported and facilitated by the
provisions already existing in the current EPBD, as EPCs are already required for every
building transaction. MEPS1 should also include specific exemptions for buildings for
which energy renovations are subject to certain technical constraints. As the targeted
buildings under MEPS1 will only cover a limited fraction of the EU building stock, MSs
could decide to apply MEPS to the rest of the building stock, on a voluntary basis.
Under options MEPS2 and MEPS3 MSs are allowed more flexibility in setting
minimum energy performance standards in comparison to MEPS1, both as regards the
trigger points and the type of buildings or building segment to be affected. In MEPS2 and
MEPS3 there are no measures established at EU level, and MEPS are instead to be
established at national level. The national MEPS schemes will have to follow a trajectory
in line with the transformation of the national building stock into zero-emission buildings
by 2050. Flexibility will be left to Member States to set locally relevant standards and to
best adapt MEPS to national or local specificities in terms of buildings ages, specific
ownership structure and climatic conditions. MEPS will have to be designed based on the
national milestones and goals set by MSs in their LTRS, and contribute to their
achievement. Specific national criteria could be set up also to allow that MEPS are
framed to address indoor air quality concerns, so to target the buildings types with poor
energy performance, which affects the health and well-being of people. MEPS2 and
MEPS3 differ for the targeted buildings, as in MEPS3 only non-residential buildings will
be affected (public buildings, offices, hotels, etc.), while under MEPS2 standards apply
progressively to the entire building stock. MEPS will have to be designed to complement
(where existing) the national schemes providing incentives to renovation such as tax
exemptions or fiscal and financial measures. Additional provisions which could support
national MEPS relate to addressing the barriers to renovation in multi-family buildings,
for example by removing unanimity requirements in co-ownership structures, or allowing
co-ownership structures to be direct recipients of financial support.
47
Differently from the other options which foresee that the metric for MEPS is the overall
building energy performance based on the EPC class, MEPS4 has a narrower scope as it
is based instead on the performance of the heating and cooling appliances installed in the
building or building unit. The trigger point of application is their planned replacement,
which could be done only with appliances which are best in class based on their energy
label or based on carbon emission performance levels. This option can be implemented
by specific requirements in the EPBD, building on the existing provisions on technical
building systems under Article 8. Compliance can be ensured via the inspections
mechanisms already foreseen. Generally, the replacement of the heating and/or cooling
appliances alone without a combination of improvements to the thermal integrity of the
building can lead to suboptimal results and lock-in effect that cannot guarantee that a
building is renovated over time in a way to become ‘2050 ready’. To avoid lock-ins and
suboptimal choices resulting from the implementation of this option, the planning of a
staged renovation with the support of a building renovation passport could be envisaged.
The options identified are not alternative to each other but can be combined to increase
impacts and effectiveness. The advantages of combining options are discussed in Chapter
6.1. Aspects of technical feasibility and exemptions to be applied are to be provided for
each of the options, and can build on the exclusions already identified in the EPBD for
the implementation of minimum energy performance requirements83
. Specific measures
and a more targeted set of accompanying measures, could also be established for multi-
ownership and multi-apartment buildings.
All options will only be acceptable and successful if specific financial instruments (such
as energy efficiency mortgages) and funding schemes are made available to support the
affected building owners (in particular low-income households), which would face
increased investments costs upfront, while the reward in terms of lower energy bills and
other benefits will be spread along a longer period84
. This aspect has been clearly
underlined by stakeholders, which indicated that targeted financial support for low to
middle-incomes households coupled with minimum energy performance standards are
the main areas where to focus to address energy poverty. In connection with MEPS,
some stakeholders also highlighted the need to respect cultural heritage in buildings as
part of the cultural heritage of the EU and the higher costs of their renovation.
A.2 Buildings renovation passport (BRP)
BRPs are stepwise roadmaps with renovation measures tailored to individual buildings,
typically with a 15-20-year timeline85
. BRPs are being implemented already in some
83
In article 4(2) of the EPBD, specific exemptions to the application of minimum energy performance
requirements are foreseen.
84
Bertoldi, P, Economidou, M, Palermo, V, Boza-Kiss, B, Todeschi, V. How to finance energy renovation
of residential buildings: Review of current and emerging financing instruments in the EU. WIREs Energy
Environ. 2021; 10:e384. https://doi.org/10.1002/wene.384
85
BPIE (2018).
48
countries or regions86
and are already mentioned as optional tools in Article 2a(1)(c) of
the EPBD.
Achieving a successful deep renovation requires expertise and careful detailing of the
renovation measures, especially when it is achieved in several stages. The BRP can
facilitate this by providing a tailored renovation roadmap for a specific building, which
can be carried out in one stage or multiple steps over several years, thus helping owners
and investors to better align renovation according to, on one hand, short-term individual
needs and financial availability and, on other hand, long-term requirements87
. The
majority of the respondents to the public consultation recognised the need to establish
this new tool, and to favour its development through guidance, best practices exchanges
and funding to develop the appropriate framework.
The feasibility study on the possible introduction of a European BRPs pursuant to Article
19a EPBD concluded that ‘existing Building Renovation Passports have proven that the
instrument is effective in providing renovation advice taking into account the long-term
vision for the building stock. It influences the renovation rate (number of energy
renovations), renovation depth (scope of the renovation and energy savings to be
achieved), the timing of the works (building owners with a BRP tend to renovate earlier
than they previously planned) and the quality of the works (fewer mistakes and unwise
renovation decisions)88
.
On the basis of the lessons learnt from existing experiences, and of the preferences
expressed by stakeholders, the following three options have been identified. BRP1
reflects the possibility to introduce a voluntary framework for BRPs in the EPBD, to be
implemented in subsequent steps, mirroring the gradual process involving industry and
other stakeholders which has led to the development of the Smart Readiness indicator.
Under BRP1 the national implementation of BRP is voluntary, interested actors develop
their BRP product autonomously on the basis of the common EU framework, and its
deployment is led by market conditions. In BRP2 MSs are required to set up a national
common framework for BRPs, which nonetheless remains an optional tool. The use of
the BRP becomes mandatory for financial incentives for staged deep renovations in
BRP3, which is the most ambitious option.
The building renovation passport will be digital, issued by a qualified and accredited
expert, following an on-site visit. It will comprise a renovation roadmap indicating a
sequence of renovation steps building upon each other, with the objective to transform
86
Known implemented BRPs are the Flemish Energy Performance Certificate [Belgium], the local Energy
House Passport [France] and private Energy Efficiency Passport [France], the Individual Renovation Plan
[Germany], as well as pilots tested in the iBRoad project (with pilots in Poland, Portugal, Germany,
Bulgaria and stakeholder engagement in Greece, Romania and Austria). Ireland is piloting a building
renovation passport, based on the iBRoad model.
87
Fabbri, M et al. (2020). “Final report – Technical study on the possible introduction of optional building
renovation passports”. European Commission. (Available: Online)
88
Ibidem.
49
the building into a zero-emission building by 2050 at the latest. It will have to indicate
the expected benefits in terms of energy savings, the impact on energy bills and
greenhouse emission reductions as well as wider benefits related to health and comfort. It
will contain information about potential financial and technical support. The requirement
to have a BRP on the basis of which to renovate buildings can either apply to specific
building types, or to trigger points, like for instance becoming a pre-condition to access
certain funding instruments.
Independent control systems for the building renovation passports will have to be
established, and the EPC should indicate if a building renovation passport is available for
the building.
A.3 Energy performance certificates (EPCs) – strengthening quality and comparability
Energy performance certificates (EPCs) are a well-established instrument under the
EPBD89
. Their purpose is to provide information on a building’s energy performance
status and to offer suggestions for cost-effective improvements. On an aggregate level,
they offer information about the performance of the building stock.
The strengthening of the EPC framework in the EPBD revision pursues different goals,
and options linked to these goals are therefore presented separately in this impact
assessment. Under Area A the options to improve quality and reliability are presented,
as those are considered to be instrumental to support and facilitate a successful roll-out of
MEPS.
Options EPCQ1 and EPCQ2 foresee the introduction in the EPBD of a common and
digital template for EPCs (voluntary or mandatory). The standardisation of EPCs will
facilitate its acceptability and recognition by users, and the harmonisation of this tool
could also be deepened to its content and to the calculations to be applied while
compiling EPCs. Options EPCQ1 and EPCQ2 differ from EPCQ3 as regards the
modality to pursue the goal of establishing more homogeneous rating of buildings across
countries. While in EPCQ1 and EPCQ2 benchmarks to facilitate the harmonisation of
energy performance classes across MSs remain voluntary, in the most ambitious option
EPCQ3 MSs are required to harmonize to a greater degree, by establishing the highest
and lowest classes of energy performance and ensuring an even distribution of energy
performance indicators among the classes. The EPC ‘class A’ will correspond to zero-
emission buildings and the letter G will correspond to a certain percentage of the worst-
performing buildings in the national building stock. Other important routes to ensure that
EPCs become more reliable relate to the conditions under which EPCs are issued and to
the ex-post quality controls in place. Those are made more stringent in option EPCQ3.
Reporting measures could enhance the transparency, credibility and reliability attributed
89
See Annex G for an overview of the current implementation of EPC across Europe.
50
to EPCs, by requiring that certain information is regularly disclosed to the general public
(in respect of GDPR rules) and to the European Commission.
According to the public consultation, 65% of respondents consider that EPCs need to be
updated and their quality needs to be improved. The suggested areas for improvement
include requiring on-site visits, use of metered data, improved quality control schemes
and training of experts. The value of site visits is recognised in inspection schemes, such
as the inspection schemes in-line with Articles 14 and 15 of the EPBD. This is due
mainly to the feasibility to produce more detailed and better tailored recommendations
which fit to the actual situation in the building. Site-visits and inspections also allow the
evaluation of elements such as the state of the installations, indoor air quality or indoor
environmental quality. These elements are otherwise difficult to evaluate through indirect
means, unless it is through more developed monitoring systems, such as those found in
Building Automation and Control Systems. Finally, the direct contact with the expert is
also valued as it increases the perception of quality and reliability. A better integration
between EPCs and inspection would provide additional benefits.
76% of respondents think that harmonisation of EPCs is needed to accelerate the increase
of building performance: 46% indicate that this can be achieved by introducing a
common template, while 15% think that harmonisation is not needed. In particular,
stakeholders suggest that harmonisation of EPCs is needed in terms of calculation
methodology, scope, quality and availability of information and implementation process,
while ensuring sufficient flexibility to cater for each Member State’s specificities, to
adapt to local circumstances, to ensure reliability and allow for MSs to be more
ambitious.
In the open public consultation, stakeholders have also pointed out the very relevant role
of EPCs in linking targeted financing to deeper renovations, by underlining that EPCs are
the key tool to assess energy efficiency improvements for financing purposes.
A.4 Deep renovation standard
As stated in the Renovation Wave strategy, the introduction of a ‘deep renovation’
standard will “enable anchoring significant private and public financing to transparent,
measurable and genuinely “green” investments”. Such a standard, or definition, can help
creating an enabling framework for deep renovations that are currently not cost-effective
from a purely financial perspective, by providing clarity to investors and authorities in
charge of designing incentives and funding schemes about the type of interventions that
can be qualified as deep. The Taxonomy delegated act has defined requirements for
building renovation and individual renovation measures to be considered sustainable90
;
investors may decide to tie financial support for building renovation to Taxonomy
90
A building renovation is taxonomy-compliant if it leads to 30% energy savings or complies with
minimum energy performance requirements.
51
compliance. A deep renovation standard could go beyond the Taxonomy requirements
and set a “gold standard” for building renovation that is fully compliant with the path to
zero-emission buildings; compliance with the deep renovation standard could give access
to additional financing beyond standard financial support.
Today, “deep renovation” is commonly understood as achieving 60% energy savings91
,
disregarding the starting point of the renovation and the standard to be reached. With a
view to the need for all buildings to be fully decarbonised by 2050 at the latest, the new
deep renovation standard will set the attainment of the new zero-emissions building
standard (see chapter 5, section B.1) as the goal to be achieved, however not counting
shallow renovations leading to this result.
Deep renovation is not always achievable in one go, due to high upfront costs and the
extent of the required works; however, a first step of a staged renovation is a better
measure towards decarbonisation of a building than a complete renovation to lower
standards92
. The deep renovation standard should therefore also define “staged deep
renovation”, for example as a series of renovation measures set out in the Building
Renovation Passport which achieve the zero-emission building standard over a certain
number of years. Option DEEP1 provides for the introduction in the EPBD of a standard
for deep renovation, including staged deep renovation, which transforms a building into a
zero-emission building. In DEEP2, Member States are required to provide a higher level
of financial support for building renovation which complies with the deep renovation
standard than for building renovation which does not.
The 68% of the respondents to the public consultation identified the need to develop a
legal definition for “deep renovation” that takes into account wider environmental, social
and health aspects, by including embodied GHG emissions, as well as accessibility, air
quality and climate resilience considerations. A few of the stakeholders expressed the
need to see the seismic risk taken into account in the regions around the Mediterranean.
A.5 LTRS – Long Term Renovation Strategies
Under the EPBD (Article 2a), all EU countries are required to submit to the Commission
a Long-Term Renovation Strategy (LTRS) outlining clear plans to support the renovation
of their national building stock into a highly energy-efficient and decarbonised building
stock by 2050. The framework for the establishment of long-term buildings renovation
strategies in the EPBD was put in place before the commitment to carbon neutrality by
2050 and to the reduction of GHG by 55% by 2030. Therefore, to be aligned with higher
climate ambition, to support the need to increase the rate of renovations, under LTRS1
the cycle to prepare LTRS is shortened to 5 years, and in addition to that in LTRS2 a
91
See 2019 Commission Recommendation on Building Renovation (EU) 2019/786.
92
For example, the thick insulation of one façade, to be followed by similarly thick insulations of other
façades, is a more desirable renovation than a thinner, simultaneous insulation of all façades which
precludes additional insulation layers in the future.
52
specific monitoring and reporting framework is established, taking advantage of what is
already in place for NECPs under the Governance Regulation. In LTRS3 the
requirements are enlarged, including the reporting of the deployment of renewable
energies in buildings and operational greenhouse gas emissions and goals. Carbon
metrics, covering the whole life cycle of buildings93
are necessary for achieving zero-
emission buildings and climate goals, in addition to operational energy performance
metrics and the LTRS shall include an overview of policies and measures for the
reduction of whole life-cycle greenhouse gas emissions in the construction, renovation,
operation and end of life of buildings. The LTRS would then evolve into a more
operational plan, to be renamed “Building Renovation Plan”, which shall include a
detailed overview of national building sectors, establishment of specific targets,
presentation of existing and planned measures to achieve the targets and specific
monitoring and reporting framework on the cost-effective use of Union and national
financings, leverage of private financing and use of financial instruments, in order to
better direct and align spending to achieve the long-term goals set out94
.
The policy options for LTRS are in line with the findings of the open public
consultations, where 61% of the respondents identified the need to amend the existing
provisions in the EPBD on lTRS. In particular, 89% of the overall respondents
underlined that the European Commission should strengthen the monitoring mechanism
of the objectives identified by the Member States in their LTRS. The majority of the
respondents in this regards pointed to the development of a common template with a
monitoring framework requesting specific data and indicators.
Area B. Measures to enable the decarbonisation of new and existing buildings
This area of action is mainly targeting the second key problem identified that the EPBD
framework is insufficient for the 2050 climate objectives and to foster energy system
integration. The policy options therefore address the underlying problem driver of a lack
of standards and requirements for new and existing buildings in line with decarbonisation
goals. In addition, the policy options are aimed at providing a long-term vision for
buildings in line with climate neutrality in 2050. The measures in Area B also address the
need to improve information on energy performance and sustainability of buildings with
the use of digital tools.
The options have been developed to upgrade the existing EPBD tools in line with
increased climate ambition, so to ensure that existing standards and information tools
would provide clear information about the carbon emission performance of the building
and adequately inform the public about the measures to decarbonise them. The following
table illustrates the main problem drivers addressed by the policy measures in this area.
93
From production and transport of materials, the construction, to the demolition/reuse.
94
This is in line with specific recommendations from the European Court of Auditors, Special Report 2020
“Energy efficiency in buildings: greater focus on cost-effectiveness still needed”,
https://www.eca.europa.eu/Lists/ECADocuments/SR20_11/SR_Energy_efficiency_in_buildings_EN.pdf .
53
Table 5.2: Problems’ drivers addressed by the measures in Area B.
Problem drivers/barriers ZEB EPCI
Split incentives
Public financial support not sufficiently targeted toward deep
renovations
+
Lack of information on energy performance of buildings and
multiple benefits of energy renovations
+
Lack of well-communicated decarbonisation trajectory +
Lack of standardised information tools on energy
performance
+
Behavioural barrier +
Lack of standards and requirements for new and existing
buildings in line with decarbonisation goal
++
Insufficient measures to facilitate the integration of
digitalisation and smart solutions in new construction and
building renovations
+ +
Insufficient measures to support the uptake of electro
mobility in private buildings
As indicated by stakeholders and in line with the energy efficiency first principle, while
an operational carbon metric should become integral part of the EPBD, it should not
prevail but rather be considered a complementary one going hand in hand with indicators
for energy efficiency and integration of renewable energies. In addition to reducing
operational carbon, there is also a need to address carbon emissions over the full life-
cycle of a building which is why a calculation and disclosure of life cycle carbon
emissions is proposed in some of the options for new construction, with a link to the EPC
of the building.
As regards standards for new buildings, Article 9 of the EPBD states that Member States
shall ensure that new buildings occupied and owned by public authorities are NZEBs95
(Nearly Zero-Energy Buildings) after 31 December 2018 and that all new buildings are
NZEBs after 31 December 2020. The EU legislative framework for buildings requires
EU Member States to adopt their detailed national application of the EPBD definition on
95
In accordance with the EPBD, a NZEB is a building that "has a very high energy performance with the
nearly zero or very low amount of energy required covered to a very significant extent by energy from
renewable sources, including energy from renewable sources produced on-site or nearby". The first part of
this framework definition establishes energy performance as the defining element that makes a building an
‘NZEB’. This energy performance has to be very high and determined in accordance with Annex I of the
Directive. The second part of the definition provides guiding principles to achieve this very high energy
performance by covering the resulting low amount of energy to a very significant extent by energy from
renewable sources.
54
NZEB96
, supported by national policies for their implementation, which has led to the
integration of the NZEB concept into national building codes and international standards.
The legislative framework for NZEB was established in 2010, and the current NZEB
definition does not ensure that buildings constructed today are ‘2050 ready’, and that
they could benefit from the already existing cost-efficient technologies that enable
buildings to be zero-emission. While the implementation of NZEBs from 2021 (and 2019
for public buildings) onwards represented one big opportunity to increase energy savings
and minimise greenhouse gas emissions, such definition is not anymore aligned with
increased climate ambition. A more modern vision for new and deeply renovated
buildings will have to include aspects related to green-house gas emissions related to the
energy system services such as RES production, flexibility and storage and whole life
carbon. In addition, other aspects could be addressed by Member States, such as climate
resilience, seismic safety, fire safety and aspects of indoor air quality for new and
renovated buildings. On the latter, several stakeholders called for higher ambition for
health protection in buildings.
Another important set of measures relate to the introduction of a mandatory carbon
metric for operational carbon in EPCs, as although some MSs have already implemented
it97
, this is currently not a required element for EPCs. A visible indication of carbon
emissions would raise awareness, create a positive dynamic in the markets of
construction and renovations across its value chains, and drive informed decisions by all
operators involved in the purchase or renting properties. In the options corresponding to
higher ambition, the EPC will include a mandatory operational carbon metric, and if a
calculation of whole life carbon has been made for the building it will also be mandatory
to include it in the EPC.
The measures in Area B are:
- B.1 Introduction of a definition of “zero-emission buildings”(ZEB): ZEB1,
ZEB2, ZEB3
- B.2 EPCs - Increase the scope of information and coverage of EPC:EPCSI1,
EPCSI2, EPCSI3
B.1 Introduction of a definition of “zero-emission building”.
The concept of (net) zero greenhouse gas (GHG)/carbon emission(s) buildings is gaining
wide international attention and is considered to be the main pathway for achieving
climate neutrality targets in the built environment. A ‘zero-emission building’ standard
should ultimately aim at maximising the efficient and smart use of energy, materials and
space. Different terms and definitions can however be used, therefore the first step which
96
The implementation of NZEBs is connected to the assessment of cost optimality and high performance
technical solutions in buildings.
97
16 MS have already introduced carbon metrics in EPCs (mostly voluntary).
55
has been considered is the establishment of a sound technical qualitative definition to be
introduced in the EPBD, to be applicable to new buildings and based on key criteria
which contribute at the same time to achieve high energy efficiency, to limit or neutralise
GHG emissions and to contribute to energy system integration (i.e addressing flexibility
and storage which will be crucial for new constructions). These aspects have been
examined in detail and the available approaches to define and operationalise the “zero
emission” concept to buildings are presented in Annex H.
Among the available approaches, the following have been retained: A zero emission
building shall be defined as a building that has a very high energy performance that
complies with specific benchmarks. The very low amount of energy still required has to
be fully covered by energy from renewable sources.
The approaches and timeline to its gradual phase-in have been examined and different
options have been identified. ZEB1, ZEB2 and ZEB3 differ as regards the degree of
harmonisation and level of flexibility in adapting the ZEB standard to national and local
specific conditions. The scope of GHG emissions considered is also different, with ZEB1
and ZEB covering only operational carbon emissions while in ZEB3 also embodied
emissions are considered.
While in ZEB1 an approach similar to what the EPBD had established in 2010 for
NZEBs is followed, in ZEB2 numerical benchmarks or thresholds are established at EU
level, thus guaranteeing a more standardised definition and easing compliance. In ZEB3
the qualitative zero-emission definition includes further criteria introducing the
consideration of whole life-cycle emissions. The aspiration is to introduce the
consideration of whole life-cycle assessment of GHG emissions into building design and
construction, by requiring their accounting and reporting for new buildings. This first
step would increase awareness and the available data on whole life cycle emissions,
provide an incentive to circular solutions and to the use of recycled materials, and pave
the way for the development of further policies in the field.
B.2 EPCs - Increase the scope of information and coverage of EPC
Alongside the measures needed to improve quality and reliability of EPCs under Area A,
here options to (i) enlarge the scope of the information to be presented in each certificate
and (ii) to extend the overall use and coverage of EPCs are described.
Currently EPCs must be issued for all buildings or building units which are sold, or
rented out to a new tenant. Public buildings above a certain size also need to display
EPCs. According to the available data, only a limited share of buildings have an EPC.
Most building owners and occupants are therefore not aware of the building’s energy
performance and of the measures which could be undertaken to improve it. To increase
the number of buildings having an EPC, the options EPCSI1-EPCSI3 foresee that
56
additional buildings must have an EPC, with a varying degree of coverage for instance
linked to specific trigger points (renewal of rental contracts, renovation98
, access to
public fund, or replacement of a heating installation or another technical building system
or building elements, e.g. windows). Another trigger to increase the information value of
EPCs is to shorten its validity. The current validity period is considered by experts and
stakeholders as too long, hampering the capability of EPCs to provide a valid and up-to-
date representation/asset rating of the building performance.
Pursuant to Article 11 EPBD, the EPC must include the energy performance of a
building (in kWh/m2
year) and recommendations for improvement. The EPC may
include additional indicators such as CO2 emissions or the percentage of energy use from
renewable sources, and such indicators are in fact already present in some national or
regional schemes (see Annex G). To strengthen the information role of EPCs in driving
decarbonisation, and its use in conjunction with other EPBD tools and measures, it is
necessary that additional information is widely available to all EPC users. The options
EPCSI1 and EPCSI2 address this aspect, and foresee that additional indicators are to be
displayed in EPCs, with a varying degree of detail and flexibility. These options present a
strong synergy with the suggested provision of a common EPC template. Key indicators
to be included in EPCs relate to GHG emissions and the use of renewable energy, storage
and flexibility capacity, e-charging points, the breakdown of different energy uses (e.g.
heating, ventilation, lighting, etc.) or the type of systems installed and. EPCs could also
indicate if a calculation of whole life-cycle greenhouse gas emissions has been made.
Information in EPCs could expand also to cover technical details and information about
the presence of indoor air quality sensors etc.
A key mandatory element of an EPC is the recommendations to improve the energy
performance of the buildings. Stakeholders and experts indicated that this element has so
far had limited value in absence of clearer fixed content. EPCSI3 foresees that additional
guidance or requirements are provided in the EPBD, allowing to quantify the estimated
costs and energy savings which could be achieved by renovating the building or some of
its elements, and linking those to the long-term goal of decarbonisation of the building
stock. The recommendations in EPCs could also include specific assessment of the
preparedness of the building technical system to the installation of highly efficient
heating appliances, and could be substituted by a building renovation passport (BRP).
EPC and inspections of heating and cooling systems can support the recommendations
made by one another and allow for cross-checking of information and monitoring of
results.
98
Currently it is not mandatory to issue EPCs in conjunction to a major renovation. In some countries,
especially in conjunction with the use of incentives schemes, it is foreseen to issue EPCs before and after
the intervention, to demonstrate the impact of the energy renovation on the asset rating.
57
In the public consultation, stakeholders suggested to shorten the validity of the EPC and
to increase the scope of information. It was also suggested that EPCs should be
mandatory to access financial incentives for building renovation. As regards the scope of
information in EPCs, 59% of stakeholders find it important or very important to increase
the number of mandatory indicators in the EPC to include greenhouse gas emissions,
generation of renewable energy, breakdown of different energy uses (i.e. heating,
ventilation or lighting) or type of systems installed. Stakeholders also suggest to include
information on demand-side flexibility, IEQ, EV recharging and storage among other
additional indicators. As regards the recommendations, 68% of respondents suggest that
the EPC should include further information on estimated costs, energy saving or cost
savings, and 62% see a need for increased interoperability with other tools such as
Building Renovation Passports, SRI and digital building logbooks. 55% of respondents
suggest to tailor the recommendations towards deep renovations.
Area C. Measures to increase the modernisation and quality of buildings and of their
systems, enabled by digitalisation of information tools
The options in Area C address the second key problem that the EPBD framework is
insufficient for the 2050 climate objectives and to foster energy system integration. Area
C relates specifically to the problem drivers of insufficient measures to facilitate the
integration of digitalisation and smart solutions in new construction and building
renovations and insufficient measures to support the uptake of e-mobility in private
buildings. Therefore, options have been developed for stronger uptake of e-mobility and
of smart solutions for energy management in buildings. The following table illustrates
the main problem drivers addressed.
Table 5.3: Problems’ drivers addressed by the measures in Area C.
Problem drivers/barriers EM EPCD SRI
Split incentives +
Public financial support not sufficiently targeted toward deep
renovations
Lack of information on energy performance of buildings and
multiple benefits of energy renovations
+
Lack of well-communicated decarbonisation trajectory
Lack of standardised information tools on energy
performance
+
Behavioural barriers +
Lack of standards and requirements for new and existing
buildings in line with decarbonisation goal
+
Insufficient measures to facilitate the integration of
digitalisation and smart solutions in new construction and
building renovations
+ ++
Insufficient measures to support the uptake of electro ++ +
58
mobility in private buildings
The measures in Area C are:
- C1. Measures to remove building-related barriers to e-mobility : EM-1, EM-2,
EM-3
- C2. Enhance the role of EPCs as digital tools: EPCD1, EPCD2, EPCD3
- C3. Measures to support the implementation of SRI: SRI1, SRI2
C1. Measures to remove building-related barriers to e-mobility
The analysis of pathways achieving a reduction of GHG by 55% in the CTP shows that
electrification of transport is one of the most promising avenues for reducing the GHG
emissions arising from individual mobility. The lack of easily available recharging points
in private buildings can be a barrier when deciding whether to shift from a conventional
car to an electric one. Providing for recharging infrastructure both in and close to
buildings is therefore critical to enabling electrification of the transport sector99
.
The EPBD requires the installation of recharging points in certain parking spaces
adjacent to residential and non-residential buildings and sets ducting requirements that
allow for subsequent installation of recharging points in new or renovated residential
buildings of a certain size (as well as for non-residential buildings), while the deployment
of publicly accessible recharging points is addressed in AFID and reviewed in the AFIR
proposal.
The requirements present in the EPBD since its revision in 2018 are however not fit
anymore to provide a number of recharging points aligned with an increased uptake of
electric vehicles, as the requirements are too low because they only cover buildings with
more than 10 parking spaces. Policy option E-M1 enlarges the scope of the current
provisions to ensure preparedness to electric recharging for all new buildings and
buildings undergoing major renovation, while E-M3 extends the readiness also to the
availability of parking space for bikes and strengthen the requirements for existing large
non-residential buildings. To enhance the “right to plug”, E-M2 foresees that identified
administrative barriers are removed and measures are undertaken to enhance the
availability of technical assistance for households wishing to install recharging points. In
line with AFIR and the revised RED it is proposed that recharging points shall be capable
of smart charging and if positively assessed by the regulatory authority be capable of
bidirectional charging.
According to the results of the public consultation, requirements for the installation of
recharging points (65%), the right to plug (for both tenants and owners) (62%) and the
inclusion of provisions for recharging points for vehicles other than cars (52%) are all
99
Velten, E.K., Stoll, T., Meinecke, L. (2019). Measures for the promotion of electric vehicles. Ecologic
Institute, Berlin. Commissioned by Greenpeace e.V.
59
necessary. 72% of respondents think that the installation of recharging points to support
smart charging is needed.
C2. Enhance the role of EPC as digital tools
There is an increasing amount of data on building energy use and building occupants’
energy consumption patterns. Collecting data and making them available in a transparent
way would be useful for policymaking in buildings and social policy100
, and would
support the creation of innovative energy and buildings services and the reduction of
administrative burden relative to permitting and other regulatory procedures. To
digitalise data collection about the building stock across Europe, the key challenge is to
create a framework that systematises data collection, by allowing open interfaces and the
integration of data from different sources and the automation of the process with minimal
manual intervention. In addition, digitalisation of data collection should ensure
compliance with data protection regulation and ensure digital security.
Data from EPCs can be combined with data from other sources, such as EPBD
inspections schemes, administrative tools (e.g. building cadastre or building permits),
observatories (e.g. on energy poverty) and information from research initiatives. Acces to
building information is generaly very limited and could be improved.
To these ends, national databases of repositories of energy performance certificates are
required in option EPCD1, with different criteria qualifying accessibility for users and
reporting functionalities in its suboptions. Option EPCD2 identifies key linkages to the
EPC database to be allowed by national rules. Option EPCD3 requires a mandatory
national database, enhancing interoperability with other data sources and facilitating
administrative compliance.
In the public consultation, stakeholders stressed the need for EPCs to be digital and the
importance of EPC databases. 61% of respondents found it important or very important
for MSs to develop an accessible EPC database with further information on the EPC, to
include benchmarks and comparison tools to allow the comparison of similar buildings.
Stakeholders also highlighted the importance of providing access to data as well as
promoting data exchange and sharing.
C3. Measures to support the implementation of SRI
The ongoing voluntary application of the smart-readiness-indicator (SRI), based on the
existing EPBD framework101
, is a chance to enable smart readiness of buildings and use
efficient operation modes for individual buildings as well as the optimal system balance
100
For instance for the monitoring of LTRS or MEPS implementation.
101
https://ec.europa.eu/energy/sites/ener/files/smart_readiness_buildings_implementing_act_c2020_6929.p
df
60
between buildings and a renewable energy system and the transmission/distribution
system102
.
To enlarge its application, the option SRI1 foresees its integration with other information
tools, while in SRI2 its voluntary nature is revisited and SRI becomes mandatory for
large non-residential buildings, in coherence with the current provisions of the EPBD on
building automation and control systems. However, several stakeholders did not support
that option, and suggested instead to focus on implementing SRI on a voluntary basis,
and to develop links with other schemes.
5.3 Options discarded at an early stage
While the Inception Impact Assessment included the possibility to achieve the goals of
the EPBD revision without regulatory measures, by means of reinforced non-regulatory
policy instruments and additional guidance and support measures, such as technical
assistance, information campaigns, training, project financing etc., this option was
discarded at an early stage of preparation of this assessment. On the basis of the studies
examining the problems underlying low renovation rates and their drivers, it was
estimated that such an approach would be insufficient to remove the barriers preventing
higher rates of energy renovations, or to provide trusted and comparable tools to
investors. Stakeholders were also almost unanimous in recognizing the need for
strengthened requirements to drive higher and deeper renovations, although not
necessarily for all the supporting measures.
This is particularly the case for the development of minimum energy performance
standards, and for the standards for new buildings, which requires to be enshrined in
legislation to be effectively enforced. In the Renovation Wave strategy, the Commission
already indicated that the strengthening of the regulatory framework would be essential
to achieve the goals of doubling and deepening the rate of renovation of buildings, and
indicated specific areas of reinforcement for the EPBD. Therefore, in the subsequent
chapters, the package of measures included in the different options to be assessed include
a mix of regulatory and non-regulatory measures103
and no options features only non-
regulatory measures.
Other measures which have not been assessed in detail include minimum energy
performance standards based only on indoor air quality indicators. While such option was
envisaged by some stakeholders and consideration on the indoor environment have
become prominent during the COVID-19 pandemic, the appropriate indicators still have
to be developed. In addition, while a very efficient house with poor air quality is not
acceptable and both aspects can and normally are achieved in a complementary way,
102
Verbeke, S.; Waide, P.; Bettgenhäuser, Kjell; Uslar, M.; Bogaert, S. (2018): Support for setting up a Smart
Readiness Indicator for Buildings and related impact assessment. Final Report. vito, ECOFYS, Waide Strategic
Efficiency, Offis.
103
As for instance under BRP1 and EPCQ1.
61
higher environmental quality alone would not necessarily deliver also energy savings and
the emissions abatement in the building sector, which is the primary aim of the EPBD
revision.
The options to require that all buildings should have a BRP in place was also discarded
as entailing excessive costs and BRP deliver benefits only in some circumstances.
Based on the CTP analysis and conclusions (MIX scenario, see also Annex J) and the
Renovation Wave strategy, the options have been limited within the current boundaries
of the EPBD.
Policy instruments and options outside the EPBD scope which could deliver higher
renovation rates, e.g. through taxation or other fiscal measures, have not been assessed in
preparation of this proposal. National tax-exemptions schemes and other forms of
financial incentives through fiscal or non-fiscal measures, which are the competence of
MSs, are fully complementary to the options proposed. Such incentives schemes will
support the delivery of the ambition of the national renovation plans and will improve the
affordability of the renovation investments which will be triggered and regulated via the
EPBD.
6. WHAT ARE THE IMPACTS OF THE POLICY OPTIONS?
6.1 How the measures are grouped and assessed
The assessment of the impacts of the policy options considered for the revised EPBD
starts with the aggregation of the measures and sub-options identified in Chapter 5, based
on the following criteria:
- The strengthening of existing measures and the introduction of new ones to
address the key problems underlying the revision of the EPBD follows the logic
of identifying options of a variable level of policy intensity. The intensity has
been regulated either on the basis of a progressive increase in the scope of their
application – to a wider number of buildings or players – or of the stringency of
the requirements proposed. For MEPS, this has been obtained by adding different
MEPS mechanisms with distinctive trigger points and scope, covering a higher
share of worst performing buildings and of the overall building stock. The four
options are sufficiently varied in scope of application and intensity to allow for a
good understanding of the different impacts that they could achieve on key
performance indicators.
- The measures proposed for the revision support each other within the coherent
and structured policy framework of the EPBD. Synergies exist across instruments
in the different areas identified. For this reason, their effects and impacts are
assessed jointly across the different areas and in groups of measures.
62
- Given the strong synergies and mutual support as indicated above, the impacts are
associated across all areas, and the measures to which the majority of impacts are
associated are highlighted in bold in Table 6.1.
On this basis, beyond the baseline, we have identified four different options for the
EPBD revision packaging measures, characterised by progressively higher ambition
levels (from low ambition to high ambition). Options 3 and 4 both show high ambition
and differ only in the combination of MEPS sub-options. This chapter presents the main
environmental, economic and social impacts expected from the above four options.
Table 6.1: Groups of measures across options
Areas Baseline
Option 1.
Low
ambition
Option 2
Medium
ambition
Option 3
High
ambition I
Option 4
High ambition
II
Area A. Measures to increase
the number of buildings being
renovated and renovation depth
EPC
LTRS
MEPS1
BRP1
EPCQ1
DEEP1
LTRS1
MEPS1+
MEPS3
BRP2
EPCQ2
DEEP2
LTRS2
MEPS1+
MEPS2
BRP3
EPCQ3
DEEP2
LTRS3
MEPS1+
MEPS2+
MEPS4
BRP3
EPCQ3
DEEP2
LTRS3
Area B. Options to enable
decarbonisation of new and
existing buildings
NZEB
EPC
ZEB1
EPCSI1
ZEB2
EPCS2
ZEB3
EPCSI3
ZEB3
EPCSI3
Area C. Measures to increase
the modernisation and quality of
buildings and of their systems,
enabled by digitalisation of
information tools
EM
EPC
SRI
E-M1
EPCD1
SRI1
E-M2
EPCD2
SRI1
E-M3
EPCD3
SRI2
E-M3
EPCD3
SRI2
Before presenting such results, it is important to explain how the effects of national
schemes that set minimum energy performance standards (MEPS2, MEPS3) have been
modelled104
. This also brings with it policy considerations.
For MEPS2 and MEPS3, national MEPS schemes are modelled as standards that impose
a progressive renovation pathway between 2025 and 2050. Through a combination of
staged and single deep renovations, Member States gradually achieve higher shares of
104
Annex F, Section 7.1 presents additional modelling choices.
63
buildings renovated to high standards, close to ‘zero-energy building (ZEB) levels’,
thereby achieving decarbonisation of building stock by 2050. This is a simplification of
the different choices that national authorities could make in implementing national MEPS
alongside the trajectory and criteria established in the EPBD. Based on these choices,
some building segments could be targeted as a matter of priority.
Importantly, the transformation modelled is required to achieve’ a decarbonised building
stock in the absence of other policies, which overestimates the regulatory effort and
makes the decision to renovate more costly (in the absence of other incentives). In
particular, in the context of the ‘Fit for 55’ package, this modelling mechanism does not
take into account the effects of other EU instruments, which could also trigger decisions
to renovate buildings or make the economic case for it more favourable. These
instruments could be regulatory ones (like Article 6 of the Energy Efficiency Directive
(EED) Recast or Article 23 of the Renewable Energy Directive on binding RES heating
& cooling (H&C) targets) or market-based in the form of carbon pricing or enabling
condition types (like Article 8 of the EED Recast, which makes funding more easily
available). From a modelling perspective, this is a conservative approach as it is likely to
overestimate the renovation efforts that would need to be triggered by MEPS2 and
MEPS3 and the costs for consumers. From a policy perspective, this means that what is
modelled by MEPS2 and MEPS3 is a ‘maximum effect’. In reality, the impact of MEPS
(and corresponding effects in terms of benefits, costs and investments) could be lower as
some renovation efforts would be incentivised by other policy instruments. These will be
factored into the specific design of national MEPS mechanisms. Bearing this ‘maximum
effort’ perspective in mind is crucial in designing the national mechanisms to introduce
and enforce MEPS. These should be adaptable and coherent with other policies at EU
and national level.
6.2 Impacts of the EPBD revision as part of scenarios delivering the increased
climate target
In addition to assessing the impact of the EPBD revision alone, as explained in Section
6.1, we also need to see how they combine with the other ‘Delivering European Green
Deal’ (DEGD) initiatives (also referred to as the ‘Fit for 55’ package) and what their
cumulative impact is on the energy system and the economy as a whole. This exercise
was performed with the ‘core scenarios’105
REG, MIX, MIX-CP, used in the impact
105
See the description of core scenarios here: https://ec.europa.eu/energy/data-analysis/energy-
modelling/policy-scenarios-delivering-european-green-deal_en as well as Annex 4 in the impact
assessment accompanying the amendment to Renewable Energy Directive SWD(2021)621 final.
64
assessment underpinning initiatives tabled by the Commission in July 2021106
. The
EPBD revision with these scenarios is captured107
by the following:
- an increased rate and depth of renovations (notably of deep and medium
renovations instead of only light renovations)108
;
- an increased uptake of renewable H&C solutions (notably heat pumps)
accompanying renovations – heat pumps become an attractive choice for low
energy consumption of a deeply renovated building;
- more stringent and better enforced standards for new buildings109
;
- enabling conditions created by legal certainty on the measures described above
and additional actions such as the building renovation passport to increase
consumer awareness110
.
In fact, these elements were already part of the Climate Target Plan scenarios111
that were
later fine-tuned (as concerns both the baseline and preferred policy options) in the DEGD
core scenarios.
The drivers described above – increased renovations also covering H&C equipment
change and better performance of new buildings – can be found in the majority of
decarbonisation pathways: in the Commission’s own analysis (2050 Long-Term
Strategy112
), in Intergovernmental Panel on Climate Change work113
, or in stakeholders’
own analysis such as ‘Net Zero by 2050’ from the International Energy Agency114
. While
the intensity of these drivers and their impact vary depending mainly on whether
106
See the ‘Delivering European Green Deal’ website: https://ec.europa.eu/info/strategy/priorities-2019-
2024/european-green-deal/delivering-european-green-deal_en
107
Drivers capturing the EPBD revision are present in REG and MIX core scenarios, while the’ MIX-CP
scenario has those drivers increasing only slightly from the baseline level.
108
Importantly, the renovations increase in MIX (compared to REF2020) is incentivised not only by
drivers illustrating the revision of EPBD, but also the horizontal energy savings obligation (as in Article 8
of the proposal for a EED recast). Reflecting policy options described in Section 5, the whole increase of
deep renovations (thanks to the introduction of deep renovation standards) and the partial increase of
medium renovations (thanks to the introduction of MEPs and obligation to apply MEPs to buildings under
transaction) is assigned to the EPBD revision. Removing these drivers would mean that some renovations
do not happen and some are only light ones thanks to the operation of Article 8 of the proposal for a
revised EED.
109
Thanks to the introduction of long-term renovation strategies and the ZEB standard definition.
110
In modelling terms, such enabling conditions translate into more frequent investment decisions as
economic agents have full information about costs and benefits expected and in general perceive lower
transactional costs.
111
See impact assessment accompanying Climate Target Plan SWD(2020)176 final. All CTP scenarios
except one (CPRICE scenario driven by carbon pricing) have drivers on building renovations and new
building standards.
112
In-depth analysis in support of Commission Communication COM(2018) 773.
113
https://www.ipcc.ch/site/assets/uploads/sites/2/2019/05/SR15_Chapter2_Low_Res.pdf
114
See: Net Zero by 2050 – A Roadmap for the Global Energy Sector, https://www.iea.org/reports/net-
zero-by-2050
65
scenarios are constructed top-down (target-driven) or bottom-up (measures-driven), they
are, in most of the scenarios, part of the toolbox and have a visible impact on reducing
energy demand in the building sector and on the fuel switch. The exceptions are carbon
pricing-driven scenarios. These usually show that even high levels of carbon pricing do
not properly incentivise renovations of building shells in particular (due to the multiple
and non-economic barriers explained in Chapter 2). They therefore require an even more
significant fuel switch. This results in a lower energy renovation rate overall (see Figure
6.12 below, with the MIX CP scenario representing the scenario with greater reliance on
carbon pricing) or scenarios that by design concentrate only on the fuel switch,
neglecting energy efficiency and therefore have the shortcoming of showing very high
demand in low-carbon energies115
. A case in point is the ‘delayed retrofit case’ of the
International Energy Agency116
.
Among DEGD scenarios, the central MIX scenario has ambitious drivers that effectively
represent the preferred options for the revision of EPBD working in synergy with carbon
pricing. On the REG scenario, it shows a further increased regulatory effort, with
correspondingly higher investment expenses, also required by lower income households.
Conversely, the MIX-CP scenario shows a very high carbon price (EUR 80/tCO2 in 2030
in the building and transport sectors with only a lower intensification of regulatory
measures) that would translate into high energy prices for all consumers (thereby having
a regressive effect if not mitigated by revenue use). The MIX-CP scenario illustrates very
well that carbon pricing alone, even at higher levels, does a poor job of incentivising
renovations of buildings to optimal levels (in particular their thermal envelope), as it
alone cannot tackle market and non-market barriers described in the problem definition
of this initiative (Figure 6.1). The economic incentives of carbon pricing and revenues
raised can be used for other measures to tackle those barriers more effectively and
address social impacts of carbon pricing117
.
The common analysis produced for the ‘Fit for 55’ package provides elements that
illustrate the interactions between regulatory measures targeting energy consumption in
115
This is the case of some scenarios advocating a 100% renewables-based energy system and usually
showing high demand in biomass or land (for wind or/and solar power).
116
This scenario shows that (on the global level) a delay in reaching 2.5% of annual renovations by 2030
would require a very steep increase of renovations post-2030 (in order to reach carbon neutrality) and, even
if we catch up, would cause an increase in residential space heating energy demand of 25% by 2050, in
space cooling of more than 20%. This translates to a 20% increase in electricity demand, putting strain on
the power sector, which would need much more low‐carbon generation capacity. See: Net Zero by 2050 –
A Roadmap for the Global Energy Sector, https://www.iea.org/reports/net-zero-by-2050
117
See Chapter 2.2. As explained in DEGD initiatives, the low ambition policy options consisting of
additional guidance only for energy efficiency or renewables polices would likely lead to results of the
MIX-CP scenario. Conversely, the most ambitious regulatory options would yield results similar to the
REG scenario with low/irrelevant carbon price applied in sectors beyond the current ETS. Moreover, the
low ambition outcome of the legislative processes or delays in implementation – be it on regulations or on
carbon pricing – would be illustrated by the MIX-CP or REG scenarios respectively.
66
buildings, in particular the EPBD and the proposal for a new emissions trading system
(ETS) to abate greenhouse gas (GHG) emissions in this sector as well as the contribution
of decarbonisation of buildings to the EU GHG target.
Among the three core policy scenarios118
produced in the context of the ‘Fit for 55’
package, the MIX-CP scenario describes a policy environment where the drivers for
energy efficiency and renewable energy uptake in buildings are closer to the existing
energy policy framework (represented by the 2020 Reference scenario). In particular, it
achieves lower renovation rates of buildings’ thermal envelopes, close to Reference.
Likewise, it has low drivers for renewables uptake in H&C, close to reference levels, but
significantly incentivises the uptake of renewable energy in heating and cooling,
including of heat pumps in buildings via carbon pricing. This scenario falls short of the
proposed new 2030 targets related to energy efficiency and renewable energy. However,
the MIX-CP scenario achieves the 55% net GHG emissions 2030 target.
Figure 6.1: Renovation rates in the Delivering the European Green Deal scenarios
Source: Primes
118
The ‘Fit for 55’ three core policy scenarios, including the MIX-CP scenario, are described in ‘Annex E
Analytical methods’ of the impact assessment (SWD(2021) 623 final) accompanying the proposal for a
revision of the Energy Efficiency Directive (COM(2021) 558 final), as well as in ’Annex 4: Analytical
methods’ of the impact assessment (SWD(2021) 621 final) accompanying the proposal for a revised
Renewable Energy Directive (COM(2021) 557 final). Detailed results can be found at:
https://ec.europa.eu/energy/data-analysis/energy-modelling/policy-scenarios-delivering-european-green-
deal_en
67
The lower ambition energy policy framework entails on the one hand a higher carbon
price in the ‘new ETS’ sectors than in the MIX scenario119
(EUR2015 80/ t CO2 in MIX-
CP, against EUR2015 48/ t CO2 in MIX120
) and, on the other hand, a lower contribution of
buildings to GHG emissions reductions121
. The lower CO2 reductions in buildings is to be
compensated, in the MIX-CP scenario, by higher reductions of CO2 emissions in the
power system and non-CO2 emissions compared to the MIX scenario.
The MIX-CP scenario therefore illustrates the importance of having a policy framework
that can trigger a reduction in energy consumption and shift towards low carbon fuels in
buildings. This is the aim of a proposal for a revision of the EPBD, to complement the
proposal for a new ETS that covers emissions from buildings and road transport.
The central MIX scenario illustrates that ambitious renovations and investors’ certainty
created by it are part of the well-balanced policy mix towards the GHG target of 55%
and, in the longer term, climate neutrality. But the MIX scenario on its own cannot
answer the question of how much of GHG reductions, energy savings, renewables
deployment or cost increases can be attributed to drivers that illustrate the revision of the
EPBD.
For this purpose, a counterfactual MIXwoEPBD scenario variant was developed that
removes the main policy drivers that represent the EPBD revision, but keeps other MIX
drivers (notably carbon price to the same level) frozen at the levels present in the MIX
scenario (see Annex D for a description of the scenario). Using this design, the
MIXwoEPBD variant complements MIX-CP, which similarly had few EPBD revision
relevant drivers, but compensated for this with increased carbon pricing.
As a result, gaps to the energy targets appear in the MIXwoEPBD variant, which also
results in fewer contributions to GHG reductions. These gaps are substantial, and
bridging them can be attributed to the EPBD revision. This approach therefore provides
the necessary insights to see the value added of the EPBD within the complete set of
DEGD proposals. It does have weaknesses: it is a static counterfactual (the real-life
carbon price would have increased as already illustrated in the MIX-CP scenario). It
captures only implicitly the more granular impacts of EPBD revision such as building
passports, long-term strategies or actions in the area of modernisation and quality of
buildings and of their systems. These are enabled by the digitalisation of information
tools and the impacts of the EPBD revision on e-mobility deployment, which to some
119
The MIX scenario includes a balanced approach between price-based mechanisms (like the ETS) and
sectoral regulatory instruments.
120
See Table 15 of the impact assessment (SWD(2021) 623 final) accompanying the proposal for a
revision of the Energy Efficiency Directive.
121
See Table 15 of the impact assessment (SWD(2021) 623 final) accompanying the proposal for a
revision of the Energy Efficiency Directive.
68
extent may also be captured by other policies, including the market signalling function of
the carbon price effect. The quantitative assessment of the impacts of the specific policy
options proposed is mainly performed using a building stock model and assessing the
effect of the measures proposed bottom-up.
Bearing in mind these limitations, the variant still provides a useful assessment that is
reflected in the sections below. It does so by complementing the main analysis, which
compares the EPBD revision alone to the baseline with the analysis of gaps created by
the MIXwoEPBD variant. The following sections provide a summary of the
MIXwoEPBD variant, while Annex D contains a more detailed description.
Results of MIXwoEPBD variant analysis
By removing the drivers illustrating the EPBD revision, a gap is created between the
variant and the MIX scenario. Bridging the gap can be attributed to the revision of the
EPBD. We can therefore identify the absolute impact in terms of bridging the gap with
the GHG target of 55%, the newly proposed energy efficiency target122
and renewable
energy targets123
(e.g. in amounts of CO2 saved, energy saved, renewables uptake or
costs/investment increase). In addition, these absolute amounts due to EPBD revision can
be compared to the full gap between the REF2020 and MIX scenario to be bridged by all
DEGD measures, thereby providing information in terms of relative impact or required
impacts by other policy drivers124
. The following impacts can therefore be identified
from the below analysis of the MIXwoEPBD variant. Table 6.2 presents a summary of
key results.
Energy system impacts
The MIXwoEPBD variant creates a significant gap to the necessary 2030 energy
efficiency in final energy consumption. Bridging this gap corresponds to 24% of the
total, economy-wide final energy savings effort between the REF2020 and MIX scenario.
The savings in final energy consumption have effects on primary energy consumption. A
gap to the necessary 2030 energy efficiency in primary energy consumption therefore
122
The newly proposed energy efficiency targets for primary and final energy consumption (see
COM(2021) 558 final) of at least 9% in 2030 compared to the level of efforts under the 2020 Reference
Scenario. The new way of expressing the level of ambition for the EU’s targets corresponds to a reduction
of 36% for final energy consumption and 39% for primary energy consumption respectively when
compared to the 2007 Reference Scenario projections for 2030 (i.e. the current way to reflect the energy
efficiency targets).
123
As proposed in COM(2021) 557 final, i.e. an EU overall target of at least 40% renewable energy in
gross final energy consumption by 2030 and a specific EU target of 1.1 p.p. annual increase in renewable
energy in the heating and cooling sector.
124
For example, the EPBD revision of brings an additional 18 Mtoe of final energy consumption savings
out of 77 Mtoe needed between REF2020 and MIX. It therefore contributes 24% of the final energy
consumption reduction effort.
69
also emerges. Bridging this gap corresponds to 10% of the primary energy savings effort
between the REF2020 and MIX scenario. The impacts are most pronounced in the
residential sector, where EPBD revision brings 41% of energy savings effort, and in the
services sector, where EPBD revision represents 37% of the effort.
The impacts of EPBD revision are also significant on the renewables share, which
becomes bigger thanks to energy savings but also thanks to an absolute increase in the
amount of renewables in the H&C sector as deep renovations are often coupled with the
installation of renewable H&C equipment (notably heat pumps). As a result, the overall
RES share grows by 0.9 percentage points (p.p.) between MIXwoEPBD and MIX, which
represents 18% of the effort between REF2020 and MIX. The change is more
pronounced in the RES H&C share, which grows by 2.4 p.p., representing 46% of the
effort.
Environmental impacts
The MIXwoEPBD variant, in the absence of drivers illustrating the EPBD revision,
therefore results in particular in the underachievement of the energy target, which also
impacts GHG, reducing the contribution to emission reductions by 0.6 p.p. to 2030. This
assumes that the new ETS would not contribute to bridging the cap (carbon pricing
assumed static compared to MIX) and would therefore not compensate for the reduced
deployment of the EPBD revision.
The differences are the most pronounced in the building sector, where the EPBD revision
would deliver up to 50% of the decarbonisation effort in the residential sector and up to
45% in the services sector.
Economic impacts
The MIXwoEPBD variant shows that in the absence of the EPBD revision, the system
costs would fall by EUR 12 bn/year in 2021-30 (metric excluding carbon pricing and
disutilities). This is explained by the fact that some investments in renovations would not
take place. But the reductions on the side of investments are partly offset by increased
expenditure for heating fuel and smaller savings in energy expenditure, which could be
achieved by switching to renewables (many of them with lower operational costs). Put
differently, the EPBD revision brings a 38% increase in total system costs between
REF2020 and MIX, taking into account increased investment needs but reduced energy
purchase expenditure.
Zooming in on the investments, the MIXwoEPBD variant shows that in the absence of
the EPBD revision, investments would fall by EUR 34 bn/year in 2021-30. Put
differently, the EPBD revision brings a 33% increase in total system costs between
REF2020 and MIX. While the figure is significant, the reductions in energy purchase
expenditure in the building sector must be also highlighted: over EUR 3 bn/year in 2021-
70
30. Renovations involve reducing operating expenditure, but at the cost of increased
capital expenditure.
With clearly reduced fossil fuel expenditure, the fossil fuels import bill is also lower
thanks to EPBD revision. The savings between MIX and MIXwoEPBD amount to EUR
13 bn over 2021-30 and amount to 12% of the effort between REF2020 and MIX.
Social impacts
Building-related energy expenditure as a share of private consumption increases by 0.2
p.p. in 2030 because of the EPBD revision as renovation investment costs will be higher
than fossil fuel savings also for consumers.
Table 6.2: Key results of the MIXwoEPBD variant in comparison to MIX and REF scenarios
EU27 2030 results unless
otherwise stated metric REF MIX
MIX-
woEPBD
variant
Difference
MIX vs
MIXwoEPBD133
Difference
MIX vs
MIXwoEPBD
compared to
difference
MIX vs REF 134
Energy and environmental impact
CO2 emission in
residential sector
Mt CO2
eq 211.6 142.2 176.8 -34.6 50%
CO2 emission in services
sector
Mt CO2
eq 91.2 69.1 79.1 -10.0 45%
CO2 emission in
residential and services
sectors
Mt CO2
eq 302.8 211.3 255.9 -44.7 49%
CO2 emissions reduction
(intra-EU scope, excl.
LULUCF)
Mt CO2
eq 2850.3 2376.0 2407.1 -31.1 7%
Total GHG emissions
reductions (incl. intra EU
aviation and maritime,
excl LULUCF) compared to
1990
Mt CO2
eq 43.4% 52.9% 52.2% 0.6 7%
PEC2020-2030 Mtoe 1124.3 1021.9 1032.5 -10.6 10%
FEC2020-2030 Mtoe 883.0 806.4 824.5 -18.1 24%
FEC in residential sector Mtoe 215.4 182.2 195.8 -13.6 41%
71
FEC in services sector Mtoe 118.0 106.6 110.7 -4.2 37%
FEC in residential and
services sectors Mtoe 333.4 288.7 306.5 -17.8 40%
Overall RES share % 33.2% 38.4% 37.5% 0.9 p.p. 18%
RES H&C share % 32.8% 38.4% 35.6% 2.4 p.p. 46%
Economic impacts
Investments (excl.
transport) (2021-30)
€15 bn
/year 296.7 402.0 367.6 34.4 33%
Energy purchase
expenditure in buildings
sector (2021-30)
€15 bn
/year
463.6 451.9 455.3 -3.4 29%
Energy system costs excl.
carbon pricing and
disutility (2021-30)
€15 bn
/year
1518.0 1550.1 1537.8 12.3 38%
Average price of
electricity
€/MWh
157.9 157.7 157.5
no visible
impact
Fossil fuels imports bill for
the period 2021-30
bn
€'15/10
years 2274.4 2159.7 2173.1 -13.4 12%
Social impact
Energy-related
expenditure in
buildings (excl. disutility)
share in private income % 6.9% 7.5% 7.3% 0.2 p.p. 41%
Source: PRIMES
6.3 Environmental impacts
The environmental impacts of the policy options assessed cover energy use, GHG
emissions, the use of materials, water and air pollutants. These impacts not only occur
through changes in production or consumption patterns within the EU, but also in other
countries that manufacture and trade products or materials imported into the EU. The
impacts of the options have been assessed using the modelling tools described in detail in
Annex D.
72
6.3.1 Impacts on building renovations and new buildings
The key dimension for assessing impacts of policy options for the revision of the EPBD
is the transformation of the building stock and its energy performance over time. The
dynamic of transformation is illustrated by the renovation of floor area to variable
depths/intensities and by the energy performance of new builds.
The MEPS options relate to different segments of the building stock, which are also
distributed differently across Member States.
Table 6.3: Building stock covered under MEPS125
Segments of the
building stock
Share of the building stock
(EU average)
Differences across Member States in
the share of the building stock
covered
MEPS1 Worst performing
buildings, rented/sold
On average rented every 18
years and sold every 50 years,
with worst performing buildings
representing a variable share of
the buildings under transaction
For residential buildings, the
share of building transactions at
EU level in 2018 was around
4%/year, including sales, renting
and renting at reduced rates
126
.
Could be large for residential buildings,
depending on differences in the
efficiency of the building stock (starting
point) illustrated in Figure 2.1,
ownership structure (Figure 2.7 for
residential sector), the dynamics of the
property and rental markets, and the
share of small and large multi-family
houses in residential buildings.
MEPS2 All worst performing
buildings
Gradually covering all buildings
by 2050, depending on the
priorities of the national
schemes
Could be large, reflecting the
differences in the starting point
(average efficiency of the building
stock).
MEPS3 Non-residential buildings Gradually covering up to 25.8%
of the building stock
Moderate, with most countries close to
average with some outliers (from 8.8%
in Cyprus to 47.6% in Estonia). Figure
2.9
MEPS4 All buildings in which
heating and cooling
appliances are replaced
Approx. 4%/year (all stock
replaced in around 25 years)
Expected to be moderate (national data
not available)
All MEPS sub-options will produce different effects depending on the starting point in
each country, with more efforts in the countries with the largest share of inefficient
buildings on the basis of EPC classes. MEPS2 has the potential to be more complete in
terms of covering the whole stock gradually, although the effects would also depend on
the specific pathway identified in Member States and adapted to the national conditions.
MEPS1, MEPS3 and MEPS4 will only cover a limited subset of the building stock.
125
See also Annex F on the differences related to the buildings to be targeted under MEPS schemes.
126
Calculations based on Eurostat SILC microdata. For Denmark, Estonia, Latvia, the Netherlands and
Finland, data was not available. The most recent reliable data for Romania and Bulgaria are from 2016, and
for Hungary from 2017.
73
It is assumed that some 55% of buildings are not renovated at present, while around 43%
have undergone some kind of renovation since they were first built127
. Only 1.3% and
0.8% respectively have been renovated at average and deep renovation levels in 2020.
In the baseline scenario, the EU floor area is expected to be transformed over time by
standard and shallow renovation (labelled ‘reno-average’), with only very low shares of
ambitious renovation (labelled ‘reno-ZEB’). It is also expected that a small share of new
buildings will go beyond the current new standard (nearly zero-energy buildings/NZEB)
until 2050 and be built to a higher standard, which is referred to as ‘new ZEB’ (Figure
6.2). These assumptions reflect the historical trends in renovations and the most likely
development under the current policy framework.
Figure 6.2: EU floor area development in the baseline and considered scenarios128
Source: Guidehouse et al.
The impacts on floor area development already become visible by 2030 in the most
ambitious scenarios HIGH-I and HIGH-II, when stronger policy signals lead to more
renovation activities. A slightly higher share of renovated buildings also stands out as a
consequence of anticipating activities before the introduction of MEPS (Figure 6.1). The
additional renovated floor area over 2021-2030 ranges from 16-17% in the LOW and
MODERATE scenarios up to 23% in the two most ambitious scenarios. By 2050, the
additional renovated floor area will reach 46-53% and 66% of the building stock
respectively in the least ambitious and most ambitious scenarios. In the least ambitious
127
This is why the building stock has two status quo levels in 2020 (‘not renovated’ and ‘already
renovated’), to which different energy needs are associated for the scenario calculations.
128
Based on Guidehouse (2021).
74
scenarios, almost all of the additional renovations are done at an ‘average’ level129
all
over the period up to 2050.
By contrast, in the most ambitious scenarios there is a progressive increase in ‘depth’ in
the renovation of existing buildings after 2030, where ZEB renovations that achieve
higher savings start to significantly upgrade ‘not renovated’ buildings and ‘already
renovated’ buildings130
. The high impact of the most ambitious scenarios comes not only
from MEPS2, but also from the cumulative effects of the other measures in designed
policy packages, notably DEEP2, LTRS3 and BRP3. The latter triggers a more
systematic and effective approach to staged renovation. As for new buildings, no more
NZEBs are built after 2030 in the HIGH scenarios, being replaced by a more ambitious
ZEB standard131
. In the least ambitious scenario, the new standard will be an incremental
increase from current NZEB that will last until 2050, while the penetration of the ZEB
standard will remain limited.
The effects are therefore very different across scenarios. While in the LOW and
MODERATE scenarios a limited share of the building stock is renovated and shallow to
medium renovation dominates, in the two most ambitious scenarios a gradual
transformation of the existing building stock is achieved. These results can also be
illustrated by the evolution of renovation rates as presented in Table 6.4.
Table 6.4: EU average renovation rates (average over 5 years period) and share of deeply renovated floor
area in total renovated floor area
2020 2025 2030 2035 2040 2045 2050
Average renovation rate in full renovation equivalent (over 5 yrs) [%total floor area]
BSL 1.35% 1.47% 1.65% 1.72% 1.72% 1.72% 1.71%
LOW 1.35% 1.47% 1.85% 2.06% 2.06% 2.05% 2.05%
MODERATE 1.35% 1.47% 1.83% 2.01% 2.01% 2.23% 1.74%
HIGH-I 1.35% 1.47% 2.99% 3.60% 3.34% 2.29% 0.93%
HIGH-II 1.35% 1.47% 2.99% 3.60% 3.34% 2.29% 0.93%
Average share of deeply renovated floor area after 2020 (over 5 yrs) [% of total renovated area]
BSL 1.0% 1.2% 1.4% 1.7% 2.0% 2.2% 2.6%
129
For a detailed overview of the energy performance and corresponding savings attributed to each
renovation category, see Annex D on ‘Analytical methods’. ‘ZEB partial’ are buildings on the way to
‘retrofit ZEB’ level, but reach this in several steps.
130
In the high ambition scenarios, the average renovation is no longer implemented after 2035 due to the
progressive introduction of stricter requirements and corresponding enabling conditions in favour of ‘ZEB’
renovations. As MEPS2 drives buildings retrofitted to ZEB level by 2050, in the high scenarios ‘ZEB
partial’ first builds up after 2030, and then decreases again towards 2050 – by then, most ‘ZEB partial’
buildings will have turned into (full retrofit) ‘ZEB’.
131
For ZEBs, for new constructions a standard definition of ‘passive house’ is applied for modelling
purposes. The impact of potential reductions of embodied carbon content due to ZEB2 is not modelled as it
goes beyond the boundaries of the baseline assumed, which only covers CO2 from energy use. However,
the existing literature helps us understand the magnitude of the emissions addressed and the potential for
reductions (see Annex H).
75
LOW 1.0% 1.2% 1.4% 1.6% 1.9% 2.2% 2.5%
MODERATE 1.0% 1.2% 1.6% 3.3% 6.0% 9.6% 10.8%
HIGH-I 1.0% 1.2% 3.9% 18.9% 39.6% 53.6% 59.2%
HIGH-II 1.0% 1.2% 3.9% 18.9% 39.6% 53.6% 59.2%
Source: Guidehouse et al.
While the building stock was renovated at an average rate of 1.35% in 2020, the rate
increases up to 3% in two HIGH scenarios by 2030. After peaking at 2-3.6% in 2035-
2040 across scenarios, the average renovation rate starts to decrease after 2040. As the
average renovation rate does not provide information about the level of energy savings
achieved due to renovations, it is interesting to also look at the share of deeply renovated
floor area (see table above).
Deep renovation takes off in the two HIGH scenarios after 2030, facilitated by the
introduction of stricter minimum energy performance standards (MEPS1, 2 and 4). The
average share of deeply renovated floor area in total renovated floor area increases from
1% to around 19% in 2035, reaching 60% in 2045-2050. By contrast, in the LOW and
MODERATE scenarios the share of deeply renovated floor area remains at 1.6% and
3.3% respectively by 2035 and reaches 11% by 2050.
Thanks to building renovation, the share of worst performing buildings (those ‘not
renovated’) is progressively reduced across all options. In HIGH scenarios, the floor area
of worst performing residential buildings decreases gradually towards zero by 2050
through the implementation of MEPS1.
Figure 6.3: Evolution of the floor area of worst performing building stock in the EU regions considered in
the model, High I scenario
Source: Guidehouse et al.
There are however differences across the EU, reflecting the different ages of building
stock in Member States. The distribution of worst performing buildings, both residential
and non-residential, varied across EU regions in 2020 – from 47% of the building stock
76
floor area in the Northern region to 65% of the floor area in the North-Eastern region
(Figure 6.3). Residential buildings represent the biggest part of the worst performing
floor area in all regions, i.e. 2-3 times bigger than the floor area of the worst non-
residential buildings.
6.3.2 Impacts on energy consumption and GHG emissions
Table 6.5: Energy and GHG emission reductions at EU level across scenarios
2030 2040 2050
Main indicator [unit]
LOW
MOD
HIGH-I
HIGH-II
LOW
MOD.
HIGH-I
HIGH-II
LOW
MOD.
HIGH-I
HIGH-II
Energy savings
in space
heating/cooling and
DHW132
[% from
BSL]
-2.4 -3.6 -11.7 -16.1 -7.8 -11.3 -24.4 -28.0 -11.7 -15.8 -34.0 -36.0
GHG emission133
savings
in space
heating/cooling and
DHW
[% from
BSL]
-3.1 -4.2 -22.8 -28.5 -10.4 -15.7 -49.7 -55.4 -14.4 -20.6 -53.5 -57.1
Source: Guidehouse et al.
The options from LOW to MODERATE show a progressive reduction in the final
energy consumption used for heating and cooling purposes across scenarios. In 2030,
the reduction is in the range of -2% to -11% across scenarios compared to the baseline
(Table 6.5, Figure 6.4). In HIGH-I and II, the introduction of MEPS at scale leads to an
earlier and then much steeper decrease compared to the baseline scenario. While the
reduction in energy consumption is limited for the LOW and MODERATE scenarios, the
two HIGH scenarios reduce it by 11-12% compared to the baseline in 2030. The decrease
in energy demand in the two HIGH scenarios becomes even more significant in 2040 (-
24% compared to baseline) and reaches -34/-35% towards the mid-century.
Figure 6.4: Final energy consumption for space heating across considered scenarios134
132
DHW=Domestic hot water.
133
“GHG emissions” includes direct emissions from fossil fuel combustion in the buildings as well as
indirect emissions from the power and heat production sector corresponding to the electricity and heat used
for heating, cooling and domestic hot water.
134
Based on Guidehouse (2021).
77
Source: Guidehouse et al.
Besides absolute energy consumption values in HIGH scenarios, the average annual
energy savings achieved compared to 2020 levels sees an increase from 1.5% between
2020 and 2025 to a peak of 3.2% between 2025 and 2030. The annual energy savings
rates will gradually decrease towards 2050 by around 1.1-1.5% in LOW and
MODERATE and by 2.1% in HIGH-I and II. The HIGH scenarios therefore achieve
almost a doubling of the energy savings in 2030-2035 compared to the baseline scenario.
The reduction in energy consumption resulting from higher rates and deeper energy
renovations induced by MEPS, together with higher standards in new construction, leads
to a progressive decrease in GHG emissions in the building sector in 2020-2050 (Figure
6.5).
Figure 6.5: Evolution of the GHG emission reduction for heating, cooling and DHW in buildings compared
to baseline scenario
Source: Guidehouse et al.
In 2030 and compared to the baseline scenario, the reduction in GHG emissions from
heating, cooling and domestic hot water (DHW) is in the 3-4% range for
LOW/MODERATE scenarios and around 23% in the HIGH-I and HIGH-II scenarios.
Around 66% and 62% of these emission savings are achieved in residential buildings in
78
LOW/MODERATE and HIGH-I and II scenarios respectively135
, while the remaining
share is achieved in non-residential ones. These emission reductions are achieved thanks
to a combined uptake of deeper and accelerated energy renovations triggered by MEPS1
and MEPS2136
. In this case, the introduction of DEEP2, LTRS3 and BRP3 in the two
HIGH scenarios also amplifies the effect of MEPS.
This emission reduction will be achieved by (i) reducing the energy demand of buildings
and increasing the use of renewable energy; and (ii) by a gradual shift from fossil fuels to
renewable and electricity-based building systems. As a result, part of the direct emissions
of buildings will be shifted to the power and heat sector. The share of direct emissions in
the total emissions of buildings – around 80% in 2020 – will therefore gradually decrease
in 2030 to around 77-79% in LOW/MODERATE and to 71% in the two HIGH scenarios
respectively.
Compared to the baseline, all considered scenarios have a consistent long-term impact.
This leads to a reduction of GHG emissions from heating of 14-21% in
LOW/MODERATE scenarios and 53-55% in the two HIGH scenarios by 2050.
When comparing the embodied GHG emissions resulting from renovation works (i.e.
from the materials used such as insulation) with the reduced operational emissions after
renovation, case studies show that renovation can bring about significant environmental
gains. For old (poorly/non-insulated) buildings, the material-related impact of energy
renovation is low, whereas gains in terms of operational energy are high137
.
Studies of embodied GHG emissions in buildings have shown that the addition of
embodied emissions caused by the renovation of an existing building, depending on the
nature and depth of the renovation works and the materials used, is typically less than
50% of the embodied emissions for a new building (i.e. less than 125–200 kg
CO2eq./m2). It can be much lower if the renovation focuses, for example, on insulation
and heating/cooling system improvements without major structural changes. If a
renovation using materials with modest levels of embodied emissions, together with
decarbonised energy supplies (e.g. renewable electricity), is therefore able to successfully
reduce the operating emissions from an existing building to near zero, then the period
during which the cumulative emissions are greater than they would have been without the
renovation can typically be less than about 3 years138
(typical values of embodied GHG
135
This relative distribution of emissions savings between residential and non-residential will gradually
decrease by 2050 to 60-64% and an almost equal share (52%) as in non-residential buildings (48%) in
LOW/MODERATE and HIGH-I and II scenarios respectively. The lower share of emissions savings in
non-residential buildings from the MODERATE scenario is explained by MEPS3, which addresses only
large non-residential buildings and is implemented later than others.
136
The demolition of buildings creates a false improvement in building stock as it reduces the floor area.
This effect is however very limited as demolition rates are assumed to be 0.1-0.2% and constant across
scenarios.
137
CA EPBD May 2021, LCA to combine energy and material performance, BBRI.
138
EASAC policy report 43.
79
emissions per square metre of floor area for new buildings lie between 250 and 400 kg of
carbon dioxide equivalent per square metre (kg CO2eq./m2), whereas the operating GHG
emissions from existing buildings typically lie between 30 and 50 kg CO2eq./m2 per
year).
The projected GHG emission reductions from the LOW and MODERATE scenarios (3-
4%) are considerably lower compared to the reduction level of around 15% (compared to
reference) attributed to the EPBD contribution by the counterfactual scenario
‘MIXwoEPBD’ (Section 6.2). At the same time, the GHG emissions reduction of 23% in
the two HIGH scenarios appears more comparable to that attributed to the EPBD.
Similarly, the energy savings in final energy consumption of residential and services
sectors by 2030 for LOW and MODERATE scenarios (2.4-3.6%) appear low compared
to the projected energy savings of 5.3% from the MIXwoEPBD scenario (compared to
reference). However, the energy savings in the HIGH scenarios are by comparison more
pronounced.
6.3.3 Air pollution, indoor air quality, water and material use
Table 6.6: Summary of main results on air pollution, water and material use at EU level
Source: Guidehouse et al.
Significant non-energy co-benefits can be achieved thanks to policies that lead to the
increased energy renovation of buildings. The air pollutants that are reduced as a result
of energy savings are SOx, NOx and particulate matters (PM 2.5 and 10, Table 6.6).
Their reduction generates co-benefits for human health and ecosystems.
Building renovation also has an impact on health-related factors linked to indoor air
quality like proper ventilation flow, indoor temperature, air pollution, noise or exposure
to toxic substances. Thermal insulation of different parts of buildings, ventilation and
renovation in general can have different positive and negative aspects for human
health139
. During the consultation phase, several stakeholders expressed the need for
EPBD policies to contribute to better indoor air quality. The increase in renovation
activities triggered by MEPS would have effects on the use of materials for
139
Mzavanadze, N. (2018). COMBI: WP5 Social welfare: Final report: quantifying energy poverty-related
health impacts of energy efficiency.
80
construction works140
. Building renovation usually requires material extraction and use
in construction. Demolition activities as well as construction also have impacts on waste
production and the environment. Minerals have the highest share of all materials in
buildings, comprising around 65% of total aggregates (sand, gravel and crushed rock),
and approximately 20% of total metals are used by the construction sector141
. Growth in
construction activities will therefore increase the pressure on the environment. However,
embodied CO2 emissions emanating from building materials could potentially be reduced
by 50% or more using circular approaches142
.
Figure 6.6: Impact of renovation and new-build investment on material consumption within the EU 27 and
rest of the world, 2030 (difference to baseline)143
Source: Guidehouse et al.
Figure 6.6 shows that investments in renovations and in highly efficient new
constructions in the high ambition scenario II lead to additional material use of some 16
million tonnes in 2030 within the EU compared to the baseline, and to an additional 8
million tonnes in other countries. This translates into around 0.2% and 2.2% total
additional resource use in 2030 in LOW/MODERATE and HIGH-I AND HIGH-II
scenarios compared to the baseline. This is a net effect between the increase in resources
used for the construction and material sector and a decrease in resources used within the
gas and heat sector and also petroleum refining (included in industry) and fossil-based
140
For instance iron, aluminium, copper, clay, sand, gravel, limestone, wood, and building stone.
141
Herczeg et al. 2014: Resource efficiency in the building sector; available at:
https://ec.europa.eu/environment/eussd/pdf/Resource%20efficiency%20in%20the%20building%20sector.p
df
142
Material Economics 2018: The Circular Economy: A Powerful Force for Climate Mitigation. Available
at: https://materialeconomics.com/publications/the-circular-economy-a-powerful-force-for-climate-
mitigation-1
143
Exiobase modelling.
81
electricity (included in electricity). The increased materials mainly come from the EU,
although around 30% of the construction materials are traded from Asia-Pacific.
Compared to the baseline, water usage rises by around 0.4% and 0.3% by 2030 and
2050 in the most ambitious scenarios. Water usage mainly increases in the agricultural
and forestry sector that provides products and services to the sectors directly affected by
renovation and new build activities.
6.4 Socio-economic impacts
The increase in renovation activities triggered by the implementation of MEPS will have
positive effects of variable intensities across the building renovation value chain, which
is quite complex and fragmented144
. It includes on-site construction activities, together
with raw materials supply and the manufacture of construction materials and products,
mostly supplied by upstream sectors.145
Value is unevenly distributed along the chain
with developers, material distributors and logistics capturing a rather large share of the
value pool146
. A large number of suppliers are engaged in building renovation, providing
services, and intermediate products from sectors further up the value chain, including
materials, machinery, electrical equipment, chemicals, metal products, and more. Small
and medium sized enterprises (SMEs) play a key role in the build environment. Over
99% of the construction industry ecosystem consists of SMEs147
, either supplying
essential technologies and materials or providing services locally in their area. Capacity
limitations on their side might limit the renovation rate that can be achieved. New
technologies also require know-how and capacity development. All the operators across
the value chain would be affected by a positive increase in value and activities, with
positive corresponding effects on employment.
While energy costs would be reduced for end-users, building owners would incur
investments and other compliance costs, and public administration would face
administrative and enforcement costs.
6.4.1 Investments, costs and property values
6.4.1.1 Investments
MEPS and ZEBS uptake results in higher investments in building renovation and new
construction. Investments sharply increase across scenarios after 2025, when the new
standards come into force and require worst performing buildings to be renovated.
Compared to the baseline, the relative increase in investment in 2030 is +18% / +22% in
144
Groote and Lefever, 2016.
145
Ecorys et al., 2016.
146
McKinsey & Company, 2020.
147
https://ec.europa.eu/growth/sectors/construction_en#:%7E:text=The%20construction%20industry%20is
%20very,social%2C%20climate%20and%20energy%20challenges
82
LOW/MODERATE scenarios and around +80% / +83% in HIGH-I/HIGH-II scenarios,
slightly decreasing towards 2050 (Figure 6.7).
As explained in relation to environmental impacts, this relates to the ‘maximum effect’
needed, while the national MEPS scheme could be of lower intensity depending on the
specific set-up and interaction with other instruments. The majority of the investments
relate to renovations triggered by MEPS148
, while the rest relates to the compliance of
new constructions with the ZEB standard. This is in line with the analysis underpinning
the Renovation Wave strategy. Following the Climate Target Plan (CTP), the strategy
identified that building renovation is one of the sectors facing the largest investment gap
in the EU149
.
The dimension of investments is also linked to the financing challenge for building
renovations. The supporting tools included in each option are expected to have effects in
providing a comprehensive policy framework to facilitate the targeting of available funds
to the right renovation projects. While the deep renovation definition would help
investors targeting money towards integrated and staged renovation packages – providing
a longer-term perspective to building owners – building renovation passports will help
identify case-by-case and from a technical point of view the most suitable and cost-
efficient refurbishment packages according to building characteristics.
Figure 6.7: Investment cost development at EU level for renovation and new construction (in billion
EUR2020/year)150
148
Around 75% in LOW/MODERATE and 81% in HIGH-I/HIGH-II.
149
The analysis underpinning the CTP and Renovation Wave strategy indicated that to achieve the
proposed 55% climate target by 2030, around EUR 275 billion of additional investment in building
renovation is needed every year. For the EPBD and compared to the baseline scenario, the additional
annual investment costs in the two HIGH scenarios are estimated at around EUR 152-157 billion in 2030
(in fixed 2020 prices).
150
Based on Guidehouse (2021).
83
Source: Guidehouse et al.
6.4.1.2. The challenges of increasing capacity in the supply markets
An increase in demand for construction materials, besides generating environmental
impacts as mentioned in Section 6.3 above, could also create pressure on markets. This
would result in higher prices and potential difficulties in sourcing materials.
This effect has to be carefully considered in the light of the price increases and
imbalances observed since May 2020151
. The COVID-19 pandemic and related
containment measures, as well as the follow-up recovery plans, have had a significant
impact on the EU industry. On the supply side, the pandemic has led to supply shocks
disrupting supply chains within and outside the single market. Global shipping costs for
instance have seen huge increases, with container prices increasing several-fold during
the pandemic (almost 400% between October 2020 and May 2021). On the demand side,
the strong economic recovery during 2021, together with unprecedented public
investment plans in the EU, China and the USA, have increased pressure on demand for
products. In addition, consumers have partially reallocated their expenditure from
services to goods.
Figure 6.8: Production in the construction sector 17/09/2021 (Eurostat)
Source: Eurostat
151
On this issue, see also Annex D, 8.1 Energy and environmental impacts.
84
The construction sector has been badly affected as regards wood and metal products and
components. In some cases, prices have reached their highest levels since 2008-2011 (the
end of the last commodity boom). Between May 2020 and June 2021, the price of
aluminium, copper and steel increased by more than 50%, and timber by around 40%.
The inflationary pressure has been less significant for glass, concrete and cement, at less
than 10%. This is mainly due to the fact that they are mostly produced locally. The
delays and increase in prices of raw materials have affected the construction ecosystem,
which is largely dependent on primary inputs. During the pandemic, construction output
suffered a major decline as a result of lockdown (Figure 6.8) and, in some Member
States, the temporary closure of construction sites. However, Eurostat data152
indicates
that EU production in construction increased by 3.8% in July 2021 compared with a year
earlier.
As inflationary prices are mainly due to short-term imbalances between supply and
demand factors, monitoring and analysis indicate that such steep increases are at least
temporary in part. Supply-side issues are expected to be progressively resolved by the
easing-off of restrictions on the movement of goods (mainly on freight disruptions),
customers’ partial move back to services and supply capacities’ adaptation to higher
demand (supply elasticity, via new investments).
However, macroeconomic trends make it unlikely that commodity prices will fully return
to pre-pandemic levels. Global growth is expected to be 4.9% in 2022153
. Demand,
including in the construction sector, is expected to continue to be supported by
government support measures and low interest rates until at least 2023 – the date when
stimulus packages will start to shrink (the EU Recovery and Resilience Facility in
particular will finance reforms and investments in Member States until 31 December
2026). Around that period, the HIGH-I/HIGH-II set of options will start triggering
additional renovation works. It is therefore expected that the additional stimuli triggered
by the EPBD revision will come at a moment in time (after 2025) in which the current
temporal imbalances would either be compensated by additional capacity or prices would
have been set at higher levels compared to their historical level. In particular, the use of
materials for construction is expected to increase by 7.8% in the HIGH-I/ HIGH-II
scenarios in 2030 and by 6.9% and 7.3% respectively in 2050 compared to the
baseline154
.
On insulation works specifically, material accumulation in the EU (mainly roads, bridges
and buildings) was 2,944 million tonnes in 2019, of which non-metallic minerals (sand,
gravel) 2,516 million tonnes, metal ores 324 tonnes, wood 84 tonnes and fossil energy
materials/carriers 20 million tonnes. Roughly 60% of insulation materials is glass wool
152
Eurostat Euroindicators 107/2021: https://ec.europa.eu/eurostat/documents/2995521/11563279/4-
17092021-BP-EN.pdf/edff43b7-5ef5-01c8-2cf8-f572825bab56?t=1631867055642
153
Source: IMF World Economic Outlook Update July 2021.
154
Based on Guidehouse et al. (2021).
85
or stone wool (non-metallic minerals), while the rest is mainly divided between fossil-
based and renewable materials. A typical average density for insulation results in roughly
5-10 million tonnes annual flow for insulation materials, meaning less than 0.33% of the
total yearly material accumulation. Compared to the above-mentioned total flow of raw
materials, a doubling of the use of insulation materials does not appear to be a reason in
itself for causing a scarcity of materials, as it would only lead to a very low percentage
growth in material flows.
On machinery and equipment, in particular heating systems, demand is expected to grow
by 4.4%/4.8% in the HIGH-I/HIGH-2 options by 2030 and by 4.5%/5% by 2050
compared to the baseline155
. Unlike insulation materials, which lead to material
accumulation in the building stock, the replacement of heating systems does not add
material to the building stock. The majority of heating systems consist of metal.
According to Eurostat material flow data, they already have a high recycling rate in waste
treatment (around 90%). For this reason, a scarcity of materials for heating systems
appears to be rather improbable, as the substitution of raw materials with secondary ones
could compensate for the additional demand.
In addition, overall production in the construction industry in the EU is significantly
below – more than 10% – the level reached in 2008156
. This gap illustrates the
construction industry’s cyclicality and its capacity to expand relatively quickly to its pre-
financial crisis levels and beyond, provided the appropriate conditions are met.
The historical capacity of market expansion together with the unprecedented global post-
COVID market conditions could lead to a progressive cooling-off over time of the
current price shock. However, the linked risks of high prices and lack of key materials
and products on the renovation markets cannot be excluded for the future, and other
shocks could also arise. Climate change and the global integration of value chains in
particular will lead to higher shock frequency and severity in the future. Shocks affecting
the supply of materials could stem from events including, but not limited to, extreme
climatic events, financial crises, another pandemic, cyberattacks or trade disputes. It is
however not possible to accurately quantify upstream the impact of such potential future
shocks on the production, delivery and prices of materials in 2030 and 2050.
There are nonetheless mitigation factors that can be supported. Section 8.4 on the
‘Challenges of the proposed measures’ lays down the conditions to further ensure market
scalability and limit those risks.
155
Ibid.
156
Based on Eurostat data from [sts_copr_m]; with an indicative index of 100 in 2015, by way of
comparison, production was 113 in February 2020 and 111 in July 2021, compared to the record of 128 in
February 2008. Production in construction means the output and activity of the construction sector. It
measures changes in the volume of output.
86
6.4.1.3 Impacts on energy expenditure, investments and their distribution
across income groups and regions
The counterpart of high upfront costs in building renovation, which becomes necessary to
implement MEPS, is a reduction of the energy needs of the building, and with it the
energy costs to be faced by building occupants.
Figure 6.9 shows how total energy costs in all buildings157
develop between 2020 and
2050. In 2020, around 80% of energy costs are spent on residential buildings, while only
around 20% are linked to non-residential buildings. Compared to 2020, energy costs for
heating in the baseline scenario are projected to increase by 17% in 2030, driven by the
increase in energy consumption and higher energy prices158
.
Figure 6.9: Energy costs at EU level in the considered scenarios compared to baseline159
Source: Guidehouse et al.
The introduction of MEPS and ZEBs has clear effects in reducing total energy costs.
These become progressively more significant over time (together with more stringent
standards) and with a more comprehensive combination of MEPS, with maximum effects
in the HIGH scenarios. In 2030 compared to the baseline, the energy cost savings will be
around 1.7% in the MODERATE scenario and around 8% in the HIGH scenarios. The
impact becomes visible after 2025 due to anticipation effects and first obligations before
2030. In the modelled scenarios, there is a steep decrease in energy costs between 2030
and 2050, induced by a decrease in the energy needs of buildings through implemented
measures. The annual energy costs will therefore reach EUR 223 billion by 2020 in the
baseline scenario, EUR 197 billion in the MODERATE scenario and around EUR 161
157
This applies to building services covered by the EPBD, i.e. heating, cooling, ventilation, DHW; other
uses, e.g. household appliances, are not included.
158
Energy price assumptions have been aligned to those used in all the proposals of the ‘Fit for 55’
package. See Annex D on analytic methods for more details.
159
Based on Guidehouse (2021).
87
billion in the two HIGH scenarios. Despite increased energy prices, this means that
energy savings in the MODERATE scenario and in the two HIGH scenarios will be
around 12% and 28% of the total energy costs in 2050 in the baseline scenario.
It is important to mention that as the baseline only accounts for policies already in place,
the introduction of a carbon price for heating fuels and its effect on energy prices is not
included in the analysis of impacts of energy costs. An extension of ETS to the building
sector would cause an increase in heating fuel costs (for fossil fuels), which is expected
to reach around EUR 48/tonne in 2030 in the CTP MIX scenario. While providing for an
additional incentive to a fuel switch and therefore to more efficient heating appliances
that will improve the performance of buildings, it would also lead to an increase in the
cost of GHG-intensive heating faced by final consumers. However, an ETS extension
would also allow governments to raise the necessary funds to tackle energy poverty and
help vulnerable customers.
The reduction of costs in the energy bills of consumers resulting from the implementation
of MEPS would be greater if there is a carbon price. The higher the carbon price, the
lower the payback period for renovation investments.
The impact on the share of expenditure that households need to use for energy is different
across income groups. For low-income households, the share of energy expenditure in
total consumption expenditure is much higher than for higher-income households.
Renovations and subsequent energy savings in their homes therefore result in energy
savings with positive impacts on energy poverty alleviation. A change in energy
expenditure through renovation helps households with lower incomes, in particular those
that live in worst performing buildings and are able to save the most.
Figure 6.10 shows the difference between HIGH-I and baseline at EU-27 and EU
regional level regarding the share of heat and electricity expenditure in total consumption
expenditure by income quintiles in 2030. The distributional impact depends on a number
of key issues: building stock efficiency, climate conditions of the Member States, the
energy source and energy amount used for heating and electricity combined with the
disposable income of EU households. Data on building stock efficiency in the EU and its
link to household income and building performance is incomplete. Therefore, the
following analysis is based on assumptions about the allocation of energy savings
resulting from building renovation measures. Reductions in energy expenditure are
attributed to income quintiles according to the expenditure shares in the baseline. This is
an assumption taken within the analysis to allocate savings across income groups. It
implicitly assumes that renovation projects with roughly the same efficiency
improvements are distributed evenly across income groups.
The results show larger savings for households in the lower quintiles for the EU-27 in
total. The first quintile saves around 0.8% of energy expenditure in HIGH-I, while the
fifth quintile saves around 0.5%. Since low-income households have to spend
88
proportionally more of their income on energy, they also save more within the HIGH-I
scenario. A shift in this assumption towards increased renovation of worst performing
multi-family buildings would imply an even more pronounced savings effect for low-
income households. North-east and south-east EU countries show the highest decrease in
energy expenditure. The building stock likely included a higher range of worst
performing houses. This results in higher savings.
Due to a lack of data on building stock efficiency, the proportion of energy expenditure
savings especially for low-income households in the first quintile is subject to sensitivity:
if energy efficiency improvements are predominantly made in buildings inhabited by
low-income households, savings would be more pronounced, in particular relating to
overall expenditure.
Figure 6.10: Difference between HIGH-I and baseline: share of heat and electricity expenditure on total
consumption expenditure by income quintiles for EU-27 (2030)
Source: Guidehouse et al. based on Eurostat (hbs_str_t223) and own calculation (explanation quintiles:
quintile 1 = lowest income households to quintile 5 = highest income households)
In addition to improving building efficiency through renovation measures, heating and
cooling technologies play a major role in energy expenditure. The replacement of old
heating technologies can have a large impact on low-income households. From the
assessment of options, it seems that as income rises, the share of household income spent
on heating energy declines. In Member States with lower mean incomes, expenditure on
heating energy is generally higher. This indicates that heat is a necessary good and does
not readily respond to changes in income. However, energy prices and climatic
conditions in the respective Member States also play a large role. As income rises,
households spend a smaller fraction of their income on heating. At the same time, the
89
amount of heating energy consumed rises with income. In fact, the top income quintile
regularly consumes 2-3 times as much heating energy as the bottom one.
The results vary between Member States: it clearly shows that eastern European
countries (region NE = -1.4%, region SE = -0.9%) benefit much more from the measures
in the HIGH-I scenario (compared to the baseline and due to a reduction in heat and
energy expenditure). This can be due to the fact that the share of worst performing
buildings and therefore energy expenditure is higher. The majority of the population in
eastern Europe own and live in single-family houses. The share is significantly higher
than in western European countries.
Figure 6.11 shows the difference in energy expenditure between the HIGH-I scenario and
the baseline in absolute terms. Following our assumption that renovation and subsequent
energy savings are distributed proportionally to expenditure shares, low-income
households in the first quintile save around 92 PPP160
in 2030 and 284 PPP in 2050.
High-income households in the fifth quintile save around 202 PPP in 2030 and 624 PPP
in 2050. This is due to energy efficiency measures in buildings.
Figure 6.11: Difference between HIGH-I and baseline: heat and electricity expenditure by income quintiles
for EU-27 (2030 and 2050)
Source: Guidehouse et al., based on Eurostat (hbs_str_t223) and own calculation
6.4.1.4 Property values and rents
Estimating the impact of energy efficiency on the value of buildings is difficult, as both
sale and rental prices are influenced by a multitude of endogenous and exogenous factors
(e.g. location), as well as market conditions and general supply-demand balance. There
160
Purchasing power parity.
90
is, however, some evidence to suggest that higher values are associated with better
performance161
. In addition, buildings with better energy performance have shorter
vacancy periods, a lower loss of rental income due to changing tenants and, as such,
show a more positive operating impact for the owner. In the commercial sector, buildings
that fail to keep up with technological advances, including widespread advances in
energy efficiency, risk becoming obsolete, especially in unfavourable market conditions
(such as periods of low or negative economic growth)162
.
Figure 6.12: Distribution of the EU population by tenure status, region and income group in 2019163
Source: Guidehouse et al., based on Eurostat (hbs_str_t223) and own calculation
We can therefore assume that an indirect effect of the implementation of MEPS on the
value of upgraded buildings would be positive. At the same time, worst performing
buildings needing renovation to comply with MEPS could be penalised in market
transactions by ‘brown discounts’, which could lead to their depreciation or even
stranded assets.
161
Zancanella et al. (2018) explain that energy efficiency measures increase the price of residential assets
by around 3-8%, with an increase of around 3-5% in residential rents compared to similar properties
(https://link.springer.com/article/10.1007/s11146-019-09720-0) . The values vary across regions and
countries, as well as due to different property types (e.g. apartments vs. houses). Chegut et al. (2019) show
the high variation in energy efficiency values on European housing markets; they find ranges between
0.04% and 15%, depending on the market and transaction type. Chegut et al. (2020): Energy Efficiency
Information and Valuation Practices in Rental Housing; https://link.springer.com/article/10.1007/s11146-
019-09720-0/tables/6
162
The Macroeconomic and Other Benefits of Energy Efficiency (europa.eu)
163
Guidehouse (2021) based on Eurostat (ilc_lvho02).
91
In turn, MEPS could result in an increase in rents for those buildings that are renovated in
compliance with minimum energy performance standards. To cover their investment
costs, landlords tend to pass on energy efficiency-related investment costs to tenants by
increasing rents. Depending on the extent of the rent increase, this might counterbalance
any savings that tenants might experience through lower energy costs164
. This effect is
expected to be variable across countries and income groups as illustrated in Figure 6.12,
which shows the variable share of tenancy across the EU.
Aligning the incentives in the rental housing market with efficient climate protection is
most important in Germany, Austria, the Netherlands, France, Sweden and Denmark,
where more than 30% of households are renters. The effect of higher rents is also
expected to be regressive, as tenancy is higher in populations with below 60% of median
equalised income. Appropriate policies and incentives can mitigate the possible increase
in rents165
.
6.4.2 Macroeconomic impacts
6.4.2.1 Employment and value added
Table 6.7: Summary of key macroeconomic impacts166
Source: Guidehouse et al.
The EU construction industry ecosystem contributes around 9.6% of EU value added and
employs almost 25 million people in 5.3 million firms167
. It consists of contractors for
building and infrastructure projects, some construction product manufacturers168
,
engineering and architectural services as well as a range of other economic activities such
as rental and leasing of machinery and equipment and employment agencies.
Higher renovation rates and higher standards for new constructions will have a multiplier
effect on jobs and growth in the construction sector and across the renovation value
chains. The construction ecosystem is labour-intensive, and over 99% of its firms are
164
Where the rent includes costs for heating and domestic hot water, the situation is different as the
landlord makes the investment and also benefits from the savings.
165
Renonbill (2021): The Renovation Wave: building renovations to foster EU economic recovery. Policy
briefing.
166
Results of the Exiobase modelling, reflecting changes in jobs and value-added induced by changes of
domestic production due to investment impulse on affected sectors.
167
SWD(2021) 351 final.
168
Some categories of products that are essential to construction, such as cement, glass, ceramics and tiles,
and plastic pipes are covered under the energy-intensive industries ecosystem.
92
micro businesses or small and medium-sized enterprises (SMEs)169
. They supply
essential technologies, materials and services locally170
.
The effects on employment and valued added are the economic effects that result from
increased investments in building renovation and reduced energy consumption of fossil
fuels for heating. These effects can be considered net effects as they account for
simultaneous changes due to investment in renovation and a subsequent reduction in
energy demand.
However, the expected positive impact is dependent on the availability of financial
resources. If financing is not available, the additional expenditure diverts productive
resources (either capital or labour) from other productive uses. Such crowding out results
in scarcity conditions that have adverse effects on the economy171
. In addition, budgetary
effects (when the funding of energy efficiency expenditure reduces other expenditure to
the detriment of private consumption and productive investment) can also reduce the
positive impact of energy efficiency spending.
In the HIGH scenarios, the need for low- and medium-skilled labour172
increases
significantly, while the reduction in fossil fuel energy demand leads to reduced
employment and value added in those sectors that supply fossil fuels for heating, in
particular natural gas followed by heating oil and district heating, and also to a smaller
extent coal. At the same time, additional employment is needed to provide electricity
used in heat pumps. New electricity demand is assumed to be based on renewable
electricity, e.g. solar PV, wind and biomass-based electricity. In the HIGH I scenario, a
total of around 1.4 million additional low- and medium-skilled jobs will be created by
2030 compared to 2020. These additional jobs will be kept at almost the same level in
2050 compared to 2020 (Table 6.7). Another 450,000 additional jobs will be created in
the high-skilled segment. For high-skilled labour, the share of additional employment is
highest in the trade & services and construction sectors. This reflects the jobs of
architects, real estate, logistics, financial services and several other professions in the
construction sector, which are key to renovations. Renovation and new build activities
within the EU also further stimulate employment in countries that supply products and
services to the EU173
.
169
SWD(2021) 351 final.
170
Only companies in the chemicals, rubber and plastic product sectors are likely not to be small or
medium-sized.
171
The analysis underpinning the Climate Target Plan and the EED revision estimated that around 9-20
jobs in manufacturing and construction are created for every USD 1 million invested in retrofits or
efficiency measures in new builds in the EU.
172
The need for additional low- and medium-skilled labour is highest in the construction and material
sector, including on-site construction activities, but also glass production for windows, chemicals, rubber,
and plastics to provide insulation material, wood for window frames and new construction.
173
Such employment effects are seen mainly in the Asia and Pacific regions for low- and medium-skilled
labour, and to a smaller extent also in other non-EU countries (including the UK, Norway, Iceland etc.) and
93
Effects on value added174
follow a similar pattern to employment effects and are
dominated by stimulus in the construction and material sector through investment in
insulation, window renovation and new build (Table 6.7). Trade and services also play a
major role. They include installation of machinery and equipment, e.g. heating
technologies (boilers, heat pumps, pipes, radiators etc.) but also architects, contracting,
real estate activities, renting of machinery and equipment, logistics, transport services,
and delivery. The service sector, which consists almost entirely of SMEs, is traditionally
heavily involved in the building environment. The effects are almost constant over 2030-
2050.
The main positive stimulus can be seen for the construction and material sectors as well
as machinery and equipment. This is due to their important role in providing goods and
services for wall/floor/roof insulation, windows and heating replacements as described
above. A reduction in energy demand only has small negative effects on value added, in
particular in the sectors that provide fossil fuels for heating, i.e. natural gas, heating oil
and coal. Overall, EU value added in the HIGH-I and HIGH-II scenarios is around
+0.9% (or around EUR 115-125 billion additional value added) higher than in 2020 both
in 2030 and 2050, while in LOW/MODERATE it is around +0.2-0.25% in 2030 and
+0.11-0.14% in 2030 and 2050 respectively (Table 6.7).
6.4.2.2 The challenges of increasing labour
Delays in the construction sector experienced since the beginning of the pandemic call
for an analysis of whether the economy can adapt to higher demand on workforce and
skills175
. In September 2021, almost one third (29.7%) of the firms in the construction
sector in the EU-27 declared that a shortage of labour is a factor limiting building
activity176
. The average proportion in 2018-2019 was 23.7%, up from 13.2% in 2016-
2017 and 6.6% in 2014-2015, showing a clear increase over a five-year period.
We first need to analyse the impact of the measures proposed under the ‘Fit for 55’
package overall and of the EPBD revision specifically on the availability of labour. On
the impact of the ‘Fit for 55’ package, methods used include a dynamic analysis using the
general equilibrium model GEM-E3-FIT. It takes into consideration direct as well as
indirect and induced effects on both the demand and supply of labour, also in other
in Africa. High-skilled labour effects in other regions induced by EU-27 activities occur to a smaller extent
also in Asia-Pacific as well as in the rest of Europe. While employment effects in Asia-Pacific and the rest
of Europe refer mainly to industry and trade & services that get delivered to the EU-27 (e.g. insulation
materials), for Africa they are highest in the agricultural and forestry sector.
174
The main difference between GDP and gross value added is that the gross value added of a sector is
measured net of taxes (for instance VAT) and subsidies on products. In the national accounts for the euro
area, product taxes (minus subsidies) are recorded for the economy as a whole and added to the total gross
value added.
175
No conclusive data was found on the extent (quantification) of those delays.
176
Eurostat monthly data from the Business Survey. No conclusive data was found on the extent
(quantification) of those delays.
94
sectors affected by activity in the construction sector. The GEM-E3-FIT model is
described in the impact assessment of the ‘Fit for 55’ package177
.
Figure 6.13 shows the additional demand for labour by occupation type in the MIX
scenario compared to REF.
Figure 6.13: Renovation expenditure and additional demand for labour by occupation type in the EU (MIX vs REF).
Source: analysis based on GEM-E3-FIT input-output tables.
To put these changes into perspective, we can compare the values reported in Figure 6.13
to the year-to-year variations of employment in the construction sector as shown in Table
6.8.
Table 6.8: Employment in the construction sector in the EU
2011 2012 2013 2014 2015 2016 2017 2018
Employment in
construction [m
people]
11.78 11.46 10.96 11.19 10.97 11.29 11.53 12.14
Change year-to-year
[m people]
- -0.319 -0.498 0.232 -0.217 0.321 0.240 0.608
Change year-to-year
[%]
- -2.7% -4.3% 2.1% -1.9% 2.9% 2.1% 5.3%
Source: Eurostat SBS.
177
For example in the annexes of the EED impact assessment SWD(2021) 623 final, Part 2. The setup for
the model is similar to the scenarios used to estimate the macroeconomic impact of the Climate Target Plan
or the ‘Fit for 55’ policy initiatives.
95
The additional demand for labour in the construction sector by 2030 due to the ‘FIT for
55’ package appears to be smaller (or at most comparable to) than the year-to-year
variations in employment. Moreover, the figures from Table 6.8 cumulate the effect of all
policies and measures in the ‘Fit for 55’ package and therefore constitute an upper bound
for the impact of the EPBD.
To understand the likely impact of the EPBD revision alone on labour supply, we
performed a sensitivity analysis on investments in construction. To find a meaningful
range for the change in investments, we linked it to the renovation rate, which depends
on the implementation of the revised EPBD. The renovation rate in the residential sector
is 1.2% of the building stock per year in the REF scenario and 2.1% in the MIX
scenario178
. The renovation rate could be lowered by 0.6 percentage points without the
drivers provided by the EPBD revision. A range of +-0.6% was therefore chosen for the
sensitivity analysis, corresponding to renovation rates of 1.5% and 2.7%. This
corresponds to a change in investments of +-29% (using the split of investments between
renovation and new buildings provided by the PRIMES model).
This investment shock was introduced in the GEM-E3-FIT model. Table 6.9 shows the
% change in construction activity and employment. A +-29% change in expenditure on
the renovation of old constructions results in approximately a 1% change in construction
activity and employment (changes in total employment are negligible179
).
Table 6.9: Change (in %) due to a +-29% change in expenditure on renovation of old constructions.
Source: GEM-E3 based on Eurostat
This 1% change is substantially and logically below the change to the impact of the ‘Fit
for 55 Package’ overall. As explained above, this is itself in line with or even below the
rates of job creation in the construction sector recorded in recent years. According to
Eurostat, employment in the construction sector remains well below the peak reached in
the late 2000s: 12.6 million employees (6.7% of total employment) in Q1-2021 vs. 16.1
million employees (8.4% of total employment) in Q3-2008. Those historical trends and
fluctuations indicate that the construction sector is probably able to further absorb the
178
Since the only goal is to define a range for investments, for simplicity reasons only the renovation rate
in the residential sector was used.
179
Due to the rest of the impacts via the readjustment of wages, interest rates etc. as explained in the
Climate Target Plan impact assessment and under fairly pessimistic assumptions on the availability of
capital and labour.
96
estimated additional jobs that will be needed. The revised EPBD could contribute to a
sector severely hit after the 2008 crisis.
This capacity of the construction market to adapt to higher demand should be supported
by the fact that the EU-27 is not at full employment at aggregate level. Cross-sectoral
shifts and cross-border migration (i.e. from countries with an excess of unemployed
workers to those with a deficit) will also help ease potential shortages linked to higher
demand for works. Demand in the construction sector is mostly for unskilled jobs, but
pressure in this labour market is mitigated by the decline of unskilled employment in
other sectors.
Those elements nonetheless have to be considered with care. As shown in the rates of job
creation and destruction, the construction sector is particularly cyclical since it depends
not only on business and consumer confidence, but also macroeconomic factors such as
interest rates linked to central banks’ monetary policies and to governments’ budgetary
programmes. It is therefore not immune to temporary shocks, which may lead to delays
and temporary price increases similar to those recorded since the beginning of the
pandemic. The lack of even a small number of critical workers in key sectors could also
result in significant disruptions.
While those shocks and potential disruptions cannot be fully anticipated, an appropriate
package of policies and mechanisms can limit their occurrence and impact. Those
responses, including Commission initiatives, are presented in Chapter 8.
6.4.3 Impacts on energy poverty
A fair transition is central to the EU Green Deal. The CTP impact assessment showed
that, in the absence of mitigating measures, climate policies could have a regressive
impact that negatively affects vulnerable consumers. Policy intervention in the building
sector has the potential to mitigate or even reverse this effect, especially with regards to
energy poverty180
and its linkage to poor energy efficiency of homes. The Commission
Recommendation on energy poverty181
highlights the need to address building
performance, the fair distribution of burdens and energy poverty simultaneously to
ensure clean energy for all Europeans182
.
180
Caldeira, Igor; Dallhammer, Erich; Schuh, Bernd; Hsiung, Chien-Hui (2019): Energy Poverty.
Territorial Impact Assessment. European Committee of the Regions: Commission for the Environment,
Climate Change and Energy (ENVE).
181
Commission Recommendation of 14.10.2020 on energy poverty (SWD(2020)960final)
https://ec.europa.eu/energy/sites/ener/files/recommendation_on_energy_poverty_c2020_9600.pdf together
with its annex and accompanying staff working document.
182
According to the Commission Recommendation on energy poverty and Regulation (EU) 2018/1999 and
its recast 2019/944/EU, ‘energy poverty’ means a situation in which households cannot afford the essential
energy services necessary for a decent standard of living.
97
Table 6.10: Summary of main socio-economic impact at EU level in the considered scenario (compared to
baseline)
Source: Guidehouse et al.
On average, EU consumers spent 31.9% of their overall consumption on housing183
. The
share spent on housing including water, heat and electricity increases when income
decreases, therefore low-income households carry a much higher burden for housing than
higher-income households184
. The EU survey on income and living conditions (EU
SILC) estimates that 31 million Europeans (7% of the EU-27 population) were unable to
keep their home adequately warm in 2019. This is a reduction of 4 percentage points
compared to 2014. A similar number is being reported with regard to arrears on utility
bills. Around 6% of the EU-27 population were affected by this in 2019. As assessed in
the previous section, all options would reduce heat and electricity expenditure (albeit
with different degrees of intensity across scenarios). This is expected to have positive
effects on poverty alleviation if combined with appropriate funding schemes.
183
Eurostat (hbs_str_t211).
184
This is the case even though actual expenditure for energy (heat and electricity) is much higher for high-
income households. In fact, the top income group regularly consumes 2-3 times as much heating energy as
the bottom one. This is mainly due to larger floor spaces in houses or apartments as well as more
appliances in high-income households.
98
Compared to the baseline, all scenarios lead to a decrease in the share of population in
energy poverty for all main energy poverty indicators185
: arrears on utility bills, inability
to keep home warm, the proportion of households whose share of energy expenditure in
income is more than twice (2M) the median share or whose absolute energy expenditure
is only half of (M/2) the median expenditure (Table 6.10). The impact is highest in the
two HIGH scenarios – these deliver more and better renovations, which will reduce
energy bills and improve indoor conditions. Lower-income households in particular
benefit from the policy measures, notably in the two HIGH scenarios. The relative
decrease (compared to the baseline) in energy poverty indicators for the poorest decile
and in the mean across all deciles is around 3-4 times higher in 2030 and more than twice
in 2050 for HIGH scenarios than in LOW and MODERATE ones. In HIGH scenarios,
this affects around 12 million households, whose energy poverty is reduced compared to
the baseline. In the HIGH-I scenario, the share of the population in decile 1 unable to
keep their homes warm decreases from 22% to 19% in 2030 and to 14% in 2050. In the
second decile, the share of the population decreases from 17% to 15% (in 2030) and to
11% (in 2050). The high ambition measures therefore result in a decrease in energy
poverty as measured by the indicator ‘share of population unable to keep home warm’.
Figure 6.14: Comparison HIGH-I and baseline: share of energy poverty by indicators in population of EU-27
and five European regions (2030)
Source: Guidehouse et al., based on data from the EU Energy Poverty Observatory and Eurostat (EU
SILC; Household Budget Survey)
185
The calculation is based on the assumption that energy savings are proportional to energy expenditure
across income groups. The expenditure on energy per disposable income is taken from Eurostat (2021) and
the Energy Poverty Observatory (2021).
99
Figure 6.14 provides a more detailed view of the countries affected by energy poverty.
Member States like Bulgaria, Croatia, Hungary, Cyprus and Latvia exhibit high rates of
energy poverty according to the indicators ‘arrears on utility bills’ and ‘inability to keep
the home warm’ in 2030. On the two expenditure indicators (M2 and 2M), Nordic
countries are most affected (e.g. Sweden, Finland).
While there are benefits in reduced energy expenditure due to energy efficiency
measures, there is also the potential of unrealised energy savings as efficiency gains can
be counterbalanced by increased energy consumption. The rebound effect leads to fewer
reductions than expected. In particular, households who were previously unable to keep
their homes warm might use more heat after the efficiency improvements than before.
The extent of such indirect effects driven by higher disposable income cannot be
anticipated. However, examples from Sweden, which has a high efficiency renovation
rate, show that such effects tend to be small186
.
6.4.4 Financing, affordability and distributional impacts across EU regions: a
sensitivity analysis
As shown above, investments in HIGH scenarios are much higher than in the baseline or
in the LOW or MODERATE ambition scenarios. Additional investments in renovation
combined with heating and cooling technology is around four times higher in HIGH
scenarios.
Investments can be recovered through energy savings. However, if buildings are not
owner-occupied, energy costs are usually paid by tenants. To cover their investment
costs, landlords then tend to pass on energy efficiency-related investment costs to tenants
by increasing rents. Depending on the extent of the rent increase, this might
counterbalance any savings that tenants might experience through lower energy costs,
thereby placing an additional burden on households. Therefore, distributional impacts for
tenants depend largely on whether and in how far renovation costs can be passed on and
whether they exceed savings in energy costs. The possibility to increase rents is regulated
in different ways across Member States187
. As low-income households spend the highest
share of income on housing-related costs, they are most vulnerable to any increase in
rent, which is not balanced out by energy savings.
Many stakeholders, in particular non-governmental organisations and professional
associations, expressed concern about the lack of access to affordable and sustainable
energy for all EU citizens. They also stressed the importance of the EPBD revision to
tackle energy poverty and vulnerable households in general. The rental market is
dominated by the split incentives (or principal agent) dilemma of investing in the energy
renovation of buildings. More precisely, tenants have no incentive to invest in a building
186
Agora (2019).
187
Castellazzi 2017: Overcoming the split incentive barrier in the building sector.
100
owned by others, and building owners lack incentives to undertake renovation efforts –
tenants are largely responsible for paying energy costs, so they cannot reap the benefits
of reduced energy consumption. This non-economic barrier is more prominent in
countries from northern and western European regions where the rental market prevails
and a lower share of the population own homes (Figure 6.12).
To recover the investment costs, building owners tend to pass on energy efficiency-
related investment costs to tenants by increasing rents. Depending on the extent of the
rent increase, this might not counterbalance the savings that tenants might experience
through lower energy costs, thereby placing an additional burden on households.
Therefore, economic impacts for tenants greatly depend on whether and in how far
renovation costs can be passed on and whether they are above or below the cost energy
savings. As low-income households spend the highest share of income on housing-
related costs, they are most vulnerable to any increase in rent that is not sufficiently
compensated by energy savings as reflected in the energy bills. For this reason, a rent
increase can generate regressive impacts.
To better assess the distributional impact of renovations across income classes and tenure
status (owners and tenants), a sensitivity analysis was performed. The impact of two
types of renovation was simulated – one in which buildings are renovated to zero-
emission level, and the other one to partial zero-emission level. The analysis was applied
to two representative residential buildings – a single-family house and a building unit in a
multi-family block of flats, transposed to the most representative country from each EU
climate zone in question (Table 6.11).
Table 6.11: Reference conditions for the sensitivity analysis of distributional impact of renovation on low-
income households
Tenant Households 1 Owner Households 2
Climate zone NO, WE, SO, NE, SE NO, WE, SO, NE, SE
Selected Member States DK, DE, CY, CZ, SK FI, BE, ES, SI, SK
House type Apartment in MFH SFH
Time-frame average year (2020-2050) average year (2020-2050)
Discount rate 6%, over 30 yrs 6%, over 30 yrs
Floor area 75 m² 130 m²
Status Tenant Owner
Source: Guidehouse et al.
For each zone and type of building, the investment in renovation and the corresponding
energy savings were calculated, annualised (present value) over a 30-year period with a
6% discount rate188
. The annual income of lowest and highest quintile were also
188
6% is the average discount rate used in Member State cost-optimality reports for the ‘micro-
perspective’.
101
estimated as well the approximate share of tenure for households below and above 60%
of the median equivalised income (i.e. below and above at risk of poverty).
Second, the sensitivity analysis was performed based on 3 scenarios. These represent
different possibilities related to the financial support available to owners or to the passing
on of investment costs to tenants (Table 6.12).
Table 6.12: Scenarios for the sensitivity analysis
Owner Tenant
Scenario 1 No additional support for the
investment
All investment cost passed
onto the tenant
Scenario 2 25% grant support for
investment
75% of investment cost passed
onto the tenant
Scenario 3 40% grant support for
investment
60% of investment cost passed
onto the tenant
Source: Guidehouse et al.
Tables 6.13 and 6.14 present a summary of the results for ZEB and partial-ZEB
renovation on each of the two reference buildings and in all three scenarios. Annex D
presents a more extensive version of the sensitivity analysis.
In the case of a low-income household living in a rented apartment in a multi-family
building that undergoes a ZEB-level renovation, the energy savings as a share of the
annual income of low-income households vary from 7.9% in the NE region to 4.4% in
the NO region. The sensitivity analysis shows significantly different impacts depending
on the share of investment costs compensated by higher rents. When the full investment
(annualised) is passed onto the tenant (scenario 1), then the rent increase does not
compensate for the reduction in energy expenditure in all regions. The exception is in the
NE region, where the reduction in energy costs generated by the energy savings
overcompensates for the increase in rent due to the investment. When 75% of the
annualised investment costs are passed onto the tenant (scenario 2), there is a positive
economic impact (the savings on energy bills compensate for higher rents) in all regions
except for inthe NO region. If only 40% of the annualised investment is passed onto the
tenant, then there is a positive impact on the rent in all regions since the energy cost
reductions generated by the renovation overcompensate for the impact of investment.
This example therefore shows that even with more costly renovations, it is possible that
with split incentives, well-designed rules on rent increases, which take into account the
impacts on energy savings, can result in win-win solutions for the owners and tenants, or
limited net economic impacts for tenants. However, this can be difficult or limited to
some regions. Financial assistance to the building owner to cover partial investment costs
ensures that win-win situations could be achieved more easily. These results are also
sensitive to energy prices. If there is a carbon price on heating fuels, the payback periods
shorten and the net economic impact for the tenant becomes larger.
102
Table 6.13: Impact of renovation on low-income households living in multi-family houses (tenant)
Source: Guidehouse et al.
If the same apartment undergoes only a partial ZEB renovation, this will generate a rental
increase in all regions and all scenarios except for NE and SE regions in scenario 3,
where only 40% of the annualised investment is passed onto the tenant. This example
shows that with renovation that achieves lower savings, even in cases where two thirds of
the investment costs are passed on through a rent increase, it is likely that the net
economic impact will be rather small or that the extra costs will be compensated.
However, compared to the first example, there are net benefits for the tenant only if
lower costs are passed on, and the upfront investment is considerably higher.
The case of an owner-occupied apartment is similar to the rented apartment case above189
.
If a low-income household living in their own single-family house undertakes a ZEB-
level renovation, the energy savings generated as a share of annual income are higher
than in an apartment, varying from around 16% in NO, WE and SO regions to around
27% and 40% in SE and NE regions respectively. The analysis shows that when there is
no financial support for investment and the full cost of renovation is paid by the owner
(scenario 1), then the housing costs increase in all regions. The exception is in the NE
and SE regions, where the reduction in energy costs generated by the energy savings
overcompensate for the investment costs. With a 25% investment grant (scenario 2),
there is a positive impact on the housing costs in all regions except for in the NO region.
189
In the case of an owner-occupied apartment in a multi-family building, the scenarios will be such:
scenario 1 with no investment grant, scenario 2 with 25% investment grant and scenario 3 with 60%
investment grant.
103
With an investment grant of 60%, there is a positive impact across regions since the
energy cost reductions generated by the renovation overcompensate for the impact of
investment. Thanks to the significant reductions in energy bills, the investment costs do
pay off in some of the regions even without investment support, and in almost all regions
with 25% support.
Table 6.14: Impact of renovation on low-income households living in single-family houses
Source: Guidehouse et al.
If the same single-family house undergoes only a partial ZEB renovation, then the energy
savings generated as a share of annual income are consistently lower, i.e. from around
8.5% in the SE region to around 1.9% in the NE region and 1.3-3.5% in the other
regions. In this case, the net economic impact on housing costs is positive only for the SE
region with 25% investment support (scenario 2) and for WE, NE and SE regions in
scenario 3 with a 60% investment grant (scenario 3). Compared to the previous example,
repayment is therefore more difficult, but the net impact is also much smaller.
Based on the above case studies, we can draw several conclusions:
 ZEB renovations are more costly than partial ZEB renovations, but the associated
energy and cost savings are also higher (across all EU zones and scenarios).
Therefore, the net impact on the housing budgets of low-income households is
consistently smaller for ZEB renovations.
 The negative impact on the housing budgets of low-income households can be
mitigated by additional financial schemes with preferential loans adjusted
appropriately to the payback period of the renovation measure.
 Well-designed rules on rent increases that take into account the impacts on energy
savings result in win-win solutions for owners and tenants.
104
 Although the upfront investment is higher for ZEB renovations than for partial
ZEB renovations, the benefits are higher in the former. The measure also leads to
more consistent savings that have the potential to alleviate energy poverty. Partial
ZEB (medium) renovations may be cheaper, but even a high level of subsidies for
the upfront investment in some EU regions will not fully mitigate the negative
impact on the energy expenditure of low-income households.
6.4.5 Further considerations regarding the impacts of MEPS at Member State level
The effects of the policy options could vary across EU countries for multiple reasons.
Some of these are structural, while others can be mitigated by proper policy design. The
following circumstances play a role:
- the existing conditions and energy performance of the building stock;
- climatic conditions190
;
- calculation of energy classes in national EPC schemes;
- ownership structure and dynamics of the housing markets.
These aspects are described in Annex F, Section 7.2.
6.5 Impacts of e-mobility options.
The impacts are presented in Annex I.
7. HOW DO THE OPTIONS COMPARE?
In this Chapter, the policy options presented in Chapter 5 and assessed in Chapter 6 are
compared from several angles in line with the better regulation criteria of effectiveness,
efficiency, coherence, administrative burden, subsidiarity and proportionality.
- Effectiveness: assessment of the extent to which proposed options would achieve
the specific objectives of this impact assessment as presented in Section 4.1.
- Efficiency and impacts: assessment of benefits versus the costs, taking into
account the quantitative assessment presented in Chapter 6 and based on
qualitative assessments for the measures related to information and planning
tools.
190
This could be expressed for instance in heating and cooling degree days.
105
- Coherence: assessment of the coherence of each option with the overarching
objectives and other EU policies, focusing on the policies proposed in the
‘Delivering the European Green Deal’ package.
- Administrative burden and compliance costs: assessment of the cost and
additional burden due to the increased ambition (the analysis is included in Annex
L).
- Subsidiarity and proportionality: assessment of how the measures comply with
the subsidiarity principle and if they necessary to meet the objectives.
7.1 Comparison of options
Effectiveness
Option 1 offers the lowest level of impact with modest GHG emission reductions, mainly
because of the narrow scope for mandatory energy performance standards. Furthermore,
Member States’ voluntary implementation of the BRP does not sufficiently encourage
renovation depth, nor does it significantly increase the renovation rate.
Option 2 offers modest additional final energy savings and related GHG emission
reductions compared to option 1 by including all non-residential buildings above a
certain size, e.g. 1000 m2 by adding MEPS3. A significant leap can be observed between
options 2 and 3. The key element of option 3 is the addition of MEPS2, which goes far
beyond and includes standards to be set at national level to all residential and non-
residential buildings with differentiated schedules to move towards ZEB level. It also
includes mandatory BRP for selected building types and strengthened information tools,
underpinning MEPS2 and reducing lost opportunities in addressing the energy saving
potentials of buildings renovation.
Finally option 4 adds MEPS4 requiring best in class replacements for technical building
systems, mainly heat generators. This leads to additional energy and GHG savings, yet
does not speed up replacements of boilers.
Table 7.1: Weighted average of the policy options impacts (ref. Table 6.1)
Option 1:
LOW
Option 2:
MODERATE
Option 3:
HIGH-I
Option 4:
HIGH-II
Effectiveness 0 + ++ ++
Efficiency 0 0 ++ ++
Coherence + + ++ ++
Proportionality 0 0 0 0
106
Subsidiarity - - - -
Negative Slightly negative
No/small positive
impact /
adequate
Positive Very positive
-- - 0 + ++
Table 7.2: Comparison of policy packages
Impact in 2030 at EU level Option 1:
LOW
Option 2:
MODERATE
Option 3:
HIGH-I
Option 4:
HIGH-II
Additional final energy
savings (vs. BSL)
-2.4% -3.6% -11.7% -16.1%
Additional GHG emission
reduction (vs. BSL)
-3.1% -4.2% -22.8% -28.5%
Increase of average renovation
rate (vs BSL)
0.2% 0.2% 1.3% 1.3%
Additional investment in
buildings envelope and HVAC
system (vs. BSL)
EUR 33.2bn/a EUR 42.3 bn/a EUR 152 bn/a
EUR 157.3
bn/a
Additional value added creates
including in SMEs (vs. 2020
baseline)
EUR 22bn/
0.18%
EUR 29bn /
0.24%
EUR 104bn /
0.86%
EUR 110bn /
0.91%
Jobs retained or created (vs.
2020 baseline)
332,000 410,000 1. 833 mn 1 .897 mn
Energy poverty: Impact on
high share of energy
expenditure in income-2M (vs.
2020 baseline)
-0.3% -0.4% -1.7% -1.7%
Source: Guidehouse et al.
As shown in the above Table, the increase of the policy intensity across options (from
Low to High) corresponds to greater impacts and a higher contribution to the overall
objectives of the revision of the EPBD in terms of reduced GHG, increased energy
savings and energy renovations. Overall, the single policy measure that allows a
significant increase in the impacts on energy savings, GHG reduction and renewable
energy deployment is MEPS2. As illustrated in Chapter 6, the mandatory national
measures in MEPS2 significantly extend the scope of application of minimum energy
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performance standards and therefore substantially increasing the effectiveness of the
package of measures in option 3 in comparison to the others. While the EU measures in
MEPS1 cover only a fraction of buildings (those being rented or sold and with a low
energy class), national standards in MEPS2 will cover progressively all buildings.
MEPS1 will be key in addressing the difficulties of split-incentives in renovations,
allowing for the worst buildings in the rental market or being purchased to be renovated
to medium level, ensuring enough time to carry out the interventions needed. MEPS2
leaves to Member States the flexibility to design MEPS, while framing them in clear
decarbonisation pathways defined in national plans Building renovation Plans with clear
timelines and intermediate goals and milestones.
Table 7.3: GHG emission and final energy consumption reduction from F55 due to EPBD
EU27 2030 results
F55 gap in the absence of EPBD revision
(MIXwoEPBD-MIX)/REF)
CO2 emission in residential sector -16.4%
CO2 emission in services sector -11.0%
CO2 emission in residential and services
sectors
-14.8%
FEC in residential sector -6.3%
FEC in services sector -3.6%
FEC in residential and services sectors -5.3%
Source: Primes
On the EPBD’s expected contribution to the efforts of the ‘Fit for 55’ package of
measures, options 1 and 2 are insufficient, and only in HIGH scenarios the impacts will
be commensurate with the impacts assumed in the CTP. Under options 1 and 2, the
EPBD revision will fail to substantially contribute to a doubling of the annual rate of
renovations. While the average renovation rate in the baseline scenario increases by 0.3%
by 2030, the additional renovation rates increase in LOW (option 1) and MODERATE
(option 2) scenario is of 0.2% as MEPS apply only to a limited fraction of the building
stock. At the same time, the relative increase of renovation rates in the two HIGH
scenarios (option 3 and 4) as compared to baseline is 1.3%, notably due to the extension
of MEPS measures to all worst performing buildings from the building stock.
GHG emissions in comparison to the baseline will be reduced by only 3.1% and 4.1% in
LOW (option 1) and MODERATE (option 2) respectively in 2030 in comparison to the
baseline, while in HIGH scenarios (options 3 and 4) the reductions could increase up to
23%. Only these latter levels are considered commensurate with sufficiently contributing
to the ‘Fit for 55’ package of measures. By comparison, in the counterfactual
MIXwoEPBD scenario (see Section 6.2), the reductions to be achieved thanks to a
strengthened EPBD were considered to be of an order of magnitude of 15% (residential
and services sectors).
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Similar considerations can be applied to the reductions achieved in final energy
consumption as final energy consumption in LOW (option 1) and MODERATE (option
2) will be reduced only by 2.4 – 3.6% by 2030 respectively, which as a contribution is
considered too low. The reductions of final energy consumption achieves -11.4 –11.7%
in the HIGH scenarios (option 3 and 4). By comparison, in the counterfactual
MIXwoEPBD scenario, the reductions to be achieved by 2030 in comparison to the
baseline thanks to a strengthened EPBD were considered to be of an order of magnitude
of 5.3% (residential and services sectors).
Options 1 and 2 are therefore failing to achieve the first key objective of this initiative of
‘Contributing to reducing buildings’ greenhouse gas emissions and final energy
consumption by 2030, to a level commensurate to the Climate Target Plan goals.’ Only
options 3 and 4 score high on effectiveness as their impacts are comparable to those
expected from the EPBD revision. This assessment is based on the order of magnitude of
the efforts as a clear numerical equivalence between the estimate of the contribution of
the EPBD revision, and the assessment of impacts of the policy options is not possible
due to the different methodological approaches of the two analysis (system-wide, top-
down assessment in the Climate Target Plan; versus sectoral, bottom-up in this impact
assessment).
Options 3 and 4 will also reduce GHG at a level compatible with climate neutrality by
2050 (second key objective of providing a long-term vision and ensuring that buildings
make an sufficient contribution to achieving climate neutrality in 2050), while under
option 1 and 2 emissions in the buildings sector by mid-century will still be significant.
However, a (-) is attributed to option 4 as MEPS4 could lead to suboptimal renovations
in some circumstances as regards the depth of renovation achieved.
Introducing a definition of ‘zero emissions buildings’ (ZEB) is expected to contribute to
the overall goals of reducing GHG, increased energy savings and deployment of
renewables in the building sector. ZEBs will also ensure avoiding lock-ins in new
constructions, ensuring that they will be ‘2050 ready’ and therefore in line with the long-
term decarbonisation objective. The experience of NZEBs shows that the effectiveness of
standards and definition could be limited if benchmarks and clear requirements are not
set at EU level. Applying ZEBs following a similar process than NZEBs (as in ZEB1)
does not therefore seem to guarantee an effective achievement of the goals. ZEB2 and
ZEB3 provide for a more effective framework also addressing emissions across the life-
cycle of the building (ZEB3).
The information and planning tools (BRP, DEEP, EPC, LTRS) only in the more
ambitious options 3 and 4 will ensure the establishment of an adequate supporting
framework, enabling to overcome the existing weaknesses and providing consumers
reliable and comparable tools. In particular, BRP3 drives staged renovations, in synergies
with MEPS and the establishment of a deep renovation definition under DEEP2 which
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ensure the strongest links with financial instruments. More reliable and similar ratings
achieved thanks to EPCQ3 ensure higher market acceptance and comparable efforts and
are therefore preferable to softer approaches in EPCQ2 and EPCQ1. LTRS updates and
impacts monitoring as in LTRS3 become essential in view of the establishment of
national minimum energy performance requirements, while the other options do not
guarantee an adequate update of the current provisions.
As regards the strengthening of EPCs, it is expected that only by requiring mandatory
additional information on carbon emissions and other indicators (as in EPCSI2 and
EPCSI3) EPC would be able to play a role in properly informing and orientating markets
towards the decarbonisation of buildings. Trade-offs exist however between costs,
completeness of info and simplicity of the tool, which would need to be balanced.
Increasing the scope of information and coverage will also help to ensure that public
support such as EU funding can be better targeted towards high-impact projects and
qualitative investments. It will also facilitate the follow-up in terms of reporting and
monitoring and long-term impact of public support to building renovation.
In the light of higher climate ambition, the relevance of private parking facilities to
enable the electrification of transport is of pivotal importance for decarbonising the
transport sector and raising the share of renewable energy in the energy system. If the
recharging infrastructure does not keep pace with the increase of e-vehicles, there is a
great risk that there won’t be sufficient recharging points in the future. In the impact
assessment for the AFIR191
it was assumed that around 60% of all recharging events will
happen in private buildings, therefore within the scope of the EPBD. In light of this, only
the most ambitious option E-M3 would have the potential to ensure sufficient private
parking infrastructure and will be coherent with the ambition of the other F55 proposals
and overall goals.
Similarly, EPCs to be effective digital tools will need to be strengthened as identified in
the most ambitious option EPCI3. This is needed in order to acquire good data on
building characteristics, energy use and financial implications of renovation in terms of
cost savings or asset values. The current lack of data has negative consequences on the
market perception of the cost-effective energy saving potential of the EU building stock,
on enforcement tracking and on monitoring and evaluation, both at EU and national
level. Effective enforcement of minimum energy performance standards by the EU will
depend on the availability of data on national building stocks, which can best be ensured
by mandatory EPC databases and the transfer of those data to the Building Stock
191
https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX%3A52021PC0559
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Observatory192
. Enhanced building databases could also reduce the administrative
burden.
The role of the SRI as enabler of a diffusion of smart technologies especially in non-
residential buildings would be maximised under option 3 in line with higher ambition for
zero-emission buildings and contributing to highly efficient operation modes and optimal
system balance. The ongoing testing phase will provide ground for defining the next
phase and mandatory introduction for certain categories of buildings.
Efficiency
Economic impacts
Comparing the four policy options, options 1 and 2 have very moderate positive impacts
on value added and employment while options 3 and 4 have substantial positive impacts.
Option 4 is slightly more positive than option 3.
Options 1 and 2 lead to a small increase in value added and employment compared to the
baseline scenario. Option 2 performs better up to 2045 as more investment is undertaken
in non-residential buildings until 2045. By 2050, renovation rates are lower and
consequently, investment is lower. Combined with a reduction in value added and
employment in energy supply related sectors, this counterbalances some of the positive
economic growth after 2045. Economic impact remains positive, though small (about
0.13% higher than in the baseline scenario). About one third of the employment effects
relate to low and medium-skilled employment in the construction, material, machinery
and equipment sector as well as in the agriculture and forestry sector.
By comparison, options 3 and 4 have substantial positive impacts on value added and
employment. Impacts under option 4 are more positive than under option 3.
Requirements for building performance are most ambitious under the options requiring
investors to implement a significant range of renovation activities in residential and non-
residential buildings. Including MEPS4 in option 4 induces additional positive economic
effects. Investments activities spur value added and employment, in particular in small
and medium size enterprises (SME) as 95% of construction, architecture and engineering
related enterprises are micro-enterprises or SMEs. Comparing the four policy options,
options 1 and 2 have very moderate positive impacts on value added and employment
while options 3 and 4 have substantial positive impacts. Option 4 is slightly more
positive than option 3.
Options 1 and 2 lead to a small increase in value added and employment compared to the
baseline scenario. Option 2 performs better up to 2045 as more investment is undertaken
192
EU Building Stock Observatory | Energy (europa.eu)
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in non-residential buildings until 2045. By 2050, renovation rates are lower and
consequently, investment is lower. Combined with a reduction in value added and
employment in energy supply related sectors, this counterbalances some of the positive
economic growth after 2045. Economic impact remains positive, though small (about
0.13% higher than in the baseline scenario). About one third of the employment effects
relate to low and medium-skilled employment in the construction, material, machinery
and equipment sector as well as in the agriculture and forestry sector.
Security of energy supply is positively affected in all options, but only moderately under
options 1 and 2 and having the most pronounced effect under options 3 and 4 due to
significantly lower energy demand and subsequent reduced needs for energy imports
from countries outside the EU-27.
Industrial competitiveness is positively affected. Most activities along the renovation
value chain happen locally. For example, renovations needing architects, construction
workers, machinery and equipment, project management, installers, rentals and leasing of
equipment etc. Raw materials, such as insulation material, can be imported or produced
domestically while heavy weight materials, such as cement, are rarely transported over
longer distances. A strong EU buildings sector can lead to positive spillover effects
outside the EU. Option 3 will deliver a significant contribution, the increased intensity in
renovation activities will stimulate the economy, increase jobs especially in SMEs and
locally.
Social impacts
As regard social impacts, the options with higher ambition have the potential to deliver
significant net social benefits, if accompanied by adequate and targeted funding. Trade-
offs however exist between possible regressive impacts in terms of distribution of
renovation costs and their affordability, and distribution of benefits which are also
expected to be the highest in low-income households. Social impacts, positive and
negative, remain limited when MEPS are targeting specifically non-residential buildings,
as in option 2.
In assessing the four policy options, option 1 has the lowest impact on energy poverty
alleviation. Most measures included under option 1 address single family houses at a rate
which is not significantly above the baseline. Option 2 has an overall medium impact on
energy poverty alleviation, with more extensive requirements for Member States to
implement new provisions. Option 2 has positive impacts on the share on expenditure
that households need to use for energy. The effects vary greatly compared with options 3
and 4.
By comparison, options 3 and 4 have the strongest impact on energy poverty alleviation
and avoiding negative distributional impacts. The measures include all residential
buildings, including worst-performing building stock in multi-family houses. Option 3.b
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has positive impacts on the share on expenditure that households need to use for energy.
For low-income households, in general the share of energy expenditure in total
consumption expenditure is substantially higher than for higher income households.
Therefore, renovations and subsequent energy savings in their homes, results in energy
savings with positive impacts on energy poverty alleviation. A change in energy
expenditure through renovation, in particular through renovating the worst performing
buildings helps households with lower income. This is due to the fact that a more than
average share of low income households lives in worst performing buildings.
Additionally, positive effects on health benefits (‘non-energy benefits’) and positive
impacts on social inclusion are stronger than in options 1 or 2.
Environmental impacts
The impacts on GHG emissions and energy savings are assessed under ‘Effectiveness’ as
they are directly related to the achievement of the goals of the EPBD revision. Impacts
on pollutants were considered for NOx, SOx and PM 2.5 – 10. Impacts are twofold:
renovation activities lead to an increase in pollutants in industry while reduction in
energy demand leads to a decrease in emissions, in particular in the gas and heat sector.
In all four policy options, the reduction effect is higher than any increase by 2050 so that
improvements in building performance has positive impacts for pollution abatement.
Effects on pollutants are very small in options 1 and 2 as the increase of renovation rates
is rather low and subsequent energy reduction is moderate. Option 2 performs slightly
better as more buildings are renovated at an earlier stage with positive impacts on
emissions reductions through decreased energy consumption.
In option 3 and option 4 renovation rates are substantially higher leading on the one hand
to higher emissions of pollutants from the building industry and industries providing
materials to the building industry. At the same time, energy savings are substantially
higher as well offsetting the increase in emissions from construction and renovation.
Effects for all considered pollutants are most pronounced in 2050 and by then about three
times better in option 3 and 4 than in option 1 and 2. SOx emissions decline slightly more
than NOx emissions because electricity and steam and hot water production are slightly
more SOx emissions intensive.
Coherence
All policy options examined are in line with the EPBD framework. A number of
measures aim at strengthening the existing framework and provisions – to different
degrees depending on the policy option. This applies notably to requirements such as
those related to Member States’ long-term Renovation Strategies, the framework for
EPCs regarding coverage, scope and quality as well as to the application of the smart
readiness indicator. New provisions including the mandatory minimum energy
performance standards or the building renovation passport largely build on and work in
synergy with other elements of the EPBD such as the EPC framework. The proposed
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measures also complement each other in addressing different market barriers and
failures, e.g. addressing the gradual phase-out of worst-performing buildings on the one
hand and stimulating building renovations and new constructions compatible with the
EU’s medium and long-term energy and climate targets on the other.
Interplay with the ‘Fit for 55’ / delivering the European Green Deal proposals
To assess the coherence of the policy options in relation to the other key measures of the
legislative proposals adopted in July 2021, it is useful to first provide an overview of
them.
 Energy Efficiency Directive
- Set a target of 36% for final and 39% for primary energy consumption and an
annual energy savings obligation of 1.5%.
- Introduce an obligation for the public sector to reduce energy consumption by
1.7% per year.
- Set an obligation for Member States to renovate 3% of public buildings to NZEB
levels.
- Require systematic consideration of energy efficiency in public procurement.
- Introduce measures to help alleviate energy poverty and help vulnerable
households by empowering consumers (one-stop-shops, consumer protection,
awareness raising), improving affordability and access to energy and providing
financial assistance and incentives for energy-efficient renovations.
- Introduce the energy efficiency first principle in policy and investment decisions.
 Renewables Energy Directive
- Set a benchmark of 49% of renewables in buildings and the obligation to increase
the use of renewable energy in heating and cooling by 1.1 percentage point every
year.
- Raise the use of renewable energy in district heating and cooling by 2.1
percentage points every year.
- Requests that the EPBD step-up building renovation across the EU building stock
‘to make buildings fit for renewables, as most renewables can work optimally
only with high energy performance buildings’.
- Require smart charging capability for non-publicly available recharging points.
 Emission Trading Scheme Directive
The proposal to extend ETS to emissions in buildings and road transport will
provide an economic incentive encouraging producers and consumers of heating
fuels to invest on clean energy and on the energy performance of buildings.
 Effort Sharing Regulation
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The ESR proposal sets more ambitious national targets to cut emissions for
sectors outside the current scope of the ETS. The revision of EPBD is also a
precondition for fulfilling increased ESR national targets. Member States will
need to ensure more renovations are carried out in terms of rate and depth) in
order to meet the more ambitious national ESR targets.
 Social Climate Fund
The SCF proposal provides for the use ETS auction revenues to provide financial
support to the EU public, in particular vulnerable households, to invest in
renovation or heating systems and ensure a fair transition.
 AFIR
- Introduce capacity-based and distance-based targets for the roll-out of publicly
available recharging infrastructure for e-vehicles.
- Require Member States to develop national plans for the roll-out of recharging
infrastructure, covering both publicly available and private infrastructure.
As assessed under the ‘Effectiveness’ criteria, the revision of the EPBD is also in line
with and contributes to achieving the EU’s overall climate targets of reducing the EU’s
greenhouse gas emission by at least 55% by 2030 compared to 1990. It also contributes
to achieving climate neutrality by mid-century, as set out in the EU climate law. In this
regard, the buildings sector is one of the sector where there is a high potential for cost-
effective decarbonisation solutions and efforts must be ramped up.
Strengthening and aligning the EPBD with the more ambitious energy and climate targets
is part of the European Commission’s broader renovation wave, an action plan with
specific regulatory, financing and enabling measures published on 14 October 2020. The
options are also in line with the NextGenerationEU (NGEU) recovery package, as
building renovation stimulates employment and growth in the construction sector, and
thanks to a multiplier effect on other economic sectors provides a significant impulse for
economic recovery.
As part of the European Commission’s ‘Delivering European Green Deal package,’ the
EPBD revision will work in synergy with the proposals tabled in July 2021.
In particular, the proposed policy options provide instruments to achieve the EED energy
efficiency target:
 Direct complementarity/ interplay: requirement for Member States to renovate
public buildings in the EED193
and public procurement.
193
Public buildings are part of non-residential buildings, and currently central government buildings are
subject under the EED to the obligation to renovate yearly 3% of the floor area to meet at least the
minimum energy performance requirements under the EPBD, or to apply measures achieving equivalent
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 Direct complementarity/ interplay: the policy options support the achievement of
the overall energy efficiency targets under Art. 3 EED and the goals under Art. 7
EED (reference is made to the current article numbers).
The EPBD supports key targets and instruments of the RED:
 Direct complementarity / interplay: the policy options support the increase of the
renewable energy shares in the heating sector and therefore supports the targets in
Article 23 of the RED II.
 Direct complementarity / interplay: the policy options contribute to providing a
minimum share of renewable energy in new buildings and in major renovations
(Article 15 of the RED II).
The proposed policy options complement the EU ETS (proposal to broaden the scope to
cover buildings):
 The revision of EPBD and the revision of the ETS are complementary and
mutually reinforcing in driving decarbonisation of the building stock. Targeted
regulatory measures under revised EPBD are necessary to address market and
non-market barriers to renovations that cannot be incentivised by a carbon price
alone. Without such policies, a very high carbon price signal would be needed
and had to be born by all consumers using fossil fuels for heating (up to
80€/tCO2 was modelled for the DEGD package and this still without significant
impact on renovations but rather delivering a further fuel switch).
 In presence of a carbon price signal delivered through the ETS extension to
buildings, the strengthened informative tools of the EPBD (EPCQ, DEEP, BRP),
which will include also a carbon metric, will help financial investors to monetize
the benefits of buildings decarbonisation and household or commercial actors to
better factor in the economic benefits of building renovations and their repayment
plans.
 The investments costs measures under area A will become cheaper in presence of
a carbon price on heating fuels, which will therefore facilitate compliance with
MEPS.
A strong link exists also with the measures under area A and the Climate Social Fund,
which by targeting specifically the renovation of buildings of low-income households
will make more affordable the investments in building renovations. This should
significantly reduce their upfront costs and therefore ease MEPS compliance. It should
also limit their potential regressive distributional impacts, specifically under the options
in which MEPS will target also the residential sector. As illustrated in the analysis in
savings. This obligation has been proposed to be extended to all public buildings and renovations to reach
NZEB levels in the revision of the EED.
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Chapter 6, in the context of limited financial support deeper energy renovation can
generate net-economic impacts for both building owners and tenants. At the same time,
the improved information tools of the EPBD (EPCQ, DEEP, BRP), which will include
also a carbon metric, will help the beneficiary of the CSF to plan in an optimal way their
building renovations, and national authorities will be facilitated by LTRS in planning the
disbursement of the CSF and of the reuse of revenues from ETS.
The proposed policy options are complementary to the AFIR:
 Direct complementarity / interplay: the policy options support the roll-out of
charging infrastructure in private buildings which is directly complementary to
the AFIR targets for publicly available charging infrastructure.
There is a high complementarity between ESR and EPBD revisions.
 The revision of the EPBD supports the fulfilment of increased ESR national
targets, as both EU and national measures can contribute to the achievement of
the national targets set in ESR.
 Member States will need to deploy more ambitious measures in the building
sector to respect the increased national ESR targets, which provide a safeguard
for Member States to put in place sufficiently ambitious policies.
The proposed policy options are also in line with requirements set out in the Ecodesign
and energy labelling rules:
 Complementarity of requirements for building renovation in MEPS approaches
and requirements for efficiency of heating systems under the Ecodesign Directive.
 Synergies between MEPS options that directly set the requirements on the energy
efficiency of heating systems.
Subsidiarity
The subsidiarity principle requires that policy measures are decided at a level which is as
close as possible to the EU public and at EU level only where necessary. In areas of
shared competences, the EU therefore only acts if action at EU level is more effective
than action taken at national, regional or local level.
Energy policy is a shared competence between the EU and the Member States. The legal
basis for the EU to act is Article 194(2) of the TFEU, which represents the legal basis for
EU policy to promote energy efficiency and energy savings. Improving the energy
performance of buildings is a key vector for the European Green Deal’s objective to
achieving climate neutrality, as subsequently translated into the renovation wave
strategy. Improving buildings’ energy performance is also central to the EU’s green
recovery.
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In the assessment of the four policy options, all options have been assessed with a
slightly negative score on subsidiarity, to account for the increased intensity of EU
intervention in the buildings sector in relation to the baseline. Option 1 has the lowest
impact on subsidiarity. Most measures comprised in option 1 leave significant room for
Member States regarding implementation, e.g. by leaving provisions up to Member
States for voluntary implementation or by granting significant time for implementing
these. Also, many measures are developing existing provisions further or are aimed at
streaming those on a voluntary basis. The introduction of minimum energy performance
standards (MEPS1) to ban the sale or rental of worst-performing buildings, on the other
hand, represents a new measure in the EPBD, even though several Member States
already have a MEPS scheme in place.
Option 2 has an overall medium impact on subsidiarity, with more extensive
requirements for Member States on large non-residential buildings. This option however
also leaves flexibility for Member States regarding the specific design and scoping of
relevant measures, and by limiting national MEPS to the non-residential sector, leaves
margin of manoeuvre on the most relevant share of the building stock.
By comparison, options 3 and 4 have the strongest impact on subsidiarity, requiring
Member States to implement a significant range of more far-reaching provisions, aimed
at improving a common level of implementation and better harmonisation.
Corresponding elements can for instance be found in measures MEPS1 and MEPS2,
BRP3, EPCQ3, EPCSI3, ZEB3 or E-M4.
All options assessed are in line with the intervention logic, yet address the policy
objectives to different extents. For assessing the subsidiarity impacts outlined above
against the added value of EU action, one has to consider the fact that the existing
legislative framework is not sufficient to achieve the necessary decarbonisation of the EU
building stock. Stronger EU level action is therefore necessary to ensure policy alignment
towards the decarbonisation of buildings, in particular through a higher renovation depth
and by comprising all building segments. So far, significant room has been left to
Member States in implementing the EPBD. Implementation at national level is very
divergent, and sometimes not ambitious194
. As set out in Chapter 3, with a view to the
massive EU-wide challenge of building decarbonisation, a step change with stronger EU
level action is now necessary to ensure policy alignment across the EU towards the
required contribution of buildings to the enhanced climate and energy targets. On
194
JRC, Progress of the Member States in implementing the Energy Performance of Building Directive,
2020.
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minimum energy performance standards, their introduction would give the missing
market signals for the decarbonisation of the existing building stock.195
The transaction-based, EU-wide renovation obligation via MEPS1 will give the
necessary strong policy signal towards the phase-out of worst-performing buildings.
However, MEPS1 will only cover a relatively small share of national building stocks. For
the remaining building stock, MEPS 2 and 3 set target dates and benchmarks to be
reached at EU level, leaving Member States room to set their national pathways and
priority building types. The combination of MEPS1 and either MEPS 2 or MEPS3,
possibly complemented by MEPS4, strikes the right balance between a sufficiently
strong minimum framework at EU level and sufficient flexibility for Member States to
adapt to national and local conditions. The EU-wide introduction of a deep renovation
standard and building renovation passports are demanded by the financing industry that
operates cross-border.
Stronger EU harmonisation of the new ZEB standard like in ZEB2 and ZEB3 (compared
to the greater national flexibility for the current NZEB standard) is justified, especially
with a view to the observed lack of ambition and too great divergence of the national
implementation of the NZEB standard.196
As regards the added value of stronger EU
action on EPCs, the financing industry that operates cross-border demands a greater
harmonisation of energy performance certificates as a basis for EU-wide criteria for the
financing of building renovation.197
Individuals moving within the EU and businesses
operating cross-border would also benefit from more comparable energy performance
certificates to enable them to make informed decisions about their housing and offices.
As regards SRI, the mandatory use of SRI for specific non-residential buildings under
option 3 would give an important policy signal to mobilise the industry towards the
increased development of smart solutions, but for most buildings, it will be left to
Member States to decide whether to require SRI use.
Considering the required step change to reduce emissions from transport to meet the
enhanced climate targets, the more prescriptive elements at EU level are justified from
the subsidiarity perspective. In terms of EU added value, increased charging
infrastructure will accelerate roll-out of e-mobility and thereby support the development
of the EU’s car industry towards a future-proof business models.
Proportionality
Proportionality relates to the choice of instrument as well as to the scope and reach of
requirements in light of their respective contribution and adequacy to achieve policy
195
The joint EU ambition for all new buildings to be nearly zero-energy by 2020 has shown the significant
impact of mobilising the buildings sector around a common objective, see Chapter 3 and Annex H.
196
JRC report on NZEB implementation, see results presented in Annex H.
197
The recently developed taxonomy for buildings already today ties certain criteria to EPC classes.
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objectives. In order to be proportionate, measures should not go beyond what is
necessary to achieve objectives satisfactorily, limit the scope to aspects where EU action
brings added-value and limit costs for authorities and economic operators.
The policy options considered were developed in view of revising the EPBD to bring it
in line with the EU’s upgraded energy and climate targets. Existing legislation will not
suffice to achieve the goals, therefore, a revision of the EPBD is necessary and one of the
vehicles to deliver on the goals of the renovation wave strategy. Many of the assessed
measures are developing existing provisions further or are streamlining these to
strengthen a common level of implementation. This applies for instance to measures
aimed at enhancing the coverage, quality and scope of EPCs, at advancing the application
of the smart readiness indicator or at those relating to Member States’ long-term
renovation strategies.
A proportionality assessment is particularly relevant for most policy options having the
most ambitious and therefore the most stringent measures, i.e. options 3 and 4. Overall,
the measures in option 3.a with its comprehensive package of measures appears to be
proportionate compared to the very significant impact and contribution it achieves. In its
practical implementation and design, MEPS2 will enable the streamlining and alignment
with other measures on the building stock, therefore ensuring for more proportionality
with regards to national jurisdictions. Streamlining the deep renovation standard, the
definition for zero-energy buildings and further requirements being part of the EU
taxonomy on sustainable investments would be a further consideration in terms of
limiting the complexity of rules to ensure that proportionality is correctly applied.
8. PREFERRED OPTION
8.1 Introduction
This impact assessment identifies and analyses options for revising the EPBD to
contribute to reducing greenhouse gas emission, putting the buildings sector at the centre
of the digital and energy transitions and on the path to becoming carbon neutral by 2050.
It follows the assessment conducted under the CTP which found that without the policy
drivers from the EPBD, efforts from the building sector to reduce GHG will be 49%
lower than what is required to achieve the Climate Law’s goal of -55% GHG.
The EPBD revision is an integral part of the policy mix of measures necessary to deliver
the European Green Deal. In this impact assessment, various policy options have been
assessed following the guidance provided in the Renovation Wave strategy.
8.2 Conclusions of the analysis and preferred option
The analysis identified the key drivers behind the low renovation rates, the barriers to
upscaling buildings and the factors limiting the autonomous development of buildings
towards becoming a neutral societal asset. The analysis makes a clear distinction between
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factors that can be addressed through EPBD revision and aspects that are tackled by other
components of the policy mix. There is a strong interplay and complementarity in that
respect with the carbon price of heating fuels proposed by the Commission following the
proposed extension of the current EU ETS.
Based on the knowledge of building stock characteristics in terms of age, types, tenure,
technologies, energy uses and resulting greenhouse gas emissions, the analysis examined
how policy mechanisms enforcing minimum levels of performance for certain buildings
could prompt more building renovation. As the current EPBD does not include an
appropriate instrument triggering renovations, a new one had to be identified. Guided by
the feedback collected through stakeholders also in preparation of the Renovation Wave
strategy, and based on EU and international experience, four different options for design
were identified and their impacts assessed in packages of measures, including a measure
to strengthen information tools and support renovation journeys at every stage. Besides
standards to increase the performance of existing buildings, the options also consider
how to make new constructions compatible with the 2050 objective and how to
strengthen the modernisation of the building sector and its role in energy system
integration.
Based on the quantitative and qualitative comparison of options against the two key
objectives of this initiative, option 3 ‘High Ambition I’ emerged as the preferred
option. Policy measures under this option will lead to a substantial change and bring
maximum benefits compared with current building renovations trends, while optimising
the cost and administrative burden. The increase in renovation activities is considered to
be in line with the stepping up of efforts needed in light of higher climate ambition, and
with renovation efforts expected to be achieved thanks to the EPBD revision. This option
proposes MEPSs that would entail an evolving combination of binding EU-level
minimum energy standards for worst-performing buildings being rented or sold,
complemented by standards set at the national level based on LTRS, gradually covering
all building stock as they progress towards decarbonisation. This approach would
guarantee clear market signals at EU level and comparable decarbonisation pathways,
while leaving flexibility and time to adapt efforts to national conditions and to achieve
the best combination of measures at national level.
The preferred option on MEPs and ZEBs will come with a comprehensive package of
better information tools. The measures are summarised in the table below; more details
are set out in Chapter 5, Annex E and the respective thematic annexes.
Table 8.1: Overview of measures in the preferred option
Option 3
High ambition
I
Summary description of the measures of the preferred option for the revision of the
EPBD
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Area A. Measures to increase the number of buildings being renovated and renovation depth
MEPS1+
MEPS2
Minimum energy performance standards established at EU level, to be applied to
worst-performing buildings rented/sold. Buildings under transaction have to achieve at
least EPC class D (or similar), and the standard will be gradually tightened.
National schemes setting minimum energy performance standards to be
established by Member States, on the basis of criteria and timeline defined in the
EPBD, gradually transforming the building stock into zero-emission buildings by 2050.
BRP3
EPCQ3
DEEP2
LTRS3
Establishment of a common EU framework for Building Renovation Passports under
the EPBD, to become mandatory for certain financial incentives.
Strengthening of Energy Performance Certificates with the introduction of a
mandatory common EU template, harmonisation of highest and lowest EPC
classes, on-site visit, new quality control and reporting measures.
Introduction of a definition of “deep renovation” in the EPBD, higher level of public
funding for deep renovations.
Strengthened requirements for Long-Term Renovation Strategies (to be renamed
Buildings Renovation - Plans), to follow a shortened cycle, include additional
information accompanied by new monitoring and reporting measures.
Area B. Measures to enable decarbonisation of new and existing buildings
ZEB3 Introduction of a zero-emission building standard for new and existing buildings,
based on benchmarks, also including a requirement to report whole-life cycle carbon
emissions; new buildings to comply with ZEB as of 2030.
EPCSI3 Strengthened content and greater availability of Energy Performance Certificates:
EPCs to include additional indicators (e.g. on greenhouse gas emissions, renewables),
and to become mandatory for more building categories.
Area C. Measures to increase the modernisation and quality of buildings and of their systems, enabled by
digitalisation of information tools
E-M3
(ZEB3)
Extension and strengthening of the requirements on recharging for electric
vehicles in buildings, establishing that all new buildings or buildings undergoing major
renovations have to be prepared for EV recharging and have parking space for bikes, and
that certain buildings should also be equipped with recharging points. Introduction of
measures to enhance the “Right to plug”.
EPCD3
SRI2
Mandatory national EPC databases, enhancing interoperability with other data sources
and facilitating administrative compliance.
Update of the requirements related to the Smart Readiness Indicator, enhancing
linkages with other information tools and to making it mandatory for certain new buildings.
8.3 Meeting the challenges of the proposed measures
Challenges in the implementation of option 3 ‘High Ambition I’ linked to the supply of
materials, workforce and financing are set out in Sections 6.4 (see in particular Sections
6.4.1.2 ‘The challenges of increasing capacity in the supply markets’, 6.4.2.2 ‘The
challenges of increasing labour’ and 6.4.1.1 ‘Investments’).
122
8.3.1 Materials, workforce and skills
The availability of inputs for the construction sector is a precondition for the successful
implementation of option 3, as the higher renovation rate and depth will entail an
additional demand for materials and labour.
In the medium to long term, materials and labour supply appear to be sufficiently elastic
to accommodate the additional demand for inputs in the construction sector. Historical
trends laid down and compared with additional demand based on the HIGH scenario in
Section 6.4.1.2 show that the market has the capacity to expand input supply in response
to higher prices. As mentioned in Section 8.2 on the conclusions of the analysis and the
preferred option, the Fit for 55 package overall and the EPBD specifically will bring
more certainty to a sector that has in the past faced market and policy volatility. In
particular, the price signal stemming from the extended ETS198
, regulatory clarity coming
from energy efficiency targets under the updated EED and the progressive roll-out of
MEPS as well as a higher level of information linked to updated EPCs should incentivise
the construction sector to expand its capacities. Expanded capacities of both workforce
and investments in fixed costs would in turn give more certainty to input suppliers to
invest in expanding their own supply capacity.
However, in the short term, the implementation of option 3 could exacerbate current
COVID-19 related market imbalances, as the elasticity of input supply is more limited.
As a result, policy responses may be needed to ensure that supply of materials and labour
grows at the requirement scale.
Regarding materials, increasing recyclability and material efficiency can help ease
market tensions, as pointed out by several stakeholders in the consultation on the EPBD
revision. Thus, more effective waste prevention and disposal policies together with the
re-use of secondary materials could at the same time reduce demand for materials and
ensure additional supply. Increased efforts to recycle waste and the increasing cost of
landfilling for construction waste199
already support this trend200
. The EU will continue
to support the application of circular economy principles in the construction sector in the
near future. Building on the 2020 circular economy action plan, several initiatives are
being developed on resource efficiency, durability and recyclability (including the
sustainable products initiative, review of the Construction Products Regulation and the
198
Positive anticipation of future carbon costs is among the relevant policy drivers incentivising the choice
of energy-efficient or low-carbon technologies.
199
Overall in the EU the landfill rate of construction waste fell by 11.7% between 2010 and 2018 (Eurostat
2021), and the energy recovery rate increased by 27.8% between 2010 and 2018. Eurostat 2021: Number
and capacity of recovery and disposal facilities by NUTS 2 regions [env_wasfac].
200
Overall in the EU the landfill rate of construction waste fell by 11.7% between 2010 and 2018 (Eurostat
2021), and the energy recovery rate increased by 27.8% between 2010 and 2018 (Eurostat 2021. Eurostat
2021: Number and capacity of recovery and disposal facilities by NUTS 2 regions [env_wasfac].
123
roadmap for the reduction of whole life carbon of buildings). Furthermore, studies are
ongoing regarding possible future action on waste prevention and re-use and recycling
targets for construction and demolition waste, in the context of the Waste Framework
Directive.
On labour supply, the Renovation Wave communication acknowledged the ‘shortage of
qualified workers to carry out sustainable building renovation and construction’. As
indicated in the Climate Target Plan, a key challenge is the capacity of the education and
vocational training systems to train or re-train workers, as well as the ability of workers
to move from one job and sector to another requiring potentially different skills201
. For
instance, it is expected that appropriate qualifications will play an increasingly important
role in the construction, heating technology and refurbishment sector with new
technologies and higher levels of digitalisation.
The Commission’s initiatives on education, skills and training such as the pact for skills,
the green strand in Erasmus+ and the Education for Climate Coalition can help to address
these challenges. The accompanying action plan for the Renovation Wave strategy
included a deliverable on ‘Support[ing] Member States to update their national roadmaps
for the training of the construction workforce through the Build Up Skills Initiative and
helping implement the 2020 European Skills Agenda’202
.
The proposal for the EED203
recast also includes provisions for the availability of training
programmes and qualification, accreditation and certification schemes as an enabler of
energy efficiency improvement measures.
In addition, the updated industrial strategy of May 2021204
announced the co-creation of
transition pathways for industrial ecosystems, including construction. In a process of co-
creation with Member States, industry and other stakeholders, the pathways will identify
the scale of the needs, including upskilling, resource efficiency and digitalisation, and
will propose action to address them.
Finally, an increase in productivity in the sector would allow for an expansion of output
with less use of labour. Investments in technologies for the industrialisation of
construction205
as well as project management and collaboration tools therefore have the
201
Climate Target Plan Impact Assessment, Part 1, p.86. It is important to acknowledge in this regard that
transitional costs such as reskilling and upskilling have not been considered in the simulations of the Fit for
55 package’s impact.
202
The European Skills Agenda was presented in July 2020 by the Commission. Action 6 is about ‘Skills
to support the twin transitions’.
203
https://eur-lex.europa.eu/resource.html?uri=cellar:a214c850-e574-11eb-a1a5-
01aa75ed71a1.0001.02/DOC_1&format=PDF
204
https://ec.europa.eu/info/sites/default/files/communication-industrial-strategy-update-2020_en.pdf
205
For example using techniques such as prefabrication and off-site assembly, automation, modularisation
and additive manufacturing.
124
potential to increase productivity and reduce the additional demand for labour.
Industrialisation can also result in other benefits, including greater resource efficiency
and less time spent on the building site (and therefore less disruption for building
occupants during renovation works)206
.
While acknowledging that not all market friction stemming from higher demand and new
shocks can be tempered, the combination of the proposed policies and initiatives should
help to substantially address them.
8.3.2 Financing: EU, national and private financing to support the investment needs
The impact analysis identifies an additional need of EUR 152 billion annual investment
in the renovation of buildings to meet the requirements and targets of the revised EPBD
according to the preferred option 3 – HIGH I. This is in line with the 2030 climate target
plan and the Renovation Wave communication and action plan, which identify an
additional investment need of EUR 275 billion per year in building renovation to meet
the RW objectives and the building renovation contribution to the 2030 emission
reduction target. It will be a considerable challenge to obtain the additional EUR 152
billion on annual investments in energy renovations of buildings stemming from the
preferred option for the revision of the EPBD and in particular from the introduction of
MEPS.
To be able to deliver on the needs, financing should be stepped up across the board.
Three main areas of actions are therefore considered key to ensure support for the revised
EPBD: (1) support for building renovations for low-income households and to meet
Minimum Energy Performance Standards; (2) technical assistance to develop sound
building renovation projects, support programmes to develop public administration
technical capacities, and programmes to train energy renovations skills; (3) cost-effective
use of EU and national financing and mainstreamed information tools on the energy
performance of buildings to mobilise private capital.
At EU level, compared to previous multi-annual programming periods, the current Multi-
Annual Financial Framework 2021-2027, in line with the European Green Deal, has
considerably increased the amount of financial support and budgetary commitment
allocated to achieve EU climate and energy goals. Of the overall EUR 1 800 billion
committed in the 2021-2027 MFF and the Next Generation EU (NGEU) package, 30% of
it, i.e. around EUR 550 billion, has been set aside for climate-related spending. In the
context of the post-COVID-19 economic recovery, significant additional financing
resources have been made available to Member States through the Recovery and
206
D’Oca et al 2018. Technical, Financial, and Social Barriers and Challenges in Deep Building
Renovation. Available at https://www.mdpi.com/2075-5309/8/12/174.
125
Resilience Facility (RRF) under NGEU. For that purpose, the European Commission has
collected on the financial market and made available to Member States a total of EUR
672.5 billion in grants and loans programmed through the national Recovery and
Resilience Plans (RRPs). A mandatory climate-key in which spending for climate-related
objectives207
must represent 37% of the total expenditure under RRF and across each
RRPs have been proposed by the RRF Regulation and taken up by Member States in
their RRP.
The Renovation Wave strategy played a central role in the EU recovery package
stimulating MS to provide for regulatory and financial support for building renovations
and energy efficiency measures in their RRPs. This was also supported by the widely
recognised benefits of building renovations and energy efficiency measures for economic
recovery and growth, in particular for SMEs, as well as for local jobs growth potential.
Therefore, as part of the RRF guidance for Member States on the preparation of the
national RRPs, the Commission has published the ‘Renovate’ priority flagship
component.
In the 22 adopted plans, so far EUR 41 billion of climate-related investments have been
allocated to energy renovations in buildings, of which EUR 14.3 billion with a focus on
public buildings and EUR 26.5 billion on private/residential buildings. This corresponds
to 23% of all costs related to climate-related measures, or 9% of the total 22 RRPs
allocation (EUR 445 billion).
Thanks also to the alignment with the EU Taxonomy, on 12 October 2021 the European
Commission issued the first NGEU 15-year green bond for a total of EUR 12 billion,
establishing a relevant standard on the market, achieving a strong oversubscription rate
and offering excellent pricing conditions208
. The objective will be to issue NGEU green
bonds in the years to come to leverage a total amount of EUR 250 billion on the financial
market. The financial resources leveraged through the NGEU green bonds will finance
the programmed energy renovations in buildings to achieve a minimum threshold of 30%
reduction in energy consumption, in line with the objectives and framework of the EPBD
revision. The positive reply from the financial market to the European Commission’s first
green bond bodes well for future operations to support decarbonisation efforts in
buildings after the current MFF 2021-2027. Such large oversubscription of the first
NGEU green bonds, which includes the RRF planned investments in energy renovations
207
Measures can also include measures for adapting to climate-related risks and also non-climate-related
natural risks (for example earthquakes, fire and accidents). This is in line with the methodology for climate
tracking set out in Annex VI of Regulation (EU) 2021/241 of the European Parliament and of the Council
of 12 February 2021.
208
Press Release: NextGenerationEU: European Commission successfully issues first green bond to
finance the sustainable recovery. https://ec.europa.eu/commission/presscorner/detail/en/IP_21_5207.
126
with a minimum threshold of 30% energy savings, is therefore a positive sign of financial
market support for EU policy and investments in this area.
Beyond the EU recovery package, financing available at EU level in the current MFF to
step up energy renovation in buildings has been clearly identified as part of the SWD on
‘Support from the EU budget to unlock investment into building renovation’
accompanying the Renovation Wave strategy209
. The SWD provides an overview of EU
financing incentives and founding programmes to support the uptake of energy
renovations in buildings towards the achievement of the Renovation Wave and climate
target plan objectives. In terms of financing support for direct investments on energy
renovations in buildings, beyond the RRF, the 2021-2027 MFF intervenes as well with
the cohesion policy funds, the Just Transition Mechanism and REACT-EU. The cohesion
policy funds remain one of the main EU instruments supporting energy renovations. In
the 2014-2020 period, energy efficiency in buildings represented approximately EUR 13
billion of planned investments. It is expected that the 2021-2027 programming period
will continue this support, as 30% of the European Regional Development Fund and 37%
of the Cohesion Fund investments are expected to contribute to climate objectives. This
will especially help Member States, regions and local authorities to boost building
renovation.
Additionally, ETS auction revenues can be used by Member States to finance ambitious
energy renovation in buildings. The Modernisation Fund was planned to support
investments on clean energy transition in the 10 lower-income MS with 2% of the
revenues from the total ETS allowances. Now, in addition, the proposed Social Climate
Fund210
will support investment to mitigate the impacts of the clean energy transition in
all Member States, with 25% of the revenues from the total ETS allowances. As regards
buildings, the SCF is aimed at targeting specifically energy renovations in low-income
households. The SCF is considered to be a key instruments to make renovations
affordable and to support the roll-out of MEPS.
To support the upscaling and mainstreaming of energy efficiency and building renovation
investments and to appropriately leverage private financing, under the European Green
Deal Investment Plan and the 2021-2027 MFF the Commission has also developed
dedicated financing products and advisory services under InvestEU. These include the
ELENA Facility and the Clean Energy Transition sub-programme of the LIFE Clean
Energy Transition (CET) sub-programme. In particular, LIFE CET finances market
uptake activities for larger building renovations such as the setting up of one-stop-shops;
project-development assistance; a number of activities to foster behavioural changes; the
209
SWD on ‘Support from the EU budget to unlock investment into building renovation’, SWD(2020) 550
final, Brussels, 14.10.2020.
210
Social Climate Fund (europa.eu)
127
societal uptake of energy performance certificates; and a greater citizens-led focus on the
multiple benefits of energy renovations. Research and innovation in solutions for
upscaling and for deeper energy renovations will be supported through the Horizon
Europe programme and in particular through the dedicated destination on energy use in
buildings and the private-public partnership on ‘people-centric sustainable built
environment’ (Built4People), a continuation of the previous energy-efficient buildings
private-public partnership with a broadened scope.
National financing for energy renovations in buildings, in line with the Renovation Wave
communication and following the EU’s support for economic recovery through the RRF,
has also been strengthened in recent years. Historically, a large majority of Member
States have had in place financing schemes, direct subsidies and tax reduction to support
energy efficiency measures in residential buildings211
. Compared with financing schemes
and public support for energy renovations in residential buildings, support for
commercial or residential buildings owned by economic operators is less common212
. In
2019, the JRC overview estimated a total of EUR 16 billion in national public resources
spent annually across the Member States on energy efficiency renovation in buildings.
Studies, including the 2019 JRC policy report, point to a necessary shift from direct
grants and public direct investments to the development of more innovative financial
instruments to achieve the uptake of a larger rate in terms of energy renovations. The
need for a more standardised framework for energy performance certificates and deep
energy renovations should be underlined here. This would make the best use of available
national public resources and target public financial support in a cost-effective way
where it matters most and where it is possible to reap larger benefits in terms of the
energy performance increase of national building stocks. In particular, deeper energy
renovations, low-income households and worst-performing buildings should have
priority access to national public financing support if the 2030 energy and
decarbonisation targets for buildings are to be achieved. The submission of the most
recent 2020 LTRS gives a positive but rather general overview of the planned financing
schemes.
The EPBD revision, and in particular the proposed new building renovation action plans
to substitute the existing long-term renovation strategies, will reinforce provisions on
accessible and targeted funding supported by technical assistance to fill the investment
211
JRC, ‘Accelerating energy renovation investments in buildings Financial and fiscal instruments across
the EU’, Economidou Marina, Todeschi Valeria, Bertoldi Paolo.
212
Ibidem.
128
needs. This will increase the volume and impact of EU funding, attract private
investment and mobilise further financial instruments and private financial products213
.
Building renovations are currently the subject of an unprecedented level of public
financial support, which will nevertheless not be sufficient if private financing and
dedicated private financial tools are not adequately mobilised. The new policy measures
proposed in the EPBD revision are expected to have a strong positive effect on
mobilising additional private capital, scaling up investments for energy renovations in
buildings, and in general improving market conditions and investment opportunities for
energy renovations in buildings.
The introduction of MEPS addresses one of the main barriers to energy-efficient
renovations of buildings by intervening in building owners’ demand and thus improving
market conditions for energy efficiency measures in buildings. Additionally, revision of
the energy performance certificates framework through increased harmonisation,
reliability and comparability across the EU, as well as the introduction of building
renovation passports, a definition of deep renovations, and a long-term decarbonisation
trajectory toward zero-emissions buildings, will provide financial institutions, public
administration, the construction industry ecosystem and building owners with more
stable and harmonised information tools. It will also ensure a more certain long-term
policy environment for a greater uptake of investment opportunities, development of
business solutions and public strategies.
More accurate and comparable information on the energy performance of buildings and
the setting up of national EPCs databases will support the de-risking of private
investments in energy-efficiency renovations across the EU. This will reduce financial
costs associated with energy renovations in buildings while making the targeted financial
products for energy renovations (energy efficiency mortgages) more attractive for FIs to
develop. It will also make it easier for building owners to access dedicated loans.
Similarly, the long-term trajectory established through building renovations passports
and the definition of deep renovations up to zero-emission standards allow for the long-
term programming of public administration support, real-estate enterprises and building
owners’ business development and planning of energy renovations.
8.4 REFIT (simplification and improved efficiency)
The EPBD was revised in 2018; the main purpose of the current revision is to align the
EPBD on the enhanced climate ambitions. The key objective is to increase effectiveness.
213
This is in line with specific recommendations from the European Court of Auditors, Special Report
2020 ‘Energy efficiency in buildings: greater focus on cost-effectiveness still needed’,
https://www.eca.europa.eu/Lists/ECADocuments/SR20_11/SR_Energy_efficiency_in_buildings_EN.pdf.
129
Strengthened regulatory requirements will increase the administrative burden somewhat,
notably for building owners and administrative authorities in the Member States at
national and local level. However, the planned digitalisation of Energy Performance
Certificates and related databases aims at reducing administrative and compliance costs.
Table 8.2: REFIT
REFIT Cost Savings – Preferred Option(s)
Description Amount Comments
Digitalisation of EPCs and
databases
Low The monitoring of the building stock would be
facilitated by the availability of data collected
by digital tools, thereby reducing
administrative costs.
Digital EPCs have the potential to reduce
compliance costs for building owners, if
interoperability with national databases and
buildings permitting procedures is ensured.
9. HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED?
The impacts of the revised EPBD on the policy objectives set out in Chapter 4 on energy
consumption, greenhouse gas emissions and renovation rates will be monitored and
progress will be evaluated mainly on the basis of the provisions already in place in the
current EPBD and in Regulation (EU) 2018/1999 on the Governance of the Energy
Union and Climate Action.
Data collection and assessment will be the key monitoring tool to support Member States
in keeping track of progress in the achievement of the milestones established in national
long-term renovation strategies and later the national targets developed under the
Building Renovation Plans, following a call from the Council.214
The Governance Regulation established an integrated energy and climate planning,
monitoring and reporting framework. Under the Governance Regulation, Member States
had to submit their integrated national energy and climate plans to the Commission by
the end of 2019. The plans have to cover the five dimensions of the Energy Union for
214
The Council Conclusions of 11 June 2021 on the Renovation Wave, call the Commission to “[…]
monitor the progress made in the implementation of the renovation wave by: o analysing the domestically
established progress indicators set out in Member States' long-term renovation strategies which would
measure the evolution of renovation activity at European level and the energy performance of the European
building stock, including deep renovations where applicable; the need to avoid a bureaucratic and further
administrative burden as far as possible has to be considered; […] o developing ways to assess the
economic impacts of the improvements achieved through renovation and track their effect on the real estate
market; and […] o expanding the overall progress report on the renovation of the national building stock
envisaged in its biennial State of the Energy Union report into a comprehensive report on all aspects of the
renovation wave; […]”
https://data.consilium.europa.eu/doc/document/ST-8923-2021-INIT/en/pdf
130
2021-2030, including energy efficiency and buildings215
. The link and interplay of the
EPBD and the Governance Framework will be maintained with the revised EPBD
provision.
To this end, Article 17 of the Governance Regulation provides that by 15 March 2023,
and every two years thereafter, each Member State shall report to the Commission on the
status of implementation of its national Energy and Climate Plan by means of an
integrated national energy and climate progress report, which also includes specific
indicators on buildings and their renovation. The biennial integrated reporting under the
Governance Regulation will collect information on the progress in Member States, which
will be monitored and evaluated periodically by the Commission services.
The revised EPBD will provide a clear structure for what is to be included in the
Building Renovation Plans: an overview of the building sector, a roadmap with specific
national targets for 2030, 2040 and 2050, implemented and planned policies and
measures and the budgetary resources to implement the renovation plan. The process of
monitoring the national Building Renovation Action Plans includes their assessment by
the Commission services, in line with the provisions of the Governance Regulations.
Reporting on progress for key indicators and other important elements under the EPBD,
together with an analysis and breakdown of the factors influencing it, also takes place
periodically through the ‘State of the Energy Union Report’ required by Article 35 of
Regulation (EU) 2018/1999 on the Governance of the Energy Union and Climate
Action216
.
Key indicators and data to be used for reporting purposes will also rely on statistics
already available from Eurostat energy balances. Data collection for energy consumption
in households by end-use type allows monitoring of the specific use of renewable energy
in households’ heating and cooling. Additionally, Eurostat structural business statistics
allow monitoring of the overall evolution of workforce, turnover and value-added in the
construction sector. The impact on household energy expenditure and effects on energy-
poor households will be monitored through the Eurostat household budget survey (HBS)
and the survey on income and living conditions (SILC), following the indicators set out
215
In particular, the national Energy and Climate Plans should include information on the national long-
term renovation strategy, the cost-optimal minimum energy performance requirements, the number of
nearly zero-energy buildings and the equivalent to inspections of heating and air-conditioning systems
reports.
216
The Commission has to submit a State of the Energy Union report by 31 October of every year to the
European Parliament and the Council, and the report must include, biennially, an overall progress report on
the renovation of the national stock of residential and non-residential buildings, both public and private, in
line with the roadmaps set out in the long-term renovation strategies that each Member State has to
establish in accordance with Article 2a of the EPBD. Every four years, an overall progress report must be
submitted on Member States' increase in the number of nearly zero-energy buildings.
131
in Commission Recommendation (EU) 2020/1563 and associated SWD (2020) 960
final. There is continuous cooperation between DG Energy and Eurostat to improve the
statistical basis for monitoring energy efficiency in buildings. As a result, an hoc data
collection exercise under SILC contained a module for collecting data about households’
heating systems and fuels used, recent renovation (thermal insulation, windows, heating
systems) and building component affected, type of windows (optional) and year of
construction (optional). There are also discussions with the Eurostat population and
housing statistics team to further improve building-related data availability on similar
lines as for SILC.
A big step towards transparency and monitoring of national methodologies to calculate
the energy performance of buildings is represented by updates to the provisions in Annex
I, requiring Member States to describe their national calculation methodology following
the key European overarching standards on the energy performance of buildings, namely
EN ISO 52000-1, EN ISO 52003-1, EN ISO 52010-1, EN ISO 52016-1, and EN ISO
52018-1, or superceding documents. Member States must also report the choices made
and the data sources for the definition of primary energy factors or weighting factors
according to EN 17423 or superceding document.
The monitoring and evaluation would be facilitated by the increasing availability of data
collected by digital tools. The EU Building Stock Observatory collects, and makes public
and accessible, data on the transformation of the building stock which would allow for
systematic monitoring of key parameters, including renovation rates of the EU building
stock. The digitalisation of energy performance certificates and their national databases
could gradually feed into it, allowing for systematic tracking of the EU building stock’s
performance.
The JRC will continue developing specific analyses and studies focusing on the
implementation of EPBD measures that contribute to its overall policy objectives.
An additional data source for monitoring the impact of end-use energy efficiency policies
in buildings are the databases of Odyssee-MURE217
, an EU project running for almost
two decades which collects relevant energy consumption and energy efficiency data
through a network of energy agencies from all the EU countries.
The transposition and implementation of the Directive will be followed up by the
Commission after the transposition deadline. In addition, the Commission will work with
the Member States through the Committee of Article 26 and other well-established
217
Odyssee-MURE website at: https://www.odyssee-mure.eu/.
132
networks such as the Concerted Action on the EPBD218
, which provides a structured
dialogue on transposition as well as a forum for the exchange of best practices.
218
Concerted Action on the EPBD website at: https://epbd-ca.eu/.


EN EN
EUROPEAN
COMMISSION
Brussels, 15.12.2021
SWD(2021) 453 final
PART 2/4
COMMISSION STAFF WORKING DOCUMENT
IMPACT ASSESSMENT REPORT
Accompanying the
Proposal for a Directive of the European Parliament and of the Council
on the energy performance of buildings (recast)
{COM(2021) 802 final} - {SEC(2021) 430 final} - {SWD(2021) 454 final}
Offentligt
KOM (2021) 0802 - SWD-dokument
Europaudvalget 2021
Table of contents
ANNEX A: PROCEDURAL INFORMATION ......................................................................................... 133
ANNEX B: STAKEHOLDER CONSULTATION .................................................................................... 141
ANNEX C: WHO IS AFFECTED AND HOW?........................................................................................ 152
ANNEX D: ANALYTICAL METHODS................................................................................................... 156
ANNEX E: INTERVENTION LOGIC AND COMMON BARRIERS TO BUILDING
RENOVATIONS............................................................................................................................... 211
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Annex A: Procedural information
LEAD DG, DeCIDE PLANNING/CWP REFERENCES
DG ENER, PLAN/2020/8667, Commission work programme 2021 (COM(2020) 690
final) Annex I. 1.k.
ORGANISATION AND TIMING
The revision of the EPBD was announced in the Renovation Wave Communication of 14
October 2020.
The following DGs were part of the Inter-Service Group: SG, AGRI, BUDG, CLIMA,
CNECT, COMM, COMP, DEFIS, EAC, ECFIN, ECHO, EMPL, ENV, ESTAT, FISMA,
GROW, JRC, JUST, IDEA, MOVE, REFORM, REGIO, RTD, SANTE, SJ, TAXUD. Three
meetings took place on 30 April 2021, 11 June 2021, 1 July 2021, 15 October 2021, 8
November 2021 and 26 November 2021.
CONSULTATION OF THE RSB
A meeting with the RSB took place on 15 September 2021. On 18 September 2021, the RSB
issued a negative opinion. An improved Impact Assessment was submitted on 20 October,
addressing the recommendations provided by the Board in its first opinion. The following
table shows the RSB recommendations and the changes made to respond to them.
Opinion - What to improve How it is addressed
1.1 - The problem definition should clarify why
the initiative is needed with an increasingly and
progressively decarbonised energy sector, and
why the Fit for 55 package is not sufficient to
address the objectives.
1.2 - The problem definition should develop the
noneconomic barriers in sufficient detail in the
problem drivers.
1.3 - It should demonstrate with evidence the
uniformity of the problems and problem drivers
across Member States.
1.4 - The scope of the problem definition
should be limited to what this initiative
addresses and should exclude other building
deficiencies.
1.1 – The problem definition has been clarified accordingly in
the revised version. In Chapter 1 the role of the EPBD
revision as integral part of the package of measures
composing the “Fit for 55” has been made clearer. The
specific policy drivers attributed to the EPBD revision by the
CTP and necessary to achieve a decarbonisation of the
building sectors are elaborated upon. To disentangle the role
of EPBD revision in “Fit for 55” package, a new
counterfactual scenario “without EPBD” has been run. The
results of the counterfactual scenario are presented in Chapter
6.2 and clearly show that the policy proposals from the
“Delivering the Green Deal” package of July will not be
sufficient to achieve the EU climate and energy goals without
a strengthened EPBD. In Chapter 1 and in Section 2.5
explanations are given on the reasons why it is needed to
combine renewable deployment and energy efficiency
improvements and on the need to enhance buildings’
performance in a decarbonised energy sector.
1.2 – The problem definition has been revised to address this
point, including notably (but not only) in the problem drivers.
Non-economic barriers to buildings renovations are further
developed and detailed in a new section in Chapter 2 (and in
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Annex E).
1.3 – The uniformity of the problems and problem drivers is
further substantiated to address this point. Additional
evidence on problem distribution across the Member States is
included in a new section on the building stock in Chapter 2,
based on data from Eurostat, Long Term Renovation
Strategies (LRTS) and other sources, underpinning the
presence of common barriers to buildings renovations.
1.4 – The demarcation of the scope of the problem definition
has been revised accordingly, making it clearer and leaving
out those elements that this initiative cannot address. In
Chapter 2 a distinction is made between the barriers and
drivers that can be addressed by the EPBD revision and those
that are outside its scope.
2.1 - The report should justify why it does not
include the already proposed Fit for 55
measures in the baseline. 2.2 It should explain
why there is no common approach on the
baseline between follow-up initiatives to the
July Fit for 55 package.
2.2 - If the report uses the same baseline as this
package, the impact analysis should distinguish
between the effects of the EPBD and of the
package.
2.1 – The report has been revised to adequately justify why it
does not include the July components of the Fit for 55
package in the baseline. Section 5.1 demonstrates that given
that the EPBD revision is an integral part of the “Fit for 55”
efforts and from this perspective not a ‘follow-up initiative’ to
the July package (but simply coming slightly later), it is
appropriate to use the same baseline approach followed in the
Impact Assessment underpinning the proposals adopted in
July 2021. The report explains why there is no common
approach on the baseline between the July part of the package,
and the initiatives that will be adopted in December. More
specifically, it is additionally explained that initiatives not
contributing per se to decarbonisation (which is the case for
the revision of the Energy Performance of Buildings
Directive) and mainly addressing energy infrastructures (as
other parts of the December proposals) have followed a
different approach.
2.2 – Since the report uses the same baseline as the proposals
in the July package, the impact analysis further distinguishes
between the effects of the EPBD and of the already adopted
proposals. From the “Fit for 55” core scenario MIX, a new
dedicated counterfactual scenario “without EPBD” has been
run to disentangle the EPBD effects. The results of the
counterfactual scenario “without EPBD” are presented in
Chapter 6.2 and 7, showing the expected impact of the revised
EPBD. In Chapter 6 the assessment of impacts focuses only
on the options for the EPBD revision, and the interplay with
other measures are clearly outlined.
3.1- The report should clarify the link between
the reformulated problem drivers and the
objectives and options.
3.2 - It should clarify which emission coverage
(e.g. direct, operational, indirect/embedded, full
life cycle) corresponds to each of these
dimensions and why.
3.3 - It should reflect whether this may lead to
regulatory overlap (e.g. with construction
material standards).
3.1 – The reports has been revised to clarify these links. The
explanations and illustrations on how the policy options
address the problem drivers and contribute to the objectives
have been updated and clarified.
3.2 – The specific emission coverage of each dimension is
now made explicit and argued for A section in Chapter 1
clarifies upfront that the scope of GHG emissions covered in
the Impact Assessment, is in line with the scope of the EPBD
provisions, which always address operational emissions
unless otherwise specified. The specific dedicated measures
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proposed addressing lifecycle emissions are clearly presented.
This is reflected also in the section on environmental impacts
in Chapter 6.
3.3 – The slight extension of the emissions coverage
complements and does not overlap with other initiatives and
this is further reflected in the revised text. In Chapters 1 and 5
and Annex K the additional elements provided on the
interplay with other initiatives addressing life-cycle emissions
clarifies that there is no overlap with them. This is further
assessed and confirmed in particular as regards the
Construction Product Regulation currently under revision.
4.1 - The options should identify and highlight
the main policy choices and relate them to the
reformulated problem drivers and identified
gaps to be filled.
4.2 - The current approach does not
demonstrate that all measures are necessary, in
particular the obligation to renovate buildings.
4.3 - The report should make a clearer
distinction between ‘main measures’ and
‘supporting measures’, and apply it more
coherently. It should specify the precise content
and parameters of all measures.
4.1 – The options identify clearly the main policy choices and
link them back to the problem drivers and gaps that the
revision aims to tackle. Across Chapter 5, the measures
proposed are better put in relation to the problems identified
and their drivers.
4.2 – The text further substantiate how measures in the current
approach are necessary, notably as regards minimum energy
performance standards and building renovation, which is a
key gap that the revision aims to fill in. The findings from the
Climate Target Plan demonstrating the need for higher
building renovations to achieve decarbonisation in the
building sector are presented in Chapters 1 and 6. The results
from the counterfactual “without EPBD scenario” in Chapter
6 confirm those findings. In Chapter 5, the need for minimum
energy performance standards in the EPBD to address the
current lack of specific measures to increase energy
renovation (rates and depths), by reducing the non-economic
barriers preventing renovations from happening, is clearly
presented and explained.
4.3 – To address this comment, the distinction between main
and supporting measures is not made anymore in Chapter 5
and all measures are explained in detail.
5.1 - The report should demonstrate better the
respect of the subsidiarity principle of this
initiative.
5.2 - It should be more explicit on the inter-play
between the harmonised objectives at EU level
and the flexibility for Member States (e.g. the
use of fiscal measures).
5.3 - To demonstrate the need for EU
intervention, it should explain clearly what
would be the cross-border effects of a lack of
building renovation in some Member States.
5.1 – The respect of the subsidiarity principle has been further
demonstrated. Sections 3.2 on the necessity of EU
Intervention and 3.3 on added-value better relate to the
problems – common to all Member States - addressed by the
initiative. The assessment of subsidiarity of the options in
Chapter 7 has been clarified.
5.2 – The interplay between EU level harmonised objectives
and national flexibility has been expanded. The description of
the policy options and measures in sections 5.2 and 5.3 makes
it more explicit which requirements would be harmonised
(e.g. on new buildings) and where Member States would keep
flexibility (e.g. on priority segment of the building stock to
address with national minimum energy performance
standards).
5.3 – To demonstrate the need for EU intervention, section 3.2
better describes the need to pick all low-hanging fruits of
renovation of the worst performing buildings to meet the
targets. In section 3.3 explanations are added on cross-border
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value chain of buildings renovation, and on the fact that
without standardised/aligned renovation measures and policy
tools, there will not be sufficient uptake of the necessary
private financing, and barriers to investment opportunities and
to a stronger market for energy renovation will persist.
6.1 - The report should assess the feasibility of
the options, given the possible shortage of
(skilled) labour and materials.
6.2 - It should analyse the required capacity
changes and assess their feasibility and impacts
in a realistic macroeconomic scenario.
6.3 - It should also be clear about the emissions
resulting from renovations themselves as
compared to those from an un-renovated
building using decarbonised energy.
6.1 and 6.2 - In Chapter 6 new sections on “The challenges of
increasing capacity in the supply markets” and section on
“The challenges of increasing labour” assess the increased
materials and labour needs and relate them to historical
trends. A new sensitivity analysis of the impact of the EPBD
revision on jobs and skills examines the expected implications
also in relation to the Fit for 55 Package overall (the upper
bound for the additional needs). In Chapter 8 the Commission
policies addressing upskilling needs and materials needs
within the construction ecosystems are presented.
6.3 - Evidence on emissions from renovations themselves are
presented in Chapter 6 (as compared to those from an un-
renovated building using decarbonised energy) together with
their mitigation measures.
7.1 - The report should disaggregate the
positive and negative impacts across different
stakeholders, e.g. income groups,
renters/owners, sectors and Member States.
7.2 - It should not simply assume that sufficient
financing or mitigating measures would be
available when assessing distributional effects.
7.3 - It should take into account the
heterogeneous characteristics of individual
Member States including in terms of building
type and age, property ownership and differing
liabilities of owners, leaseholders and tenants;
and how these differences may lead to uneven
impacts.
7.4 - The report should discuss the total
investment needs and identify possible funding
mechanisms that may remove some of the
barriers.
7.1, 7.2 and 7.3 - In Chapter 6 some of the economic impacts
have been further disaggregated by climatic zones. To better
understand how national differences could affect the
economic impacts, a sensitivity analysis to simulate the
different economic impacts of renovation requirements for
different types of buildings and renovation types has been
applied. It shows how the economic impacts could vary for
building (unit) owners or tenants, also in presence of financial
support of different intensity.
7.2 and 7.4 - On top of the existing section on investments (in
Chapter 6), in Chapter 8, a new section links the investment
needs with the Union, national and private financing
available. The uncertainties post-2027, the areas towards
which funding mechanisms should focus on and references to
how the preferred options will help stepping-up financing
have been provided as well.
8.1 - The report should better reflect the
stakeholder views throughout the report,
including in the problem definition, option
construction and the choice of preferred option.
8.2 - It should explain how it took into account
minority views.
8.1. and 8.2 - The views expressed by stakeholders,
particularly on the policy measures identified have been
further integrated into the problem definition, policy options
and assessment of options and throughout the Impact
assessment overall. Concerns voiced and minority views in
particular, especially on affordability and renovation hassle,
have been better reflected as well.
9.1 - The report should identify the indicators
and data sources needed for an adequate
monitoring framework.
9.2 - It should define from the outset what
success would look like, and when would be
the most appropriate moment for an evaluation.
9.1 and 9.2 - In Chapter 9 the EPBD data to be collected
through the revised EPBD monitoring framework is presented
and the key indicators to assess progress towards the key
objectives and the respective data sources are identified. It is
also explained that the assessment of LTRS (to become
Building Renovation Action Plan) would allow to evaluate
progress, in synergy with the Governance Framework
mechanisms.
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The Regulatory Scrutiny Board issued a second negative opinion on 18 November 2021.
Following the opinion, the legislative proposal for the revision of the EPBD has been adapted
to address the concerns raised. The modifications made to the legislative proposal are
described in the “Explanatory memorandum” accompanying the legislative proposal.
The table below includes the recommendations from the RSB and how they have been
addressed.
Opinion - What to improve How it is addressed
(1) The problem definition should clarify why
the other measures in the Fit for 55 package are
not sufficient to address the greenhouse gas
reduction objectives in the buildings sector. It
should specify the remaining gap that would be
left for the EPBD to fill after the combined
effect of the inclusion of the building sector in
the Emissions Trading System and, in
particular, the more ambitious targets for
Member States in the Effort Sharing
Regulation, which also includes the buildings
sector.
The chosen set of options reflected in the legislative proposal
has been reviewed and further calibrated following the second
opinion from the Board. As a result, the legislative proposal
has been revised and the scope of the proposed provisions on
existing buildings reduced. More specifically, regulatory
measures focus on those segments of the buildings stock in
which the non-economic barriers to energy renovations are
more acute and more difficult to be addressed by economic
measures or targets, and where the broader macro-economic
and social positive impacts can be maximised.
The interplay between the EPBD and the ESR has been
further explained in [Chapter 7, Annex K] and in the
Explanatory memorandum to the legislative proposal. In
short, the measures in the EPBD would support the
achievement and not substitute the targets set under the Effort
Sharing Regulation (ESR) and it supports their achievement.
(2) The report should better justify why the
drivers that are assumed to capture the impacts
of the EPBD to construct the new
MIXwoEPBD modelling scenario can be fully
attributed to the EPBD. In particular, it should
explain why increased renovations and higher
use of renewable heating and cooling
equipment would not also or primarily result
from Member States’ actions under the Effort
Sharing Regulation.
It is important to clarify that the MIXwoEPBD counterfactual
scenario does not capture all drivers to building renovation as
if they all were to be attributed to the EPBD. Instead, this
counterfactual scenario does not exclude all drivers to energy
renovations, but only those that can be largely attributed, with
certainty, to a strengthened regulatory framework in the
EPBD revision. Energy renovations still occur in the
MIXwoEPBD scenario at a higher rate in comparison to the
baseline, thanks to the incentives and stimuli from the
measures in the July Fit for 55 package, but at a much lower
scale, especially for what concerns deep renovations. Based
on MIXwoEPBD scenario, in absence of EU measures to
increase the rate and depth of energy renovations, national
measures would have to fill the gap to ensure the achievement
of the national targets established through the ESR and the -
55% GHG emissions reduction goal by 2030. In other words,
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
proposed ESR (and the carbon pricing impacts of the new
emissions trading system for fuels used in buildings).
(3) The report should better analyse and
demonstrate the respect of the subsidiarity
principle of this initiative. It should justify why
it includes split incentives in the problem
drivers, even though the analysis shows that
these are best tackled at Member State level due
The retained option in the legislative proposal has been
revisited and amended as a follow up to the opinions of the
Regulatory Scrutiny Board. Careful attention has been put on
respecting subsidiarity and proportionality and taking into
account the particularities of building stocks across different
Member States, whilst maximising the magnitude of the
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to their heterogeneity. More generally, the
report should systematically integrate into its
analysis that barriers to renovation are country-
specific (as is demonstrated by the added
information on the European building stock)
and that there are only limited (potential) cross-
border effects in the fragmented buildings
sector.
achieved energy savings, cost-effectiveness and energy
poverty alleviation impacts. While acknowledging the
heterogeneity of the EU building stock, the evidence provided
in Chapter 2 demonstrates that the barriers to energy
renovations are largely common and similar across EU
countries, which justifies the role of EU intervention.
However, given the need to ground the subsidiarity and
proportionality of the proposal on a more solid evidence base,
the EPBD revision draft proposal has been reviewed
following the opinions from the Regulatory Scrutiny Board
and aligned with Option 2 on medium ambition for several
aspects, and medium to low ambition as regards measures
tackling the renovation of existing buildings, whilst keeping
Option 3 - high ambition I approach for new buildings and
their modernisation. More detailed description of the choices
made to design the legislative proposal in comparison to the
preferred option in the Impact assessment is provided in the
Explanatory Memorandum of the legislative proposal. In
addition, as regards cross-border effects, the explanatory
memorandum highlights that even if buildings do not move
across borders, 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,
many EU-manufactured, and enabling cost reductions when
they are most needed, and industrial growth. Even is possibly
more limited than those in other more ‘movable’ sectors,
these cross-border effects are not to be neglected.
(4) The options should be organised in a way
that highlights political trade-offs and relevant
political choices. The construction of options
should allow for assessment of which measures
are decisive for reaching the objectives and
which ones should not be
selected because of proportionality concerns.
As a follow up to the opinions of the Regulatory Scrutiny
Board, the measures selected for inclusion in the proposed
legislative text has been significantly reviewed and revised. In
addition, a description of the choices made to design the
legislative proposal in comparison to the preferred option in
the Impact assessment, and to ensure that the proposal is
proportionate to the goals of the initiative, is provided in the
accompanying Explanatory Memorandum.
(5) The comparison of options should be more
coherent with the analysis. It should specify the
differences across the options for
proportionality and subsidiarity and integrate
these in the respective scores. The report should
justify why it considers that the options perform
similar to the baseline on subsidiarity, even
though they significantly reduce the
room for manoeuvre of Member States to deal
with county-specific barriers to renovation. It
should more convincingly argue, based on
available evidence, why the preferred option
performs better than other options.
To address this point, the assessment and scoring of
subsidiarity in Chapter 7 has been amended to clarify the
difference with the baseline, highlighting for each options the
room for manoeuvre of Member States to deal with country
specific barriers to renovation.
(6) The report should further clarify how the
initiative will be monitored and evaluated. It
Monitoring and reporting of this initiative will be grounded
on the common tools established under the Governance
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should, in particular, specify what information
Member States will have to provide in the
annexes to their building renovation action
plans and how the Commission will use this
information. It should also stipulate how and
when the Commission will evaluate the overall
performance of the EPBD.
Regulation framework, which ensures that a transparent and
reliable planning, reporting and monitoring system is in place.
Accordingly, the description of chapter 9 on monitoring and
evaluation has been further clarified, highlighting that this
point and coherence with the already existing framework for
National Energy and Climate Plans under the Governance
Regulation. The adjusted legislative proposal specifies which
information of the national Building Renovation Plans are
mandatory and which ones are voluntary and it amends the
existing review clause. The date for the next review pursuant
to Article 19 is set to 2028. The review clause makes explicit
reference to the possibility for the Commission to assess and
possibly introduce further binding minimum energy
performance standards if the implementation of minimum
energy performance standards by Member States does not
sufficiently deliver.
(7) The report should find a better balance
between its core messages in the main report
and the detailed discussion and analysis that
should be part of the annexes.
In order to better balance core messages in the main report
and the detailed discussions and analysis in the annexes,
Chapter 2 has been revised and the additional subsection
including details on the building stock (The European
building stock and buildings ownership structure) has been
moved to the annexes.
EVIDENCE, SOURCES AND QUALITY
The preparation of the Impact Assessment has benefitted from several sources of evidence
and analysis. As regards the current EPBD framework, the outcomes of the evaluation carried
out in 2016 provided a relevant basis which has been reflected in the development of the
policy options, with a view to overcome the weaknesses of the existing provisions in light of
higher climate ambition. Given that the evaluation exercise was completed recently, and that
the EPBD was reviewed in 2018 and the new measures introduced had to be transposed only
recently (2020), it was considered of limited added value to perform another evaluation back-
to-back to the ongoing revision. The analysis and assessment of compliance and of the
practices in the Member States was based on the analysis performed by JRC for DG ENER,
which regularly prepares reports on a number of topics linked to the implementation of the
EPBD, namely NZEBs, EPCs, cost-optimal methodology, financial instruments to support
buildings renovations, split-incentives, LTRS, and overall compliance to the EPBD. The
EPBD Concerted Action initiative produced several thematic reports based on the analysis of
the national experiences of implementation of the EPBD and best practices going beyond the
legal requirements, which provided relevant input and were quoted throughout the Impact
Assessment. Dedicated sessions on topics relevant to the EPBD revision took place also at the
(virtual) EPBD Concerted Action1
plenary meetings of November 2020 and May 2021.
1
https://epbd-ca.eu/
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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
contract2
. This study is quoted in the document as ‘Guidehouse et al.’ .The analysis within
this contract included a substantial literature review on topics of interests, with a view of
informing the assessment with the latest academic and research findings on the topics relevant
to the analysis. The modelling of the baseline and of impacts built substantially from the
datasets, technical and economic assumptions, and the overall assessment made in the CTP
and the initiatives under the ‘Fit for 55’ package through the Primes model. As regards the
data related to the technical characteristics and trends of the building stock, the main statistics
and data used, also to populate the dataset underlying the models used, refer to the Building
Stock Observatory, EUROSTAT indicators and Odyssee-Mure datasets3
. For social impacts
EUROSTAT data were used as well as evidence from the Energy Poverty Advisory Hub4
.
Several studies and analysis from stakeholders, think-tanks, research organisations, the
International Energy Agency, the Intergovernmental Panel of Climate Change were analysed
in preparation of this Impact assessment. These are either cited directly as sources throughout
the document or in the underlying studies.
Several ongoing or recently concluded studies conducted for DG ENER contributed to the
development of the policy options, in particular a study on Lessons learnt, feasibility of BRP,
big data for buildings, renewable technologies, heating and cooling appliances,
competitiveness of construction, Smart Readiness Indicator, renovation rates and on whole-
life cycle carbon. These studies were cited in the relevant parts of the Impact Assessment.
Results from several ongoing research and innovation projects funded under the Horizon2020
programme were also assessed and provided valuable input to the analysis, in particular as
regards buildings stock data, buildings technologies, skills and Energy Performance
Certificates.
2
Technical assistance for policy development and implementation on buildings policy and renovation Support
for the ex-ante impact assessment and revision of Directive 2010/31/EU on energy performance of buildings
Service request 2020/28 – ENER/CV/FV2020-608/07; DG Climate Action CLIMA.A4/FRA/2019/0011. The
study under this contract is performed by Guidehouse, Trinomics, Öko-Institut and Ricardo-AEA.
3
Energy Efficiency Trends & Policies | ODYSSEE-MURE
4
EU Energy Poverty Observatory | EU Energy Poverty Observatory
141
Annex B: Stakeholder consultation
1. SYNTHESIS OF CONSULTATION ACTIVITIES
This Annex provides a synopsis of the stakeholder consultation strategy carried out to gather
stakeholder views and insights to feed into the revision of the EPBD.
The consultation strategy aimed at ensuring, via a series of consultation activities, that
relevant stakeholders had the opportunity to express their views and feed into the
Commission’s work on all the elements relevant to the revision of the EPBD. It has integrated
and built upon the results from the very extensive and in-depth public consultation for the
Renovation Wave that took place between January and September 20205
.
A variety of methods and tools has been used to ensure a comprehensive and well-balanced
consultation process:
 An Inception Impact Assessments published on the Have Your Say portal on 22
February 2021 was open for feedback during 4 weeks.
 A 12 weeks public consultation, based on a structured online questionnaire in the EU
Survey tool, was published on the Commission Have Your Say portal from 30 March
2021 to 22 June. The public consultation covered the scope, type and design of
possible policy options.
 Five dedicated and targeted workshops were organised with various stakeholders
between 31 March and 3 June 2021. These events were organised thematically to
address specific areas for policy options.
 Additional engagement with stakeholders has taken place on an ad hoc basis, to the
extent that this was deemed necessary in addition to the previous activities.
The consultation on the Inception Impact Assessment and the Public Consultation
questionnaire were open to the public while the workshops were targeted to certain
stakeholders.
At meetings of the EPB Committee and the Energy Working Party and sessions of the
Concerted Action plenary meetings, to the Commission informed national delegations and
administrations and collected their views.
2. OUTCOME OF THE CONSULTATION ACTIVITIES
5
https://ec.europa.eu/energy/sites/default/files/stakeholder_consultation_on_the_renovation_wave_initiative.pdf
142
2.1 Outcome of the Consultation on the Inception Impact Assessment (22
February 2021-22 March 2021)
The consultation encouraged inputs in free format and uploading position papers, in reply to
the Inception Impact Assessment. 243 feedback submissions were received, of which 154
included an attached position paper.
The feedback came mostly from business associations, companies /business organisations and
NGOs (figure B1). 22 SMEs responded to the survey directly, and several more were
represented by the associations participating into the consultation. The objective of this
consultation activity was to engage with stakeholders in a structured manner and allow for an
elaborate input on the issues that the revision of EPBD would tackle, especially regarding the
introduction of mandatory minimum energy performance standards, the update of the
framework for EPC and the introduction of Building Renovation Passports and a Deep
Renovation standard. The results of the feedback were analysed using Atlas.ti (text processing
software).
Figure B.1: Stakeholder type- Inception Impact Assessment feedback responses
The feedback covered a range of topics, including EPBD general aspects and principles,
specific measures/indicators, social/economic impact, climate/environmental impact and
building technologies. The main points raised by stakeholders are summarised per topic in the
following sections.
2.1.1 General aspects
 EPBD Revision
Overall, there is wide support for the EPBD to be amended and translate the actions proposed
in the Renovation Wave and the increased ambition towards building decarbonisation into
legislation. There was also support for regulatory measures to be combined with voluntary
ones. No participants were in favour of an unchanged framework.
143
Amongst the non-legislative measures, the diffusion at scale of one-stop shops supporting
energy efficiency in building renovation projects received vast support. Additionally,
awareness of the benefits and savings of energy efficiency measures was considered as
needing to be increased for European citizens, public authorities and SMEs. Stakeholders also
supported the exploration of a lifecycle carbon approach. Energy communities were also
acknowledged as an important element for reaching energy efficiency goals within the
buildings sector.
While the importance of carbon metrics was highlighted, the majority of respondents
considered that they should not be prioritised to energy performance as currently defined in
the EPBD. It was considered that the EPBD review should reflect the Energy Efficiency First
principle.
 Renovation rate
Several stakeholders indicated that renovation rates need to drastically increase to reach 2030
and 2050 climate targets. Stakeholders suggest the following mechanisms: Minimum Energy
Performance Standards; regulatory measures that reduce costs and rapidly increase scale of
renewable energy; Building Renovation Passports; more and highly-qualified workforce;
strengthened rules for Energy Performance Certificates at EU level, and in general, more
ambitious and binding energy performance requirements. Stakeholders warned that increasing
the number of renovations should not lead to a decrease in their quality.
 Financing
Stakeholders indicated that renovation obligations must go hand in hand with financing.
Targeted support for vulnerable households is essential. Innovative ways to release more
funding for energy efficiency improvements from public and private sources should be
explored. Technical knowledge by financial institutions to reduce the risks of investments in
buildings and reliable data (e.g. from EPCs) are needed. The importance of sharing best
practices in shaping national support schemes, and of Energy service providers specialised in
delivering and financing energy efficiency projects was also indicated. New construction and
charging infrastructure were also mentioned in the context of financing.
2.1.2 Economic and social aspects of buildings renovations
 Energy Poverty
Tackling energy poverty should be a priority. As already highlighted above, stakeholders
suggested helping specifically vulnerable households, addressing poorly insulated buildings
and accompanying minimum energy performance standards with financing tools and technical
assistance. Other specific measures suggested are the following: loans for renovation that do
not have to be repaid until the property is vacated, assistance to local authorities for planning
and financing renovations for energy poorest. Highlighting the benefits
(health/comfort/safety) of deep renovations can encourage low-income and low-energy
tenants to engage in renovation.
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 Rental housing
The EPBD revision should not negatively affect the affordability of housing for tenants.
Public and private financing schemes should be used to help tenants pay for major
renovations. The EPBD should address the problem of split incentives between tenants and
landlords. Energy Performance Certificates are seen as an important tool for landlords to
provide transparency on the energy needs of a building.
 Health
The EPBD should make air quality objectives explicit and set requirements for indoor
environment quality and health in various provisions, such as LTRS, NZEB, MEPS, EPCs
and BRP. Article 10 could be amended to link financial measures with improvement of the
indoor environmental quality.
 Skills
Upgrading and re-skilling should include workers of all ages and from different sectors in
order to increase the available workforce in the construction sector. The EPBD must ensure
that adequate efforts are made at national level to address shortages of skilled workers. The
revision of the EPBD should also explore synergies with other EU initiatives on skills.
2.1.3 EPBD measures
 Minimum Energy Performance Standards (MEPS)
The phased introduction of MEPS for all building types is key. MEPS should be designed at
national level, with sufficient lead-time, respecting the requirements of economic rationality,
adapted to different types of buildings (occupied/rented/commercial) and accompanied by a
financial framework.
MEPS should be introduced gradually, based on EPCs and real national data on the building
stock. Technical and organisational assistance is needed for owners and tenants, as well as for
training of the workforce. MEPS should start with the renovation of the worst performing
buildings for sale or rent, both for residential and non-residential buildings. MEPs should be
final-energy based to ensure a greater focus on effective decarbonisation of buildings. Some
stakeholders indicated that MEPS should be developed in conjunction with existing national
or European frameworks, such as Ecodesign and Energy Labelling.
 Building Renovation Passport (BRP)
There is general support for the EPBD to introduce a BRP which provides adequate
estimation of the renovation potential of buildings and helps create a long-term renovation
roadmap. BRPs should be: linked with EPCs; digital; include a carbon component; take air
quality into account; cover the carbon performance of the energy system; be integrated with
MEPS; and include information on accessibility of the building. BRPs could be mandatory for
all Member States and for all buildings at a specific time in the life of each building. Also,
BRPs should be supported with public funding.
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 Energy Performance Certificates (EPCs)
For several stakeholders, the reform of the EPC framework is a priority. There is a need to
improve their quality, so that they can be widely used to determine the performance of
buildings and the compliance with MEPS. The EPBD should address the current overlap
between EPCs and energy audits (under the EED). EPCs should be carried out by certified
professionals, using the common EPBD framework, and with a shorter period of validity.
EPCs should provide relevant data to end-users, based on energy bills.
In terms of metrics, EPCs should include additional information, such as CO2 emissions,
indicators reflecting climate resilience, indoor environmental quality, difference between
calculated and measured energy, thermal and seasonal comfort, financial valuation,
circularity, sustainable mobility, smart readiness indicator. Stakeholders also suggest that
energy management options should be better reflected in EPCs. Accelerating the digitalisation
of EPCs would make them more reliable and ensure that energy and CO2 savings are real.
National EPC databases should be more accessible, transparent, and closely integrated with
digital building logbooks.
Some stakeholders believe that EPC requirements should be strengthened and better
harmonised between Member States. Harmonisation is also needed for financial institutions to
facilitate the implementation of the European taxonomy.
 Deep Renovation standard
According to many respondents, a uniform definition, methodology or performance
calculation, and target for defining ‘deep renovation’ should be established. This definition
could be based on final energy and CO2 savings, and facilitate the phase out of fossil fuels.
There is no consensus on whether deep renovation should be required through ‘one-step’
renovation to avoid the negative effects of staged renovation, or through a staged approach,
grasping the low hanging fruits, in case building owners cannot afford deep renovation in one
step.
A deep renovation standard should be included in the EPBD or EU taxonomy and linked to
funding. Given the current long payback periods and the fact that targeted subsidies for deep
renovation are not common across Europe, EU grants are needed. Other non-regulatory
measures, such as technical assistance, consumer guidance, information campaigns, training,
project financing are also required.
 National long-term renovation strategies (LTRS)
LTRS should be adapted to the higher EU ambitions. There is also a need to improve
enforcement. Stakeholders suggest several measures: setting a target of 100% reduction of
greenhouse gas emissions by 2050; being more closely linked to Article 5 of the EED;
strengthening waste heat assessments (Article 15 RED) and including them into Article 2a;
introducing a district-based approach. The LTRS should also take into account life cycle of
buildings and replacement of the existing building stock by NZEB. Stakeholders suggest
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involving municipalities in drafting the LTRS, providing clear guidance on the role of citizen-
led renovation programmes and including a communication plan for citizens. Member States
should provide updated LTRS for 2030, including COVID-19 funding. The Commission
should improve guidance to Member States and encourage best practices.
 Nearly zero-energy buildings (NZEB)
An ambitious definition and harmonised methodology for NZEBs should be introduced.
Respondents suggest ensuring alignment with the Energy Efficiency First principle and that
residual energy consumption is covered by RES; including requirements for the reduction of
embedded emissions and addressing health, comfort and peak power demand. The public
sector should lead the way. The deep renovation standard and MEPS should be designed to
support the transformation of the EU building stock into NZEBs.
 E-mobility
According to some stakeholders, the EPBD should set higher EV charging requirements.
Article 8 seems outdated in light of the projected increase in the market share of EVs in
Europe for the coming years. The EPBD should ease access to private charging infrastructure,
through more ambitious requirements for multi-unit buildings undergoing important
renovation works, and through simplified procedures for the installation of charging points.
Also, the EPBD should enable tenants and co-owners to install charging points in their homes.
The EPBD needs to provide incentives for investments facilitating the installation of
collective charging infrastructures, particularly in residential buildings.
 Smart Readiness Indicator (SRI)
The SRI can be used to make building equipment comparable across Member States and helps
to identify renovation needs. The SRI methodology should be simplified. The EPBD should
establish a roadmap for the (voluntary) implementation of SRI and to accelerate its adoption.
2.2 Public Consultation questionnaire (30 March 2021-22 June 2021)
The PC included 32 questions via the EU Survey tool and 535 contributions were received.
Most of the responses come from companies/business organisations and business associations
(278 responses, 52%) and EU citizens (Figure B.2). 59 SMEs responded directly to the
consultation, and several more were represented by associations or business organisations.
Stakeholder contribution to the PC was encouraged using social media and via the dedicated
Commission webpage. The results of the PC were analysed using excel for the closed
questions and Atlas.ti (text processing software) for the open questions.
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Figure B.2: Stakeholder type - Public Consultation questionnaire
The questionnaire included open and closed questions. It was divided in three parts: ‘Planning
and policy instruments’, ‘Information provisions and energy performance certificates’ and
‘Enabling more accessible and affordable financing for building renovation’.
2.2.1 Planning and policies instruments
 Mandatory Minimum Energy Performance Standards (MEPS)
MEPS should be introduced (75%) and accompanied with proper funding and a solid
financing framework. 78% of SMEs support this measure. MEPS should be linked to EPCs
and BRP, focusing on worst-performing buildings and deep renovation. EU-wide MEPS are
seen as a challenge due to MS differences. It was also indicated that mandatory MEPS should
be introduced on the basis of a staged approach and linked to specific moments of a building
life-cycle. The most important elements to a successful roll-out of MEPS are the availability
of financial support to building owners, a stable legal framework, availability of adequate
workforce capacity, correct identification of the worst-performing buildings and availability
of emerging technologies.
 Long Term Renovation Strategy (LTRS)
The EPBD provisions on LTRS should be modified (61%). The ambition of the LTRS should
be aligned with the new 55% emission reduction target for 2030 and climate neutrality by
2050. Their implementation should become a national priority, paying attention to
affordability and social acceptance, with continuous revision (every 5 years), ensuring
synergies with all related instruments (RED, EED), mainstreaming financing measures and
inclusive financial strategies, targeting also indoor air quality and health & safety. The
monitoring of the objectives identified by MSs in their LTRS should be strengthened (89%).
 Zero emission buildings and deep renovation
Zero emission buildings by 2050 should be defined in the EPBD (84%), to address also life-
cycle emissions and facilitating the phase out of fossil fuels. The current definitions of
NZEBs are not ambitious enough to contribute towards a fully decarbonised building stock
(57%) and need to be more harmonised (67%). It would be beneficial to have a legal
definition of deep renovation in the EPBD (68%). This definition should relate to both
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operational and embodied GHG life-cycle emissions, as well as broader aspects such as health
and environmental standards, accessibility for persons with disabilities and climate resilience.
 Inclusion of carbon emissions and climate change impacts
The EPBD should include measures to report on whole life-cycle carbon emissions from
buildings (68%) for all buildings and require that the likely impacts of climate change are
taken into account in the planning of new buildings and major renovations (68%), particularly
for new public and private buildings.
 Electromobility
Upgraded e-mobility provisions should apply to new non-residential (61%) and residential
buildings (60%), and possibly refurbished (non-residential) buildings (53%). Requirements
for installation of recharging points (65%), right to plug (for both tenants and owners) (62%)
and inclusion of provisions for recharging points for vehicles other than cars (52%) are all
necessary. Smart charging is considered key for grid stability. The promotion of public
transport/active mobility or alternative technologies (e.g. hydrogen) was also raised.
2.2.2 Information provisions and energy performance certificates
 Energy Performance Certificate (EPC)
EPCs need to be updated and quality needs to be improved (65%). Quality improvement is
key to assure owner/occupier’s confidence (but also for the finance sector). A multiplication
of tools has to be avoided, and the existing ones should be linked, such as the energy audit (of
EED), BRPs which describe a building’s deep renovation roadmap, and Digital Building
Logbooks. Digital assets providing accessible real-time data should be considered. EPCs are
considered as the main option to define MEPS. Improvements should be accompanied by
measures enhancing the availability of qualified professionals, strengthening enforcement,
controls and on-site visits. 71% of respondents think it is very important or important to
improve control mechanisms, 76% of respondents state that harmonisation of EPCs is needed
(76%). EPCs should provide information on energy performance (final and primary energy)
and carbon emissions. The following aspects could also be introduced: demand-side
flexibility, fire safety, comfort, Indoor Air Quality, Indoor Environmental Quality, ventilation,
cost of energy, EVs, on-site renewables and storage. 68% of respondents think that EPCs
should include further information on estimated energy and cost savings (68%). The validity
of EPCs should be shortened.
 Building Renovation Passport
The Commission should clarify the scope of the BRP, then develop guidelines and best
practice exchanges and make funds available for BRP development and implementation. A
common EU template could be developed and the Commission could encourage tests in the
Member States. BRPs should be deployed with digital logbooks informing on energy aspects,
enabling data access to all relevant stakeholders. The link and interoperability with existing
and potential tools such as EPCs, SRI and Digital Building Logbook should be ensured.
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 Building digitalisation
Stakeholders think that the EPBD can contribute in making a wider range of building-related
energy performance data available and accessible (73%). Some expressed the need for a
structured approach to data collection, limiting administrative burden. Different tools, such as
EPC, BRP, MEPS and SRI, may enrich data availability. Regarding the SRI, respondents
suggest focusing on the implementation of SRI on a voluntary basis and developing links with
other schemes.
2.2.3 Enabling more accessible and affordable financing for building renovation
Stakeholders think that the most important financial support mechanisms are direct grants to
low-income citizens (73% think they are very important or important) and tax incentives
(72%). There should be an attractive system of public subsidies, grants, low interest loans and
tax incentives to stimulate deeper renovations across the EU. Measures such as EPC, BRP or
MEPS should be linked to public financial incentives. The intensity of funding should be
linked to the depth of the renovation (77%) and the level of energy performance, based on the
EPC class achieved.
Public financial incentives should have a long-term vision and take into account
vulnerable/low-income households. Other suggestions include support for energy service
companies, energy performance contracting, earmarking part of the EU budget for building
renovation. The most important policy measures addressing energy poverty that should be
further reinforced are targeted financial support for lower and middle-income households and
MEPS coupled with financing.
2.3 Stakeholder Workshops (31 March - 3 June 2021)
The workshops were designed to focus on specific topics relevant for the revision of the
EPBD. The format facilitated an in-depth discussion and allowed for more direct stakeholder
feedback on specific policy issues. Stakeholders which registered to the workshops received
questions to be addressed during the workshops’ sessions ahead of the workshop. Each
workshop was centered around a dedicated topic and structured around 2-4 interactive
sessions, which included also flash polls to gather participants’ views .
Five workshops were organised, with an average of 242 registered participants.
Table B.1: Stakeholders’ workshops
N° Topic Number of
participants
Date
1 Setting a vision for buildings and a decarbonised building
stock
258 31 March 2021
2 Minimum energy performance standards for existing
buildings
301 15 April 2021
3 Strengthening buildings information tools (with a focus on
EPC)
241 29 April 2021
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4 Fostering the green and digital transition 220 19 May 2021
5 Accessible and affordable financing – energy poverty 190 3 June 2021
 Workshop 1: setting a vision for buildings and a decarbonised building stock
The workshop included 2 interactive sessions concerning (1) new metrics for long-term
decarbonisation and (2) prioritised EPBD provisions to be revised.
The discussions were centred on the need for building decarbonisation, supported by clear
metrics. In relation to carbon metrics and indicators the benefits of transparency, clarity and
accountability were highlighted. Life-cycle based GHG metric received support by several
participants. Several stakeholders stressed that MEPS for existing buildings are key, but that
they should be open enough to allow for differences between MSs. In addition, certain
stakeholders emphasised that the focus from now on until 2030 should be on implementing
the last revision of the EPBD (from 2018).
 Workshop 2: minimum energy performance standards for existing buildings
The workshop included 3 interactive sessions concerning (1) key elements to guarantee a
successful roll-out of MEPS, (2) setting an appropriate intensity level and (3) first steps
setting up a MEPS Scheme.
Overall, most of the stakeholders support the introduction of MEPS with a clear timeline,
goals and a long-term trajectory towards climate neutrality by 2050. However, several
stakeholders pointed out that the reliability of EPCs needs to be strengthened. Stakeholders
also pointed out that phasing is key: MEPSs should be defined as early as possible, leave time
to scale up (at MS level), and establish clear intermediate objectives. There should also be
some flexibility provided.
MEPSs should also be kept simple. They should not be overloaded with too many specific
requirements, too hard and costly to enforce, or simply too difficult to be understood.
Compliance should be based on transaction-related trigger points (sell and rent) and natural
trigger points (e.g. planned renovation, end-of-life of fossil-based heating system).
 Workshop 3: strengthening buildings information tools (with a focus on EPCs)
The workshop included 3 interactive sessions on (1) strengthening the information role of
EPCs, (2) strengthening the quality of EPCs and (3) digitalisation and improving coverage of
EPCs.
In general, stakeholders expressed the view that the purpose and final use of EPCs need to be
clearly defined. Stakeholders also raised the importance of focusing on improving the
reliability of EPCs.
Many stakeholders raised the importance of EU level harmonisation of EPCs. Some
stakeholders also promoted the idea of having EPCs which are tailored for specific target
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groups. Furthermore, according to several stakeholders, EPCs should provide personal
recommendations, made by qualified experts. Overall stakeholders recommended digitalising
EPCs, which would reduce their costs.
 Workshop 4: fostering the green and digital transition
The workshop included 4 interactive sessions concerning (1) smart ready buildings, enablers
to improve energy performance & decarbonisation and empower citizens, (2) Building
Renovation Passport & digitalisation, (3) e-mobility & energy flexibility fostered by building
codes and (4) data gathering & management.
Some participants pointed out the need to improve provisions on inspection of heating
systems and air-conditioning systems, in particular to tackle the issue of implementation and
compliance. Other participants advocated for the gradual introduction of compulsory and
harmonised SRIs. It was also mentioned that synergies should be explored between SRIs,
EPCs and other certifications, and that smart systems should also improve the whole
decarbonisation of the building, not only energy performance. According to several
stakeholders, BRPs should be digital and have a connection to databases. Financial
institutions should be involved in BRPs and get the data they need. BRPs should also include
other aspects, such as indoor environmental quality.
Participants highlighted that the EPBD is particularly key for private/semi-private charging,
but some stakeholders expressed the fear that focusing on transport could lead to losing focus
on renovation. As regards e-mobility and charging, it was stressed that to accelerate the pace,
(pre-)cabling (i.e. ducting) is key. There should be minimum requirements on functions and
power thresholds.
 Workshop 5: accessible and affordable financing – energy poverty
The workshop included 3 interactive sessions concerning (1) strengthening the EPBD, (2)
enhancing financing for decarbonisation of the EU building stock, and (3) accessibility, social
inclusion & alleviation of energy poverty.
According to several participants, loans, tax incentives, etc. can complement (i.e. be blended
with), but not replace subsidies.
Stakeholders stressed that tools need to be adapted to income levels, as decarbonisation is
easier for higher income groups. It is necessary to ensure that the right framework is created
so that low income groups, which may not access a loan, are included (i.e. reliance mainly or
exclusively on grants for lower income groups). The importance of one-stop-shops (OSS),
providing a trusted support to renovations for consumers, investors and retail banks, was also
highlighted. ETS revenues were proposed as possible source of funding to alleviate energy
poverty. It was also pointed out that energy poverty should be addressed rather as general
poverty, and that renovations may also entail increases in rents.
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Annex C: Who is affected and how?
SUMMARY OF COSTS AND BENEFITS
I. Overview of Benefits6
(total for all provisions) – Preferred Option HIGH-I scenario
Description Amount Comments
Direct benefits
Reduced GHG emissions from heating,
cooling and domestic hot water in
buildings
98 Mt CO2 eq./yr or 23% by
2030
106.5 Mt CO2 eq./yr or
53.5% by 2050
Reductions/savings in the buildings
sector compared to baseline scenario.
Reduced energy consumption from
heating, cooling and domestic hot water
in buildings
307 TWh/yr or 11.7% by
2030
686 TWh/yr or 34% by 2050
Reductions/savings in the buildings
sector compared to baseline scenario
Reduced energy costs for consumers on
heating, cooling and domestic hot water
EUR 20.3 billion per year or
8% by 2030
EUR 61.7 billion per year or
27.6% by 2050
Reductions/savings compared to
baseline scenario. Buildings owners or
tenants in the residential (households)
and non-residential sector will be
affected7
.
Indirect benefits
Additional jobs created in EU 1.833 mn additional jobs or
1.2% low and medium skilled
and 0.6% high skilled
additional jobs by 2030
1.763 million new jobs or
1.2% low and medium skilled
jobs and 0.7% high skilled
jobs by 20508
Compared to the baseline scenario.
Most of additional new jobs created
will be in construction, trade and
services and industry (machinery,
equipment, others) sectors.
All these sectors are highly SMEs
intensive since more than 90% of the
EU companies from buildings
construction sector, manufacturing of
machinery and equipment and
manufacturing of construction materials
and glass are SMEs9
.
Loss of jobs will be in gas & heat
industry (as anticipated, due to shift to
clean energy).
6
The benefits are “maximum effects”. The degree they will be achieved depends to a large extent on specific
implementing schemes at national levels.
7
More precisely, this scenario will reduce the energy costs by 11% and 34% for residential consumers by 2030
and 2050 respectively. For non-residential consumers, the energy costs will increase by 4.5% but will decrease
by 8% in 2030 and 2050 respectively.
8
On top of the impact at the EU level, the scenario may generate on the worldwide supply chains some 805,000
and 890,000 additional jobs by 2030 and 2050 respectively. Out of these jobs about 22% is estimated to be
created in the rest of European countries.
9
According to Eurostat structural business statistics 2018 [sbs_sc_con_r2].
153
Additional value added created EUR 104 billion per year or
0.9% additional value-added
created by 203010
Compared to the baseline scenario.
Most of additional value-added created
will be in construction, trade and
services and industry (machinery,
equipment, others) sectors. Loss of
value-added will be in gas & heat
industry (as anticipated, due to shift to
clean energy).
Reduced air pollution 1.2% less SOx by 2030
5.9%, 1% and 0.8 % less
SOx, NOx and PM
respectively by 2050
Compared to the baseline scenario.
Impact on households expenditure Estimate of about 11.5% and
35% reduction of household
expenditure on electricity and
heat by 2030 and 2050
respectively.
Compared to the 2020 baseline and for
expenditure estimated in PPS (purchase
power parity).
Impact on energy poverty The two main indicators for
energy poverty arrears on
utility bills, inability to keep
homes adequately warm are
estimated to go down by
1.2% and 3.6% in 2030 and
2050 respectively.
Compared to the 2020 baseline.
II. Overview of costs – HIGH-I11
Consumers & Businesses Administrations
One-off Recurrent One-off Recurrent
MEPS1
Direct costs
Administrative
costs: 288 M€/y
(preliminary
compliance
checks)
Enforcement costs:
93.2 M€ (national
IAs, update IT and
forms, information
campaigns)
Enforcement costs:
0.7 M€/y
(compliance report
to EC)
Indirect
costs
1M€ (adapt valuation
standards to account
for energy efficiency)
5M€/y
(monitoring and
update of
valuation
standards)
MEPS2
Direct costs
Administrative
costs: 696 M€/y
(preliminary
compliance
checks)
Enforcement costs:
18.9 M€ (national
IAs, dev. National
scheme, reporting
compliance to EC)
10
On top of the impact at the EU level, the scenario may generate on the worldwide supply chains about EUR bn
11.6 and EUR bn 13.5 by 2030 and 2050 respectively. Out of these, about 24%-25% is estimated to be generated
in the rest of European countries.
11
Administrative and enforcement costs are illustrated in more detail in Annex L.
154
Indirect
costs
92.2 M€2020/y
(additional average
investment costs for
renovation over period
2025-2030)
1M€ (adapt valuation
standards to account
for energy efficiency)
5M€/y
(monitoring and
update of
valuation
standards)
BRP3
Direct costs
Administrative
costs: 70 M€/y if
subsidised and
278 M€/y without
subsidy
Enforcement costs:
29.5-29.7 M€
(national & EC
implementation) out
of which 0.3-0.5 M€
for the Commission
(develop common EU
scheme and template)
Indirect
costs
N/A N/A N/A N/A
EPCSI3
Direct costs
Administrative
costs: 1120 M€/y
Enforcement costs:
9.5 M€ (training &
qualification,
implementation)
Indirect
costs
N/A N/A N/A N/A
EPCQ3
Direct costs
Not considered to
have significant
costs additional to
EPCSI
Enforcement costs:
5.4-8.1 M€ (increase
quality control –
scheme)
Enforcement costs:
9-90 M€ (increase
quality control –
additional checks)
Indirect
costs
N/A N/A N/A N/A
EPCD3
Direct costs
Administrative
costs: -0.3 M€/y
(reduced person-
hours work)
Enforcement costs:
4.2 – 9.6 M€
(running EPC
database, inform
public)
Indirect
costs
-0.3 M€ indirect
savings (savings due to
increased efficiency
and access to data)
SRI2
Direct costs
Administrative
costs: -0.31 – 0.82
M€/y (additional
costs to produce
them)
Enforcement costs:
0.18 – 0.46 M€
Indirect
costs
N/A N/A N/A N/A
DEEP2
Direct costs
Not considered to have
significant additional
costs.
Not considered to
have significant
additional costs.
Not considered to
have significant
additional costs.
Not considered to
have significant
additional costs.
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Indirect
costs
N/A N/A N/A N/A
LTRS3
Direct costs
Not considered to have
significant additional
costs.
Not considered to
have significant
additional costs.
Enforcement costs:
4.1 M€ (additional
LTRS reports)
0.5 M€ for the EC
Indirect
costs
N/A N/A N/A N/A
ZEB3
Direct costs
Not considered to
have significant
additional costs.
Enforcement costs: 2
– 8.1 M€ (adapting
national legislation,
establish LEVEL(S)
framework)
Enforcement costs:
2.5 - 5 M€/y
(implementing
LEVEL(S) for new
public buildings)
Indirect
costs
2.4 M€2020/y
(additional investment
costs over period
2025-2030)
EM3
Direct costs
Not considered to have
significant additional
costs.
Not considered to
have significant
additional costs.
Enforcement costs:
2.7 M€ (Legal
feasibility study &
implementation)
Indirect
costs
EUR 11.1 billion until
2050 for ducting
infrastructure
(CAPEX, cumulated
between 2020 and
2050)
EUR 35.3 billion for
recharging points
(CAPEX, cumulated
between 2020 and
2050)12
12
Detailed explanations of the costs is provided in Annex I on e-mobility.
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Annex D: Analytical methods
1. Overview of methodology and models used
The figure below illustrates the articulation between the different models used to assess the
quantitative impacts of the policy options on key environmental, economic and social
parameters.
Figure D.1: Overview of models
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The assessment with the BEAM² model is clustered in five zones, covering all member states
of the EU-27. Impacts of policy options and packages are calculated for each of these zones
individually, since some key parameters (like climate, building stock etc.) differ significantly
and therefore will be treated separately. The analysis with BEAM² is done in yearly time-
steps until 2050.
Figure D.2: Reference zones for the EU
2. Built-Environment-Analysis-Model BEAM²
This section gives an overview on the methodology used for the ex-ante
assessment of policy option, which is the BEAM² model.
Terms and Definitions
As the Built Environment Analysis Model BEAM² model is set up in the framework of the
European Energy Performance of Buildings Directive (EPBD), the general terms and
definitions are aligned with it. The relevant document in that context is the umbrella
document for all European standards within the EPBD, which is the Technical Report (TR):
Explanation of the general relationship between various CEN standards and the EPBD, see
158
(CEN/TR 15615).13
They are also valid for the energy demand calculations for space heating
and cooling from (DIN EN ISO 13790)14
, which are also referred to.
Scope
Figure D.3: Schematic Illustration of the scope for the Built-Environment-Analysis-Model15
(1) represents the energy needed to fulfil the users requirements for heating, cooling, lighting etc, according to levels that are
specified for the purposes of the calculation.
(2) represents the "natural" energy gains - passive solar heating, passive cooling, natural ventilation, daylighting ˝U together with
internal gains (occupants, lighting, electrical equipment, etc)
(3) represents the building’s energy needs, obtained from (1) and (2) along with the characteristics of the building itself.
(4) represents the delivered energy, recorded separately for each energy carrier and inclusive of auxiliary energy, used by space
heating, cooling, ventilation, domestic hot water and lighting systems, taking into account renewable energy sources and co-
generation. This may be expressed in energy units or in units of the energy ware (kg, m3, kWh, etc).
(5) represents renewable energy produced on the building premises.
(6) represents generated energy, produced on the premises and exported to the market; this can include part of (5).
(7) represents the primary energy usage or the CO2 emissions associated with the building.
The general references for the energy-related calculations are (CEN/TR 15615) and a report
by Boermans et al.16
The calculation methodology follows the framework set out in the
relevant Annexes to the EPBD. For useful heating and cooling demand calculations the
13
CEN/TR 15615. Technical Report - Explanation of the general relationship between various European
standards and the Energy Performance of Buildings Directive (EPBD) - Umbrella Document, CEN April 2008
(English).
14
DIN EN ISO 13790. Energy performance of buildings - Calculation of energy use for space heating and
cooling (ISO 13790:2008), Beuth Verlag Berlin 1999 (German version EN ISO 13790:2008).
15
BEAM2 (CEN/TR 15615)
16
Boermans, Thomas, Kjell Bettgenhäuser, Andreas Hermelink, and Sven Schimschar. May 2011. Cost optimal
building performance requirements - Calculation methodology for reporting on national energy performance
requirements on the basis of cost optimality within the framework of the EPBD, Final Report, European Council
for an Energy Efficient Economy eceee, Stockholm (English).
159
methodology in EN ISO 13790 (DIN EN ISO 13790) allows a simplified monthly calculation
based on building characteristics. It is not dependent on heating and cooling equipment
(except heat recovery) and results in the heating energy that is required to maintain the
temperature level of the building. The calculations are based on specified boundary conditions
of indoor climate and external climate, which are also given on monthly basis. Based on that
energy demand, the delivered energy (final energy) for heating, cooling, hot water, ventilation
and lighting if applicable are calculated per fuel type. In a last step the overall energy
performance in terms of primary energy and CO2 emissions is calculated. An overview of the
calculation process is given in the following Figure which is based on CEN/TR 15615.
Energy flows are to be followed from the left to the right. The three steps of the energy
performance calculation are always done for reference buildings for a sector, age group,
renovation level and HVAC systems. Subsequently the energy costs per year and the
investment costs in case of a new buildings or renovation are calculated.
Structure and methodology
The basic model setup and calculation process is shown in the figure below. It is based on the
energy demand calculations for space heating and cooling from the ISO Standard 13790:2008
(DIN EN ISO 13790). As all calculations are executed for a highly disaggregated building
stock with all its characteristics, the following description of the methodology and calculation
process applies for all sub-segments of the building sector within the model.
Basic input to the model are data on the building stock such as building types, floor area, age
groups, renovation levels, HVAC systems in stock and population. Furthermore, the climate
data such as temperature and irradiation is required. Based on this data a status-quo inventory
of the building stock can be constructed.
For the scenario analysis as central part of the model, additional input data with respect to
population forecast, GDP development, new building, demolition and renovation activities,
thermal insulation standards, heating, ventilation and air conditioning equipment, renewable
energy systems and energy efficiency measures is required. Furthermore, energy costs, cost
for energy efficiency measures at the building envelope and costs for heating, cooling and
ventilation systems and renewable energy systems together with increase rates and discount
rates are processed. With respect to the overall energy performance, the greenhouse gas
emissions factors and primary energy factors are required per fuel type and GHG emissions
for energy efficiency and HVAC systems.
The calculation process over the scenario time frame is organised as follows. Based on the
initial floor area distribution along the reference buildings (RB), age groups (AG), renovation
levels (RL), heating systems (HS)17
, hot water systems (DHW)18
and cooling systems (CS) a
17
Heating systems (HS) also include ventilation systems (VS) and solar thermal systems (STS) for HS support if
applicable.
18
Hot water systems (DHW) also include solar thermal systems (STS) for hot water if applicable.
160
forecast for the floor area is done taking into account new building, demolition and renovation
programs for all or parts of these combinations. All activities in year i have an effect starting
in year i+1.
The useful energy demand for heating and cooling is derived from an integrated calculation
algorithm based on (DIN EN ISO 13790). The energy demands for hot water, auxiliary
energy and electrical appliances if applicable are also derived. The final energy is calculated
based on the parameters of the HVAC systems.19
The aggregated final energy for heating can
be compared to top-down data. In this case a calibration factor is calculated, which can be
applied to the final energy for heating.
The delivered energy together with the primary energy and GHG emission factors are
combined to the overall primary energy and GHG emissions. For the economic assessment
heating and cooling loads per single building type are derived, which are relevant to the
systems sizes and investment costs. The economic evaluation takes beside the investment
costs also the energy costs into consideration. In addition to the above described output, the
embodied energy and primary energy for all energy-related components (efficiency and
HVAC systems) are quantified in the model based on the total volumes of insulation, area of
windows and number and power of HVAC equipment.
19
The final energy is equal to the delivered energy plus energy produced in or on the building by solar or wind
systems.
161
Figure D.4: General structure of the Built-Environment-Analysis-Model BEAM2
Scenario Results
The main outputs of the model are the floor area developments for reference buildings
(RB), age groups (AG), renovation levels (RL) heating (HS), hot water (DHW), and
cooling systems (CS) in the first place. The next step is the calculation of the useful
energy demands for heating, cooling and hot water. From this the final energy/ delivered
energy for heating, cooling, hot water, ventilation and auxiliary energy is derived. For the
overall energy performance, the greenhouse gas emissions and primary energy is been
calculated. For the economic evaluation energy costs per year are provided as well as
investment costs in new buildings and renovation. In order to compare yearly costs, the
investments are broken down along the lifetime of components to yearly costs by use of
annuities. All results are given in specific units (e.g. per m2
) and for the overall building
stock in the respective scenario.
Input Data
Input data to the model describes the current building stock as status-quo. This is e.g. the
floor area distribution and the definition and specifications of reference buildings (RB),
age groups (AG), renovation levels (RL) and HVAC systems such as heating (HS), hot
water (DHW), solar thermal systems (STS), ventilation systems (VS) and cooling
systems (CS).
For the analyses it is necessary to investigate the typical construction characteristics of
the considered building types, e.g. size, geometries, insulation level by regulation, typical
HVAC equipment (space heating system etc.), kind and size of windows, orientation etc.
A good source for this task is the TABULA webtool20
which provides detailed reference
building data for up to 20 European countries, differentiated between residential building
type and age class. The national cost-optimality reports from EU Member States also
provide useful information for different residential and non-residential buildings21
.
More general examples for European reference buildings are provided in the FP7 project
iNSPiRe22
, especially in its report D2.1a. Specifically for non-residential buildings, a
number of reference buildings can also be found in Schimschar et al. (2011) “Panorama
of the European non-residential construction sector”23
.
20
http://episcope.eu/building-typology/webtool/
21
https://ec.europa.eu/energy/en/topics/energy-efficiency/buildings
22
http://inspirefp7.eu/about-inspire/
23
http://www.leonardo-energy.org/sites/leonardo-energy/files/documents-and-links/European%20non-
residential%20building%20stock%20-%20Final%20Report_v7.pdf
163
For the definition of representative HVAC and BACS configurations in the reference
buildings, relevant information can be found in EPISCOPE’s scientific reports24
,
PRODCOM25
, data from ECODESIGN LOT 33 “Preparatory study on Smart
Appliances”26
, the ZEBRA data tool27
, the ENTRANZE data tool28
, EUBAC29
and the
former BPIE’s data hub for the energy performance of buildings which migrated and
improved in the form of current EU Building stock observatory30
.
The following disaggregation of the building stock for the residential and non-residential
building sector per age class and subcategory is applied:
 Residential buildings
o Single family houses (SFH)
o Multi-family houses (MFH)
 Small multi-family houses
 Large multi-family houses
 Non-residential buildings
o Office Buildings (OFB)
o Trade and Retail Buildings (TRB)
o Education Building (EDB)
o Touristic Buildings (TOB)
o Health Buildings (HEB)
 Other Non-residential Buildings (ONB)Age groups:
o Pre 1945
o 1945-1970
o 1971-1990
o 1991-2013
o From 201431
.
As basis for all scenarios, the baseline defines the development of the building stock
structure until 2030 and until 2050. For characterising the current and future building
stock the following new construction and renovation target levels have been used to
identify different level of efficiency of the building shell:
24
http://episcope.eu/building-typology/country/
25
http://ec.europa.eu/eurostat/web/prodcom
26
http://www.eco-smartappliances.eu/Pages/welcome.aspx
27
http://www.zebra-monitoring.enerdata.eu/
28
http://www.entranze.eu/tools/interactive-data-tool
29
http://www.eubac.org
30
https://ec.europa.eu/energy/topics/energy-efficiency/energy-efficient-buildings/eu-bso_en
31
A more detailed description of the BEAM² model is available in Bettgenhäuser, K. (2013). Integrated
Assessment Modelling for Building Stocks - A Technical, Economical and Ecological Analysis.
Dissertation TU Darmstadt D17, Ingenieurwissenschaftlicher Verlag 2013.
164
 Renovation levels
 reno-average
 reno-zeb partial from not renovated
 reno-zeb partial from already renovated
 reno-zeb restricted
 reno-zeb
 New construction levels
 new-nzeb standard (current NZEB)
 new-zeb
In addition, two status quo levels, characterising buildings of the current stock (‘not
renovated’ and ‘already renovated’) determine the starting level in terms of energy need
for the scenario calculations.
165
32
Western Zone: accounts for appr. 50% of the EU residential floor area; SFH: accounts for appr. 70% of
residential floor area in the Western Zone; 1945-1990: accounts for appr. 50% of SFH floor area in the
Western Zone.
33
Institut für Wohnen und Umwelt (IWU) 2015.
34
Investments include additional costs for the second retrofit step “retrofit zeb” (wall and window retrofit
only) after the first step with the “retrofit zeb partial from not renovated” (upper and cellar ceiling only).
35
Averaged energy price for gas from 2020 to 2050 is about 0.10 Euro/kWh.
36
EnerPHIT standard according to Passive House Institute (PHI).
Example of a renovation of a single family building (Western Zone)
This box provides an example building stock calculation of renovations on the basis of a single building. For
this purpose this excursus shows exemplary calculations for a representative single-family house from
1945-1990 in the Western Zone32
.
Example building in Western Zone, source: TABULA33
The chosen “not renovated” building with a floor area of 126 m² belongs to the category of the worst-
performing building of energy class F and will be renovated either to the “reno zeb partial from not
renovated” or “reno zeb” standard. The “reno zeb partial from not renovated” represents the first step of a
potential building renovation passports (BRP) lifting the building from energy class F to D. And the “reno
zeb” standard shall represent the final future renovation status of the BRP.
The following table shows the calculated impacts for space heating on energy, emissions and costs without
replacing the heating system.
Parameter Not renovated
Reno zeb
partial from not
renovated
Reno zeb Unit
Energy need 175 145 18 kWh/m²a
Final energy 241 200 25 kWh/m²a
Primary energy 265 220 27 kWh/m²a
GHG emissions 49 40 5 kgCO2/m²a
Investments34 - 84 212 Euro/m² floor area
Energy costs35 24 20 2.5 Euro/m² floor area
The table shows moderate reductions for the first step of the BRP when renovating the upper and cellar
ceiling only (appr. -17%). Significant savings of about -90% can be achieved in a second step when the
walls and windows are brought to passive house standard36
as well.
166
3. Exiobase Model for Environmental Impacts -
multiregional, environmentally extended Input-Output model (Exiobase
Environmentally Extended Input-Output (EEIO) tables can be used to quantify
environmental impacts and compare them across sectors, as they allow for a sectoral
allocation of different environmental impacts while taking into account the specificity of
individual value chains. In this project, the multiregional input-output (MRIO) database
EXIOBASE has been used used (Tukker et al. 2013; Wood et al. 2015; Stadler et al.
2018).
Figure D.5: Overview of Exiobase model37
Input-output databases map the supply relationships between economic sectors and from
them to final demand (consumption, investment, etc.). Multiregional versions relate the
economic and final demand sectors of individual countries or world regions to each other
and thus allow the consideration of complex international supply chains. The current
version (v3) of EXIOBASE38
divides the global economy into 45 countries and
distinguishes between 163 industries and 200 product groups.
With the help of detailed environmental extensions, resource consumption and
environmental impacts of individual economic sectors (manufacturers of the 200 different
37
Source: Baartmans, Ruud (o. J.), EXIOBASE Multi-Regional Supply and Use Tables.
https://exiobase.eu/index.php/2-uncategorised/29-exiobase2-mr-sut
38
https://zenodo.org/record/4277368
167
product groups) can be determined. Intermediate inputs are included, even if they are
produced abroad (for the structure of EXIOBASE, see Figure below). For example, in the
building sector, resource consumption in the case of a renovation occurs not only by the
use of bitumen and other material, but also, for example, through the use of the energy
and infrastructure. These inputs from other sectors of the economy to the building sector
are necessary for it to provide its services. According to this logic, the resulting
environmental impacts are attributed to the demanding sector.
Figure D.6: Example showing the outputs of Exiobase39
39
Extracted from Exiobase.
168
4. EmIO-Europe Employment I/O Model (EmIO-Model)
EmIO is a static input-output model for the EU based Eurostat Input-Output Table for
domestic production at basic prices as well as Eurostat employment data. It includes 59
NACE sectors for the EU. The model analyses direct and indirect production, value
added and employment effects of energy and climate policy measures.
EmIO Europe provides a transparent and easy-to-use tool for understanding linkages
between different parts of the economy. It has the advantage of i) providing direct and
indirect effects; ii) giving a relatively high resolution of sectoral detail (for the EU:
NACE Rev1.1 59 2-digit sectors, higher resolution in NACE Rev.2); iii) input-output and
employment data being readily available; iv) medium degree of complexity; v) simple
relationships (Leontief production structure for production sectors).
The model distinguishes three effects: a) direct production and employment effects
triggered by investments or production activities in certain sectors, b) indirect production
and employment effects induced in upstream production stages by these increased
investment or production activities, c) production and employment effects due to changes
in demand (quantity and structure) resulting from the need to counter-finance
investments or to create higher revenues that are passed on to stakeholders.
Figure D.7: Economic mechanisms exemplified for employment effects40
In order to make use of the model, information on both investment and operation and
maintenance (O&M) activities induced by the policy options are required and needs to be
assigned to sectors within the Input-Output model. This includes information on
increased investment and O&M activity stimulated by the policy option in some areas
(blue box) as well as information on decreased activity due to the policy option in other
40
Guidehouse (2021).
Climate policies
Generate activities
(insulation, energy
efficiency…)
Create jobs
Reduce GHG emitting
activities
Destroy jobs
Yield a net cost or
benefit for economic
agents
Raise or reduce
demand for other
activities
Positive or negative
induced employment
effect
Net employment effect,
positive or negative
169
sectors (red box). In case information is provided on a more detailed level, the data needs
to be aggregated in accordance with the sectoral aggregation level of the input-output
statistics. In the process of aggregation, some activities may need to be assigned to one
and the same sector (e.g. machinery and equipment or services relating to maintenance
and repairs) and information on positive and negative stimulation and their individual
effects on employment may no longer be disentangled. The overall net effect is then
assessed on that basis.
It is important to account for the fact that economic agents (households, businesses,
governments) will necessarily pay for the potential extra costs induced by the policy
option and will therefore reduce other expenses, thus potentially inducing a negative
effect on output and employment. Taking into account this "income effect" requires some
additional assumptions, notably relating to which economic actors will bear the extra
costs and how they will change their saving and consumption in response to these extra
costs. EmIO Europe can distinguish whether the cost of the policy or measure is borne by
consumers, by industry or by the government.
5. Definition of the baseline and coherence with the “Fit for 55” baseline
A baseline has been defined for the assessment of the impacts of the policy options for
the EPBD revision. The policy options have been compared against this baseline to
determine their impacts across key indicators.
The baseline considers the current regulatory framework. To ensure alignment with the
baseline and point of departure of analysis of the other “Fit for 55” initiatives, key
assumptions on the energy systems and on policy from the Reference scenarios 202041
have been adopted also in BEAM and EmIO-Model. The adoption of the same
assumptions ensures that while for the revision of the EPBD the analysis is focused on
impacts on the building stock only, the key parameters related to the business as usual
development of the energy system in the 2020-2050 timeframe are aligned with the other
“Fit for 55” initiatives.
In particular, to ensure consistency and comparability, the following assumptions have
been aligned to the Reference scenario 2020:
- Energy prices
- Population data
- Gross Domestic Product
- Carbon content of electricity supply and district heating (both for baseline and policy
scenario aligned with “Fit for 55”)
- Heating and cooling degree days data
41
EU Reference Scenario 2020 | Energy (europa.eu)
170
Policy intensity has also been assumed in accordance to the Reference scenarios 2020 for
what concerns the achievement of the 2030 energy efficiency and renewable goals, and
the reduction of greenhouse gas emissions by 2030 and 2050.
6. Impact Categories
An overview of the impact categories used for the assessment is provided in Figure D.8.
Figure D.8: Overview of impact categories, methodologies, and indicators
Impacts on the building stock performance
Impacts of the building stock performance include all physical indicators and parameters
of buildings, such as building types, age groups, renovation levels, efficiency of
components (walls, windows, roof, ceilings etc.), technical building systems (e.g. heating
and hot water systems, cooling systems, ventilation systems), smart readiness of
buildings etc. physical parameters of the building stock until 2050 will be determined on
a yearly basis. Renovation rates and depth regarding energy efficiency and renewable
energy measures are fully reflected by the model.
Renovation rates
171
Currently there is no univocal way to define renovation rates but several main approaches
to represent the transformation of the building stock and its improvement in energy
performance exist, such as:
a) Floor area approach, i.e. the ratio between the floor area renovated in a given year
or over a period and the total floor area of the building stock;
b) Energy savings approach (either in primary or final energy), i.e. the ratio between
the energy savings in a given year or over a period and the total energy
consumption;
c) Emission savings approach, i.e. the ratio between the emission savings in a given
year or over a period and the total emissions of the building stock.
Furthermore, there are also two main approaches in calculating the rate:
 As a ratio between floor area, energy or emission savings in a given year reported
to the corresponding total floor area, energy or emission savings of the building
stock to be renovated in the base year (fix denominator over time);
 As a ratio between floor area, energy or emission savings in a given year reported
to the total floor area, energy or emission savings of the building stock in the
same given year, taking also into account the new construction and demolition
(variable denominator over time).
It has become more common to present the renovation rates as a ratio of the renovated
floor area. This approach appears to be straightforward and easy to understand, but has
some drawbacks which need further consideration.
Firstly, and as shown in a renovation study42
, floor area based renovation rates are not
necessarily linked to the energy savings actually achieved. As a consequence, floor area
based renovation rates don’t provide a clear image of the energy and emission savings
achieved without additional information on renovation depth.
Secondly, the consideration of staged renovations introduces the possibility of double
counting when applying a floor area based approach. For example, a building renovation
passport could define five steps towards achieving a performance corresponding to
NZEB or ZEB level. In this case, each renovation step would be counted separately and
the floor area of this building would count as renovated five times within the time
interval of its renovation plan. To overcome this issue, a ‘normal’ renovation depth can
be defined, that is used to normalise all other renovations having a renovation depth
42
Esser et al. 2019, Comprehensive study of building energy renovation activities and the uptake
of nearly zero-energy buildings in the EU.
172
different from that. This ‘normal’ renovation is also called ‘renovation equivalent’.
Typically a ‘deep’ renovation is taken as ‘normal’.
The (b) energy and (c) emission savings approach to represent renovation rates have the
advantage of showing immediately the impact of renovation measures on energy
consumption and emission and of avoiding double counting in case of stage renovation.
On other hand, they fail to provide an indication on floor area (buildings) affected by the
renovation.
The BEAM modelling would allow for all the above representations of renovation rates,
but for the purpose of this Impact Assessment, renovation rates are calculated on the
basis of the renovated floor area, presented in conjunction with annual energy savings
and GHG emissions reductions.
In this Impact Assessment, the renovation rates are calculated based on annual share of
the renovated floor area, distinguishing different renovation levels used in the model:
 reno-average
 reno-zero-energy emissions (zeb) partial
 reno-zeb partial
 reno-zeb restricted
 reno-zeb
The above renovation levels are associated to the improvements of building envelope
presented in table D.1.
Table D.1: Building envelope efficiency per reference zone and renovation level [W/m²K]
Building
shell
component
EU reference zone
Northern Western
North-
Eastern
South-
Eastern
Southern
reno-average*
Wall 0.24 0.26 0.24 0.27 0.76
Window 1 1.47 1.24 1.14 3.71
Floor 0.31 0.28 0.32 0.3 0.64
Roof 0.15 0.19 0.16 0.25 0.68
reno-zeb partial from not renovated**
Wall Depend on the respective „not renovated” initial level.
Window Depend on the respective „not renovated” initial level.
Floor 0.28 0.36 0.28 0.36 1.2
Roof 0.1 0.12 0.1 0.12 0.4
reno-zeb partial from already renovated
Wall Depend on the respective „already renovated” initial level.
Window Depend on the respective „already renovated” initial level.
173
Floor 0.28 0.36 0.28 0.36 1.2
Roof 0.1 0.12 0.1 0.12 0.4
reno-zeb restricted
Wall 0.24 0.26 0.24 0.27 0.76
Window 0.65 0.85 0.65 0.85 1.25
Floor 0.28 0.36 0.28 0.36 1.2
Roof 0.1 0.12 0.1 0.12 0.4
reno-zeb***
Wall 0.14 0.18 0.14 0.18 0.6
Window 0.65 0.85 0.65 0.85 1.25
Floor 0.28 0.36 0.28 0.36 1.2
Roof 0.1 0.12 0.1 0.12 0.4
* In addition to the indicated U-values, heat bridges of 0.10 W/m²K are considered in the “reno-average”
level
** In addition to the indicated U-values, heat bridges of 0.05 W/m²K are considered in the “rreno-zeb”
levels.
*** Automatic shading devices (except in zone N) are included in the “reno-zeb“ level.
In order to mitigate the impact of staged renovation, renovation rates are presented as
average floor area renovated over a 5 years period and highlighting the average share of
renovated area to “deep renovation” levels (as currently understood) over the same
period of time. Although not perfect, the average renovation has the advantage of
approximating the staged renovations into a full renovation equivalent, being calculated
over a 5 years period as the ratio between the difference of the total renovated floor area
in the two years defining the time interval at numerator and the average total floor area of
the building stock in same two years at denominator.
The average rate of deeply renovated floor area after 2020 indicates the evolution of the
buildings floor area renovated at deep renovation levels in total renovated floor area. It is
calculated in a similar way to the average renovation rate, i.e. over a 5 years period and
as the ratio between the difference of the total deeply renovated floor area in the two
years defining the time interval at numerator and the average total renovated floor area of
the building stock in same two years at denominator. The deeply renovated floor area in
a year is the sum of floor area renovated at renovation zero emission (zeb) partial,
renovation zeb partial, renovation zeb restricted, renovation zeb. Total renovated floor
area is the sum of the renovated floor area at any renovation depth, i.e. including also
renovation average. The average renovation rate and average rate of deeply renovated
floor area in the considered scenarios are presented in the following table.
Table D.2: Average renovation rate and average rate of deeply renovated floor area in the considered
scenarios
2020 2025 2030 2035 2040 2045 2050
Average renovation rate in full renovation equivalent (over 5 yrs) [%total floor area]
174
BSL 1.35% 1.47% 1.65% 1.72% 1.72% 1.72% 1.71%
LOW 1.35% 1.47% 1.85% 2.06% 2.06% 2.05% 2.05%
MODERATE 1.35% 1.47% 1.83% 2.01% 2.01% 2.23% 1.74%
HIGH-I 1.35% 1.47% 2.99% 3.60% 3.34% 2.29% 0.93%
HIGH-II 1.35% 1.47% 2.99% 3.60% 3.34% 2.29% 0.93%
Average share of deeply renovated floor area after 2020 (over 5 yrs) [% of total renovated area]
BSL 1.0% 1.2% 1.4% 1.7% 2.0% 2.2% 2.6%
LOW 1.0% 1.2% 1.4% 1.6% 1.9% 2.2% 2.5%
MODERATE 1.0% 1.2% 1.6% 3.3% 6.0% 9.6% 10.8%
HIGH-I 1.0% 1.2% 3.9% 18.9% 39.6% 53.6% 59.2%
HIGH-II 1.0% 1.2% 3.9% 18.9% 39.6% 53.6% 59.2%
Impacts on energy consumption and GHG emissions
The impacts on energy consumption and consequently GHG emissions are determined by
the development of the physical building stock over time. All energy flows within
buildings and associated GHG emissions in the short, medium, and long term are covered
by the BEAM² model. Final energy and primary energy will be modelled and reported in
kWh, while the GHG emissions are expressed in t of CO2.
Environmental impacts
Environmental impacts induced by policy options or policy packages go beyond
greenhouse gas emissions and might include the use of materials, land, water but also
impacts on air pollutants and other categories. It is important to note that these impacts
not only occur through changes in production or consumptions patterns within the EU
but also in other countries that produce products or materials imported into the EU.
To assess such global environmental impacts, the multiregional Exiobase input-output
model has been used. The model is built upon the multiregional environmentally
extended Exiobase database 3 (https://exiobase.eu/) and provides information on a wide
set of environmental indicators in about 45 countries and more than 150 sectors. The
approach is particularly suitable for measuring environmental impacts in the context of
international value chains, as they depict the interrelations of the global economy in
detail and thus allow considering footprints of domestic production and environmental
impacts occurring abroad. It thus provides a consistent framework for quantitative
indicators that capture direct and indirect emissions.
Model inputs to Exiobase input-output model will be provided by the BEAM² model and
the micro-economic analysis. They include:
175
 Investment costs broken down by different types (equipment and installation) and
sectors (e.g. building sector, HVAC-systems, financing costs)
 Changes in EU final energy demand and costs for heating, hot water, cooling,
auxiliary and lighting for the relevant time frame
The model runs in a comparative static way. This means that economic structures are
kept constant over time. The reason for this is that changes in productivity and
production patterns outside the EU are not known and cannot be simulated with
reasonable certainty. Rather than applying a series of uncertain assumptions on
elasticities of substitution and future development for production sectors around the
world, a framework built on known input-output coefficients is applied.
Micro-economic impacts
Micro-economic impacts include effects on investment, energy expenditure, operation
and maintenance costs, compliance and administrative burden, income, information and
knowledge, access to housing and markets and potentially other factors that are relevant
for decision making or operation. The extent and kind of impacts differ by operators or
stakeholders, e.g. manufacturers, installers, retailers, Member State authorities,
consumers. Some impacts directly affect stakeholders while others have indirect effects
through changes in prices, technology, or availability. Data on investment broken down
by different types (equipment and installation) and sectors (buildings sector, HVAC-
systems, financing etc.), on energy expenditure (by technology and application) as well
as operation and maintenance cost will result from the BEAM² model.
Macro-economic impacts
Macro-economic impacts relate to consequences of policy options or policy packages for
economic growth and employment. They can further relate to conditions for investment
and functioning of markets as well as stabilization of markets.
Relevant economic effects of the identified policy options or policy packages can be
foreseen in demand, production output, value added and employment for sectors both
directly and indirectly affected by the policies. Direct effects will be seen in sectors
relating to buildings insulation and heating technologies, e.g. construction sector and its
services and maintenance activities, chemicals sector for providing insulation material,
heating technology sector as well as electrical appliance (heat pumps) and related
services and maintenance activities as well as the financing sector. Indirect effects are
expected in sectors further up the value chain that provide materials, equipment, and
services to the directly affected sectors. Furthermore, policy options/packages can impact
the competitiveness of business by stimulating innovation, increasing market shares, or
bringing down costs of inputs or technologies.
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To assess impacts on demand, production, value added and employment in sectors
immediately affected by the policy option plus sectors further up the value chain, both
macro-economic modelling and a complementary bottom-up indicator-based assessment
have been used.
The EU construction sector is a major part of the EU economies that contributed with
about 9% to the EU’s GDP in 2019 and between 13 to 18 million direct jobs43
.
The COVID-19 crisis heavily impacted the EU economy with a loss in real GDP of about
6 to 7% in 2020, followed by a recovery process and projected increase of about 3.6 to
4.2% in 2021 and stable growth thereafter.44
Consequently, the output in the buildings
construction sector decreased in early 2020 and improved again in the fall of 2020,
leaving a V-shape for the year 2020. This was a consequence of the measures limiting the
economic activity and of households’ tendency to save more and invest less during the
crisis (see below figure). Impacts in the construction sector varied by country. Some
countries, such as Denmark, Sweden, and Finland did not suffer output reductions in the
industry, while other countries (e.g. Spain, France, Slovenia) were suffered more45
.
However, output in buildings constructions sector is projected to increase further with
forecasted growth rates of 4.1% for 2021, 3.4% in 2022, and 2.4% in 202346
.
Figure D.9: Evolution of buildings construction activity and households' investment/save rate 2005 -
202147
43
European Commission, 2021, Construction Industry, available at:
https://ec.europa.eu/growth/sectors/construction_en#:~:text=The%20construction%20industry%20is%20ve
ry,social%2C%20climate%20and%20energy%20challenges And Eurostat (nama_10_a64_e)
44
de Vet, J.M, et al. Impacts of the COVID-19 pandemic on EU industries, Publication for the committee
on Industry, Research and Energy, Policy Department for Economic, Scientific and Quality of Life
Policies, European Parliament, Luxembourg, 2021.
https://www.europarl.europa.eu/RegData/etudes/STUD/2021/662903/IPOL_STU(2021)662903_EN.pdf
45
https://euroconstruct.org/ec/blog/2020_08
46
Idem.
47
Based on Eurostat data from [sts_copr_m] and [nasq_10_ki].
177
Source: Eurostat
Macro-economic modelling
The macro-economic model (EmIO-Europe - Employment Input-Output Model) is an
input-output model for the EU based on the system of national accounts. It is set up to be
used to analyse direct and indirect production, value added and employment effects of
energy and climate policy measures in the EU. EmIO Europe uses a comparative static
approach. It can give a basic assessment of the effect of the additional burden a policy or
measure may impose on the economy as well of the effect of recycling of revenues that
may be raised by a policy or measure. The financial burden to cover needed investments
can be expressed as a reduction in demand distributed across sectors, while revenue
recycling may – even at the same time – stimulate demand across the same or other
sectors. The model can differentiate these demands induced third-stage effects for
households, industry and/or government.
Model inputs to EmIO are provided by the BEAM² model and the micro-economic
analysis. They include:
 Investment costs broken down by different types (equipment and installation)
and sectors (e.g. construction sector, HVAC-systems, financing costs);
 Changes in EU final energy demand and costs for heating, hot water, cooling,
auxiliary and lighting for the relevant time frame.
Model outputs will be compared to a baseline development and include effects on
sectoral value added, production output, GDP, employment and consumer spending and
trade.
As regards to economic effects outside the EU, to account for output, Value Added and
employment effects induced in countries outside the EU, the multiregional Exiobase
input-output model has also been used. The model relates the economic and final demand
sectors of individual countries or world regions to each other and thus allows considering
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complex international supply chains. This helped identifying the economic effects of the
policy options for countries outside the EU.
The breakdown of investment and demand impulses into economic sector aggregates
reflects investment and reduction in energy expenditure derived from BEAM² modelling
supplemented with information from the literature. The economic sector aggregates
involve wood products for window frames and new build, chemical, rubber and plastic
products for insulation material, glass and glass products for windows, metal products for
heating technologies, heating pipes and new build, machinery and equipment for all
purposes, electrical machinery and apparatus for heating technology, construction and
reprocessing of construction materials for onsite construction and trade and services
accompanying all activities, also including architects, real estate agents, retailers,
logistics etc.
Social impacts
Distributional effects and in particular energy poverty is a key concern. In this respect,
several indicators can contribute understanding the impacts of policies, including a
broader context of energy poverty. A standard EU-definition of energy poverty is still
missing. According to the Commission recommendation on energy poverty and in line
with Regulation (EU) 2018/1999 and its recast 2019/944/EU, ‘energy poverty’ means a
situation in which households cannot afford the essential energy services necessary for a
decent standard of living. In line with the Annex48
to the Energy Poverty
Recommendation, the following indicators have been considered the most appropriate
ones: energy expenditure of households in relation to an income measure, affordability
(ability to keep home adequately warm in winter and cool in summer; arrears on utility
bill (heating, electricity, gas), number of disconnections, share of population at risk of
poverty below (60% of median equivalised income).
The assessment is based on the Eurostat EU-Statistics on Income and Living Conditions
(EU-SILC), which is the EU reference source for comparative statistics on income
distribution and social inclusion at the European level. In particular, the following data
have been used:
 Data on income distribution on household level across MS and energy
consumption
 Expenditures on electricity and heating purposes, additional expenditures and
investments due to policy options
 Prices changes in consumer goods on different income groups and social status
48 https://ec.europa.eu/energy/sites/ener/files/recommendation_on_energy_poverty_-_annex.pdf
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EU-SILC data has been used for microsimulation-analysis to assess distributional
impacts. The output of the analysis gives indications about how a price increase, or an
induced change affects different household income groups. In particular, changes in
expenditures (savings on energy and, if possible, also investment expenditure or rent
increase) are shown in relation to disposable income. The representation across different
income groups provides information on whether a policy option has a regressive or
progressive effect, i.e. whether households with lower incomes are relatively more or less
burdened than high-income households. The analysis thus provides indications for
specific design features of the instruments which could become relevant also in the
design of accompanying measures.
7. Assessment of impacts
7.1. Specific modelling choices
Some specific choices have been made in the modelling of MEPS, taking into account
the constraints of the tools used:
- For MEPS1, in the residential sector the trigger of renovation to “class D” level
has been applied primarily to Single Family Houses (SFH) and only marginally to
small (SMFH) and large multi apartments’ ones (LMFH). This simplification has
been applied to take into account that while the available data sources on sales
and rentals reported transactions of single dwellings in SMFH and LMFH, in the
modelling only the full buildings can be renovated. From the point of view of the
assessment of effects. In addition, this conservative estimate would be more
impactful in the countries and regions with higher shares of SMFH or LMFH.
From a policy perspective this consideration relates to the need to factor in that
specific measures at EU or national level need to be put in place to address the
specificities of the renovation of multi-apartment residences.
- For MEPS2 and MEPS3, national MEPS schemes are modelled as standards that
follow a progressive renovation pathway between 2025 and 2050 gradually and
through a combination of staged and single deep renovations progressively
achieve higher shares of buildings renovated to high standards, close to “ZEB
levels”, thus achieving decarbonisation by 2050. The transformation modelled
allows the achievement of a decarbonised building stock in the absence of other
policies. This is a simplification of the diverse choices that national authorities
could make in national MEPS alongside the trajectory and criteria established in
the EPBD, and following which some buildings segments could be targeted with
priority. Coherently with the baseline adopted for all “Fit for 55” proposals, this
mechanism does not take into account the effect of other EU instruments which
would affect building renovation, being regulatory ones (like the provisions in the
EED related to the renovation of public buildings) or carbon pricing. From a
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modelling perspective this is a conservative approach based only on current
policies, and it is likely to overestimate the renovation efforts which would need
to be triggered by MEPS2 and MEPS3. From a policy perspective, this means
that what is modelled is a “maximum effect” and in reality costs and investments
for MEPS could be lower as some renovation efforts would be incentivised by
other policy instruments which could be factored in in the specific design of
national MEPS mechanisms. This reinforces the need for national mechanisms to
introduce and enforce MEPS which should be adaptable and coherent with other
policy drivers.
- For MEPS4 it has been modelled that the heating and cooling installations at end
of life would be replaced by ones in higher Energy Label classes, avoiding the
installations in the lowest class of the respective product category. It has been
observed that within a certain period of application of this standard and following
the rescaling of the Energy Label of the corresponding appliances, this would not
allow anymore to purchase fossil based appliances in certain product categories.
7.2 Considerations regarding the impacts of MEPS at MSs level.
There are effects of the policy options that could vary across EU countries for multiple
reasons, some of which are structural while others can be mitigated with proper policy
design. The following circumstances play a role:
- The existing conditions and energy performance of the building stock;
- Climatic conditions;
- Calculation of energy classes in national EPCs schemes;
- Ownership structure and dynamics of the housing markets.
The first aspect reflects the starting point across countries and would imply that at parity
of other conditions the countries which have already upgraded their building stock would
find EU minimum standards (for instance under MEPS1) less stringent than others, and
vice versa. However, these differentiations are expected to even out while the
implementation of MEPS progress over time since in all countries the end-point would
have to be the decarbonisation of the buildings stock for which MSs have already
identified challenges and trajectories in their national LTRS. MEPS2 and MEPS3 can
therefore be grounded in existing national strategies and offer a specific tool for their
implementation. In addition, the harmonisation of EPC classes will contribute also to
harmonize efforts on the compliance with minimum standards.
The thermal comfort and energy performances of buildings are closely connected, as a
large amount of energy is used to control the indoor temperature of buildings and to
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make them thermally comfortable environments. The thermal comfort needs vary across
countries and within them, depending on the climatic zones. This variability hasn’t been
a barrier to the development and implementation of effective policy tools in the EPBD
and this is not expected to be an obstacle for effective application of minimum energy
performance standards. With appropriate technical design, minimum standards for
existing buildings and standards for new ones can ensure an adequate contribution to the
goals of improving the energy performance and reducing greenhouse gas emissions
across EU countries.
Energy performance certificates classify buildings according to their energy performance
and they will be key tools to identify the buildings to be renovated and ensure
compliance with MEPS, alongside with being essential information and awareness tools
for building owners and tenants and other actors. Although this impact assessment
focuses on the areas for improvement of EPCs, it should not be underestimated that the
current system is of great value, as it sets a uniform EU legislation requiring that EPCs
are available in all MS. Even if there are some differences in implementation in different
MS it ensures that an energy performance assessment method with a common ground is
being used in all MS, which is not the case for other assessment methods (i.e commercial
rating systems) which have different coverage in different countries. The similarity
between EPCs and the labelling of household appliances make it easy for citizens to
access the information. The requirement that EPCs are present in advertisements for
property transactions is also of big use for informing citizens. Furthermore, there are
links between the EPCs and taxonomy and EPCs are to a large extent used in financial
policies in MS. All this taken together means that EPCs is a powerful policy that can be
made even stronger by improving coverage, quality, content and digital storage.
EPC classes across Europe currently do not correspond to comparable levels of energy
performance, as national schemes have developed in parallel to cost-optimal calculations,
largely reflecting national specificities and choices (see Annex G on EPCs).
This results in different levels of energy savings which are necessary to upgrade a
building from the lowest class to higher classes. In particular, based on the current class
distribution, on average the following reductions in energy performance are to be
achieved:
- - 60% to upgrade buildings in the lowest class to Class C
- - 40% to upgrade buildings in the lowest class to Class D
- - 20% to upgrade buildings in the lowest class to Class E
Results also show significant variability across countries, with a range of savings to
upgrade a building in the lowest class to class D in the vast majority of countries between
35% and 50%. This difference is due both to the specificities of the national class system,
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but also to climatic conditions and overall average performance of the building stock in
the country, and the higher the savings to be achieved to ensure compliance with the
standard set, the greater will normally be the costs of the renovation, at parity of other
conditions.
This variability can be mitigated by ensuring comparable EPC classes across Europe and
in particular with a system of classes in which the improvements needed to move
upwards in classes is similar. This is one of the objectives pursued with options EPCQ1-
EPCQ2-EPCQ3 which will strengthen quality alongside harmonisation of classes. The
revision of EPCs will therefore contribute to a more even distribution of efforts in
respecting minimum energy performance standards across EU countries.
The last aspect is also a structural one. Depending on a number of factors including
economic conditions but also culture and habits, in some countries the number of
transactions in the building markets in much higher and dynamic than in others.
Similarly,, also the share of tenants in the all occupiers of buildings (residential or non
residential) vary greatly. Split incentives present a substantial barrier to buildings
refurbishment. Investment costs must be carried by landlords while tenants benefit from
energy savings. Landlords lack incentives to undertake renovation efforts. This is most
pronounced in countries with a high share of rental markets, and also more pronounced
for low income households who more often live in rented properties.
The variable number of transaction will affect the efficiency of MEPS1, as in countries
with more dynamic markets the triggers to apply MEPS1 will be greater, and therefore
higher will be possibilities to improve the performance of buildings and to find a solution
to split incentives. The application of MEPS1 in countries with fewer transactions will be
on the contrary more modest. By combining MEPS1 with a national scheme and linking
it to specific milestones and criteria (as in MEPS2) it is possible to counterbalance that
effect. In countries in which transaction triggers will apply more often there will be less
need to implement standards on the basis of national schemes, and vice versa.
Such differences also show the interest in combining different MEPS sub-options. In the
Option 2 (Moderate scenario), while MEPS3 has effect only on non-residential buildings,
MEPS1 triggers the renovation of worst performing buildings also in the residential
market. Still given that MEPS1 applies to a fraction (progressively increasing over time)
of residential buildings, a large share of residential stock is left unrenovated and it is not
expected to be decarbonised by 2050 if only autonomous renovations will occur. Option
3 (HIGH-I scenario) has on the contrary the potential to gradually cover all the building
stock in each MSs, with early effects on the properties being subject to transaction thus
exploiting the benefits of renovating at existing “trigger points”, while other buildings
will be renovated gradually on the basis of the national schemes put in place (MEPS2).
Under Option 4 (HIGH-II) all the building stock will be covered by the different
mechanisms put in place, with MEPS4 addressing specifically heating and cooling
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installations and ensuring that the worst performing ones are not installed once a
replacement has to be made at end of life. The combination is expected to have the effect
of accelerating the diffusion of highly efficient space and water heating appliances in
comparison to Option 3, although with unclear effects as MEPS4 could lead to
suboptimal choices if not accompanied by interventions on the buildings fabric and
insulation.
7.3 Scenario description
Low Ambition / LOW (S1)
The LOW scenario is defined based on the BSL scenario. The central policy option is to
improve the energy performance “worst performing” buildings, triggered by a sale or
new rental contract from 2026 onwards, which is defined as minimum energy
performance standard (MEPS1) achieving a performance equivalent to predefined EPC
classes level. Based on EU-SILC data for sale of buildings and new rental contracts, the
yearly rate of transaction is determined. This results in a conservative level of
renovations. Non-residential buildings are also considered. Based on data from the
project Hotmaps49
and on further assumptions, the annual share of non-residential
buildings affected by the trigger has been determined. For these residential and non-
residential buildings an increased renovation rate has been applied in the modelling. The
MEPS obligations are also reinforced with other policy elements such as building
renovation passports (BRPs), EPCs, a deep renovation standard, long-term renovation
strategies and the smart readiness indicator (SRI), which have from a modelling
perspective an enabling and supportive character to the MEPS rather than a direct impact
on model parameters. The heating system exchange mix is assumed the same way as in
the BSL scenario.
Medium Ambition / MODERATE (S2)
In the medium ambition scenario S2 additional obligations are defined for non-residential
buildings with floor area above 1,000 m² (MEPS3). Here it is assumed that these
buildings have first obligations by 2026 and reach ZEB-level on average by 2045,
accordingly the renovation rate is determined to reach significantly higher levels as in
BSL. For all other buildings (residential and non-residential buildings below 1,000m²)
the assumptions from the low ambition scenario S1 are applied. The MEPS obligations
(same as in S1) are also aligned with the other policy elements such as building
renovation passports (BRPs), EPCs, a deep renovation standard, long-term renovation
strategies and the smart readiness indicator (SRI), which have from a modelling
49
Hotmaps Project - The open source mapping and planning tool for heating and cooling (hotmaps-
project.eu)
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perspective an enabling and supportive character to the MEPS rather than a direct impact
on model parameters.
The heating system exchange mix is assumed to be more in line with decarbonisation for
the MEPS3 buildings (non-residential buildings larger than 1,000 m²), but is the same as
in S1 for the other buildings (residential buildings and non-residential buildings smaller
than 1,000m²).
High Ambition / HIGH-I (S3-I )
In the high-ambition scenarios all buildings are generally obliged to reach ZEB-level by
certain years, except buildings for which exemptions/restrictions apply (included in the
category “zeb-restricted”). In the S3-I scenario MEPS2 requires that all buildings are
decarbonised progressively by 2050. Therefore, the respective building types and parts of
the building stock are addressed by the modelling in such a way that as many buildings
as possible can reach this target over time, but at the same time considering maximum
feasible renovation activities in the building stock. Not only one-off renovations are
assumed, but also set-by-step partial renovations that are target-compliant. The
obligations that have been introduced in S2 for large non-residential buildings only are
applied now for all buildings starting in 2026. The MEPS obligations (same as in S2 and
S1) are also aligned with the other policy elements such as building renovation passports
(BRPs), EPCs, a deep renovation standard, long-term renovation strategies and the smart
readiness indicator (SRI), which have from a modelling perspective an enabling and
supportive character to the MEPS rather than a direct impact on model parameters.
The heating system exchange mix is assumed to be more in line with decarbonisation for
all buildings.
New buildings are assumed with a 100% ZEB-share from 2030 onwards.
High Ambition / HIGH-II (S3-II)
The second high ambition scenario S3-II is defined in the same way as S3-I and adds the
obligation for all buildings to require best-in-class heating systems to be installed when
replacements are made, starting in 2026 (MEPS4). The impact of this additional
requirements is modelled with higher efficiency assumptions in the model for the new
installed systems as well as a slightly more efficient heating system mix to be installed
over time. The MEPS obligations (same as in S3-I, S2 and S1) are also aligned with a
other policy elements such as building renovation passports (BRPs), EPCs, a deep
renovation standard, long-term renovation strategies and the smart readiness indicator
(SRI), which have from a modelling perspective an enabling and supportive character to
the MEPS rather than a direct impact on model parameters.
New buildings are assumed with a 100% ZEB-share from 2030 onwards.
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8. Modelling results
This section provides an overview of modelling results across scenarios, complementing
the summary results provided in Chapter 6.
8.1 Energy and environmental impacts
Energy savings
Figure D.10: Additional energy savings in final energy consumption for space heating compared to
baseline (at EU level)
Source: Guidehouse et.al.
In all scenarios, the renovation of non-residential buildings generates about one third of
the energy savings over the period 2030-2040.
As shown in Figure D.10, most energy savings until 2040 is achieved in single family
houses (SFH)50
, which today represent around 46% in total stock and 63% in residential
stock. This reflects the fact that worst performing buildings from residential sector,
notably SFH, are the ones affected by MEPS1 across scenarios. The other building types
are renovated relatively later, with the MODERATE scenario having effects on non-
residential buildings, showing the effects of national schemes gradually requiring all
buildings to be renovated at ZEB levels.
50
The building types reported are the following: for residential buildings: Single Family House (SFH),
Small Multi Family House (SMFH) and Large Multi Family House (LMFH). In the non-residential sector
reference buildings have been developed along Annex I.5 of the EPBD: Office Building (OFB), Trade and
Retail Building (TRB), Education Building (EDB), Touristic and Health Buildings (TOB_HEB), Other
non-residential buildings (ONB). Note: Hospitals and hotels and restaurants are listed under
Touristic/Health buildings (TOB_HEB). Sport facilities are addressed with other non-res buildings (ONB).
186
Figure D.11: Evolution of space heating energy consumption by sources at EU level
Source: Guidehouse et.al.
The renovations in the HIGH-II results also in significant impacts on the distribution of
heating appliances (and consequently energy carriers) across the observed period in
comparison to the baseline, towards decarbonisation by 2050. While in the baseline
roughly 8 billion m2
of floor area are still supplied by gas and oil in 2050, this share
significantly decreases to less than 2 billion m2
in HIGH-I and HIGH-II, with a quasi-
complete phase-out of oil and coal. Compared to the baseline, there is a very significant
increase in heat pumps that will supply an important part of the final energy consumption
for heating in 205051
. By 2030, the relative importance of gas in buildings heating needs
will decrease marginally in LOW and MODERATE scenarios (by about 4 %points) and
by about 13 %points and 18 %points in HIGH-I and HIGH-II scenarios respectively. The
decrease of relative importance of gas in buildings heating in HIGH-I is in line with the
results from a recent JRC report52
.By 2050 and compared to 2030, the share of gas in the
buildings’ heating mix will further halve in the least ambitious scenarios whilst will be 4
and 6 times lower in the most ambitious ones. District heating share in heating mix of the
buildings will increase in all scenarios but notably in LOW and MODERATE. Compared
to baseline, wood fuels share in buildings heating mix will increase only by 1-2 %points
in LOW and MODERATE scenarios and will grow more significantly in the two HIGH
scenarios, reaching an almost double share by 2050.
51
This includes hybrid heat pumps which are a combination of electric heat pumps and gas boilers, where
the heat pump provides the base heat load during most of the heating season, while a gas boiler kicks in for
peak loads. This leads to an assumed 70/30 distribution of heat supplied from the heat pump part vs. the
gas boiler part of the hybrid system.
52
Nijs W., Tarvydas D. and Toleikyte A., EU challenges of reducing fossil fuel use in buildings – The role
of building insulation and low-carbon heating systems in 2030 and 2050, Publications Office of the
European Union, Luxembourg, 2021, JRC127122.
187
Air pollution, indoor environment, health and wellbeing
Air pollution
The impacts on air pollution are twofold. Renovation activities lead to an increase in
pollutants in the construction industry while reduction of energy demand leads to a
decrease in emissions, in particular in the gas and heat sector. In all four scenarios, the
reduction effect offset the increase by 2050. Effects on pollutants are very small in
LOW/MODERATE scenarios as renovation rates are rather low and subsequent energy
reduction is moderate, while in HIGH-I and HIGH-II they are 2-3 times better 53
.
The number of people affected by health issues due to inadequate renovation of their
dwellings, especially by indoor cold and dampness will be reduced within the options
identified for the revision of the EPBD, with different degrees of intensity and maximum
effects achieved in the HIGH-I AND HIGH-II scenarios. Thanks to increased renovation
rates and better insulated buildings as a result of the introduction of MEPS it is expected
that rates of morbidity and mortality especially during winter will decrease, because of
the decrease in the emergence of cardiovascular and respiratory diseases. This will
reduce health care costs.
Figure D.12: Comparison across scenarios – share of total EU population living in a dwelling with a leaking
roof, damp walls, floors or foundation, or rot in window frames or floor54
Source: Guidehouse (2021), based on Eurostat (ilc_mdho01)
53
SOx emissions decline slightly more than NOx emissions because electricity and steam and hot water
production are slightly more SOx emissions intensive.
54
Guidehouse (2021) based on Eurostat (ilc_mdho01)
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Impacts on Material use
Figure D.13: Impact of renovation and new-build investment on material consumption within the EU
(compared to 2020, total impact across all economic sectors)
Source: Guidehouse et.al.
The figure shows that investments in renovations and in highly efficient new
constructions, translate into about 0.50.2% and 2.2% additional resource use in 2030 in
LOW/MODERATE and HIGH-I AND HIGH-II scenarios compared to the of baseline.
Resource use refers to the increase of those used in the construction and material sector
and to the decrease in resources used within the gas and heat sector and also petroleum
refining (included in industry) and fossil-based electricity (included in electricity). The
increased materials are mainly coming from the EU, although around 30% of the
construction materials are traded from Asia/Pacific. The quantitative impacts in 2050 are
slightly higher but still account for about 0.5% of resource use recording a decrease of
resource use in the least ambitious scenario (0.2%/0.3%) and to a smaller increase (0.9%-
1.1%) in the most ambitious scenarios.
Market observers, industry analysts and construction trade associations have reported in
2021 unprecedented increases in prices and even supply shortages for certain
construction materials. This effect has been linked to the disruption of supply chains of
certain materials during the COVID-19 pandemic crisis and freight problems55
that still
persisted while the demand increased due to the recovery of the economy and the re-start
of large-scale infrastructure construction activities in early 2021 (especially in China).
The pandemic has in fact affected entire supply chains in unprecedented ways. Producers
have been facing significant difficulties in sea and land transport. A shortage of
55
The disruption of supply chains as a result of the COVID-19 pandemic has reduced container
availability. This in turn has resulted in a significant increase in shipping prices. The March 2021 Suez
crisis also had effects.
189
containers on the markets as a result of the broken trade routes have led to price
increases. Factories had to be shut down or closed for maintenance and have not yet
regained full capacity. The resulting increase in prices has been reported especially for
timber, steel, cement and construction chemical products56
.
At the time of writing this Impact Assessment it is not possible to thoroughly evaluate
the magnitude of the problem and to understand if it is a short-term temporary effect due
to recovery and economic rebound while factories producing raw materials have still not
reached full capacity, or if there are more structural causes behind the observed price
increases. The current price hikes have to be monitored to understand if capacity
adjustments will be put in place or if the markets are facing more structural imbalances.
The increase in construction activities induced by the implementation across the EU of
minimum buildings standard could also increase pressure on construction materials
markets and supply chains starting from 2025-2026 or earlier due to market anticipation
effects. Specific policy design for MEPS could also alleviate market pressure, for
instance leaving adequate time to building owners to comply with the standards after the
compliance date, as foreseen for MEPS1.
8.2 Economic impacts
Investments
Investments will have to be supported by building owners, being households, public
authorities, companies or real estate sector, depending on the ownership structure of the
specific country. Return on investments typically varies depending on how
comprehensive the intervention is, with higher payback periods for the larger packages of
renovations leading to deep renovations in which the building achieves very high
efficiency standards. In the DEEP database57
, the average payback58
period reported is 5
years59
. This varies greatly across type of interventions (around 3 years for lighting and
HVAC improvements to close to 11 years for building fabric improvements to a median
56
Including paints and their components (such as epoxy resins – an important binder for many paints and
coatings), polyurethane foams, sealants and construction adhesives (silicone, acrylic, hybrid and
polyurethane).
57
The Energy Efficiency Financial Institutions Group (EEFIG) was established in 2013 by the European
Commission and the United Nations Environment Programme Finance Initiative (UNEP FI). EEFIG is
composed of over 300 representatives from more than 200 organisations - spanning public and private
financial institutions, industry representatives and sector experts and aims to accelerate private finance to
energy efficiency. EEFIG aims to develop practical tools to facilitate the energy efficiency market. As one
of these, EEFIG has developed the De-risking Energy Efficiency Platform (DEEP). The DEEP Database is
intended to support financial institutions in energy efficiency investment decisions.
58
Years required for the saving to pay for the investment without any interest costs.
59
Overview data from 7767 energy efficiency projects in buildings. De-risking Energy Efficiency Platform
-Factsheet (quick) (eefig.eu).
190
of 13,5 years for more integrated renovations)60
. The highest returns are observed in the
worst performing buildings. However, this value is based on a narrow approach, and on
the assumption that such interventions will have to be repaid only by reduction over time
in the energy bill. However, multiple economic and non-economic benefits are realised
through investments in buildings renovations which are not taken into account in this
simplified calculation.
Stakeholders have indicated that grants and subsidies schemes should be privileged over
tax-refund incentives and loans61
, and that grants should target low-income households to
facilitate social acceptance, enhance social inclusion62
and increase the efficiency and
overall societal benefits of MEPS.
One-stop-shops and technical assistance have also been considered crucial by
stakeholders. One-stop-shops in combination with BRPs are key to help not only the
demand side but also the supply side. BRPS will also help supply side because
refurbishment packages can be standardised and lead to replicable business models.
Stakeholders indicated also that channels for technical assistance and funds need to be
better streamlined, it is currently too hard to navigate the EU funding mechanisms63
as
there is a wealth of information and a number of routes. Simplification, clarification and
clearly earmarked funding are required.
Energy costs
In baseline scenario, energy costs for heating, cooling and DHW will increase by 17% in
2030 as compared to 2020. Thanks to energy savings achieved autonomously and driven
by the policies in place in the baseline, the energy costs start decreasing from 2035
onwards going down to 2050 at just 2.3% higher than in 2020. This decrease will be
60
See also the Impact Assessment Report Accompanying the proposal for a Directive of the European
Parliament and of the Council amending Directive 2012/27/EU on energy efficiency.
61
The International Union of Property Owners (UIPI) conducted a survey on European property owners’
capacity and willingness to renovation (collecting 10.415 answers in 36 countries in Europe and published
in March 2021). It shows that traditional forms of financial incentives seem to be the most effective ones.
Subsidies and grants are the top choice incentives (54.03%) for homeowners and individual landlords that
they would like to have set in place as a help to renovate followed by incentives related to tax reductions
(36.95% (income tax credits/deductions – 40.61%, property tax deduction – 39.19%, VAT deduction –
31.06%). Other potential incentives that could enable homeowners to renovate are professional/technical
advice (28.17%) and One-Stop-Shops (17.21%), while loans seem to be the least preferred incentive with a
mean value of 8.17% (traditional loan and soft loan schemes –10.99%, loans with performance contract bill
repayment model – 8.68%, loans with on-tax repayment model – 8.23%), UIPI – International Union of
Property Owners – Union Internationale de la Propriete Immobiliere
62
This aspect is included in the recommendations by FEANTSA (2021), Renovation: Staying on Top of
the Wave — Avoiding social risks and ensuring the benefits, European Federation of National
Organisations Working with the Homeless. Renovation_Wave_final_report.pdf (feantsa.org)
63
The SWD accompanying the Renovation Wave Communication provides an overview of funding
available updated to September 2020; “Support from the EU budget to unlock investment into building
renovation under the Renovation Wave”, SWD(2020) 550 final.
191
driven by the reduction of energy use in the residential sector, although the energy costs
in non-residential buildings will increase by about 18% and 24.5% in 2030 and 2050
respectively.
As result of more vigorous renovation measures, the energy costs evolution in the
modelled scenarios increase less than in the baseline. In 2030 they increase by 15% in
LOW/MODERATE scenarios and only by 6.6%/7.7% in HIGH-I/HIGH-II scenarios. By
2050, it is estimated that, compared to 2020 levels, the energy costs will go down by 8%
/ 10% in LOW / MODERATE scenarios and by about 26% in the two HIGH scenarios.
Still by 2050 and compared to 2020 levels, thanks to the reduction of the energy demand
through renovation, the energy costs in residential buildings will go down by 15% / 16%
in LOW/MODERATE scenarios and by about 36%/37% in HIGH-I/HIGH-II scenarios.
For non-residential buildings the energy costs by 2050 will still increase compared to
2020 levels, but only by 17% in MODERATE scenario and by around 15% in the two
HIGH scenarios.
Figure D.14: Evolution of the energy costs for heating, cooling and domestic hot water at EU level
Source: Guidehouse et.al.
8.3 Social impacts
It is expected that the effects in costs reductions will be more pronounced in low-income
groups as worst performing buildings are occupied in relative higher shares by low-
income households64
. The quantitative effect is however difficult to assess because the
share of low-income population living in worst performing buildings is not known. If
assumed that renovations and subsequent energy savings are distributed proportionally to
64
Mellwig, P. et al. (2021): Gebäude mit der schlechtesten Leistung (Worst performing Buildings) -
Klimaschutzpotenzial der unsanierten Gebäudein Deutschland. Download: https://www.gruene-
bundestag.de/fileadmin/media/gruenebundestag_de/themen_az/bauen/PDF/210505-ifeu-kurzstudie-
gebaeude-mit-schlechtester-leistung.pdf
192
expenditure shares, in the two HIGH scenarios, the lowest-income households in the first
quintile will save in 2030 around 100 PPP per year compared to 2020. In 2030 in the
same HIGH scenarios, higher-income households in the fifth quintile save around 200-
230 PPP through energy efficiency measures in buildings. In 2030, the savings in heat
and electricity expenditure in LOW/MODERATE scenarios will be significantly lower,
i.e. at around 17-19 PPP for the lowest-income quintile and 37-42 PPP for the highest-
income quintile.
As regards MEPS1, by addressing the renovation of worst performing buildings, this
measure is also expected to have higher impacts on lower-income quintiles, in which the
share of tenants (facing split incentives) is statistically greatest.
Figure D.15 Evolution of heat and electricity expenditure by income quintiles at EU level (compared to
baseline)65
Source: Guidehouse et al.
Respiratory infectious diseases that occur due to indoor air tightness can be avoided by
insulation and adequate ventilation systems. Thermal insulation and an upgrade of the
heating or ventilation system can prevent indoor cold and dampness, avoid unhealthy
conditions and decrease the cases of cold and asthma related morbidity and mortality
significantly. However, better insulation can possibly also have negative health impacts,
because of reduced air flow, if no adequate ventilation system is installed.
Worst-performing buildings are a burden on their occupants: because of the high heating
costs, they are usually not adequately heated. Comfort is correspondingly low. In
inadequately heated buildings, damp and mold can lead to health problems66
. It is
65
Guidehouse et al. (2021) based on Eurostat (hbs_str_t223).
66
BPIE (2019) estimates, that about 2.2 million Europeans have asthma because of their living conditions
and 110 million live in buildings with high concentrations of hazardous pollutants due to inadequate
levels of ventilation. It will be expected that rates of morbidity and mortality especially during winter will
193
estimated that about 2.2 million Europeans have asthma because of their living
conditions and 110 million live in buildings with high concentrations of hazardous
pollutants due to inadequate levels of ventilation.
Figure D.16: Change in share of main energy poverty indicators in the EU population per income decile
compared to the baseline scenario67
Source: Guidehouse et.al.
8.3.1. Results of sensitivity analysis for distributional impact and financial support
for low-income households undertaking renovation
decrease, because of the less emergence of cardiovascular and respiratory diseases. This will reduce health
care costs. http://bpie.eu/wp-content/uploads/2019/04/Policy-paper_IEQ-_Final.pdf
67
Guidehouse based on the EU Energy Poverty Observatory and Eurostat (EU SILC; Household Budget
Survey)
194
Table D.17: Impact of ZEB renovation on a low-income household living in a rented apartment from a
multi-family house
Source: Guidehouse et.al.
Table D.18: Impact of partial ZEB renovation on a low-income household living in a rented apartment from
a multi-family house
Source: Guidehouse et.al.
Table D.19: Impact of ZEB renovation on a low-income household living in the owned single-family house
195
Source: Guidehouse et.al.
Table D.20: Impact of partial ZEB renovation on a low-income household living in the owned single-family
house
Source: Guidehouse et.al.
Employment
196
Figure D.21: Impact of renovation and new-build investment AND reduced energy consumption on low
and medium skilled employment, 2030 – all building types68
Source: Guidehouse et.al.
Value added
Figure D.22: Impact of renovation and new-build investment and reduced energy consumption on value
added at the EU level69
68
Exiobase modelling, absolute values estimated based on changes of domestic consumption induced by
the investment impulse in the affected sectors (conservative approach)
197
Source: Guidehouse et.al.
A summary of main modelling results for the preferred option are presented in the tables
below.
69
Exiobase modelling, absolute values estimated based on changes of domestic consumption induced by
the investment impulse in the affected sectors (conservative approach)
198
Table D.23: Summary of main results for the preferred option HIGH-I (source: Guidehouse et.al.)
Table D.24: Summary of key scenarios results (source: Guidehouse et al.)
HIGH-I scenario: Main results [unit] 2030 2040 2050
GHG emission* savings in heating/cooling/DHW [% from BSL] -22.8% -49.7% -53.5%
heating [% from BSL] -24.9% -53.3% -58.8%
residential [% from BSL] -28.9% -55.3% -61.5%
non-residential [% from BSL] -10.4% -38.7% -40.0%
Energy savings in heating/cooling/DHW [% from BSL] -11.7% -24.4% -33.9%
heating [% from BSL] -13.3% -27.6% -39.5%
residential [% from BSL] -13.0% -24.8% -38.2%
non-residential [% from BSL] -8.8% -23.6% -26.7%
Additional investment [% from BSL] 80.3% 90.9% 75.2%
renovation of existing buildings [% from BSL] 113.9% 127.4% 104.8%
new buildings [% from BSL] 8.6% 12.9% 11.9%
Energy costs savings for heating, cooling and DHW [% from BSL] -7.9% -18.0% -27.6%
residential [% from BSL] -11.0% -21.8% -33.8%
non-residential [% from BSL] 4.5% -3.8% -7.9%
Evolution of the renovated floor area
Renovated floor area post-2020 (cumulative)
[% of total floor
area]
23.0% 55.0% 66.0%
Average share of deeply renovated in total
renovated floor area after 2020 (over 5 yrs)
[% of total
renovated area]
3.9% 39.6% 59.2%
Average renovation rate in full renovation
equivalent (over 5 yrs)
[% of total floor
area]
3.0% 3.3% 2.3%
Macro-economic impact
Additional low and medium skilled jobs [% from 2020] 1.24% 1.18%
Additional high skilled jobs [% from 2020] 0.63% 0.65%
Additional value-added created in the EU [% from 2020] 0.86% 0.85%
Environmental impact
Air pollution
Sox [% from 2020] -1.2% -5.9%
Nox [% from 2020] 0.3% -1.0%
PM 2.5 and 10 [% from 2020] 0.1% -0.8%
Water use [% from 2020] 0.4% 0.3%
Material use [% from 2020] 2.2% 1.1%
Social impact
Household expenditure
Share of heating expenditure in total expenditure
Quintile 1 [% from 2020] -0.4% -1.3%
Quintile 2 [% from 2020] -0.4% -1.2%
Quintile 3 [% from 2020] -0.4% -1.1%
Quintile 4 [% from 2020] -0.3% -1.0%
Quintile 5 [% from 2020] -0.3% -0.8%
Share of electricity expenditure in total expenditure
Quintile 1 [% from 2020] -0.4% -1.2%
Quintile 2 [% from 2020] -0.4% -1.1%
Quintile 3 [% from 2020] -0.3% -1.0%
Quintile 4 [% from 2020] -0.3% -0.9%
Quintile 5 [% from 2020] -0.2% -0.8%
Energy poverty indicators (mean change across deciles)
Arrears on utility bills [%points from BSL] -1.2% -3.6%
Inability to keep home adequately warm [%points from BSL] -1.2% -3.7%
Low absolute energy expenditure (M/2) [%points from BSL] -1.6% -4.8%
High share of energy expenditure in income (2M) [%points from BSL] -1.7% -5.3%
Population in a dwelling with a leaking roof, damp, rot frames
<60% of median eq income [% from 2020] -1.2% -1.8%
>60% of median eq income [% from 2020] -0.7% -1.0%
Total population [% from 2020] -0.8% -1.1%
* direct emission from buildings and indirect from power&heat sector
199
Baseline scenario - BSL 1
2020 2025 2030 2035 2040 2045 2050
Building stock
by type ofbuilding [bn m2]
Single family house 11.1 11.4 11.8 12.2 12.6 13.0 13.5
Small multifamily house 2.9 3.0 3.1 3.2 3.3 3.4 3.5
Large multifamily house 3.8 3.9 4.1 4.2 4.3 4.5 4.6
office buildings 1.5 1.6 1.7 1.7 1.8 1.9 2.0
trade and retail buildings 1.5 1.6 1.6 1.7 1.8 1.9 2.0
educational buildings 1.1 1.2 1.2 1.3 1.4 1.4 1.5
tourism and heath building 1.3 1.4 1.4 1.5 1.6 1.6 1.7
other buildings 0.9 0.9 1.0 1.0 1.1 1.2 1.2
total residential 17.8 18.4 19.0 19.6 20.2 20.9 21.5
total non-residential 6.3 6.6 7.0 7.3 7.7 8.1 8.5
total residential and non-residential 24.1 25.0 25.9 26.9 27.9 29.0 30.1
by type ofmeasure [bn m2]
not renovated 13.3 12.2 11.0 9.7 8.4 6.9 5.4
already renovated 10.3 9.5 8.4 7.2 6.0 4.9 3.7
renovation - average 0.3 2.1 4.2 6.4 8.7 11.0 13.4
renovation - ZEB partial-not renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB partial-already renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB restricted 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB 0.0 0.0 0.1 0.1 0.2 0.3 0.4
total existing buildings 23.9 23.8 23.6 23.4 23.3 23.1 22.9
new building - nZEB standard (nearly-zero energy) 0.2 1.2 2.1 3.1 4.0 4.9 5.8
new building - ZEB standard (zero emission) 0.0 0.1 0.2 0.4 0.6 1.0 1.4
total new buildings 0.2 1.2 2.3 3.4 4.6 5.9 7.2
Average renovation rate in full renovation equivalent
(over 5 yrs)[%total floor area] 1.35% 1.47% 1.7% 1.7% 1.7% 1.7% 1.7%
Average share ofdeeply renovated after 2020
(over 5 yrs)[% oftotal renovated area] 1.00% 1.22% 1.4% 1.7% 2.0% 2.2% 2.6%
Environmental impact
heating, by type ofbuilding [Mt CO2 eq]
Single family house 222.8 197.5 170.7 144.0 110.5 86.3 69.6
Small multifamily house 44.6 39.3 33.7 28.2 21.6 16.7 13.2
Large multifamily house 45.7 39.9 34.0 28.2 21.1 16.2 12.8
office buildings 31.3 28.4 25.1 21.9 17.6 14.8 13.1
trade and retail buildings 36.7 32.9 28.9 25.0 19.9 16.5 14.5
educational buildings 35.4 32.4 29.0 25.8 21.1 18.1 16.5
tourism and heath building 22.9 20.5 17.9 15.4 12.2 10.0 8.6
other buildings 21.8 19.6 17.2 14.9 11.9 9.9 8.7
total residential 313.1 276.7 238.4 200.4 153.2 119.1 95.6
total non-residential 148.1 133.6 118.1 103.0 82.7 69.4 61.4
total residential and non-residential 461.1 410.3 356.5 303.4 235.9 188.5 157.1
heating, by type ofmeasure [Mt CO2 eq]
not renovated 312.5 264.8 217.5 171.9 120.5 82.7 55.1
already renovated 144.4 120.0 93.6 69.2 45.3 28.9 17.4
renovation - average 3.2 18.9 33.9 46.4 51.7 55.0 58.6
renovation - ZEB partial-not renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB partial-already renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB restricted 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB 0.0 0.1 0.3 0.4 0.6 0.7 0.9
total existing buildings 460.0 403.9 345.3 287.9 218.0 167.4 132.0
new building - nZEB standard (nearly-zero energy) 1.1 6.2 10.5 14.2 16.0 18.4 21.3
new building - ZEB standard (zero emission) 0.0 0.3 0.7 1.3 1.9 2.7 3.8
total new buildings 1.1 6.5 11.2 15.6 17.9 21.1 25.1
heating, by type offuel [Mt CO2 eq]
Coal 32.9 21.1 12.6 6.9 3.6 1.7 0.7
Oil 86.2 75.8 55.8 36.8 23.9 15.1 9.1
Gas 251.7 231.9 212.2 186.0 153.7 121.9 94.3
District heating 52.1 50.1 48.6 49.5 37.7 35.5 39.2
Electricity 30.8 19.7 11.3 6.1 2.6 1.3 0.8
Solid biomass 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Heat pumps 7.4 11.7 16.0 18.1 14.4 13.0 13.0
Hybrid heat pumps 0.0 0.0 0.0 0.0 0.0 0.0 0.0
total impact envelope +equipment [Mt CO2 eq]
residential total 373.3 332.0 288.0 245.3 189.3 150.3 124.9
heating 313.1 276.7 238.4 200.4 153.2 119.1 95.6
domestic hot water 50.3 46.2 42.6 38.9 32.1 28.1 26.3
cooling 10.0 9.0 7.0 6.0 4.0 3.0 3.0
non-residential total 179.7 161.4 142.0 123.2 98.1 82.4 74.2
heating 148.1 133.6 118.1 103.0 82.7 69.4 61.4
domestic hot water 17.6 15.7 13.9 12.2 9.4 8.1 7.8
cooling 14.0 12.0 10.0 8.0 6.0 5.0 5.0
residential and non-residential total 553.0 493.3 430.0 368.5 287.3 232.7 199.1
200
Baseline scenario - BSL 2
2020 2025 2030 2035 2040 2045 2050
Energy impact
Envelope measures
heating, by type of building [TWh]
Single family house 1278.0 1189.5 1089.3 985.8 887.4 796.1 713.4
Small multifamily house 249.0 230.1 208.8 186.8 165.8 146.1 128.1
Large multifamily house 265.9 243.6 218.7 193.8 170.8 149.7 130.7
office buildings 152.1 149.8 145.8 140.7 135.8 131.7 128.8
trade and retail buildings 177.0 173.4 167.7 160.8 154.1 148.3 144.0
educational buildings 172.8 172.7 170.8 168.1 165.8 164.8 165.8
tourism and heath building 111.5 108.6 104.4 99.4 94.4 89.8 86.0
other buildings 105.5 103.4 100.0 96.0 92.1 88.8 86.4
total residential 1792.9 1663.2 1516.7 1366.4 1223.9 1091.9 972.2
total non-residential 718.9 707.8 688.7 665.0 642.1 623.4 611.0
total residential and non-residential 2511.8 2371.0 2205.5 2031.5 1866.1 1715.3 1583.2
heating, by type of measure [TWh]
not renovated 1699.2 1527.8 1343.9 1150.5 955.5 762.2 574.0
already renovated 789.4 696.7 581.5 465.6 361.9 270.7 187.6
renovation - average 16.4 105.1 202.8 300.7 394.7 487.1 582.2
renovation - ZEB partial-not renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB partial-already renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB restricted 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB 0.1 0.7 1.7 2.9 4.4 6.4 9.0
total existing buildings 2505.1 2330.3 2129.9 1919.8 1716.6 1526.3 1352.9
new building - nZEB standard (nearly-zero energy) 6.5 38.8 70.5 101.8 132.8 163.4 193.2
new building - ZEB standard (zero emission) 0.2 1.9 5.1 9.9 16.7 25.6 37.1
total new buildings 6.7 40.7 75.6 111.7 149.4 188.9 230.3
heating, by type of fuel [TWh]
Coal 96.7 61.9 36.9 20.4 10.5 4.9 2.0
Oil 323.3 284.3 209.3 137.9 89.7 56.6 34.0
Gas 1246.2 1148.3 1050.7 921.0 760.9 603.5 466.9
District heating 248.4 291.7 345.9 408.0 474.4 541.9 606.9
Electricity 130.1 97.9 66.6 43.1 27.8 17.5 10.5
Solid biomass 428.7 424.3 401.3 374.2 351.3 324.9 294.1
Heat pumps 38.4 62.6 94.9 126.8 151.4 165.9 168.8
Hybrid heat pumps 0.0 0.0 0.0 0.0 0.0 0.0 0.0
total impact envelope + equipment [TWh]
residential total 2076.6 1952.4 1807.6 1657.1 1514.7 1383.5 1266.4
heating 1792.9 1663.2 1516.7 1366.4 1223.9 1091.9 972.2
domestic hot water 252.0 256.8 257.9 257.3 256.9 257.6 260.0
cooling 31.7 32.4 33.0 33.4 33.8 34.1 34.2
non-residential total 842.4 835.5 819.9 799.4 779.8 764.9 757.4
heating 718.9 707.8 688.7 665.0 642.1 623.4 611.0
domestic hot water 73.3 75.8 77.7 79.3 81.3 83.9 87.5
cooling 50.2 51.9 53.5 55.0 56.4 57.7 58.9
residential and non-residential total 2919.1 2787.9 2627.5 2456.5 2294.5 2148.5 2023.8
Investment and energy costs
Investment costs [bn Euro2020]
total investment costs 146.8 167.0 189.2 199.4 210.0 221.4 233.4
total renovation of existing buildings 92.1 109.6 128.8 135.9 143.1 150.8 159.0
envelope 59.1 69.7 81.2 84.4 87.5 90.9 94.4
floor 6.1 7.2 8.4 8.7 9.0 9.3 9.7
roof 23.5 27.8 32.3 33.6 34.8 36.2 37.6
walls 18.7 21.9 25.4 26.3 27.2 28.1 29.1
windows 10.8 12.9 15.1 15.8 16.5 17.3 18.1
equipment 33.0 39.8 47.6 51.5 55.5 60.0 64.6
heating + domestic hot water system 28.0 32.7 37.9 39.5 41.1 42.6 44.1
ventilation system 5.1 7.2 9.7 12.0 14.5 17.4 20.5
total new buildings 54.6 57.4 60.3 63.5 66.9 70.5 74.4
envelope 44.6 46.7 48.9 51.3 53.7 56.4 59.2
floor 4.7 4.9 5.1 5.3 5.5 5.7 6.0
roof 17.5 18.4 19.3 20.3 21.3 22.4 23.6
walls 13.6 14.2 14.8 15.5 16.2 16.9 17.7
windows 8.8 9.3 9.7 10.3 10.8 11.4 12.0
equipment 10.0 10.7 11.4 12.3 13.2 14.1 15.2
heating + domestic hot water system 6.8 7.0 7.2 7.4 7.7 7.9 8.2
ventilation system 3.2 3.7 4.3 4.9 5.5 6.2 7.0
Energy costs [bn Euro2020]
total energy costs for heating, cooling and domestic hot water 218.3 241.8 255.4 248.9 241.4 232.2 223.3
residential 175.7 195.3 204.8 198.0 189.9 179.5 170.3
non-residential 42.6 46.5 50.6 51.0 51.5 52.6 53.0
total heating energy costs 177.3 198.1 207.2 200.0 191.5 180.4 170.0
residential 145.6 162.7 169.1 161.7 152.8 141.8 131.2
non-residential 31.7 35.3 38.1 38.3 38.7 38.6 38.8
total domestic hot water costs 26.0 28.7 31.2 31.9 32.9 33.7 35.3
residential 23.1 25.5 27.7 28.3 29.1 29.8 31.1
non-residential 2.9 3.2 3.5 3.6 3.8 4.0 4.2
total cooling costs 15.0 15.0 17.0 17.0 17.0 18.0 18.0
residential 7.0 7.0 8.0 8.0 8.0 8.0 8.0
non-residential 8.0 8.0 9.0 9.0 9.0 10.0 10.0
201
Low ambition scenario - LOW 1
2020 2025 2030 2035 2040 2045 2050
Building stock
by type ofbuilding [bn m2]
Single family house 11.1 11.4 11.8 12.2 12.6 13.0 13.5
Small multifamily house 2.9 3.0 3.1 3.2 3.3 3.4 3.5
Large multifamily house 3.8 3.9 4.1 4.2 4.3 4.5 4.6
office buildings 1.5 1.6 1.7 1.7 1.8 1.9 2.0
trade and retail buildings 1.5 1.6 1.6 1.7 1.8 1.9 2.0
educational buildings 1.1 1.2 1.2 1.3 1.4 1.4 1.5
tourism and heath building 1.3 1.4 1.4 1.5 1.6 1.6 1.7
other buildings 0.9 0.9 1.0 1.0 1.1 1.2 1.2
total residential 17.8 18.4 19.0 19.6 20.2 20.9 21.5
total non-residential 6.3 6.6 7.0 7.3 7.7 8.1 8.5
total residential and non-residential 24.1 25.0 25.9 26.9 27.9 29.0 30.1
by type ofmeasure [bn m2]
not renovated 13.3 12.1 10.8 9.3 7.8 6.1 4.3
already renovated 10.3 9.5 8.3 6.9 5.4 4.0 2.6
renovation - average 0.3 2.1 4.5 7.1 9.8 12.7 15.6
renovation - ZEB partial-not renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB partial-already renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB restricted 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB 0.0 0.0 0.1 0.1 0.2 0.3 0.4
total existing buildings 23.9 23.8 23.6 23.4 23.3 23.1 22.9
new building - nZEB standard (nearly-zero energy) 0.2 1.1 2.0 2.9 3.7 4.5 5.2
new building - ZEB standard (zero emission) 0.0 0.1 0.3 0.5 0.9 1.4 2.0
total new buildings 0.2 1.2 2.3 3.4 4.6 5.9 7.2
Average renovation rate in full renovation equivalent
(over 5 yrs)[%total floor area] 1.35% 1.47% 1.8% 2.1% 2.1% 2.1% 2.0%
Average share ofdeeply renovated after 2020
(over 5 yrs)[% oftotal renovated area] 1.00% 1.16% 1.4% 1.6% 1.9% 2.2% 2.5%
Environmental impact
heating, by type ofbuilding [Mt CO2 eq]
Single family house 222.8 192.3 159.3 125.6 88.4 64.0 48.9
Small multifamily house 44.6 39.3 33.9 28.5 22.0 17.0 13.5
Large multifamily house 45.7 39.9 34.2 28.5 21.5 16.5 13.0
office buildings 31.3 28.3 24.8 21.1 16.2 13.1 11.6
trade and retail buildings 36.7 32.9 28.6 24.1 18.2 14.7 12.9
educational buildings 35.4 32.2 28.5 24.6 19.1 15.9 14.5
tourism and heath building 22.9 20.4 17.5 14.5 10.8 8.4 7.1
other buildings 21.8 19.5 17.0 14.3 10.9 8.8 7.7
total residential 313.1 271.5 227.4 182.6 131.8 97.5 75.4
total non-residential 148.1 133.3 116.4 98.7 75.1 60.9 53.8
total residential and non-residential 461.1 404.8 343.8 281.2 207.0 158.4 129.1
heating, by type ofmeasure [Mt CO2 eq]
not renovated 312.5 260.7 206.9 153.8 98.4 60.9 35.1
already renovated 144.4 118.5 89.9 62.1 36.4 19.9 8.8
renovation - average 3.2 19.1 35.7 49.6 54.0 56.3 59.9
renovation - ZEB partial-not renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB partial-already renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB restricted 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB 0.0 0.1 0.3 0.5 0.6 0.7 0.9
total existing buildings 460.0 398.4 332.7 266.0 189.3 137.7 104.7
new building - nZEB standard (nearly-zero energy) 1.1 6.1 10.2 13.6 15.1 17.1 19.5
new building - ZEB standard (zero emission) 0.0 0.4 0.9 1.7 2.5 3.6 5.0
total new buildings 1.1 6.4 11.1 15.3 17.6 20.6 24.5
heating, by type offuel [Mt CO2 eq]
Coal 32.9 21.5 12.7 6.7 3.3 1.5 0.7
Oil 86.2 72.7 53.3 34.2 21.5 13.1 7.6
Gas 251.7 226.9 198.7 162.6 123.8 91.3 67.6
District heating 52.1 49.9 47.8 47.6 35.2 31.8 33.5
Electricity 30.8 20.6 11.9 6.2 2.5 1.3 0.7
Solid biomass 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Heat pumps 7.4 13.2 18.7 21.1 16.2 13.9 13.3
Hybrid heat pumps 0.0 0.0 0.7 2.8 4.5 5.5 5.8
total impact [Mt CO2 eq]
residential total 373.3 326.2 276.1 226.2 166.2 126.8 103.0
heating 313.1 271.5 227.4 182.6 131.8 97.5 75.4
domestic hot water 50.3 45.7 41.7 37.6 30.4 26.3 24.6
cooling 10.0 9.0 7.0 6.0 4.0 3.0 3.0
non-residential total 179.7 161.3 140.8 119.5 91.4 74.9 67.5
heating 148.1 133.3 116.4 98.7 75.1 60.9 53.8
domestic hot water 17.6 16.0 14.4 12.8 10.2 9.0 8.7
cooling 14.0 12.0 10.0 8.0 6.0 5.0 5.0
residential and non-residential total 553.0 487.5 416.8 345.7 257.6 201.7 170.5
202
Low ambition scenario - LOW 2
2020 2025 2030 2035 2040 2045 2050
Energy impact
Envelope measures
heating, by type of building [TWh]
Single family house 1278.0 1176.4 1041.7 893.1 756.4 638.8 537.7
Small multifamily house 249.0 230.8 210.2 188.2 167.1 147.3 129.1
Large multifamily house 265.9 244.5 220.4 195.5 172.2 150.9 131.5
office buildings 152.1 148.3 142.5 134.9 127.5 122.3 119.3
trade and retail buildings 177.0 171.6 164.0 154.2 144.8 138.0 133.6
educational buildings 172.8 170.6 166.3 160.1 154.6 152.0 152.2
tourism and heath building 111.5 107.0 100.8 93.0 85.4 79.2 74.5
other buildings 105.5 102.2 97.7 92.0 86.5 82.5 80.0
total residential 1792.9 1651.7 1472.3 1276.7 1095.8 937.0 798.3
total non-residential 718.9 699.7 671.2 634.2 598.8 574.0 559.6
total residential and non-residential 2511.8 2351.4 2143.5 1910.9 1694.6 1511.0 1358.0
heating, by type of measure [TWh]
not renovated 1699.2 1512.0 1288.9 1046.3 810.6 591.1 383.4
already renovated 789.4 691.5 563.2 425.1 304.5 201.4 108.8
renovation - average 16.4 106.8 214.9 326.4 428.3 527.4 632.5
renovation - ZEB partial-not renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB partial-already renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB restricted 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB 0.1 0.7 1.7 3.1 4.8 6.9 9.8
total existing buildings 2505.1 2310.9 2068.6 1800.9 1548.1 1326.8 1134.5
new building - nZEB standard (nearly-zero energy) 6.5 38.3 68.7 97.6 125.3 151.5 176.0
new building - ZEB standard (zero emission) 0.2 2.2 6.2 12.4 21.1 32.7 47.4
total new buildings 6.7 40.5 74.9 110.0 146.4 184.2 223.5
heating, by type of fuel [TWh]
Coal 96.7 63.2 37.2 19.7 9.7 4.5 1.9
Oil 323.3 272.5 199.8 128.2 80.4 48.9 28.5
Gas 1246.2 1123.5 983.7 805.3 612.9 452.1 334.8
District heating 248.4 291.9 343.1 396.7 447.9 493.3 528.5
Electricity 130.1 101.6 68.9 43.3 26.9 16.3 9.4
Solid biomass 428.7 429.2 398.1 357.0 319.6 283.3 246.6
Heat pumps 38.4 69.5 109.1 145.4 167.8 174.9 168.2
Hybrid heat pumps 0.0 0.0 3.6 15.4 29.4 37.8 40.1
total impact [TWh]
residential total 2076.6 1940.5 1761.0 1562.4 1378.7 1219.0 1082.1
heating 1792.9 1651.7 1472.3 1276.7 1095.8 937.0 798.3
domestic hot water 252.0 256.4 255.8 252.2 249.1 247.9 249.6
cooling 31.7 32.4 33.0 33.4 33.8 34.1 34.2
non-residential total 842.4 828.6 803.8 769.2 736.2 714.8 705.2
heating 718.9 699.7 671.2 634.2 598.8 574.0 559.6
domestic hot water 73.3 77.0 79.0 80.0 81.0 83.1 86.7
cooling 50.2 51.9 53.5 55.0 56.4 57.7 58.9
residential and non-residential total 2919.1 2769.1 2564.8 2331.5 2114.9 1933.9 1787.3
Investment and energy costs
Investment costs [bn Euro2020]
total investment costs 146.8 181.1 222.4 239.1 250.4 262.0 274.2
total renovation of existing buildings 92.1 123.6 161.9 175.3 183.2 191.1 199.3
envelope 59.1 77.8 102.1 110.4 114.7 119.1 123.8
floor 6.1 8.0 10.6 11.4 11.9 12.3 12.8
roof 23.5 31.1 40.9 44.3 46.0 47.8 49.6
walls 18.7 24.2 31.5 33.9 35.1 36.3 37.6
windows 10.8 14.4 19.1 20.8 21.8 22.8 23.8
equipment 33.0 45.8 59.7 64.8 68.5 71.9 75.4
heating + domestic hot water system 28.0 34.6 41.4 44.3 46.0 47.2 48.4
ventilation system 5.1 11.2 18.4 20.5 22.5 24.7 27.0
total new buildings 54.6 57.5 60.5 63.8 67.3 71.0 75.0
envelope 44.6 46.8 49.1 51.6 54.2 56.9 59.8
floor 4.7 4.9 5.1 5.3 5.5 5.7 6.0
roof 17.5 18.4 19.3 20.3 21.4 22.5 23.7
walls 13.6 14.2 14.8 15.5 16.2 17.0 17.8
windows 8.8 9.3 9.9 10.4 11.0 11.7 12.3
equipment 10.0 10.7 11.4 12.2 13.1 14.1 15.2
heating + domestic hot water system 6.8 7.0 7.2 7.4 7.7 8.0 8.3
ventilation system 3.2 3.7 4.2 4.8 5.4 6.1 6.9
Energy costs [bn Euro2020]
total energy costs for heating, cooling and domestic hot water 218.3 241.1 251.4 239.9 227.0 213.4 200.5
residential 175.7 194.5 200.7 189.0 175.9 161.5 148.7
non-residential 42.6 46.6 50.7 50.9 51.1 51.9 51.8
total heating energy costs 177.3 197.5 203.5 191.5 177.9 162.6 148.2
residential 145.6 161.9 165.1 152.9 139.3 124.4 110.3
non-residential 31.7 35.6 38.4 38.6 38.6 38.2 37.9
total domestic hot water costs 26.0 28.6 30.9 31.4 32.1 32.8 34.3
residential 23.1 25.5 27.6 28.0 28.6 29.1 30.4
non-residential 2.9 3.1 3.3 3.4 3.5 3.7 3.9
total cooling costs 15.0 15.0 17.0 17.0 17.0 18.0 18.0
residential 7.0 7.0 8.0 8.0 8.0 8.0 8.0
non-residential 8.0 8.0 9.0 9.0 9.0 10.0 10.0
203
Moderate ambition scenario - MODERATE 1
2020 2025 2030 2035 2040 2045 2050
Building stock
by type ofbuilding [bn m2]
Single family house 11.1 11.4 11.8 12.2 12.6 13.0 13.5
Small multifamily house 2.9 3.0 3.1 3.2 3.3 3.4 3.5
Large multifamily house 3.8 3.9 4.1 4.2 4.3 4.5 4.6
office buildings 1.5 1.6 1.7 1.7 1.8 1.9 2.0
trade and retail buildings 1.5 1.6 1.6 1.7 1.8 1.9 2.0
educational buildings 1.1 1.2 1.2 1.3 1.4 1.4 1.5
tourism and heath building 1.3 1.4 1.4 1.5 1.6 1.6 1.7
other buildings 0.9 0.9 1.0 1.0 1.1 1.2 1.2
total residential 17.8 18.4 19.0 19.6 20.2 20.9 21.5
total non-residential 6.3 6.6 7.0 7.3 7.7 8.1 8.5
total residential and non-residential 24.1 25.0 25.9 26.9 27.9 29.0 30.1
by type ofmeasure [bn m2]
not renovated 13.3 12.1 10.8 9.4 7.8 6.0 4.5
already renovated 10.3 9.5 8.3 6.9 5.5 4.0 2.8
renovation - average 0.3 2.2 4.4 6.9 9.2 11.6 14.0
renovation - ZEB partial-not renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB partial-already renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB restricted 0.0 0.0 0.0 0.0 0.1 0.2 0.2
renovation - ZEB 0.0 0.0 0.1 0.3 0.6 1.3 1.4
total existing buildings 23.9 23.8 23.6 23.4 23.3 23.1 22.9
new building - nZEB standard (nearly-zero energy) 0.2 1.1 1.9 2.6 3.2 3.8 4.3
new building - ZEB standard (zero emission) 0.0 0.1 0.3 0.8 1.3 2.0 2.7
total new buildings 0.2 1.2 2.3 3.4 4.5 5.7 7.0
Average renovation rate in full renovation equivalent
(over 5 yrs)[%total floor area] 1.35% 1.47% 1.8% 2.0% 2.0% 2.2% 1.7%
Average share ofdeeply renovated after 2020
(over 5 yrs)[% oftotal renovated area] 1.00% 1.17% 1.6% 3.3% 6.0% 9.6% 10.8%
Environmental impact
heating, by type ofbuilding [Mt CO2 eq]
Single family house 222.8 192.1 158.7 124.7 87.5 63.1 47.9
Small multifamily house 44.6 39.3 33.9 28.4 21.9 17.0 13.4
Large multifamily house 45.7 39.8 34.0 28.3 21.2 16.2 12.8
office buildings 31.3 28.1 23.5 18.0 11.4 7.9 7.7
trade and retail buildings 36.7 32.6 27.2 20.7 13.1 8.9 9.2
educational buildings 35.4 32.2 28.4 24.5 19.0 15.9 14.6
tourism and heath building 22.9 20.3 17.4 14.4 10.7 8.4 7.1
other buildings 21.8 19.3 16.1 12.3 7.8 5.4 5.2
total residential 313.1 271.1 226.6 181.4 130.6 96.3 74.1
total non-residential 148.1 132.6 112.6 89.9 62.1 46.5 43.8
total residential and non-residential 461.1 403.7 339.2 271.2 192.7 142.7 117.8
heating, by type ofmeasure [Mt CO2 eq]
not renovated 312.5 259.9 205.0 150.6 94.7 57.1 35.8
already renovated 144.4 118.5 89.5 61.4 35.6 19.0 10.7
renovation - average 3.2 19.0 34.1 44.3 45.1 45.4 47.2
renovation - ZEB partial-not renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB partial-already renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB restricted 0.0 0.0 0.0 0.2 0.3 0.6 0.6
renovation - ZEB 0.0 0.1 0.4 1.3 2.2 3.6 3.7
total existing buildings 460.0 397.6 329.0 257.8 177.9 125.8 98.0
new building - nZEB standard (nearly-zero energy) 1.1 5.8 9.1 11.1 11.7 12.9 14.4
new building - ZEB standard (zero emission) 0.0 0.3 1.1 2.3 3.1 4.0 5.5
total new buildings 1.1 6.1 10.2 13.4 14.8 16.9 19.8
heating, by type offuel [Mt CO2 eq]
Coal 32.9 21.9 13.0 6.8 3.3 1.5 0.7
Oil 86.2 71.8 51.8 32.6 20.0 11.9 6.9
Gas 251.7 226.5 193.9 151.2 108.1 75.8 55.2
District heating 52.1 48.7 46.7 46.6 34.2 30.2 32.5
Electricity 30.8 20.9 11.8 5.9 2.3 1.1 0.6
Solid biomass 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Heat pumps 7.4 13.9 21.0 24.0 18.1 14.8 14.0
Hybrid heat pumps 0.0 0.0 1.0 4.2 6.7 7.5 8.0
total impact envelope +equipment [Mt CO2 eq]
residential total 373.3 325.7 275.1 224.7 164.8 125.4 101.4
heating 313.1 271.1 226.6 181.4 130.6 96.3 74.1
domestic hot water 50.3 45.6 41.5 37.3 30.1 26.1 24.3
cooling 10.0 9.0 7.0 6.0 4.0 3.0 3.0
non-residential total 179.7 160.5 136.7 110.1 77.4 59.5 56.6
heating 148.1 132.6 112.6 89.9 62.1 46.5 43.8
domestic hot water 17.6 15.9 14.1 12.3 9.3 8.0 7.9
cooling 14.0 12.0 10.0 8.0 6.0 5.0 5.0
residential and non-residential total 553.0 486.2 411.8 334.8 242.2 184.8 158.0
204
Moderate ambition scenario - MODERATE 2
2020 2025 2030 2035 2040 2045 2050
Energy impact
Envelope measures
heating, by type of building [TWh]
Single family house 1278.0 1172.7 1034.7 883.8 745.5 626.7 524.7
Small multifamily house 249.0 230.6 209.9 187.8 166.6 146.7 128.4
Large multifamily house 265.9 243.8 219.1 193.8 170.2 148.5 128.8
office buildings 152.1 145.7 135.6 120.2 105.7 92.1 97.6
trade and retail buildings 177.0 168.6 156.6 138.6 121.8 104.1 112.0
educational buildings 172.8 170.4 165.9 159.4 153.8 151.1 151.2
tourism and heath building 111.5 106.8 100.4 92.5 84.7 78.4 73.5
other buildings 105.5 100.5 93.2 82.5 72.7 63.0 66.0
total residential 1792.9 1647.1 1463.7 1265.3 1082.3 921.9 781.9
total non-residential 718.9 692.1 651.7 593.2 538.8 488.7 500.3
total residential and non-residential 2511.8 2339.1 2115.4 1858.6 1621.1 1410.6 1282.2
heating, by type of measure [TWh]
not renovated 1699.2 1503.9 1275.8 1029.7 796.0 566.9 397.2
already renovated 789.4 689.4 560.4 423.0 304.8 197.5 126.4
renovation - average 16.4 106.3 206.8 295.9 365.9 434.0 508.0
renovation - ZEB partial-not renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB partial-already renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB restricted 0.0 0.0 0.2 1.2 3.1 6.9 7.2
renovation - ZEB 0.1 0.7 2.2 8.9 20.1 41.9 45.6
total existing buildings 2505.1 2300.2 2045.3 1758.6 1489.8 1247.2 1084.2
new building - nZEB standard (nearly-zero energy) 6.5 37.1 62.4 81.5 99.2 115.9 131.2
new building - ZEB standard (zero emission) 0.2 1.8 7.6 18.5 32.0 47.5 66.7
total new buildings 6.7 38.9 70.1 100.0 131.2 163.4 198.0
heating, by type of fuel [TWh]
Coal 96.7 64.3 38.1 20.1 9.7 4.4 1.9
Oil 323.3 269.2 194.1 122.1 74.9 44.6 25.7
Gas 1246.2 1121.7 960.0 748.7 535.0 375.1 273.5
District heating 248.4 286.9 339.7 395.1 445.7 480.1 525.3
Electricity 130.1 102.4 67.4 40.2 23.3 13.2 7.4
Solid biomass 428.7 422.3 390.9 348.4 307.2 263.7 226.0
Heat pumps 38.4 72.5 120.0 160.8 181.6 178.1 167.3
Hybrid heat pumps 0.0 0.0 5.3 23.2 43.6 51.4 55.0
total impact envelope + equipment [TWh]
residential total 2076.6 1935.2 1751.2 1549.1 1362.7 1200.8 1061.8
heating 1792.9 1647.1 1463.7 1265.3 1082.3 921.9 781.9
domestic hot water 252.0 255.7 254.5 250.3 246.6 244.8 245.7
cooling 31.7 32.4 33.0 33.4 33.8 34.1 34.2
non-residential total 842.4 820.6 782.9 725.4 672.1 625.0 642.3
heating 718.9 692.1 651.7 593.2 538.8 488.7 500.3
domestic hot water 73.3 76.7 77.7 77.2 76.9 78.6 83.1
cooling 50.2 51.9 53.5 55.0 56.4 57.7 58.9
residential and non-residential total 2919.1 2755.9 2534.1 2274.5 2034.7 1825.8 1704.1
Investment and energy costs
Investment costs [bn Euro2020]
total investment costs 146.8 183.2 231.5 247.1 261.2 277.7 274.6
total renovation of existing buildings 92.1 127.2 170.4 184.5 192.3 208.5 197.9
envelope 59.1 78.9 102.1 110.9 115.0 128.0 113.9
floor 6.1 8.1 10.5 11.3 11.7 13.1 11.4
roof 23.5 31.4 40.7 44.2 45.8 51.6 44.6
walls 18.7 24.5 31.6 34.0 35.2 37.8 36.0
windows 10.8 14.8 19.3 21.4 22.3 25.5 21.8
equipment 33.0 48.4 68.4 73.6 77.3 80.5 84.0
heating + domestic hot water system 28.0 35.4 43.8 46.9 48.6 49.6 50.8
ventilation system 5.1 13.0 24.6 26.6 28.7 30.9 33.3
total new buildings 54.6 56.0 61.1 62.6 69.0 69.2 76.8
envelope 44.6 46.1 48.7 51.2 53.7 56.4 59.2
floor 4.7 4.8 5.0 5.2 5.4 5.6 5.8
roof 17.5 18.1 19.2 20.2 21.3 22.4 23.5
walls 13.6 14.0 14.7 15.4 16.1 16.8 17.6
windows 8.8 9.2 9.8 10.4 11.0 11.6 12.3
equipment 10.0 9.8 12.4 11.5 15.3 12.9 17.6
heating + domestic hot water system 6.8 6.9 7.5 7.5 8.3 7.9 8.7
ventilation system 3.2 2.9 4.9 4.0 7.0 5.0 8.9
Energy costs [bn Euro2020]
total energy costs for heating, cooling and domestic hot water 218.3 240.9 251.0 238.7 224.6 208.6 197.0
residential 175.7 194.2 200.2 188.1 174.8 160.2 147.1
non-residential 42.6 46.7 50.8 50.6 49.9 48.5 49.9
total heating energy costs 177.3 197.3 203.2 190.5 175.7 158.1 145.0
residential 145.6 161.7 164.6 152.2 138.3 123.3 109.0
non-residential 31.7 35.6 38.6 38.3 37.4 34.8 36.0
total domestic hot water costs 26.0 28.6 30.8 31.3 31.9 32.5 34.0
residential 23.1 25.5 27.5 27.9 28.4 28.9 30.1
non-residential 2.9 3.1 3.3 3.4 3.5 3.7 3.9
total cooling costs 15.0 15.0 17.0 17.0 17.0 18.0 18.0
residential 7.0 7.0 8.0 8.0 8.0 8.0 8.0
non-residential 8.0 8.0 9.0 9.0 9.0 10.0 10.0
205
High ambition I scenario - HIGH-I 1
2020 2025 2030 2035 2040 2045 2050
Building stock
by type ofbuilding [bn m2]
Single family house 11.1 11.4 11.8 12.2 12.6 13.0 13.5
Small multifamily house 2.9 3.0 3.1 3.2 3.3 3.4 3.5
Large multifamily house 3.8 3.9 4.1 4.2 4.3 4.5 4.6
office buildings 1.5 1.6 1.7 1.7 1.8 1.9 2.0
trade and retail buildings 1.5 1.6 1.6 1.7 1.8 1.9 2.0
educational buildings 1.1 1.2 1.2 1.3 1.4 1.4 1.5
tourism and heath building 1.3 1.4 1.4 1.5 1.6 1.6 1.7
other buildings 0.9 0.9 1.0 1.0 1.1 1.2 1.2
total residential 17.8 18.4 19.0 19.6 20.2 20.9 21.5
total non-residential 6.3 6.6 7.0 7.3 7.7 8.1 8.5
total residential and non-residential 24.1 25.0 25.9 26.9 27.9 29.0 30.1
by type ofmeasure [bn m2]
not renovated 13.3 11.9 9.3 6.7 4.4 2.6 1.8
already renovated 10.3 9.8 8.3 6.1 3.6 1.9 1.2
renovation - average 0.3 2.1 5.6 7.8 7.8 7.8 7.8
renovation - ZEB partial-not renovated 0.0 0.0 0.1 1.3 2.9 3.3 2.4
renovation - ZEB partial-already renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB restricted 0.0 0.0 0.0 0.5 1.4 2.3 3.1
renovation - ZEB 0.0 0.0 0.1 1.1 3.1 5.1 6.5
total existing buildings 23.9 23.8 23.6 23.4 23.3 23.1 22.9
new building - nZEB standard (nearly-zero energy) 0.2 1.2 1.8 1.8 1.8 1.8 1.8
new building - ZEB standard (zero emission) 0.0 0.0 0.5 1.6 2.8 4.1 5.4
total new buildings 0.2 1.2 2.3 3.4 4.6 5.9 7.2
Average renovation rate in full renovation equivalent
(over 5 yrs)[%total floor area] 1.35% 1.47% 3.0% 3.6% 3.3% 2.3% 0.9%
Average share ofdeeply renovated after 2020
(over 5 yrs)[% oftotal renovated area] 1.00% 1.23% 3.9% 18.9% 39.6% 53.6% 59.2%
Environmental impact
heating, by type ofbuilding [Mt CO2 eq]
Single family house 222.8 177.7 117.5 76.2 48.1 33.4 25.7
Small multifamily house 44.6 35.8 23.2 13.9 7.6 4.7 2.8
Large multifamily house 45.7 35.8 23.1 14.0 7.7 4.8 2.7
office buildings 31.3 27.7 22.4 16.5 10.4 7.3 7.0
trade and retail buildings 36.7 32.1 25.9 19.1 12.0 8.4 8.1
educational buildings 35.4 31.5 25.2 18.4 11.5 9.4 9.1
tourism and heath building 22.9 19.8 15.0 10.2 5.8 4.6 4.4
other buildings 21.8 19.1 15.3 11.3 7.1 5.0 4.8
total residential 313.1 249.3 163.9 104.0 63.5 42.9 31.3
total non-residential 148.1 130.1 103.9 75.4 46.7 34.6 33.4
total residential and non-residential 461.1 379.4 267.8 179.4 110.3 77.6 64.7
heating, by type ofmeasure [Mt CO2 eq]
not renovated 312.5 239.4 143.8 72.2 30.4 14.5 9.9
already renovated 144.4 116.1 76.3 39.8 14.9 6.2 4.5
renovation - average 3.2 17.7 35.6 35.5 23.1 17.7 16.2
renovation - ZEB partial-not renovated 0.0 0.3 2.4 16.9 23.3 18.6 11.2
renovation - ZEB partial-already renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB restricted 0.0 0.0 0.2 1.3 2.4 2.9 3.5
renovation - ZEB 0.0 0.1 0.5 3.3 6.0 7.2 7.6
total existing buildings 460.0 373.5 258.9 168.9 100.1 67.1 52.8
new building - nZEB standard (nearly-zero energy) 1.1 5.7 7.5 7.0 5.9 5.6 5.6
new building - ZEB standard (zero emission) 0.0 0.1 1.4 3.5 4.2 4.9 6.3
total new buildings 1.1 5.9 8.9 10.5 10.1 10.5 11.9
heating, by type offuel [Mt CO2 eq]
Coal 32.9 23.7 11.9 5.0 2.0 0.8 0.3
Oil 86.2 65.0 37.3 18.8 9.2 4.3 2.0
Gas 251.7 207.6 140.2 80.5 43.2 24.8 16.6
District heating 52.1 40.1 31.6 26.4 16.7 13.4 13.5
Electricity 30.8 26.3 18.2 11.6 5.5 2.8 1.5
Solid biomass 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Heat pumps 7.4 16.7 26.3 29.2 21.3 17.3 16.2
Hybrid heat pumps 0.0 0.0 2.2 8.1 12.3 14.1 14.6
total impact envelope +equipment [Mt CO2 eq]
residential total 373.3 300.8 204.6 135.6 84.6 59.8 48.1
heating 313.1 249.3 163.9 104.0 63.5 42.9 31.3
domestic hot water 50.3 42.5 33.8 25.6 17.0 13.9 13.8
cooling 10.0 9.0 7.0 6.0 4.0 3.0 3.0
non-residential total 179.7 157.8 127.2 94.1 60.1 45.8 44.5
heating 148.1 130.1 103.9 75.4 46.7 34.6 33.4
domestic hot water 17.6 15.7 13.3 10.7 7.4 6.1 6.1
cooling 14.0 12.0 10.0 8.0 6.0 5.0 5.0
residential and non-residential total 553.0 458.7 331.8 229.7 144.7 105.6 92.6
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High ambition I scenario - HIGH-I 2
2020 2025 2030 2035 2040 2045 2050
Energy impact
Envelope measures
heating, by type of building [TWh]
Single family house 1278.0 1169.6 933.4 762.5 668.1 559.7 444.6
Small multifamily house 249.0 222.9 172.9 131.3 101.9 73.7 43.9
Large multifamily house 265.9 238.4 186.2 142.4 110.6 78.8 44.3
office buildings 152.1 144.5 133.3 117.9 103.8 88.8 88.4
trade and retail buildings 177.0 166.9 153.6 135.8 119.6 101.5 101.7
educational buildings 172.8 166.4 152.2 133.6 116.8 115.7 117.3
tourism and heath building 111.5 104.0 90.2 74.0 58.8 57.1 56.5
other buildings 105.5 99.5 91.5 80.8 71.3 60.7 60.7
total residential 1792.9 1630.9 1292.4 1036.2 880.5 712.2 532.8
total non-residential 718.9 681.3 620.7 542.1 470.3 423.7 424.6
total residential and non-residential 2511.8 2312.2 1913.1 1578.3 1350.8 1135.9 957.3
heating, by type of measure [TWh]
not renovated 1699.2 1459.5 1031.4 635.0 363.7 199.2 131.8
already renovated 789.4 711.3 550.9 356.0 188.2 94.1 64.2
renovation - average 16.4 101.4 244.1 303.3 276.3 255.9 239.9
renovation - ZEB partial-not renovated 0.0 1.6 18.0 160.7 315.8 309.1 195.8
renovation - ZEB partial-already renovated 0.0 0.0 0.0 0.0 0.0 0.0 0.0
renovation - ZEB restricted 0.0 0.1 1.2 11.4 30.7 46.6 57.5
renovation - ZEB 0.1 0.4 3.3 26.3 68.1 99.4 109.7
total existing buildings 2505.1 2274.3 1848.9 1492.8 1242.8 1004.4 798.9
new building - nZEB standard (nearly-zero energy) 6.5 37.0 53.5 54.3 54.3 54.3 54.3
new building - ZEB standard (zero emission) 0.2 0.9 10.7 31.3 53.7 77.2 104.1
total new buildings 6.7 37.9 64.2 85.5 108.0 131.5 158.4
heating, by type of fuel [TWh]
Coal 96.7 69.7 35.0 14.6 6.0 2.4 0.9
Oil 323.3 243.6 139.9 70.3 34.7 16.3 7.5
Gas 1246.2 1027.8 694.1 398.7 214.0 122.8 82.3
District heating 248.4 232.8 224.3 217.5 212.6 209.5 214.5
Electricity 130.1 133.3 109.4 84.3 61.1 37.4 19.8
Solid biomass 428.7 520.4 550.1 549.9 522.3 431.7 323.8
Heat pumps 38.4 84.7 149.2 198.3 220.8 219.2 207.9
Hybrid heat pumps 0.0 0.0 11.1 44.7 79.4 96.6 100.7
total impact envelope + equipment [TWh]
residential total 2076.6 1918.2 1572.1 1303.7 1139.5 965.4 782.1
heating 1792.9 1630.9 1292.4 1036.2 880.5 712.2 532.8
domestic hot water 252.0 254.9 246.7 234.1 225.2 219.1 215.2
cooling 31.7 32.4 33.0 33.4 33.8 34.1 34.2
non-residential total 842.4 808.3 748.1 668.2 596.0 551.0 555.3
heating 718.9 681.3 620.7 542.1 470.3 423.7 424.6
domestic hot water 73.3 75.1 73.9 71.0 69.3 69.6 71.9
cooling 50.2 51.9 53.5 55.0 56.4 57.7 58.9
residential and non-residential total 2919.1 2726.5 2320.2 1971.9 1735.5 1516.4 1337.5
Investment and energy costs
Investment costs [bn Euro2020]
total investment costs 146.8 204.2 341.1 382.4 400.9 407.4 408.8
total renovation of existing buildings 92.1 147.2 275.6 314.8 325.4 333.1 325.6
envelope 59.1 89.1 178.8 213.4 221.3 226.4 215.6
floor 6.1 9.1 18.4 26.3 27.3 27.6 26.5
roof 23.5 35.3 72.3 117.1 121.4 123.4 118.9
walls 18.7 28.2 53.3 37.8 39.1 40.3 38.7
windows 10.8 16.5 34.8 32.3 33.5 35.1 31.5
equipment 33.0 58.1 96.8 101.4 104.1 106.7 110.0
heating + domestic hot water system 28.0 41.6 61.7 64.7 65.7 66.6 68.0
ventilation system 5.1 16.5 35.1 36.7 38.4 40.1 42.0
total new buildings 54.6 57.0 65.6 67.6 75.5 74.3 83.3
envelope 44.6 46.6 51.0 54.2 56.6 59.2 61.9
floor 4.7 4.9 4.9 5.0 5.2 5.5 5.7
roof 17.5 18.3 20.1 21.5 22.5 23.5 24.6
walls 13.6 14.1 15.3 16.2 16.8 17.5 18.3
windows 8.8 9.2 10.7 11.6 12.1 12.6 13.2
equipment 10.0 10.3 14.6 13.4 18.9 15.2 21.4
heating + domestic hot water system 6.8 7.2 8.4 8.2 9.4 8.5 9.4
ventilation system 3.2 3.1 6.1 5.2 9.5 6.7 12.0
Energy costs [bn Euro2020]
total energy costs for heating, cooling and domestic hot water 218.3 241.9 235.1 213.3 198.0 180.2 161.6
residential 175.7 193.9 182.2 161.4 148.5 132.2 112.8
non-residential 42.6 48.0 52.9 52.0 49.5 48.0 48.8
total heating energy costs 177.3 198.3 188.0 166.8 151.4 131.5 111.7
residential 145.6 161.4 147.5 127.2 114.3 97.2 76.6
non-residential 31.7 36.9 40.5 39.6 37.1 34.4 35.0
total domestic hot water costs 26.0 28.6 30.0 29.6 29.7 30.7 32.0
residential 23.1 25.5 26.7 26.2 26.2 27.1 28.2
non-residential 2.9 3.1 3.3 3.4 3.4 3.6 3.8
total cooling costs 15.0 15.0 17.0 17.0 17.0 18.0 18.0
residential 7.0 7.0 8.0 8.0 8.0 8.0 8.0
non-residential 8.0 8.0 9.0 9.0 9.0 10.0 10.0
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9. Modelling of the EPBD revision within the DEGD framework.
For the purpose of assessment the impacts of the EPBD revision within the “Delivering
European Green Deal” (DEGD) framework (informally also called “Fit for 55”)
MIXwoEPBD variant was developed with the model PRIMES. This variant is built on
the DEGD central MIX scenario.
DEGD central MIX scenario illustrates a balanced pathway towards the climate target of
55% GHG reduction by combination of carbon pricing and regulatory tools. In this
scenario, drivers illustrating the revision of EPBD are present. Full description of MIX
scenario, its baseline (REF2020) and its key results is available as part of DEGD
package70
.
MIXwoEPBD variant was developped to assess the impacts of the revision of EPBD
only (or more precisely of the absence of such a revision) rather than of the whole
package of DEGD policies. This variant removes typical drivers representing the revision
of EPBD:
1. Part of increase (between MIX and REF2020) in the rate and depth of
renovations. Consequently, part of the increase in deep and medium does not
happen or becomes light renovations only in this variant. This aspect has the
biggest impact on the results.
Importantly, renovations increase (between MIX and REF2020) are incentivised
not only by drivers illustrating the revision of EPBD but also the horizontal
energy savings obligation (under Article 8 of the EED recast) and the carbon
price (but this is assumed static in the MIXwoEPBD variant at the level of the
MIX scenario). Reflecting policy options of this IA, an increase of deep
renovations (thanks to introduction of deep renovation standard) and part of
increase of medium renovations (thanks to introduction of MEPs and obligation
for application of MEPs for buildings under transaction) can be assigned to the
revision of EPBD. Table below summarises the differences in renovation rates
assumed in MIX and MIXwoEPBD scenarios.
70
See the description of core scenarios here: https://ec.europa.eu/energy/data-analysis/energy-
modelling/policy-scenarios-delivering-european-green-deal_en as well as Annex 4 in the Impact
Assessment accompanying amendment to Renewable Energy Directive SWD(2021)621 final
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Table D.9: Renovation rates in MIX and MIXwoEPBD scenarios
Source: Primes
2. An increased rate of uptake of renewable H&C solutions (notably heat pumps)
accompanying the renovations. Such equipment change becomes an attractive
choice for low energy consumption of a deeply renovated building.
3. More stringent and better enforced standards for new buildings thanks to
introduction of Long Term Renovation Strategies and ZEB standard definition.
4. Enabling conditions created by legal certainty about the measures described
above and additional actions such as Buildings Renovation Passport aiming at
increasing consumer awareness. In modelling terms, such enabling conditions
translate into more frequent investment decisions as economic agents have full
information about costs and benefits expected and in general perceive a lower
transactional costs.
At the same time drivers representing all other DEGD policies are “frozen” on their level
of ambition/stringency as modelled in MIX.
In the MIXwoEPBD variant, because of removal of drivers described above, a gap to
overall EE and RES ambition appears as well as gap to GHG 55% target. Bridging these
gaps can be attributed to revision of EPBD. As this variant achieves the carbon neutrality
in 2050, it has to considerably increase the efforts in fuel switch.
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Annex E: Intervention logic and common barriers to building
renovations
1. Intervention logic
The figure below visualises the intervention logic, linking the drivers, problems,
objectives, specific objectives and policy options. The key problems and their drivers are
detailed in section 2 (“Problem definition”). The objectives and specific objectives are
laid down in section 4 ("Objectives: What is to be achieved?"). The policy options are
presented in section 5 ("What are the available policy options?").
2. Common barriers to energy renovations in buildings
The Renovation Wave Strategy Communication addressed the need to significantly
increase energy renovations in the European Union, by setting the objective to at least
double the annual energy renovation rate of residential and non-residential buildings by
2030.
In the preparation of both the Renovation Wave Communication and the present Impact
Assessment for the EPBD revision a number of stakeholder consultations, in-depth
literature reviews and targeted studies were undertaken in order to identify the different
set of barriers to energy efficiency renovations in EU Member States. Some of these
barriers to energy efficiency renovation in buildings are more or less relevant depending
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on the Member States, and sometimes of regions within Member States. However, albeit
with a different weight across Europe, all of these barriers taken together account for the
insufficient annual renovation rates in the EU and the existing gap toward the 2030
decarbonisation target for the building sector.
The barriers to energy renovations could be divided in six main categories:
(1) Economic and financial barriers associated to building renovations, from the high
upfront costs and affordability of building renovation, to access to finance, to the issue of
the split of incentives, and the presence of opportunity and transaction costs and high
discount rates;
(2) Behavioural barriers related to consumers support for the uptake of energy
renovations, from the lack of knowledge and conflicting information on energy
performance of buildings and multiple benefits of energy renovations, to a general lack
of acceptance on the need to step-up decarbonisation efforts, including in buildings, until
the inertia, the perceived hassle of renovations, and the aversion to indebtedness and
financial risk;
(3) Information barriers associated with the lack of accessible, transparent and
comparable information across the board and EU Member States on the decarbonisation
trajectory for buildings, lack of comparable and standardised informative tools on the
energy performance of buildings across the EU, as well as lack of information on
available funding opportunity for energy renovation investments and of the potential
lower credit risk associated to energy efficiency investments;
(4) Administrative barriers related to both the insufficient technical expertise and
capacities among local and regional authorities to support building renovation
programmes, length administrative process and permitting procedures;
(5) Technical barriers related to the possible shortage of skilled workforce for energy
renovation, lack of standardised practices and industrialised solutions in the building
renovation market, as well as lack of internal skills and accessible advisory and quality
assurance support for non-professional building owners;
(6) Organisational barriers associated to the complexity of building ownership and use,
where co-ownership and collective decisions process are often the norm, and where the
commercial lease of buildings and buildings unit add in term of complexity and split
incentives between rentees and renters;.
On the top of these six categories of stable barriers, some temporary and periodic barriers
might arise that affect energy renovations across EU Member States. These are often of
macro-economic nature and related to market cycles, market interventions and market
adjustments. In the last two years, a number of consequences that stems of the Covid-19
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global pandemic have affected the market of energy renovations. The interruption of the
global shipping routes had a cascade effects on the availability of construction materials.
At the same time, in EU Member States, the high number of public subsidies for energy
renovation released on the market, in particular by the Recovery and Resilience Facility,
has generated a temporary shortage of skilled workforce for energy renovations and
consequent increase in the costs of renovations. While the demands for energy
renovations in building is expected to grow in the next year, these initial shocks are
expected to fall back and the market to adjust.
The barriers to buildings renovations are presented in the following table.
Table E.1: Barriers to building renovations
Type of barrier Barrier
Financial
barriers
Upfront costs and affordability of energy renovations
Weak economic signal
Split incentives
Lack of access to public and private financial support for affordable
renovations
Limited public funds, public financial support not sufficiently targeted
toward deep renovations
Lack of clear property value differential
Transaction costs, high discount rates
Behavioral/consumer
barriers
Lack of knowledge, conflicting or lack of information on Energy
Performance of buildings and multiple benefits of energy renovations
Time and hassle factor, inertia
Perceived risk, attachment to incumbent technologies
Lack of acceptance of need to step-up decarbonisation efforts, including in
buildings
Aversion to financial risk and indebtedness for energy efficiency
investments
Information barriers
Lack of well-communicated decarbonisation trajectory
Lack of standardized informative tools on energy performance
Lack of information on available funding opportunities (public and private)
for energy renovations on buildings, and on the potential lower credit risks
of EE investments
Administrative barriers
Regulatory & planning (e.g. limitation in façade intervention, approval
process for renewable installation and renovation permits)
Lack of technical expertise and capacities in regional and local
administration for energy efficiency renovation programmes
Burdensome administrative processes (multiple permitting procedures, no
single entry point)
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Technical barriers
Lack of skilled workforce for energy efficiency renovations, lack of low-
carbon renovation skills
Lack of standardized practices and industrialized fast-track solutions for
energy renovations in buildings
Lack of quality assurance for complex renovation
Organisational/Building
complexity barriers
Collective decision problems for co-owned properties
Commercial lease barriers
Economic and financial barriers are one of the main barriers to the uptake of higher
renovation rates across Europe. Financial barriers are first and foremost associated with
the up-front capital costs and affordability of energy efficiency measures and deployment
of renewable energy technologies in buildings. Although the challenges and way to
overcome the economic and financial barriers might differ per building types, these
barriers are present for both public buildings and private residential and service
buildings. Open public and targeted stakeholder consultations, both for the Renovation
Wave Communication and EPBD revision, point clearly at the lack of sufficient financial
incentives to implement energy renovations as one of the most persistent challenges71
.
There a number of other less visible challenges and barriers hampering the uptake of
energy renovations and the growth of building renovation rates. The medium-term
payback time of investments on energy renovations, and the perceived limited and
complicated access to public financial support and favourable private financial products,
are two barriers that if addressed could contribute in limiting the challenges represented
by the upfront costs and affordability of energy renovations. Under this light, with
regards to residential buildings owned by non-economic actors and private financial
products, a stronger reluctance to indebtedness to finance energy renovations should be
registered, when compared to economic actors. Although commercial banks and financial
institutions are developing in the recent years – due to increased attention to sustainable
financing – a number of favourable lending products for energy renovations, the need to
access finance and thus borrow money for an energy renovation, even if at favourable
conditions, still represents a very relevant barrier. Due to lack of comparable information
on energy performance of buildings across EU Member States, and to the lack of a
common definition of minimum thresholds for energy renovations to be supported with
71
In the public consultation to the Renovation Wave, an overwhelming majority of 92% of respondents see
lack of or limited resource to finance building renovation as an important barrier to building renovations. In
residential buildings in particular, the second most important barrier identified is lack of simple, attractive
and easily accessible public incentive measures for renovation. At the same time more than three quarters
of the respondents point to lack of information/low awareness of available financing and to cumbersome
procedures and/or financial constraints for accessing public financial support. A significant share of
respondents pointed also to lack of mainstream of financing products.
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public support, public financial support is often not sufficiently targeted on a cost-
effective way toward deep renovations and toward low to medium income households.
Additionally, energy efficiency investments are dependent on the risk associated with the
investment class. While energy efficiency renovations are more and more recognised as
less risky investments compared to similar capital investments, the direct pay-out of the
investment might not always be as interesting for the investors than comparable
investments. A real estate enterprises might for example prefer to expand its buildings
portfolio by investing in another building block, rather than renovating its existing assets.
The issue of split incentives for energy renovation significantly affects the financial case
for energy renovation for buildings which are rented or which are under commercial
lease, and the possibility to appropriately stimulate interests for energy renovations in
such buildings. In the absence of mandatory obligations to building renovations, the issue
of split incentives remains probably the most relevant barriers to the uptake of energy
renovations in buildings through market measures.
Behavioural barriers to energy renovations refer to inertia or bounded rationality, in
presence of which even the investment decision which will generate high economic or
wider benefits are not made. These barriers also relate to resistance to change, inertia and
risk aversion. On one side, these are linked to the lack of knowledge and conflicting or
lack of information on the energy performance of buildings and the multiple benefits of
energy renovations. While the attention to the energy performance of building and on the
multiple benefits of energy renovations has been growing, there is still not a diffused
public acceptance of the need to addressing energy consumptions and GHG emissions in
buildings. For long time, and differently from other sectors, such as transports or
industry, energy performance of buildings was regarded as an individual interest of the
building owner/energy consumer and not as a source of greenhouses gas emissions with
impact on the all society.
Information barriers to energy renovations in buildings are closely related to the
general lack of accessible, reliable, transparent and comparable information across EU
Member States on the energy performance of buildings. Overall, information barriers are
summarised in three major areas, lack of well-communicated decarbonisation trajectory
involving energy renovation in buildings, lack of standardized informative tools on
energy performance and on methodologies across EU Member States, and lack of
information on available funding opportunities (public and private) for energy
renovations on buildings.
Measurements, evaluation and reporting methods on the energy performance of national
building stocks are often decided at national level and loosely aligned across Member
States. Overall, this results on a lack of information, and possible mistrust on the multiple
benefits of energy efficiency renovation. Building owners and users are often unaware of
the associated costs and benefits of an increased building performance.
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Linked as well to the technical and organisational/behavioural barriers, there is a
fragmented building sector supply chain, where knowledge and understanding of
integrated solutions are limited, and competition between the various services (e.g.,
technology suppliers, builders), as well as the need for consumers to work with each
party to obtain advice and solutions, can be time consuming and confuse decision
making.
When it comes to private financial support, the lack of information on the potential lower
credit risk of energy efficiency investments represents as well an information not
sufficiently accessible to individual companies and consumers. The difficulty in
retrieving reliable information on the benefits of the energy efficiency renovations and on
how to embark on the renovation journey, is probably one the most relevant barrier that
might discourage building owners even in presence of attractive public support72
. In the
consultation on the Inception Impact Assessment, NGOs and business stakeholders
stressed that public/consumer awareness of the benefits of renovation should increase.
They expressed concern about the current lack of understanding and trust in energy
savings from renovations.
Administrative barriers represents a relevant set of challenges for the uptake of energy
renovations in buildings. Permitting and certification procedures for energy renovations
in buildings are often cumbersome, involving a relevant number of administrative and
economic actors. The permitting procedure for the renovation works and the certification
of the increased energy performances, necessary to access public financial support as
well as favourable private financing, are often of competencies of different
administrative authorities. Also in this regards, the lack of standardised tools and
procedures represent a significant barrier for the uptake of energy renovations.
Technical barriers for energy renovations refers to the barriers present in the
construction industry ecosystem, both we regards individual skills and technological
solutions available. Construction workforce and professionals not always possess the
skills and competencies to interpret technical information or evaluate energy efficiency
opportunities and provide adequate solution for energy renovations aiming at increasing
energy performance of buildings. The need for adequate skills is further increased with
the diffusion of new technologies, requiring a stronger understanding of buildings’
infrastructure and skilled workforce. Additionally, construction sector practices and
technological solutions are often very much local. While this is positive in terms of local
economic growth and jobs, it has a negative impact in term of development of
72 In the OPC for the Renovation Wave, 80% of respondents pointed to lack of interest in building energy
renovation because it does not pay off and rate this a very important barrier to building renovation. This is
closely linked to the fact that in the same OPC, in residential buildings, insufficient understanding of
energy use and savings is rated as very important barrier by more respondents than any other barrier. In the
case of the residential sector, more than three quarters of respondents point to lack of trust or guarantee that
renovation will deliver the energy and money savings or other benefits envisaged.
217
standardised and industrialised fast-track technological solutions. The availability of
more standardised and industrialised solutions for energy renovations will increase the
uptake of energy renovations by reducing its inherent complexity. However, the lack of
standardised informative tools and methodologies to evaluate the energy performance of
buildings across EU Member States represents a relevant barriers also in this regard.
Finally, with clear cross-cutting links with behavioural barriers and the possible lack of
trust on the multiple benefits of energy efficiency renovations, the lack of standardised
solutions and the prominence of tailored solutions can lead to a lack of quality assurance
for complex renovations. This is also a very relevant barrier related to the access to
public financing schemes and energy efficiency lending products that require assurances
in term of increase in energy performances.
Organisational barrier refers to the inner complexity of building ownership status. As
buildings are immovable goods, any decision affecting them have to face two major
barriers. On one side the ownership status of buildings. Buildings are often co-owned
properties and legislation often requires formal decision-making processes and agreement
among the owners to intervene on the energy renovation of the building. On the other
side, buildings and its different units are commercial goods, leased out to assure a profit
through a rent on the basis of a formal contract. The commercial nature of buildings can
affect energy renovations due to split incentives. In addition, on the basis of the formal
contract between owner and tenants energy renovations can be limited because of
organisational reasons.
2. Overview of measures and options
Table E.1: Overview of measures and options
Area A. Measures to increase the number of buildings being renovated and renovation depth:
Minimum energy performance standards and information tools
A.1 Minimum energy performance standards (MEPS)
Building type
Trigger point and
timeline
Metric and
instrument
Ambition level
MEPS1
Worst-performing
rented/sold
residential and non-
residential buildings
First obligation from
2027, tightened
gradually
kWh/m2/y
EPC class
At least EPC class E
(or similar) to allow
transaction73
, gradually
tightened74
MEPS2
All residential and
non-residential
buildings
MSs to set up a
scheme by 2027
EPC class or
other indicator
Gradual transformation
towards ZEB till 2050
73
It could be established that the upgrade of the building could happen within a set time limit after the
transaction. In case of sales, the obligation should fall on the buyer.
74
For instance: E by 2027, D by 2030, C by 2033.
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Area A. Measures to increase the number of buildings being renovated and renovation depth:
Minimum energy performance standards and information tools
A.1 Minimum energy performance standards (MEPS)
Building type
Trigger point and
timeline
Metric and
instrument
Ambition level
MEPS3
Non-residential
buildings above a
certain size
MS to set up scheme
by 2024, first
obligations from
2026, ZEB on
average to be
achieved by 2045
EPC class or
other indicator
Gradual transformation
towards ZEB till 2050
MEPS4 All buildings
First obligation from
2026
Based on
Energy Label
class or carbon
emission
performance
Require that only best
in class heating
appliances are installed
when they are
replaced75
A.2 Buildings renovation passport (BRP)
No. Policy options
Building
Type
Timeline
EPBD
Article
Remark / Purpose / Condition
BRP1
BRP
framework in
EPBD,
voluntary
implementation
by MSs
Voluntary
impl.
EC to provide
framework by
2023
Art. 11
 EC to set up Common General
BRP Framework
 BRP to address energy
performance
 Develop delegated act including
detailed common template
 Explore feasibility to address
whole life carbon and resilience
BRP2
BRP
framework in
EPBD as in
BRP1 +
mandatory
implementation
by MSs
Up to MS,
Voluntary
application
of BRP
EC to provide
framework by
2023,
Implementation
by 2025
Art. 11
Art. 17
New
Art. on
MEPS
Possible actions:
 information in EPC
recommendations section
 requirement for public funding
 link with MEPS
 training (and certification scheme)
for building professionals and
BRPs experts
BRP3
BRP2+
Mandatory
BRP for certain
financial
incentives
Up to MS,
Mandatory
application
of BRP for
certain
buildings
EC to provide
framework by
2023,
MS to set up
scheme by
2024
Art. 11
Art. 17
New
Art. on
MEPS
As in BRP2
A.3 Quality and reliability of EPCs
No. Policy options Timeline Detailed description
75
Where technically feasible.
219
No. Policy options Timeline Detailed description
EPCQ1
Voluntary measures to
increase quality76
and
harmonisation of
EPCs
Up to MS
 Introduce in the EPBD a voluntary common EU
template (Machine readable, Database compatible)
 Voluntary harmonisation of EPC classes (Best EPC
class needs to be 2050 compatible)
EPCQ2
Mandatory measures
to increase quality and
voluntary
harmonisation
MS to
implement
by 2025
 Introduce in the EPBD a mandatory common EU
template (Machine readable, Database compatible)
 Voluntary harmonisation of EPC classes (Best EPC
class needs to be 2050 compatible)
EPCQ3
Mandatory measures
to increase quality and
harmonisation of
EPCs + Reporting
obligations
MS to
implement
by 2025
 Introduce in the EPBD a mandatory common EU
template (Machine readable, Database compatible)
 Mandatory harmonisation of highest and lowest EPC
classes (Best EPC class needs to be 2050
compatible)
Mandatory quality control measures amongst the following:
 Mandatory visits to produce EPC
 Minimum % of controlled EPCs (sample)77
 Automated and targeted control
 Quality control to include site-visit
 Possible use of metered data as control
Reporting obligations
A.4 Deep renovation standard
No. Policy options Timeline Sub-options
DEEP1 Introduce in the EPBD a definition
 In line with decarbonisation goals, deep
renovation defined as a renovation up to
a zero-emission building
 Inclusion of staged renovation,
supported by building renovation
passport
DEEP2
DEEP1+ MS to
provide a bonus for building
renovation complying with the
deep renovation standard
MS to
implement
by 2025
 In line with decarbonisation goals, deep
renovation defined as a renovation up to
a zero-emission building
 Inclusion of staged renovation,
supported by building renovation
passport
 Member States are required to provide a
higher level of financial support for
building renovation complying with the
deep renovation standard than for other
building renovation (Article 10 EPBD)
A.5 Long term renovation strategies
76
Modification to Annex II of the EPBD (improve Annex II, include references to targeted mechanisms,
but still leave significant flexibility).
77
Increase from “statistically significant” to e.g. 10%.
220
No. Policy options
EPBD
Article
Specific measures and sub-options
LTRS1
Shorten update
cycle
Art. 2a, Art.
2a
Guidance
Document
 Next LTRS update 2024; shorten update cycle for
LTRS from 10 years78
to 5 year
 Update the GHG target in line higher climate ambition
in 2030 and 2050
LTRS2
As in LTRS1+
Introduce
monitoring and
reporting measures
for the EC and MSs
Art. 2a, Art.
2a
Guidance
Document
Governanc
e
Regulation
 Introduce a dedicated monitoring and reporting
mechanism linked to the existing bi-annual NECP
progress reports79
 EC to monitor overall target achievement (e.g. by
aggregating individual MS pledges in LTRS)
LTRS3
As in LTRS2 +
Strengthened LTRS
requirements
Art. 2a, Art.
2a
Guidance
Document
 RES: Increase and documentation of renewable
share (in line with the revised REDII) and overall
decarbonisation of heating and cooling
 Clearly link national roadmaps (and the interim 2030
and 2040 milestones) to the 2050 target
Area B. Options to enable decarbonisation of new and existing buildings
B.1 Zero emission buildings
No. Description Target Timeline Article Detailed elements
ZEB1
Introduction of a
ZEB definition for
new and existing
buildings; new
buildings to
comply with ZEB
standards
(same approach
as NZEBs)
All new
buildings,
or
segments
By 2030, possible
different
compliance date
for certain
buildings
segments80
Art. 2,
Annex I
Specifications:
- EPBD to include criteria
and qualitative definition
(approach as for
NZEBs)
- MS to set
requirements/thresholds
on key indicators (e.g.
energy needs, GHG,
peak load/load match
factor)
ZEB2
Introduction of a
ZEB definition for
new and existing
buildings, based
on given
benchmarks; new
buildings to
comply with ZEB
standards
All new
buildings,
or
segments
As in ZEB1
Art. 2,
Annex I
Specifications:
- EPBD to include
numerical benchmarks
on energy performance
-
ZEB3
As in ZEB2
+ ZEB definition to
include also
reporting on
All new
buildings
As in ZEB1
Art. 2,
Annex I
Requirement to report whole
life-cycle carbon using
LEVEL(s)81
framework or
equivalent indicators
78
Governance Regulation 2018/1999, Art. 3 NECP.
79
Governance Regulation 2018/1999, Art. 17 NECP progress reports.
80
As it was foreseen for NZEBs, public buildings and/or highly frequented non-residential buildings could
be required an earlier compliance date that private buildings.
81
https://ec.europa.eu/environment/topics/circular-economy/levels_en#ecl-inpage-266
221
embodied carbon
B.2 EPCs - Increase the scope of information and coverage of EPC
No.
Policy action -
general
Timeline Sub-options
EPCSI1
Additional trigger points
for issuing EPCs
(building type) +
Increase mandatory
indicators, with
flexibility
MS to
implement
by 2025
a) All non-residential (incl. public) buildings (Art. 12)
b) Contract renewal with existing tenants (residential
and non-residential) (Art. 12)
MS to choose of the following indicators: CO2,
envelope class (energy need), RES, IEQ, TBS class,
SRI
EPCSI2
Additional trigger points
for issuing EPCs
+
Increase mandatory
indicators and improve
recommendations, with
less flexibility
+
Shorter validity for
EPCs
MS to
implement
by 2025
Trigger points as in EPCSI1+
a) Major renovation (Art. 7)
b) Renovated building elements (Art. 7)
c) Technical building system changes (Art. 8)
d) Access to public incentive/funding
Additional indicators:
Mandatory: operational GHG, (energy need), total
energy use, RES, energy carrier of heating appliances
(y/n, detail on fuels)
Voluntary: IEQ, TBS class, SRI, recharging points,
energy storage
Elements to include in EPC recommendations:
 Estimated costs of renovations, Energy and cost
savings, other relevant indicators (e.g. GHG,
RES), reference/distance from carbon neutrality
2050 compatibility
OR point to BRP instead of recommendations
5 years validity instead of 10 (Art. 12)
EPCSI3
Additional trigger points
for issuing EPCs
+
Increase mandatory
indicators and improve
recommendations, with
less flexibility
+
Shorter validity for
EPCs
MS to
implement
by 2025
EPCs mandatory for more building categories (as in
EPCSI2)
5 years validity instead of 10 (Art. 12)
Additional indicators:
Mandatory: operational GHG, (energy need), total
energy use, RES, energy carrier of heating appliances,
whole life carbon (y/n), detail on fuels)IEQ sensors,
TBS class, SRI, recharging points, energy storage
Elements to include in EPC recommendations:
 Estimated costs of renovations, Energy and cost
savings, other relevant indicators (e.g. GHG,
RES), reference/distance from carbon neutrality
2050 compatibility, peak heat demand, readiness
for alternative heating systems
OR point to BRP instead of recommendations
Area C. Measures to increase the modernisation and quality of buildings and of their
systems, enabled by digitalisation of information tools
C1. Remove building-related barriers to e-mobility
No. Policy action -
general
Timeline Sub-options
222
E-M1
All new buildings or
major renovations have
to be prepared for
electric recharging
MS to
implement
by 2025
 Preparedness via pre cabling, but reducing from
10 to 5 (or lower) the minimum number of parking
spaces triggering the obligation
 Pre-cabling to be “smart-ready”
E-M2
All new buildings or
major renovations have
to be prepared for
electric recharging
+ measures to
enhance “Right to plug”
MS to
implement
by 2025
As in E-M1+
MSs to implement right to plug :
 MS shall remove barriers that hinders e-vehicle
owners to have access to a recharging point in
parking adjacent to buildings (multi-family
residential buildings or rented single family
buildings mainly)82
 Enhance availability of technical assistance for
households wishing to install recharging points
E-M3
As in E-M2+
bike parking
Additional measures for
non-residential
buildings
MS to
implement
by 2025
As in E-M2+
 Compulsory bike parking in new and major
renovated buildings
 Existing non-residential buildings with more than
20 parking spaces at least 10% equipped with
recharging points by 2027
 Increased ambition for number of recharging points
in new and major renovated office buildings
C1. Enhance the role of EPCs as digital tools
No. Policy action - general Timeline Sub-options
EPCD1 Mandatory national EPC
databases
MS to
implement
by 2025
 Open access at least for rented properties
(in line with GDPR rules),
 Benchmarking capabilities
EPCD2
Mandatory national EPC
databases + Reporting
MS to
implement
by 2025
As in EPCD1 +
 Regular reporting to EC from EPC
databases
 Mandatory public reporting from EPC
databases
EPCD3
Mandatory national EPC
databases + Reporting + Link
with other databases
MS to
implement
by 2025
As in EPCD2 +
 Mandatory regular information transfer from
national EPC databases to Building Stock
Observatory (BSO) with common template
 Link EPC to building registry/cadastre
 Link to digital logbooks
C3. Smart Readiness indicator
No. Policy action - general Timeline Sub-options
SRI1 Link SRI with EPCs and
other information tools
Guidance by 2023
a) Support integration of SRI in other
tools (e.g. building renovation
82
There is an example in the US ”Right to Charge” law which requires building owners to allow tenants to install EV
recharging points if they want to. The Massachusetts Legislature passed a “Right to Charge” law, which requires
building owners in Boston to allow tenants to install EV charging if they want to. Session Law - Acts of 2018 Chapter
370 (malegislature.gov)
223
No. Policy action - general Timeline Sub-options
MS to achieve 2025 passports, building logbooks, etc.).
b) Require to integrate at least SRI
label in EPC and BRP
SRI2
As in SRI1+
SRI mandatory for large
non-residential buildings
with an effective rated
output for heating
systems, or systems for
combined space heating
and ventilation, or air-
conditioning systems, or
systems for combined air-
conditioning and
ventilation, of over 290
kW
MS to set up scheme by
2024, Achieve by 2026
SRI to be linked to ZEB definition and
EPC


EN EN
EUROPEAN
COMMISSION
Brussels, 15.12.2021
SWD(2021) 453 final
PART 4/4
COMMISSION STAFF WORKING DOCUMENT
IMPACT ASSESSMENT REPORT
Accompanying the
Proposal for a Directive of the European Parliament and of the Council
on the energy performance of buildings (recast)
{COM(2021) 802 final} - {SEC(2021) 430 final} - {SWD(2021) 454 final}
Offentligt
KOM (2021) 0802 - SWD-dokument
Europaudvalget 2021
Table of contents
ANNEX L: ADMINISTRATIVE COSTS ................................................................................................. 384
ANNEX M: THE SME TEST – SUMMARY OF RESULTS ................................................................... 403
ANNEX N: THE EU BUILDING STOCK................................................................................................ 409
384
Annex L: Administrative costs
1. SCOPE AND INTRODUCTION
The revision of the EPBD includes a set of policy measures covering various aspects of
the building sector and buildings renovation. This Annex briefly describes the different
measures and analyses the impact of the proposed measures with regards to:
- Enforcement costs and benefits: incurred by public authorities linked to
development of legislation, monitoring and enforcement.
- Administrative costs and benefits: incurred when undertaking administrative
activities needed to comply with obligations to provide information.
- Indirect costs and benefits: incurred by stakeholders that are not directly
targeted by the policy options.
- Compliance costs not directly related to physical renovation of buildings1
.
Direct renovation costs (installation of equipment, architectural works, etc.) and
investments are not covered in this annex and are included in Chapter 6.
The acronyms used to identify the policy measures assessed are those indicated and
described in Chapter 5 and in Annex E of this impact assessment.
The multiplicity of measures, both proposed and already existing, sometimes results in
overlaps that have similar effects in practice. Where relevant, this Annex describes the
interlinkages between the different measures and their effects in costs and benefits.
MINIMUM ENERGY PERFORMANCE STANDARDS (MEPS)
MEPS are policy instruments which require buildings to be renovated and improved to
meet a specified energy performance standard at a chosen trigger point or date and can
include standards that tighten over time. MEPS have an influence on both the rate and
depth of renovation.
Effects of MEPS in the private sector
Compliance costs
Compliance costs would consist of renovation costs, which are covered by the general
renovation costs indicated by the different policy packages in Chapter 6.
Indirect costs
1
The costs categories have been defined following as much as possible the indication from Better
Regulations.
385
The introduction of MEPS is likely to have a direct impact in the value of properties and
how this value is assessed. Because of this, valuation companies and financial institutions
may need to update their procedures and guidelines to account for this changes.
Administrative costs
Administrative costs are related to the need to certify that a building complies with the
MEPS.
For policy option MEPS1, when MEPS are linked to sale or rental, the requirement to
demonstrate compliance overlaps with the already existing requirement to produce an
EPC. Under this scenario:
- If the building owner produces an EPC and the building complies with MEPS,
the administrative costs are considered 0 as the obligation to report on MEPS
overlaps with the EPC requirement.
- If the building owner produces an EPC and the building does not comply with
MEPS, the administrative costs would cover the production of a 2nd
EPC
following completion of the upgrade works.
For policy options MEPS2 and MEPS3, the costs cover the procurement of an EPC to
demonstrate compliance with the MEPS requirements. This would affect only those
buildings that do not already have a valid EPC.
Overall, this results in higher administrative costs for MEPS2 when compared to MEPS1,
since a number of EPCs under MEPS1 would be covered by existing requirements.
MEPS3 costs are lower due to the more limited number of buildings affected. The impact
of MEPS4 in terms of administrative costs is considered negligible.
Effects of MEPS in the public sector
Enforcement costs
Public bodies would incur in enforcement costs to cover the development and
implementation of legislation, including:
- Assessment studies to define MEPS.
- Update of IT, forms and procedures.
- Development of guidelines and training material (if relevant to national
scheme).
- Information campaigns.
- Monitoring and enforcement of MEPS.
- Reporting on developments of MEPS.
Compliance costs
Public bodies would be subject to renovation costs, which are covered by the general
renovation costs indicated by the different policy packages in Chapter 6. In the case of
public buildings, all public buildings over 250m2
must already possess an EPC/
386
Therefore, their performance is already known and there are no additional costs for
assessing their performance and determining if a renovation is necessary (i.e. if they are
over/under the threshold).
Indirect costs
MEPS would not results in substantive indirect costs for the public sector.
BUILDING RENOVATION PASSPORT (BRP)
Building Renovation Passports provide a clear roadmap for staged renovation over the
lifetime of a building, helping owners and investors plan the best timing and scope for
interventions.
Effects of BRPs in the private sector
Compliance costs
BRP1 and BRP2 would generate compliance costs only for those building owners that
wish to use the scheme. BRP3 would generate compliance costs for those buildings
affected by the scheme (e.g. residential buildings and non-residential buildings over
5 000 m2
).
The costs for implementing the measures indicated in the BRP are voluntary and are
covered by the general renovation costs indicated by the different policy packages in
Chapter 6.
Indirect costs
BRPs would not generate indirect costs.
Administrative costs
The costs of producing a BRP and keeping it updated are covered by compliance costs.
Effects of BRPs in the public sector
Enforcement costs
Public bodies would incur in enforcement costs to cover the development and
implementation of the BRP scheme including:
- Development of an EU framework and template (European Commission)
- Development of the national BRP scheme
- Development of guidelines and training material (if relevant to national
scheme)
- Monitoring and reporting on the national BRP scheme
Compliance costs
BRPs would generate compliance costs only for those buildings affected by the scheme.
Indirect costs
387
BRPs would not generate indirect costs.
MEASURES TO IMPROVE QUALITY AND HARMONISATION OF EPCS (EPCQ)
Measures to improve the quality of EPCs, such as defining specific quality levels and
methods of analysis as well as reporting mechanisms. Harmonisation measures include,
amongst others, the development of a common EU EPC template.
Effects of measures to improve EPC quality in the private sector
Compliance costs
This measure would not result in additional compliance costs.
Indirect costs
This measure would not result in additional indirect costs.
The introduction of additional requirements for EPCs would require the training of
existing independent experts. Independent experts already undergo regular training in
order to retain their qualifications to produce EPCs. The additional requirement could be
integrated in these existing training schemes. Therefore it is considered that the
additional requirements would not result in additional costs.
The additional quality measures would also result in increased costs for the management
of the EPC scheme. The public administration may or may not decide to pass on these
additional costs to the private sector. The increased costs are indicated under enforcement
costs.
Administrative costs
This measure would not result in additional administrative costs.
Effects of measures to improve EPC quality in the public sector
Enforcement costs
Public bodies would incur in enforcement costs to cover the following elements:
- Development of a common EU template (European Commission)
- Translation of the template and adaptation of the scheme to the common
template (including adaptation of EPC databases)
- Development of guidelines and training material (if relevant to national
scheme)
- Increased number and depth of quality controls (manual and automated)
Public bodies would also incur in enforcement costs to carry out the necessary
enforcement of the independent control system (quality) for EPCs. The additional cost is
calculated on a per analysed EPC basis (i.e. not for all EPCs produced in a year). This
would include:
388
- Update of EPC infrastructure (e.g. calculation engine, database) to adapt to
new quality requirements
- Additional automatic controls on EPCs
- Additional manual controls on EPCs (including site visits).
In some Member States, the management of EPC schemes is carried out by private
bodies or institutions (e.g. professional associations). These are then in turn under
oversight by the public administration. This arrangement does not result in significant
differences in costs when compared to the more prevalent arrangement under (full)
public administration. In order to simplify the assessment, the IA presents all the costs
under enforcement costs.
Compliance costs
This measure would not result in additional compliance costs.
Indirect costs
This measure would not result in additional indirect costs.
INCREASING THE SCOPE, INFORMATION AND COVERAGE OF EPCS (EPCSI)
This sections covers the introduction of additional trigger points to produce an EPC and a
number of measures to improve the information aspect of EPC, for example additional
indicators and improvement to the mandatory recommendations that must be included in
an EPC.
Effects of increasing the scope, information and coverage of EPCs in the private
sector
Compliance costs
The additional trigger points for EPCs would result in an increase in the number of EPCs
produced and the costs related to it. The additional number of EPCs would depend on the
specific definition of the trigger points (in increasing ambition).
Indirect costs
This measure would not result in additional indirect costs.
The introduction of additional requirements for EPCs would require the training of
existing independent experts. Independent experts already undergo regular training in
order to retain their qualifications to produce EPCs. The additional requirement could be
integrated in these existing training schemes. Therefore it is considered that the
additional requirements would not result in additional costs.
The additional quality measures would also result in increased costs for the management
of the EPC scheme. The public administration may or may not decide to pass on these
389
additional costs to the private sector. The increased costs are indicated under enforcement
costs.
Administrative costs
This measure would not result in additional administrative costs.
Effects of increasing the scope, information and coverage of EPCs in the public
sector
Enforcement costs
Public bodies would incur in enforcement costs to cover the following elements:
- Development of additional EU guidance (European Commission)
- Transposition by Member States (including adaptation of EPC databases)
- Increased requirements on the EPC scheme (including quality assessment and
database)
- Development of guidelines and training material (if relevant to national
scheme)
Compliance costs
This measure would not result in additional compliance costs.
Indirect costs
This measure would not result in additional indirect costs.
INTRODUCING MANDATORY NATIONAL EPC DATABASES (EPCD)
This sections covers the introduction of provisions to develop, improve and harmonise
databases containing EPCs.
Effects of introducing mandatory national EPC databases in the private sector
Compliance costs
This measure would not result in additional indirect costs.
Indirect costs
This measure would result in overall indirect benefits.
EPC databases would facilitate access to building owners and relevant professionals (e.g.
designers, real estate valuators, notaries, researchers) to relevant information, either at the
level of individual EPCs or to general information at building stock level. Public
reporting and links with other databases (e.g. cadastre) would further facilitate this access
while supporting confidence in the scheme.
Administrative costs
This measure would not result in additional administrative costs.
390
Effects of introducing mandatory national EPC databases in the public sector
Enforcement costs
Public bodies would incur in enforcement costs to cover the following elements:
- Development of additional EU guidance ((European Commission)
- Transposition and implementation of new provisions at MS level
- Adaptation or development of national databases
- Development of guidelines and training material
- Communication and dissemination
Although not a requirement under the EPBD, most MS2
(except Germany, Italy), already
have functioning databases in their territories. Since this is not a current requirement, the
costs of running the database are considered a new enforcement cost (even though they
are already existing). The new provision on databases would support coherence and
harmonisation between databases and would almost certainly require adaptation of the
national databases to a certain extent. These adaptation costs are included under the
running costs.
EPC databases are an important tool to facilitate the quality assessment process for EPCs.
MS already use a number of approaches that exploit the capabilities of a database (e.g.
targeting of suspicious EPCs for quality assessment). It is difficult to evaluate the full
extent of these benefits. Because of this complexity, the additional benefits are not
included in this assessment.
The interconnection between the EPC and other databases would facilitate quality
checks. For example, it would be possible to detect differences between the building area
in an EPC and the building area in the official cadastre. However, the full extent of this
links is difficult to evaluate as there are significant differences between the national
databases and how these could be connected and share information with the EPC
database. Because of these difficulties, these additional benefits are not included in this
assessment.
Compliance costs
This measure would not result in additional compliance costs.
Indirect costs
This measure would not result in additional indirect costs.
2
Germany has multiple non-centralised databases. Italy has multiple regional EPC databases. Spain has
regional databases and is planning a national database (estimated to be online by end of 2021).
391
DEFINITION OF DEEP RENOVATION (DEEP)
The definition of a ‘deep renovation’ standard aims to enable anchoring significant
private financing to transparent, measurable and genuinely “green” investments.
Effects of definition of DEEP renovation definition in the private sector
Compliance costs
This measure would not result in additional compliance costs.
Additional renovation costs are covered by the general renovation costs indicated by the
different policy packages in Chapter 6.
Indirect costs
This measure would not result in additional indirect costs.
Administrative costs
Many financial aid schemes (grants, subsidies, soft loans) require proof of achieving a
deep renovation level. In most cases, an EPC or an energy audit report is considered
sufficient proof. Compliance with a deep renovation definition would require the same
level of proof. Since this would not deviate from existing practice, it is considered that
this measure would not result in additional administrative costs.
Effects of definition of DEEP renovation definition in the public sector
Enforcement costs
Public bodies would incur in enforcement costs to cover the following elements:
- Development of a common EU definition for deep renovation ((European
Commission)
- Transposition by Member States
- Development of guidelines and training material
- Communication and dissemination.
The concept of Deep renovation is already known and accepted in the building sector.
The introduction of a legal definition would only reinforce the existing situation.
Therefore, enforcement costs are not considered significant, particularly as in most cases
individual elements would be integrated with other measures (e.g. integration of DEEP
definition in communication material on MEPS).
Compliance costs
This measure would not result in additional compliance costs.
Indirect costs
This measure would not result in additional indirect costs.
392
ENHANCING LONG TERM RENOVATION STRATEGIES (LTRS)
Long Term Renovation Strategies (LTRS) establish a long-term renovation strategy to
support the renovation of the national stock of residential and non-residential buildings,
both public and private, into a highly energy efficient and decarbonised building stock by
2050, facilitating the cost-effective transformation of existing buildings into nearly zero-
energy buildings. The different measures contemplate improvements to the reporting
mechanisms and the update and strengthening of some of the requirements.
Effects of enhancing LTRS in the private sector
Compliance costs
This measure would not result in additional compliance costs.
Indirect costs
This measure would not result in additional indirect costs.
Administrative costs
This measure would not result in additional administrative costs.
Effects enhancing LTRS in the public sector
Enforcement costs
Public bodies would incur in enforcement costs to cover the following elements:
- Development of additional EU guidance (European Commission)
- Production of additional LTRS reports (MS)
- Analysis of additional LTRS reports and enhanced monitoring (European
Commission
Compliance costs
This measure would not result in additional compliance costs.
Indirect costs
This measure would not result in additional indirect costs.
INTRODUCING A DEFINITION FOR ZERO-EMISSION BUILDINGS (ZEB)
The concept of (net) zero greenhouse gas (GHG)/carbon emission(s) buildings is gaining
wide international attention and is considered to be the main pathway for achieving
climate neutrality targets in the built environment. As a first step, the impact assessment
has the establishment of a sound technical qualitative definition to be introduced in the
EPBD, to be applicable to new buildings and based on key criteria which contribute at
the same time to achieve high energy efficiency, to limit or neutralise CO2 emission and
to contribute to energy system integration” (i.e. addressing flexibility and storage which
393
will be crucial for new constructions). The analysis also examines different timelines to
its gradual phase-in and different implementation options.
Effects of introducing ZEB definition in the private sector
Compliance costs
This measure would not result in additional compliance costs.
Additional construction costs are covered by the investment costs for new buildings
indicated by the different policy packages in Chapter 6.
Indirect costs
This measure would not result in additional indirect costs.
The introduction of a ZEB definition would require re-training and upskilling of the
building workforce (both on-site and off-site) over a period of time. These additional
costs would be transferred to the individual building owners through the renovation
costs. Therefore, these indirect costs are covered by renovation costs.
Administrative costs
This measure would not result in additional administrative costs.
Effects of introducing ZEB definition in the public sector
Enforcement costs
Public bodies would incur in enforcement costs to cover the following elements:
- Development of a common EU definition for ZEB building (European
Commission)
- Transposition of the definition
- Development of guidelines and training material
- Communication and dissemination.
For ZEB3, there would be additional costs related to the introduction of the LEVEL(s)
assessment framework or equivalent methodology, which allows for the assessment and
reporting on key areas of sustainability in the built environment. The additional costs
would include:
- Development and implementation of LEVEL(s) at national level or equivalent
methodology
- Development of guidelines and training material
- Communication and dissemination
Compliance costs
There would be no additional compliance costs for the introduction of ZEB1 and ZEB2.
394
For ZEB3, this measure would result in additional compliance costs related to the
production of the LEVEL(s) assessment or equivalent methodology. Any additional costs
related to improved renovation are covered by the general renovation costs indicated by
the different policy packages in Chapter 6.
Indirect costs
This measure would not result in additional indirect costs.
REMOVING BUILDING-RELATED BARRIERS TO E-MOBILITY (E-M)
The 2018 amendment of the EPBD included a number of measures to support the
deployment of charging infrastructure in buildings. Due to the fast development of the
electric market, the current revision analysis a number of options to further support this
sector and future proof buildings.
Effects of E-mobility provisions in the private sector
Compliance costs
This measure would not result in additional compliance costs.
The capital expenditure of installing the physical infrastructure and charging points in
buildings are described in Annex I on e-mobility.
Indirect costs
This measure would not result in additional indirect costs.
Administrative costs
This measure would not result in additional administrative costs.
Effects of E-mobility provisions in the public sector
Enforcement costs
Public bodies would incur in enforcement costs to cover the following elements:
- Development of additional EU guidance (European Commission)
- Transposition and implementation of new provisions at MS level
- Development of guidelines and training material
- Communication and dissemination
Option EM-3 includes additional costs related to the implementation of checks and spot
visits. MS could choose to carry out enforcement through the requirement to produce an
EPC or an SRI. Under this alternative scenario, the enforcement costs would become
administrative costs to be borne by the private sector. It is estimated that the overall costs
would be equivalent. For simplicity purposes, the IA only presents the scenario of the
checks carried out by public bodies.
Compliance costs
395
This measure would not result in additional compliance costs.
Indirect costs
This measure would not result in additional indirect costs.
ENHANCING THE ROLE OF THE SMART READINESS INDICATOR (SRI)
The Smart Readiness Indicator, was first introduced in the EPBD in 2018, with the legal
instruments adopted in 2020 (Delegated and Implementing Acts). It aims to support the
adaption of smart technologies in buildings by measuring how smart ready individual
buildings are. The measures in this Impact Assessment cover provisions to improve the
links between the SRI and other provisions, and measures to support the adoption of the
SRI scheme.
Effects of enhancing SRI provisions in the private sector
Compliance costs
This measure would not result in additional compliance costs.
Indirect costs
This measure would not result in additional indirect costs.
Administrative costs
This measure would not result in additional administrative costs.
Effects of enhancing SRI provisions in the public sector
Enforcement costs
The enforcement costs related to SRI1 are very limited, as it would only require the link
between the 2 schemes. For example: EPC to show the SRI value if available, EPC
database reporting to include elements from the SRI database.
Enforcement costs for SRI2 include the adoption of the SRI at national level, including
the preparation of national legal framework, establishment of a database, development of
training material, etc.
Compliance costs
SRI2 would result in the requirement to produce SRIs for public buildings and large non-
residential buildings. The analysis assumes buildings over 5000 m2
, which is a similar
threshold used in the EU Green Taxonomy for reporting on GHG life-cycle emissions.
The size is relevant as any additional costs would be very limited compared to the overall
project and construction costs.
The requirements to produce an SRI share many similarities with those required for an
EPC (e.g. area or identification of equipment). If both analysis are carried out at the same
time, it results in significant savings. In the case of new buildings, an EPC is required in
396
current legislation. Therefore, the analysis assumes that the SRI and the EPC will be
produced at the same time, allowing for lower costs.
Indirect costs
This measure would not result in additional indirect costs.
Table L.1: Effects of policy options in the private sector
Private Sector
Policy Option
Cost
type
Description
PRICE QUANTITY
One-
off
costs
Annual
costs
1 2 3a 3b (€/unit) (units/y) (M€) (M€/y)
Introducing Minimum Energy Performance Standards
MEPS1 x x x x A Compliance checks 240 1.200.000 288
I Update of valuation standards 1 5
MEPS2 x x A Preliminary compliance checks 240 2.899.800 696
I Update of valuation standards 1 5
MEPS3 x
A Preliminary checks on compliance 240 148.500 36
I Update of valuation standards 1 5
MEPS4 x x x Not considered to have significant additional costs.
Introduction of Building Renovation Passport in the EPBD
BRP1 (subsidised) x A n° of BRPs triggered 100 69.500 7
BRP1 (unsubsidised) x A n° of BRPs triggered 400 69.500 28
BRP2 (subsidised) x A n° of BRPs triggered 100 139.000 14
BRP2 (unsubsidised) x A n° of BRPs triggered 400 139.000 56
BRP3 (subsidised) x x A n° of BRPs triggered 100 695.000 70
BRP3 (unsubsidised) x x A n° of BRPs triggered 400 695.000 278
Enhancing the quality and reliability of EPCs
EPCQ1 x Not considered to have significant costs additional to EPCSI measures.
EPCQ2 x Not considered to have significant costs additional to EPCSI measures.
EPCQ3 x x Not considered to have significant costs additional to EPCSI3.
Increasing the scope of information and coverage of EPCs
EPCSI1 x A n° of EPCs triggered 280 3.439.000,00 963
EPCSI2 x A n° of EPCs triggered 280 3.719.500 1.041
EPCSI3 x x A n° of res. EPCs triggered 280 4.000.000 1.120
Introducing mandatory national EPCs databases
EPCD1 x I Net person hours saved 30 -8.000 -0,2
398
Private Sector
Policy Option
Cost
type
Description
PRICE QUANTITY
One-
off
costs
Annual
costs
1 2 3a 3b (€/unit) (units/y) (M€) (M€/y)
EPCD2 x I Net person hours saved 30 -10.000 -0,3
EPCD3 x x I Net person hours saved 30 -10.000 -0,3
Introducing a deep renovation standard
DEEP1 x Not considered to have significant additional costs.
DEEP2 x x x Not considered to have significant additional costs.
Enhancing the Long-term renovation strategies
LTRS1 x Not considered to have significant additional costs.
LTRS2 x Not considered to have significant additional costs.
LTRS3 x x Not considered to have significant additional costs.
Introducing a definition for zero-emission buildings
ZEB1 x Not considered to have significant additional costs.
ZEB2 x Not considered to have significant additional costs.
ZEB3 x x Not considered to have significant additional costs.
Removing building-related barriers to e-mobility
E-M1 x Not considered to have significant additional costs.
E-M2 x Not considered to have significant additional costs.
E-M3 x Not considered to have significant additional costs.
E-M4 x x Not considered to have significant additional costs.
Enhancing the role of the Smart Readiness Indicator
SRI1 x x Not considered to have significant costs additional to those outlined above.
SRI2 x x E Additional costs to produce SRI (on top of EPC) 50-100 6200-8200
0,31-
0,82
399
Table L.2: Effects of policy options in the public sector
Public sector
Policy Option Cost
type
UNIT
PRICE QUANTITY
Lower
one-off
costs
Upper
one-off
costs
Lower
annual
costs
Upper
annual
costs
1 2 3a 3b (€/unit) (units) (M€) (M€) (M€/y) (M€/y)
Introducing Minimum Energy Performance Standards
MEPS1 x x x x E National assessment studies to define MEPS 200.000 27 5,4 5,4
E Update of IT and forms 625.000 27 16,9 16,9
E Setting up Information campaign and training 1.500.000 27 40,5 40,5
E Running information campaign 375.000 81 30,4 30,4
MEPS2 x x E National assessment studies to define MEPS 200.000 27 5,4 5,4
E Development of national MEPS scheme 500.000 27 13,5 13,5
E Costs of reporting on compliance to EU 25.000 27 0,7 0,7
MEPS3 x E National assessment studies to define MEPS 200.000 27 5,4 5,4
E Development of national MEPS scheme 300.000 27 8,1 8,1
E Costs of reporting on compliance to EU 15.000 27 0,4 0,4
MEPS4 x x x E Implementing best-in-class scheme 200.000 27 5,4 5,4
Enshrining the Building Renovation Passport in the EPBD
BRP1 for EC x E BRP schemes in Member States 540.000 9 4,9 4,9
(subsidised) x E Common EU framework & template (EC) 250k to 500k 1 0,3 0,5
(unsubsidised) x E BRP schemes in Member States 540.000 9 4,9 4,9
BRP2 for EC x E Common EU framework & template (EC) 250k to 500k 1 0,3 0,5
(subsidised) x E BRP schemes in Member States 540.000 27 14,6 14,6
(unsubsidised) x E BRP schemes in Member States 540.000 27 14,6 14,6
BRP3 x x E Common EU framework & template (EC) 250k to 500k 1 0,3 0,5
(subsidised) x x E BRP schemes in Member States 540.000 27 14,6 14,6
(unsubsidised) x x E BRP schemes in Member States 540.000 27 14,6 14,6
Enhancing the qualifty and reliability of EPCs
400
Public sector
Policy Option Cost
type
UNIT
PRICE QUANTITY
Lower
one-off
costs
Upper
one-off
costs
Lower
annual
costs
Upper
annual
costs
1 2 3a 3b (€/unit) (units) (M€) (M€) (M€/y) (M€/y)
EPCQ1 x E Common EU template (EC) 250k to 500k 9 0,3 0,5
E Translating template to ntl. context & PR 200k to 300k 9 1,8 2,7
E Training and qualification 100.000 9 0,9 0,9
E Increased quality controls 2,3 22,5
EPCQ2 x E Common EU template (EC) 250k to 500k 9 0,3 0,5
E Translating template to ntl. context & PR 200k to 300k 9 1,8 2,7
E Training and qualification 100.000 9 0,9 0,9
E Increased quality controls 4,5 45,0
EPCQ3 x x E Common EU template (EC) 250k to 500k 1 0,3 0,5
E Translating template to ntl. context & PR 200k to 300k 27 5,4 8,1
E Training and qualification 100.000 27 2,7 2,7
E Increased quality controls 15 to 150 600.000 9 90
Increasing the scope of information and coverage of EPCs
EPCSI1 x E Developing training and qualification 100.000 27 2,7 2,7
E Implementation by Member States 200.000 27 5,4 5,4
EPCSI2 x E Developing training and qualification 100.000 27 2,7 2,7
E Implementation by Member States 250.000 27 6,8 6,8
EPCSI3 x x E Developing training and qualification 100.000 27 2,7 2,7
E Implementation by Member States 250.000 27 6,8 6,8
Introducing mandatory national EPCs databases
EPCD1 x E Running EPC database 150k to 350k 27 4,1 9,5
EPCD2 x E Running EPC database 150k to 350k 27 4,1 9,5
E Reports to the public 20.000 6,75 0,1 0,1
EPCD3 x x E Running EPC database 150k to 350k 27 4,1 9,5
E Reports to the public 20.000 6,75 0,1 0,1
Introducing a deep renovation standard
401
Public sector
Policy Option Cost
type
UNIT
PRICE QUANTITY
Lower
one-off
costs
Upper
one-off
costs
Lower
annual
costs
Upper
annual
costs
1 2 3a 3b (€/unit) (units) (M€) (M€) (M€/y) (M€/y)
DEEP1 x Not considered to have significant additional costs.
DEEP2 x x x Not considered to have significant additional costs.
Enhancing the Long-term renovation strategies
LTRS1 x E Additional LTRS reports 50.000 27 1,4 1,4
E Update EU guidance and check reports 120.000 1 0,12 0,1
LTRS2 x E Additional LTRS reports 100.000 27 2,7 2,7
E Update EU guidance and check reports 300.000 1 0,3 0,3
LTRS3 x E Additional LTRS reports 150.000 27 4,1 4,1
E Update EU guidance and check reports 450.000 1 0,5 0,5
Introducing a definition for zero-emission buildings
ZEB1 x E EU ZEB framework 50.000 1 0,1 0,1
E Adapting national regulations 100k to 200k 27 2,7 5,4
ZEB2 x E EU ZEB framework 250.000 1 0,3 0,3
E Adapting national regulations 50k to 100k 27 1,4 2,7
ZEB3 x x E Adapting national regulations 50k to 250k 27 1,4 6,8
E Establishing LEVEL(s) as ntl. framework 50k to 100k 13 0,7 1,3
C Implementing LEVEL(s) for new public buildings
500 to 1.000
EUR 5.000 2,5 5
Removing building-related barriers to e-mobility
E-M1 x
Not considered to have significant additional
costs.
E-M2 x E
Legal feasibility study & implementation (right to
plug) 100.000 27 2,7 2,7
E-M3 x E
Legal feasibility study & implementation (right to
plug) 100.000 27 2,7 2,7
E-M4 x x E Legal feasibility study & implementation 150.000 27 4,1 4,1
E Enforcement: site vists / checks 100,00 8k to 20k 0,8 2,0
Enhancing the role of the Smart Readiness Indicator
402
Public sector
Policy Option Cost
type
UNIT
PRICE QUANTITY
Lower
one-off
costs
Upper
one-off
costs
Lower
annual
costs
Upper
annual
costs
1 2 3a 3b (€/unit) (units) (M€) (M€) (M€/y) (M€/y)
SRI1 x x Not considered to have significant additional costs
SRI2 x x E Setting SRI network 200k to 400k 27 5,4 10,80 2,7 5,40
SRI2 x x C Public buildings SRI assessed 50 to 100 3500-6400 0,18 0,46
Annex M: The SME Test – Summary of results
(1) Preliminary assessment of businesses likely to be affected
The EPBD and SMEs
The EPBD promotes the improvement of the energy performance of buildings and
its revision will impact the intensity of activities carried out by SMES. This will
happen notably in the buildings construction and related supply chain but also in
trade and services sectors, which include industrial sectors, agriculture, machinery
and equipment, electricity and gas and heat sector. Most activities in the buildings
construction sector are in fact based on small and medium sized enterprises. Up to
95% of construction, architecture, and civil engineering firms are micro-enterprises
or small and medium-sized enterprise (SME)3
. They supply essential technologies,
materials and services. Moreover, the built environment is characterized by small
and medium enterprises that act locally and provide services in their area. Only
companies in the chemicals, rubber and plastic product sector are likely not to be
small or medium size.
In 2018, SMEs accounted for 9.3 million jobs in the buildings construction sector
of the EU. This represented 86% of total employment in the sector, with 50%
micro enterprises, 24.6% for small enterprises and 11.4% for medium-sized
enterprises. The SMEs represented almost 100% of the companies active in the in
the buildings construction sector of the EU, out of which 94% micro enterprises,
5.3% small enterprises and 0.4% medium enterprises. SMEs generated about 83%
of total turnover in the buildings construction sector, out of which 38% from micro
enterprises, 28.7% from small enterprises and 16.3% from medium enterprises4
.
Specific requirements
The EPBD revision proposes several measures that will trigger, on one hand, an
increase renovation rate and depth of the existing building stock and, on other
hand, enhanced energy performance for new buildings to be constructed. These
measures do not impose requirements specifically to SMEs, but indirectly will have
an impact on increasing demand for products and services provided by SMEs in the
above mentioned sectors and on installers and inspectors of technical buildings
systems in which SMEs represent a substantial majority of employment, turnover
and added value.
Among the proposed measures targeting the renovation existing buildings there are
minimum energy performance standards, which are policy instruments requiring
buildings to be renovated and improved to meet a specified energy performance
level. As these requirements apply to building’s owners, those will apply also to
Section 6.4.2 of
the Impact
Assessment on
Macro-
economic
impacts
See Section 5.2
of the Impact
Assessment
describing
policy options
and Section 8.2
of the Impact
Assessment on
the preferred
option
3
https://ec.europa.eu/growth/sectors/construction_en#:%7E:text=The%20construction%20industry%20is%
20very,social%2C%20climate%20and%20energy%20challenges
4
Eurostat, Annual enterprise statistics [sbs_sc_sca_r2]
404
buildings owned by SMEs falling into the scope of the provisions.
(2) Consultation with SMEs representatives
SMEs have been consulted through online public consultation and at five
stakeholders consultation workshops on specific topics.
59 SMEs directly replied to the online public consultation for the EPBD revision
out of which 49% micro enterprises (1-9 employees), 24% small enterprises (10-49
employees) and 27% medium enterprises (50-249 employees). 95% of these SMEs
originate from the EU, mainly from Belgium (24%), Germany (12%), and Spain
(12%), the rest being from other Member States. Many more replied through
business organizations and sectoral organizations, therefore the direct replies from
SMEs represent only a limited share of the SMEs consulted.
Their replies on main proposed measures for the EPBD revision has been such as
in the following:
 On zero emission buildings (ZEB): 87% of SMEs considered that ZEB
should be defined in the EPBD (i.e. 85% of micro enterprises, 100% of
small enterprises and 81% of medium enterprises). 62% small enterprises
and 50% of micro enterprises and of medium size enterprises considered
that current NZEB requirements are not ambitious enough. 71% of SMEs
considered that the definition of NZEB needs to be more harmonized and
the introduction of minimum thresholds for primary energy use in the
building’s operation for different climate zones has been the most popular
option.
 On long term renovation strategies (LTRS): 54% of the SMEs (mainly
micro and medium size enterprises) considered that EPBD provisions on
LTRS should not be modified. However, 90% of SMEs considered that the
monitoring of the objectives identified by MSs in their LTRS should be
strengthened.
 On “deep renovation” definition: 67% of SMEs considered that it would
be beneficial to have a legal definition of ‘deep renovation’ in the EPBD.
 On minimum energy performance standards (MEPS): 78% of SMEs
considered that the EPBD should introduce mandatory MEPS under
specific conditions to be determined, with 83% of them being in favour of
mandatory MEPS. The most popular option was for MEPS at building
level, mandatory for all residential and non-residential buildings (33
SMEs).
 On energy performance certificates (EPCs): 71% of SMEs considered
that the EPC framework needs to be updated and quality improved, while
82% of them supported their harmonisation with 58% of consulted SMEs
in favour of a common template. Regarding the ways to improved the EPC
See Annex B
405
quality, 69% of the SMEs considered that this can be done by adding
further information of estimated costs, energy savings or cost savings, 66%
by improving training of independent experts and 64% by including
information on non-financial benefits.
 On building renovation passport (BRP): SMEs suggested that
establishing guidelines and best practice exchange are among the main
measures to accompany the introduction of BRP schemes through the
revised EPBD.
 On renovation support schemes: direct grants to low-income households
living in worst performing buildings (83% of SMEs) and tax incentives
(76% of SMEs) were considered by the responding SMEs as the most
important support schemes to renovation.
Between April and July 2021, have been organized five thematic workshops5
supporting the inception impact assessment. The participation of SMEs at these
events is summarized in the followings:
 Workshop 1 – setting a vision for buildings and a decarbonised building
stock: Of the 335 participants, at least 131 participants represented an SME
such as: 86 a micro-small enterprise (below 20 employees), 20 a small
enterprise, and 25 a medium enterprise.
 Workshop 2 – minimum energy performance standards for existing
buildings: Of the 298 participants, at least 118 participants represented an
SME such as:, 73 a micro-small enterprise (below 20 employees), 18 a small
enterprise and 27 a medium enterprise.
 Workshop 5 – accessible and affordable financing – energy poverty: Of the
190 participants, at least 71 participants represented an SME such as: 45 a
micro-small enterprise (below 20 employees), 10 a small enterprise and 17 a
medium enterprise.
(3) Measurement of the impact on SMEs
The analysis in the Impact assessment indicates that the additional economic
activities induced by the preferred option for the EPBD revision will generate by
2030 as net effect about 1.8 million additional direct and indirect jobs (out of
which 1.4 million low and medium skilled jobs) and EUR billion 104 additional
value-added compared to 2020 levels. The effects on employment and valued
added are the economic effects that result from increased investments in buildings
renovation and reduced energy consumption of fossil fuels for heating. These
effects can be considered net effects as they account for simultaneous changes due
to investment in renovation and subsequent reduction of energy demand.
Most of additional new jobs and value-added will be notably in the construction
Section 6.4.2 of
the Impact
Assessment on
Macro-
economic
impacts
5
For two workshops the size of the organisations participating was not collected.
406
and materials sector (594 thousands jobs and EUR billion 48).
It is expected that these impacts will be generated largely by SMEs, which
represent more than 90% of the EU companies from buildings construction sector,
manufacturing of machinery and equipment and manufacturing of construction
materials and glass6
. Overall, in the preferred option, the number of jobs and value
added of the construction and material sector is projected to increase by about 3.6%
each as compared to 2020 levels. The proposed measures will also have the effect
of reducing energy demand in the sectors that provide fossil fuels for
heating, i.e. natural gas, heating oil and coal. It is expected that these negative
effects will be limited and will not substantially affect SMEs.
4) Assess alternative options and mitigating measures
Delays in the construction sector experienced since the beginning of the pandemic
call for an analysis of whether the economy can adapt to higher demand on
workforce and skills.
Based on the assessment made, the additional demand for labour in the
construction sector by 2030 due to the preferred option appears to be smaller (or
comparable) to the year-to-year variations in employment between 2008 and 2030.
The capacity of the construction market to adapt to higher demand should be
supported by the fact that the EU is not at full employment at the aggregate
level. The additional demand for labour in the construction sector by 2030 due to
the preferred option appears to be smaller (or comparable) to the year-to-year
variations in employment between 2008 and 2030. Demand in the construction
sector is mostly for unskilled occupations, but pressure in this labour market is
mitigated by the decline of unskilled employment in other sectors.
Those elements nonetheless have to be considered with care. As showed in the
rates of job creation and destruction, the construction sector is particularly cyclical
since it depends on business and consumer confidence, but also macroeconomic
factors such as interest rates linked to central banks’ monetary
policies and to governments’ budgetary programs. It is therefore not immune to
temporary shocks, which may lead to similar delays and temporary price increases
as those recorded since the beginning of the pandemic. While those shocks and
potential disruptions cannot be fully anticipated, an appropriate package of
policies and mechanisms can limit their occurrence and impact.
To this end, the Fit for 55 Package overall and the EPBD revision specifically will
bring more certainty to a sector that has been facing market and policy volatility in
the past. In particular, the price signal stemming from the extended ETS7
,
See Section
6.4.2 of the
Impact
Assessment on
Macro-
economic
impacts,
Section 8.3 of
the Impact
Assessment on
Meeting the
challenges of
the proposed
measures
6
According to Eurostat structural business statistics 2018 [sbs_sc_con_r2].
7
Positive anticipation of future carbon costs is among the relevant policy drivers incentivising the choice
of energy efficient or low carbon technologies.
407
regulatory clarity coming from energy efficiency targets under the updated EED
and the progressive roll-out of MEPS as well as a higher level of information
linked to updated EPCs should incentive the construction sector to expand its
capacities. Expanded capacities of both workforce and investments in fixed costs
would in turn give more certainty to input suppliers to invest in expanding their
own supply capacity.
Regarding labour supply, the Renovation Wave Communication acknowledged
the ‘shortage of qualified workers to carry out sustainable building renovation and
construction’. A key challenge is the capacity of the education and vocational
training systems to train or re-train workers, as well as to the ability of workers to
move from one job and sector to another one requiring potentially different
skills8
. For instance, it is expected that appropriate qualifications will play an
increasingly important role in the construction, heating technology and
refurbishment sector with new technologies and higher levels of digitalisation.
The Commission’s initiatives on education, skills and training such as the Pact for
Skills, the green strand in Erasmus+ and the Education for Climate Coalition can
help to address these challenges. The accompanying Action Plan to the
Renovation Wave strategy included a deliverable on “Support[ing] Member States
to update their national roadmaps for the training of the construction workforce
through the Build Up Skills Initiative and helping implement the 2020 European
Skills Agenda”9
. The proposal for the EED10
recast also includes provisions for
the availability of training programmes and qualification, accreditation and
certification schemes as an enabler of energy efficiency improvement measures.
In addition, the updated Industrial Strategy of May 202111
announced the co-
creation of transition pathways for industrial ecosystems, including
construction. In a process of co-creation with Member States, industry and other
stakeholders, the pathways will identify the scale of the needs,
including on upskilling, resource efficiency and digitalisation, and will propose
actions to address them.
Finally, an increase in productivity in the sector would allow for an expansion of
output with less use of labour. Investments in technologies for the industrialisation
of construction12
as well as project management and collaboration tools therefore
have the potential to increase productivity and reduce the additional demand for
labour. Industrialisation can also result in other benefits including greater resource
8
Climate Target Plan Impact Assessment, Part 1, p.86. It is important to acknowledge in this regard that
transitional costs such as reskilling and upskilling have not been considered in the simulations of the Fit for
55 Package’s impact.
9
The European Skills Agenda was presented in July 2020 by the Commission. Action 6 is about “Skills to
support the twin transitions”.
10
https://eur-lex.europa.eu/resource.html?uri=cellar:a214c850-e574-11eb-a1a5-
01aa75ed71a1.0001.02/DOC_1&format=PDF
11
https://ec.europa.eu/info/sites/default/files/communication-industrial-strategy-update-2020_en.pdf
12
For example using techniques such as prefabrication and off-site assembly, automation, modularisation
and additive manufacturing.
408
efficiency and less time spent on the building site (and therefore less disruption for
building occupants during renovation works)13
.
While acknowledging that not all market frictions stemming from higher demand
and new shocks can be tempered, the combination of the proposed
policies and initiatives should help to substantially address them.
13
D’Oca et al 2018. Technical, Financial, and Social Barriers and Challenges in Deep Building
Renovation. Available at https://www.mdpi.com/2075-5309/8/12/174
409
Annex N: The EU building stock
To better understand the barriers to energy renovations across the EU it is important to
focus on the European building stock, the basic technical and energy performance
features, population distribution and ownership structure.
Before defining the problem, we should focus on the European building stock across
Member States, the basic technical and energy performance features, population
distribution and ownership structure.
The residential and services (non-residential) sectors in the EU amount to some 25 billion
m2
, with the former representing around 75% of the total. Of the current residential
building stock, 80% was built before the 1990s, with 40% built before the 1960s (Figure
N.1)14
. The old age of buildings is a common problem across Member States.
Figure N.1: EU dwelling stock per age, 201915
Space heating accounts for two thirds of energy consumption in residential buildings.
Space heating and water heating together represent around 80% of the energy
consumption of residential buildings in the EU (Figure N.3). This is a common trend
across all EU countries; only in four countries in the Mediterranean region heating is
below 50% (ES, CY, MT, PT). The energy performance of buildings is however a
concept that applies both to heating and cooling. Well-insulated buildings allow for more
thermal comfort and lower energy consumption for both heating and cooling.
Around 75% of buildings in the EU are energy inefficient according to current standards.
They were built before the introduction of energy performance requirements, which were
14
A considerable amount is even older and often classified as cultural heritage. Old building stock would
not fulfil state-of-the-art requirements on fire safety and seismic resistance (e.g. likely not to be compliant
with Eurocodes standards).
15
Based on Buildings Stock Observatory and Odyssee database.
410
first introduced towards the end of the 1970s16
. Accessibility for people with disabilities
was also not included as a general rule in the design of those buildings, and a large
number of old buildings do not fulfil state-of-the-art requirements on fire safety, seismic
resistance, and indoor quality and daylighting. Although these aspects are outside the
scope of the EPBD, renovation of the older segment of the building stock increases the
opportunities for broader improvements and integrated building renovations, addressing
multiple objectives at the same time.
Longevity is a characteristic of buildings. They typically last a minimum of 50 years.
Due to this, it is estimated that 85-95% of the buildings that exist today will still be
standing in 2050.
The figures below provide the energy efficiency rating or energy ‘class’ of buildings, as
attributed by energy performance certificates (EPCs)17
for residential buildings in a
number of EU countries.
Figure N.2: Distribution of EPC label ratings in selected residential buildings in the EU18
16
JRC (2019), ‘Achieving the cost-effective energy transformation of Europe’s buildings’,
cost_optimal_energy_renovations_online.pdf
17
Annex G explains how EPCs are used.
18
Adapted from X-TENDO project final report. The figure covers only the Member States for which data
was available.
411
Although several differences exist in the overall performance levels of buildings and
classes, the general assumption is that the vast majority of buildings are not ‘fit for 55’,
or in any case are not expected to be climate-neutral by 2050. Buildings in EPC class A
(‘A label’, green), represent a negligible share of the stock, above 5% in only five
Member States. To increase energy efficiency and contribute to decarbonisation by 2030
and in the longer term, a significant share of the building stock should progressively shift
to the highest classes. The greatest gains will be achieved from the lowest energy class
buildings (D or below), which in almost all the countries examined constitute between
50% and almost 100% of the stock.
Figure N.3: Final energy consumption of households by end-use type, 201919
Almost 57% of the energy use for space heating in the EU residential sector is based on
the direct use of fossil fuels, 10% on district heating, 5.3% on electricity and 28% on on-
site renewable energy (Figure N.4). The challenge of decarbonising heating and cooling
is therefore substantial in all Member States. Although fossil fuels dominate space
heating in countries such as Belgium, Germany, Ireland, Luxembourg and the
Netherlands with more than 70% of the heating mix, renewable energy sources cover
more than 50% of the energy needs for space heating in Bulgaria, Croatia, Latvia,
Lithuania, Portugal, Romania and Slovenia. Solid biomass represents more than 86% of
renewable energy used for space heating in the EU, which is largely dominant at
individual Member State levels. District heating supplies more than a third of space
heating energy in countries with cold climates such as Denmark, Estonia, Latvia,
Lithuania, Finland and Sweden.
19
Source: Eurostat.
412
Figure N.4: Energy mix of space heating in households, 201920
The GHG emission intensities of energy-related use in EU residential and non-residential
buildings is around 166g CO2 eq (kWh/yr) and 196g CO2 eq (kWh/yr) respectively
(Figure N.5). Emission intensities vary largely across the Member States according to the
mix of the direct fuels used. They are lower in countries with a higher use of renewables
or where the emissions are attributed to the power and heat sector by making greater use
of district heating and electricity.
Figure N.5: GHG emission intensity of direct consumption of fuels in residential and services buildings21
An important characteristic of building use that determines the possible obstacles to
renovating buildings is related to the building type, ownership structure, and the pattern
of building occupancy. At EU level, the distribution of population by type of dwelling is
slightly higher for houses (53%) than for flats from multi-family buildings (Figure N.6).
20
Source: Eurostat.
21
GHG emissions from European Environment Agency inventory, direct fuel use from Eurostat energy
balances.
413
However, there are several countries such as Czechia, Germany, Greece, Spain, Italy,
Malta and the Baltic countries where the majority of the population lives in flats.
Figure N.6 : Distribution of population by type of dwelling, 201922
Most of the EU population (70%) lives in dwellings they also own (Figure 2.7). Although
this is valid for all EU countries, the share of the population living in rented
accommodation is much higher in Germany (49%), Austria (45%), Denmark (39%),
Sweden (36%) and France (36%). In all EU countries, the problem of split incentives
(see Chapter 2) is therefore present, although to a varying degree.
Figure N.7: Distribution of population by tenure status, 201923
The population at risk of poverty (below 60% of median equivalised income24
) represents
16.5% (or 74 million) of the total EU population, and the distribution by type of building
22
Source: Eurostat-SILC.
23
Source: Eurostat-SILC.
24
Archive:Living standard statistics - median equivalised disposable income - Statistics Explained
(europa.eu)
414
is slightly more for flats (51.5%), notably in Nordic countries, Baltic countries, Czechia,
Germany, Spain, Italy, Malta and Austria (Figure N.6).
The poor energy performance of buildings leads to high energy costs and can affect the
well-being and health25
of people. In 201926
, around 6.2% of the EU population had
fallen behind on their utility bills, with Bulgaria and Greece close to 30%. Almost 7% of
the EU population was unable to keep their home warm27
. The inability to keep homes
warm enough is also more likely to coincide with health issues for residents and/or
structural building issues. The situation is much worse for the category at risk of poverty,
for which the share of people in arrears on utility bills and unable to keep their homes
adequately warm reached 14.9% and 18.2% respectively in 2019. These indicators are
widely accepted as metrics to determine the group of people living in energy poverty.
Figure N.8: Population at-risk-of-poverty (% of population below 60% of median equivalised income) living
in a dwelling with a leaking roof, damp walls, floors or foundation, or rot in window frames or floor,
201928
According to the Eurostat survey on income and living conditions, around 20% of the
population at risk of poverty (% of population below 60% of median equivalised income)
lives in dwellings with a leaking roof, damp walls, floors or foundations, or with rot in
window frames or floors (Figure N.8). Among EU countries, more than one third of the
population at risk of poverty in Cyprus (42.5%), Hungary (36.6%), Portugal (36.5%) and
25
A specific correlation analysis of 2012 EU-SILC data on housing conditions reveals for example that
around 10% of adults living in single-family homes reported poor general health. With both structural
problems (leaking roof, rot in windows etc.) and being unable to keep homes warm, this share increased to
beyond 20%. Affected by these two issues, the reported level of dissatisfaction with homes reached around
40% across the EU, and even went beyond 50% in Central and Eastern European countries – both in
single- and multi-family buildings.
26
EUROSTAT statistics on income and living conditions (SILC): Statistics on Income and Living
Conditions - Access to microdata - Eurostat (europa.eu), Arrears on utility bills - EU-SILC survey
[ilc_mdes07].
27
EUROSTAT statistics on income and living conditions (SILC): Inability to keep home adequately warm
- EU-SILC survey [ilc_mdes01].
28
Source: Eurostat-SILC.
415
Slovenia (33.6%) lives in dwellings with poor conditions. The problem of energy poverty
in conjunction with unhealthy living conditions due to poor building status is therefore
common across Member States.
Service sector (non-residential) buildings is a more complex and heterogeneous sector
compared to the residential sector (Figure N.9). Office buildings (public and private)
make up around a third of the non-residential floor area, while wholesale and retail
buildings are the second biggest category with a floor space corresponding to around a
quarter (23%) of the total non-residential floor space. School & education buildings
(16%), hotels & restaurants (12.3%) and health-related buildings (8.5%) represent large
parts of non-residential building stock. Variations in usage patterns, energy intensity, and
construction requirements are some of the factors adding to the complexity of the sector.
Figure N.9: Distribution of services buildings by type of activity, 201829
29
Source: Odyssee database, Building Stock Observatory.


EN EN
EUROPEAN
COMMISSION
Brussels, 15.12.2021
SWD(2021) 453 final
PART 3/4
COMMISSION STAFF WORKING DOCUMENT
IMPACT ASSESSMENT REPORT
Accompanying the
Proposal for a Directive of the European Parliament and of the Council
on the energy performance of buildings (recast)
{COM(2021) 802 final} - {SEC(2021) 430 final} - {SWD(2021) 454 final}
Offentligt
KOM (2021) 0802 - SWD-dokument
Europaudvalget 2021
Table of contents
ANNEX F: MINIMUM ENERGY PERFORMANCE STANDARDS (MEPS)........................................ 224
ANNEX G: ENERGY PERFORMANCE CERTIFICATES (EPC) .......................................................... 263
ANNEX H: ZERO EMISSION BUILDINGS............................................................................................ 312
ANNEX I: E-MOBILITY........................................................................................................................... 342
ANNEX J: CLIMATE TARGET PLAN POLICY CONCLUSIONS........................................................ 361
ANNEX K: THE EPBD AND ITS LINKAGES WITH OTHER INSTRUMENTS AND
POLICIES......................................................................................................................................... 365
224
Annex F: Minimum energy performance standards (MEPS)
1. Introduction on MEPS
1.1.Definitions
For a clearer understanding of the policy options related to minimum energy performance
standards it is useful to clarify some definitions.
“Minimum energy performance standards” are understood in this document as
regulations or policies that require buildings to meet some performance benchmark,
expressed as energy performance rating, often giving building owners multiple years to
bring buildings into compliance.
“Mandatory” energy codes or standards (or other policies) have provisions that are
legally binding; non-compliance could lead to financial penalties being imposed.
In the literature other similar definitions have been presented. For instance, the “Lessons
learnt” study1
defines “minimum mandatory requirement”2
as “a regulation that mandates
certain buildings within a defined territory to meet a certain performance standard, by a
specified compliance date or according to natural trigger points in the building’s lifecycle
(e.g. time of sale). The requirement can apply to all buildings or particular building
segments. The underlying metrics of the requirement is typically based on energy
performance standards (kWh/m²/year) but can also incorporate broader aspects (e.g.
climate performance standards (CO₂/m²/year, whole-life carbon and wider
environmental, social and governance factors).
1.2.Differences and interplay between MEPS and minimum energy performance
requirements in the EPBD
Article 7 of the EPBD requires Member States to take the necessary measures to “ensure
that when buildings undergo major renovation, the energy performance of the building or
the renovated part thereof is upgraded in order to meet minimum energy performance
requirements”. It also requires necessary measures to ensure minimum energy
performance in the case of the renovation of certain building elements. Article 7 is
implemented by energy codes and regulations. Codes regulating energy performance
have historically been additions and expansion to earlier building health or life safety
codes, or codes addressing insulation, initially developed for new buildings. These codes
1
BPIE et al. (2020), Lessons learned to inform integrated approaches for the renovation and modernisation
of the built environment, ENER/C3/2019-468/03, December 2020.
2
As the definition is overlapping with that of MEPS, in this Impact Assessment the reference to
“Minimum mandatory requirements” or MMR which is used in the “Lessons learnt” study is substituted by
MEPS.
225
are applied to new construction or to an existing building when some form of change to
the building structure or major infrastructure takes place. The energy efficiency
requirements in these codes for existing buildings can be the same as for new buildings
or may be less rigorous, to accommodate practical, technical or cost constraints.
The provisions under Article 7 EPBD and MEPS have a different basis and different
triggers for when they take effect, as summarised in the following table.
Table F.1: Energy codes applied to existing buildings compared with performance standards3
Minimum energy performance
requirements
Minimum energy performance
standards
Basis Codes are generally developed for new
construction, though some new construction
requirements are often applied to existing
buildings in case of substantial renovation or
alteration projects
Based on some threshold of building
energy or carbon performance linked to
a performance rating (either calculated
or measured), or a measured energy or
carbon intensity
Basic
trigger for
requirement
A “one-time” requirement to meet prescribed
energy efficiency levels or performance when
renovating, refurbishing or remodelling an
existing building, generally when the level of
renovation exceeds a stated portion of the
building floor area or value, or some specified
construction value
Meet a prescribed energy performance
level by a given date, and/or on change
of tenancy or ownership, often with the
performance level ratcheted up over
time, sending longer term signal for
requirement(s) in the future
1.3.Design options for MEPS
The experience worldwide shows that there are a variety of different policy design
decisions that have substantial impact on how many buildings are impacted by
performance standards, and the level of savings resulting from the standards. These
design criteria have guided the definition of the options on MEPS included in Chapter 5
and are illustrated in more detail in the following sections.
1.3.1 Type of standards and requirements.
An international review4
identified the following types of MEPS, based on the type of
requirement established through MEPS:
 Prescriptive standards on specific buildings element: prescriptive standards
identify specific minimum standards such as insulation levels or appliance efficiency
levels. These standards aim to improve the performance of the building, while
focusing just on one of its elements.
 Performance based renovation targets and requirements: performance standards
go beyond just individual building components and address overall building energy
3
Elaborated from BECWG (2021)
4
https://www.energy.gov.au/sites/default/files/BEET%2010%20Minimum%20Energy%20Standards%20fo
r%20Rented%20Properties%20-%20An%20International%20Review.pdf
226
performance. This category could also include goals and milestones like the ones
included in Long-Term Renovation Strategies.
 Quality and comfort standards: this type focuses more on setting minimum overall
quality, safety (e.g. fire and anti-seismic) and comfort standards as part of a broader
quality improvement policy, but always in conjunction with elements that will
improve energy efficiency.
1.3.2 The metrics and performance type to be used.
A well-designed metric – tailored to the specific purpose of the MEPS – is crucial for its
success. A metric serves to express the performance of a building in a specific category,
for example, an energy metric in kWh/(m2.yr) or a carbon metric in CO2eq/(m2.yr). In
general, for the overall building sector, metrics are mainly used to evaluate the energy
performance of the building, its climate impact, or indoor environmental quality.5
For
single buildings, metrics can get more specific and relate to construction materials,
installations, or building elements.
Metrics could also be applied to renovations, and there are many ways in which they
could be expressed. For example, in the existing Article 7 EPBD energy performance
requirements are set for buildings undergoing major renovations. These requirements are
set for the building as a whole or for building elements.
Some commonly used metrics refer to the energy performance of a building which is
reflected in Energy Performance Certificate (EPC) class, energy consumption, GHG
emissions, elements of the energy codes (e.g. U-values), etc. From the existing
experiences in the EU, energy performance rating based on EPCs has been highlighted as
one of the most appropriate approach to be used to define minimum performance level.
Another important metric differentiation is between asset-based ratings and measured-
based ratings:
 Asset-based ratings refer to a calculated energy efficiency level, which often
aggregates the designed performance of the different building components
(heating system efficiency, the thermal resistance of the envelope etc.). Most
EPCs are fully, or predominantly, based on asset ratings. The main strength of
asset-based rating is that it allows for a more reliable comparison between
buildings, as the buildings with the same components should get the same rating.
The main weakness is that the calculated energy performance is usually not
5
Fawcett & Topouzi. (2020). “Residential retrofit in the climate emergency: the role of metrics”. Buildings
and Cities. (Available: Online).
227
aligned with the actual energy performance (i.e. resulting in a potential energy
performance gap), due to the calculation, installation and/or user behaviour.6
 Measured-based ratings7
include metrics based on actual energy consumption,
which can be done through utility bills or smart meter data. A prominent example
of an operational rating is the Energy Start Score in the USA, which is based on
smart meter data.
Existing MEPS have predominantly been focused on improving a building’s energy
performance during its use phase. There are good reasons for prioritising operational
energy savings as, currently, this represents the main source of emissions in existing
buildings. However, considering the whole-life carbon impact in new constructions, and
in renovations of existing buildings, will help addressing and reducing the overall impact
of the building sector across their life-cycle. This is addressed in the provisions for new
buildings and in the national building renovation plans.
This potential could be fostered by appropriate design of MEPS, integrating whole-life
carbon considerations based on reliable data, calculations and standards, which need to
be further evolved and operationalised before they could be effectively used for MEPS
across the EU.
As soon as lifecycle and embodied carbon data becomes more readily available, MEPS
could evolve to consider whole-life carbon emissions, including emissions from
manufacturing and construction through to the end of life and disposal of buildings.
1.3.3 Buildings to be targeted and their challenges.
MEPS can be designed to target specific building segments. The building’s function can
also be a criterion for the design of MEPS, e.g. residential or non-residential buildings.
Design can be tailored to a building typology, specified to e.g. detached houses, terraced
houses or apartment buildings. Another possible option is to target a specific segment of
the housing market, e.g. privately owned, the rental sector or social housing, or e.g.
buildings constructed before a given year. Furthermore, a common criterion used in
certain MEPS scheme is a minimum building (portfolio) size in terms of floor area in
square metres.
Worst performing buildings can be identified based on class of performance in EPC or
looking at the age of buildings, which is often a good indicator of the average efficiency
of the building.
6
IEA (2019) EBC Annex 71. Building Energy Performance Assessment Based on In-situ Measurements.
(Available: Website)
7
Also referred to as “operational rating”.
228
Non-residential buildings (e.g. education, healthcare, hotels and restaurants, public
offices, private offices, trade and wholesale) account for 24% of the total floor area.8
To
achieve a significant impact, MEPS need to target older residential buildings which have
lower energy performance. Larger multi-family buildings and non-residential buildings
are also relevant as target building segments.
Figure F.1 shows that the residential sector is responsible for almost 75% of the EU’s
building stock’s heating energy demand, in which single-family and terraced houses are
the most demanding.
Figure F.1: Heating energy demand - building use9
There are specific challenges to be addressed depending on the type of buildings subject
to MEPS.
Buildings with multiple ownership
MEPS focused on triggering renovation at property transfer may not be as effective in
multi-ownership buildings compared to single-ownership ones. The complex decision-
making process in multi-ownership buildings may be a considerable barrier to
renovations, especially medium and deep ones10
. Mandatory implementation of
renovation would demand action from homeowners associations or follow the voting or
other rules established at national or local level (which need to have a clearly defined
legal status and rely on agile decision procedures).
8
Entranze Project. Policies to Enforce the Transition to Nearly Zero-Energy Buildings in the EU. European
Commission - Intelligent Energy Europe programme. (Available: Website)
9
Hotmaps database, apartment blocks are multi-family buildings with five or more dwellings.
10
The purpose, governance and frequency of homeowner association varies across the EU and well-
functioning homeowners associations is not a given. See for example: Economidou M et al (2018) Energy
efficiency upgrades in multi-owner residential buildings - Review of governance and legal issues in 7 EU
Member States, European Commission JRC. (Available: Online)
229
The presence of multi-family buildings vary significantly across countries, and while in
some Member States they represents a small share of the floor area of the residential
sector, in others they represent more than half.
Heritage buildings
Heritage buildings bring specific values and challenges, discussed in the European
Framework for Action on Cultural Heritage.11
The cultural and aesthetic value of these
buildings can make them more challenging to renovate. For example, alterations to the
interiors, facades or roofs might not be possible without negatively affecting their
historical and architectural significance. Furthermore, these older buildings are often
extra vulnerable to the effects of climate change.12
As such, the applicability of MEPS to
heritage buildings should be tailored at the national or local level, where policymakers
have the most knowledge on the regulatory framework, local climate conditions and the
cultural significance and sensitivities.
Figure F.2: Distribution of single-family and apartment buildings (residential) in the EU13
Source: Building Stock Observatory
Seismic Strengthening of Buildings
Seismic strengthening of vulnerable buildings is the best way to reduce existing
earthquake risk. Seismic strengthening is intended to improve the safety of buildings and
its occupants in case of earthquake.
11
European Framework for Action on Cultural Heritage. (2018). European Union. (Available: Online)
12
Historic Environment Scotland. (2020). “Climate Action Plan 2020-25”. (Available: Online)
13
Building Stock Observatory.
230
Approximately 40% of the buildings located in EU seismic regions are designed with
inferior safety requirements14
. Since we can neither predict nor stop earthquakes from
happening, the non-compliance to state-of-the-art building standards in seismic prone
regions, is source of concern that has to be taken into consideration when addressing
renovation of old building stock.
Over time, building seismic standards have improved substantially in almost all EU
Member States. Nevertheless, 80% was built before the 90's, while 40% are pre-60's and
a considerable amount being even older and classified as cultural heritage. This implies
that, while people safety has increased, there are still margins for improvement of the EU
building stock conditions overall.
Co-investment in seismic strengthening and energy efficiency improvements offers a
significant co-benefit for EU countries, especially in urban areas that comprise ageing
building stock, which often has high social, financial, recreational, and cultural value.15
A number of Member States, e.g., Croatia, Italy, France, Romania and Slovenia, include
simultaneous energy and seismic retrofit of buildings in their national Recovery and
Resilience Plans.
1.3.3 Trigger points
In the lifetime of a building, certain events lend themselves well to trigger a renovation.
For instance, when a house is sold this provides an opportunity to renovate at the time
when the new owners structure long-term financing (mortgage) and before they move in,
thereby reducing the nuisance of the construction work. Additionally, a switch of tenants
or a change of function of a building (section) can function as a suitable moment to
renovate with least inconvenience for the building owners and users. MEPS can use these
‘trigger points’ to require building owners to improve building performance. In the
Flanders Energy Plan Draft, for example, non-residential building owners are required to
renovate their building within five years of purchase.16
Also in this case, this trigger points would have different impacts across countries,
depending on the dynamics of the rental or national property market. In some countries
for cultural or other reasons, renting houses are much more diffused or popular than
14
Gkatzogias, K., Tsionis, G., Romano, E., Negro, P., Pohoryles, D., Bournas, D. and Raposo De M. Do N.
E S. De Sotto Mayor, M.L., Integrated techniques for the seismic strengthening and energy efficiency of
existing buildings: Pilot Project Workshop, 16–19 November 2020, Gkatzogias, K., Raposo De M. Do N.
E S. De Sotto Mayor, M.L., Tsionis, G., Dimova, S. and Pinto Vieira, A. editor(s), Publications Office of
the European Union, Luxembourg, 2021, ISBN 978-92-76-30255-1, doi:10.2760/665617, JRC124045.
15
The Pilot Project ‘Integrated techniques for the seismic and energy retrofit of buildings’ will provide
evidence and guidelines for the integrated renovation of existing buildings for energy efficiency and
seismic strengthening, based on the analysis of the current state of the building stock in Europe, scenarios
for intervention, technologies for renovation and assessment methodologies.
16
Flemish Energy Plan. (2018). “Ontwerp Vlaams Energieplan”. Flanders Government. (Available:
Website)
231
being owners occupiers. According to the data from the EUROSTAT EU-SILC survey,
while tenants represented less than 30% in 24 MSs with very low shares in Eastern
European countries, this share was close to 50% in Germany and Austria.
The research institute CE Delft indicates in a report on zero-carbon buildings that
utilizing trigger points for building renovation can contribute significantly to achieving a
zero-carbon building stock in 205017
. Moreover, research from the Energy Saving Trust
indicates that the majority of British building owners are willing to invest additional
funds in energy efficiency measures during already planned renovation measures18
. This
illustrates the relevance of harnessing the power of trigger points to improve building
performance, and the potential to tap into by integrating trigger points in the MEPS
design.
Figure F.3: Distribution of population by tenure in the EU (2018)19
Source: Eurostat/SILC
The Figure below illustrates that the required renovation rate and depth can be reached
with different means. ‘If the energy demand of dwellings can be reduced by an average
of 60% when changing owners (representing 1.7% of the dwellings per year), renovation
17
European Climate Foundation. (2020). “Zero Carbon Buildings 2050”. Modelling by Climact based on
EU Calc data. (Available: Online)
18
Energy Saving Trust. (2011). “A convenient truth – Promoting energy efficiency in the home”.
(Available: Online)
19
EUROSTAT EU-SILC.
232
associated with other key moments would not need to happen at as high a renovation
depth’20
.
Figure F.4: Different renovation rates and depths at key moments reach different average energy savings
in four scenarios21
1.3.4 Enforcement and flexibility
Measures to facilitate implementation and enforcement are also important to ensure
MEPS effectiveness, providing the real estate sector adequate time to integrate these
measures into the building’s economic lifecycle, especially for any measures that have
long payback period and for buildings with low-income tenants.
Good monitoring simultaneously facilitates compliance checks by providing regulators
with insight into the energy performance of existing buildings. Sufficient administrative
capacity is a pre-requisite to achieve qualitative monitoring and effective compliance.
In many existing cases, compliance is stimulated and enforced [carrot and stick] with on
the one hand financial subsidies and grants, combined with financial penalties in case of
non-compliance. The fine can increase depending on the duration of non-compliance and
can be embedded in a bonus-malus scheme. These funds can be used for grants
20
European Climate Foundation. (2020). “Zero Carbon Buildings 2050”. Modelling by Climact based on
EU Calc data. (Available: Online)
21
The renovation depth is associated with three key moments (left-hand purple bars) and four scenarios
(right-hand green bars) illustrate the required increase in the renovation rate resulting from lowered
renovation depth following the untapped potential of key moments. The first scenario captures the full
potential of key moments, leading to a 2.9%/year renovation rate with 51% average energy savings. Staged
renovations outside of key moments would require a 7.3%/year renovation rate to provide similar energy
savings. The bottom purple bars provide the average renovation depth corresponding to each scenario.
Source: Kruit et al. (2020) Bringing buildings on track to reach zero-carbon by 2050
233
stimulating building owners to reach the 2050 target (i.e. deep renovation) as early as
possible. Financial support programmes are often introduced alongside MEPS to improve
compliance and foster early action.
Furthermore, most jurisdictions have set up educational programmes for technical
assistance. A barrier to enforcement in England and Wales was the lack of administrative
capacity in the municipalities to carry out the enforcement and follow-up work. This
illustrates the importance of well-equipped and trained local administrations and practical
design for the effectiveness of MEPS.
MEPS could also be based on an enforcement calendar, which sets out a timeline for the
affected buildings, defining when they need to comply with the specific requirements.
Most commonly, and as implemented in the MEPS in the UK, MEPS increases the level
of ambition over time, guiding the market towards a long-term target. In each
enforcement step certain requirements are enacted, e.g. an EPC rating, specified carbon
emission level, or something else.
Enforcement calendar schemes can be applied to all building segments, types and
ownership structures. For non-residential and larger building owners, the enforcement
calendar can be applied to their portfolio of buildings (i.e. assets). The owner/investor
can then plan their portfolio investments in line with future thresholds, which
incentivises investments in high-performing buildings. Certain building/ownership types,
such as public or non-residential buildings, could be mandated to meet the requirement a
couple of years in advance and thus lead by example.
1.4.Stakeholder’s views on MEPS
The views of stakeholders on MEPS were collected on different occasions, and supported
the indication of MEPS as key regulatory instruments to implement the goals of the
Renovation Wave, and its corresponding mandate to review the EPBD to include such an
instrument. This section recalls and collects the view of stakeholders prior to the specific
consultation conducted in preparation of the revision of the EPBD, which is instead
included in Annex B. Such views are important because preferences have been expressed
also in relation to the design of MEPS, which have been taken into account in the
identification of options for MEPS in Chapter 5 of this Impact Assessment and in the
identification of the preferred option.
1.4.1 Stakeholder’s views on MEPS in the “Lessons learnt” study.
In the context of the study on “Lessons learnt”, stakeholders were consulted to gather
their views on minimum energy performance standards22. Around 80% of stakeholders
22
Stakeholders have been involved in two ways in this study: (1) 113 stakeholders answered an online
survey and (2) over 100 stakeholders participated in an online workshop. The stakeholders represent
different sectors and professions, including building owner representatives, tenant organisations,
installation manufacturers, construction sector, financial sector, public administration, (energy) service
providers, civil society, and research institutes.
234
consulted thought that MEPS are a necessary policy for the EU to decarbonise the
building stock by 2050. The same share of respondents also argues that the EU should
actively support and encourage MEPS.
Figure F.5 displays stakeholders’ preferences for different MEPS types; most
respondents think more than one type of MEPS could be successful. The large majority
of stakeholders consulted via the survey - three-quarters (74%, or 84 out of 113 survey
respondents) - think that the MEPS should focus on the overall energy performance of
the building. Over half (53%) think MEPS could be linked to certain building
components, while almost 50% say it should be linked to the building’s overall climate
performance. Only a quarter (24%) say the MEPS should be linked to the occupants’
energy behaviour, while less than 3% think the MEPS should not encompass energy or
climate requirements.
During the stakeholder workshop, support was expressed for carbon efficiency (i.e.
maximum GHG/m2
/year) as an MEPS parameter because this provides most certainty for
the long term and gives the building owner more freedom to decide how the requirement
will be met.
Some stakeholders stressed that incorporating indoor environmental quality, embodied
carbon and/or accessibility for disabled people in MEPS should be considered. In
contrast, other stakeholders argued that MEPS should only focus on energy performance
parameters, to be kept simple and effective.
Figure F.5: Survey question – Stakeholders’ preferences for different types of MEPS (several votes possible)
The views among stakeholders were diverse when it comes to central design options,
such as target groups, trigger points and when the requirement should apply. It was
0 10 20 30 40 50 60 70 80 90
Overall energy performance of the…
Performance of building…
Overall climate performance of…
Whole life carbon (i.e. carbon…
Other
Energy consumption behaviour of…
It should not include any…
What should MEPS encompass, in terms of
energy/climate requirements?
235
reiterated that these aspects ought to be defined at the national and/or regional level,
which explains some of the divergent views.
The stakeholders generally think that MEPS can best be applied to the worst-performing
buildings, excluding heritage buildings. This will achieve the highest impact in the short
term. Additionally, the building owners’ ability to comply with the requirement should
be considered. The most widespread view (57% of respondents) is that MEPS should
encompass all building typologies. This view was followed by a focus on larger and
more polluting buildings, such as public buildings (41%), multi-family buildings (31%),
commercial buildings (30%), all non-residential buildings (28%) and larger buildings and
portfolios of building assets (27%). Less popular are low-income households (10%) and
social housing (20%). See all answers in Figure 45.
One popular opinion is that MEPS could initially best be targeted at public and/or larger
commercial buildings. This might, according to the stakeholders, kick-start local
renovation markets and improve renovation skills amongst construction workers.
Figure F.6: Survey question – building and ownership types to be targeted by MEPS (several votes were
possible)
Figure F.6 shows that many stakeholders want the MEPS to include both progressive
enforcement of milestones and various trigger points, something reaffirmed in the
workshop discussion. In the multiple-choice question on when the MEPS should come
into effect, most participants say MEPS enforcement based on progressive milestones
(66%) and trigger points (55%) are the best solutions.
Most stakeholders argue that MEPS should support long-term objectives and that the
deadlines for the requirements should be planned and communicated well in advance.
0 10 20 30 40 50 60 70
All buildings
Public buildings
Multifamily buildings
Commercial buildings
All non-residential buildings
Large buildings/ portfolio of large…
Private landlords
Single-family buildings
Social housing
Buildings built before a certain…
Others
Low-income households
What type of building and ownership types should
it address?
236
This gives property owners and the market time to adapt and take actions. The enabling
framework could also be coupled to long-term targets and stimulate quick action.
Financial measures could be designed to reward early action with high support and be
reduced closer to the deadline.
The argument for linking MEPS to a building renovation passport (which is supported by
42% of the respondents) is to avoid technical and economic lock-in effects. Other
participants perceived the choice between staged and one-step deep renovation as too
simplistic and called for an open mindset to find a balanced solution.
Figure F.7: Survey question – When should the requirement apply? (several votes were possible)
Stakeholders view the EPC framework as a natural way of implementing and enforcing
MEPS by the EU. It was, however, also stressed that the reliability of EPCs and their
(lack of) comparability across the EU remains a barrier. Concerning EPCs, it was also
concluded that they could be expanded to include other non-energy parameters like
indoor environmental quality, which could then be taken into account by future MEPS.
The next figure displays what the stakeholders view as the most suitable trigger points
for MEPS. Some 86% (97 out of 113 respondents) say that major renovation or building-
related construction work is the most suitable trigger point, which partially links to what
Article 7 of the EPBD provides23
. Most respondents think ‘property transfer’ (62%) and
‘change of use’ (50%) are good trigger points for MEPS.
There is almost a consensus among stakeholders on the view that MEPS cannot function
without a supportive policy framework. Participants mentioned financial support
23
Article 7 of the EPBD states that "Member States shall take the necessary measures to ensure that when
buildings undergo major renovation, the energy performance of the building or the renovated part thereof is
upgraded in order to meet minimum energy performance requirements set in accordance with Article 4 in
so far as this is technically, functionally and economically feasible."
0 10 20 30 40 50 60 70 80
Progressive enforcement of milestones
(2025, 2030, …)
Trigger points (property transfers,
change of occupation, …)
According to building renovation
passports (setting out a renovation…
Other
When should the minimum requirement apply?
237
schemes (green loans and grants), awareness and communication campaigns, long-term
planning tools, training of experts as well as a compliance and enforcement strategy, as
essential enabling measures. The survey showed that most stakeholders view all enabling
measures to be, at least, moderately important. Financial support was seen as the most
important measure (85% say it is ‘very important’ or ‘important’), followed by
information measures (73%) and long-term planning tools (80%).
It was also stressed that the EU must take further actions to improve the trustworthiness
of EPCs and make sure data supporting MEPS is reliable and comparable. Stakeholders
suggested that the EU can play an important role in harmonising data collection and
facilitating the comparison of EPCs within the EU. Concerning the supply of
construction materials and building installations, MEPS could play a role in ensuring
that, even if MEPS are defined on a local scale, it is still part of a wider and comparable
European framework.
In addition, continuing the work on raising awareness on building performance, for
example through one-stop shops, was frequently referred to as part of the solution.
Some stakeholders warn of the additional financial burden MEPS can impose for some
building owners and tenants. This is in general seen as the most important aspect that
should be addressed and solved. Financial support is seen as the most suitable solution to
this barrier.
1.4.2 Stakeholder’s views on MEPS in the consultation for the revision of the
EPBD.
The vast majority of stakeholders consulted agreed that mandatory minimum energy
performance standards (MEPS) should be introduced in the EPBD. As regards the types
and ambition of the standards to be set, the overall energy efficiency, linked to Energy
Performance Certificates (EPCs) received high support. It was also indicated that MEPS
should cover both residential and non-residential buildings. MEPS should be
implemented in a staged approach and linked to specific moments of a building life-
cycle. The most important element to guarantee a successful roll-out of MEPS is the
availability of financial support to building owners.
In the public consultation, 17% of respondents disagreed to the introduction of MEPS,
and the explanation provided referred to the differences of the building stock across MSs
making a EU-wide MEPS challenging (e.g. different climate conditions, geography,
culture, renovation needs). Local MEPS were suggested as an alternative. Some
respondents also referred to the fact that MEPS already exist in some Member States
which could conflict with a EU approach and indicative guidance instead of mandatory
MEPS would be preferable. It was also indicated that measures should be voluntary to
ensure affordability for future generations.
MEPS should not be a standalone measure and must be accompanied by EPCs and BRPs
to support owners in long-term planning. There should also be a focus on worst
238
performing buildings (in the short term) and framework should promote deep renovation
to avoid lock-in effects. Stakeholders also suggested:
- A detailed planning describing the requirements, which benefits for their
application and the timeframe should be developed and revised in a transparent
way;
- Minimum of energy efficiency should be fixed (under certain conditions) and take
into account the technological evolution of system and materials;
- MEPS should be applied for green public procurement/public buildings;
- MEPS should be phased in different building types at different points in time; and
- MEPS design should be flexible to national and local conditions/priorities.
Figure F.7: In your view, for which category of buildings should mandatory minimum energy performance
standards be applied? (n=X)
As regards the type of buildings to be covered, the majority of the public consultation
respondents favoured a wide approach covering all buildings. Respondents were quite
split on the questions regarding how to set MEPS (figure below), for which support was
received both on the basis of a staged approach based on a clear timeline and linked to
specific moments in the buildings lifecycle. Many stakeholders referenced the need to
implement the two response choices from the public questionnaire (figure below), staged
approach and links to trigger points in building lifecycle, for the introduction of MEPS.
Particularly, it is suggested that a hybrid approach should be taken, which entails a
timetable for a staged approach and more accelerated when transactions are made.
239
Stakeholders also call for a clear timeline and targets with compliance deadline based on
long-term goals, which will incentivise gradual acceleration in energy renovations. Some
stakeholders further explained why trigger points should be used, namely because they
limit the risk of missing opportunities to renovate and avoid lock-in effects. Some
stakeholders also indicated specific trigger points, such as change of owner or use of
buildings and the building passing a certain age, such as 50 year. Some stakeholders
suggested that rental should not be a trigger point.
Figure F.8: Suggestions for the introduction of mandatory minimum energy performance standards
(n=391, 573 responses)
When identifying the most important factors to guarantee a successful roll-out of MEPS,
stakeholders mentioned the elements in the following order: availability of financial
support to building owners, the presence of a stable legal framework, the availability of
adequate workforce capacity, the correct identification of the worst-performing buildings,
and the availability of emerging technologies.
1.5.Overview of MEPS experiences across the EU and beyond
Europe
In Europe, some countries have implemented MEPS, examples of such cases are France,
the Netherlands, Belgium. The metric used for the standards in many cases relates to a
minimum EPC rating, a theoretical calculation known as ‘asset rating’. In certain regions,
e.g. Brussels and France, examples exist that focus on the measured energy, known as
‘operational rating’. The building segments targeted by these MEPS regimes are diverse,
including both residential and non-residential buildings. Compliance is based on
compliance cycles, trigger points like sale or renovation, and, in the case of Brussels,
building renovation passports.
Table F.2: Overview of MEPS cases analysed in Europe
Name/description of
requirement
Locatio
n
Building
type
Metric Effect
ive/
Enfor
ced
Compliance category
240
Mandatory
progressive
implementation of a
renovation roadmap
Brussel
s,
Belgium
Non-
residenti
al
Asset
rating
2030 Building renovation
passport
Mandatory energy
consumption
reductions (PLAGE)
Brussel
s,
Belgium
Non-
residenti
al
Operationa
l rating
2019 Enforcement calendar
Minimum energy
performance standard
for all tertiary
buildings24
Flander
s,
Belgium
Non-
residenti
al
Asset
rating*
2030 Change of owner
Minimum energy
performance standard
for residential
buildings
Flander
s,
Belgium
Residenti
al
Asset
rating
2021 Change of owner
Minimum quality
standards for basic
comfort, safety and
health
Flander
s,
Belgium
Residenti
al
Asset
rating
2021 Complaints by tenants
Travaux embarqués
(embedded work)
France All n/a 2017 Implementation of other
works
Minimum energy
efficiency standard
France Residenti
al
Asset
rating
2025 Enforcement calendar/
change in tenancy
Mandatory final
energy consumption
reduction targets for
tertiary buildings
France Non-
residenti
al
Operationa
l rating
2030 Enforcement calendar
Minimum Energy
Efficiency Standard
England
and
Wales
Residenti
al
Asset
rating
2018 Change in
tenancy/Enforcement
calendar
Minimum Energy
Efficiency Standard
Scotlan
d
Residenti
al
Asset
rating
2020 Change in
tenancy/Enforcement
calendar
Minimum standard for
all office buildings
Netherl
ands
Non-
residenti
al
Asset
rating
2023 Enforcement calendar
Renewable heating
and efficiency
obligation
German
y,
Baden
Württe
mberg
Residenti
al and
most
non-
residenti
al
Asset
rating
2008
(with
updat
es
2015)
Trigger point (heating
system)
Minimum energy
performance standard
for public buildings
Greece Public
buildings
Asset
rating
2015 Change in tenancy
Mandatory progressive implementation of a building renovation passport
24
All non-residential and non-industrial buildings.
241
Brussels, Belgium
The scheme is being developed to improve the energy efficiency of the capital’s non-
residential buildings and meet international climate goals, especially the 2030 climate
objectives of the EU. The vision has been translated into concrete objectives in a strategy
document, which was adopted by the Brussels government in 2016 and aims to reduce
GHG emissions by 30% by 2025.25
The Brussels LTRS also includes references to
renovation requirements from 2030 onwards based on specified time intervals linked to a
building renovation passport (BRP).26
Status: Planned.
Legal provision
The scheme aims to reduce the primary energy consumption (kWh/m²/year) of the non-
residential building stock. Targeted building owners must propose a three-year action
plan to reduce primary energy consumption. The mandated renovations are based on
cost-effective measures defined by the local administration, which the building owner
refers to in the action plan. The energy reduction in the plan is mandatory and applies to
the total building stock owned. The owners decide which measures to apply.
The scheme operates in five-year cycles. The first year is used to formulate the plan,
while the subsequent four years are used to execute the plan. The plan is based on
‘Energy Performance Certificates 3.0’. These are based on, amongst other factors,
thermal insulation, airtightness and heating installations, and thus an asset rating.
Building typology
The programme applies to:
• Properties of federal, regional and municipal public authorities with more than
250m2
floor space.
• Other publicly owned buildings with floor space larger than 50,000m2
.
• Large privately owned properties with more than 100,000m2
floor space.
Compliance mechanisms
At the end of every five-year cycle, the execution of the plans is verified by the Brussels
Environment Office. If the procedures are deemed non-compliant, sanctions are
applicable including administrative fines. The fines amount to €0.06 per exceeding kWh
if no valid reason has been provided.
Key success factors
25
Second National Energy Efficiency Action Plan Belgium (2011). Belgium.
26
Strategy to reduce environmental impact of buildings Brussels (2020). Mandatory renovations at 5-year
intervals to achieve decarbonisation in 2050. LTRS, p42.
242
• Proper training for inspectors.
• Cost-effective measures are mandatory and will quickly be implemented. This
is good for efficiency but discourages the uptake of less cost-effective
measures in investment packages.
• A regulation or scheme fostering the re-investment of the cost-savings from
lower primary energy consumption in other energy efficiency measures would
enhance the effectiveness but is currently absent.
Minimum energy performance standard for all tertiary buildings
Flanders, Belgium
The 2019 Flemish coalition agreement set specific energy efficiency targets as part of
Flanders’ 2050 goals for the building stock. Within the Draft Flemish Energy plan 2021-
2030, the Flemish authorities specify policies to achieve these targets, including energy
efficiency measures for the tertiary sector (all non-residential and non-industrial
buildings).27
The rationale behind energy efficiency and more responsible energy usage is
to reach European climate targets and reduce energy costs. To achieve this vision,
inefficient large non-residential buildings are required to get energy labels and need to be
renovated after they are sold.
Status: Planned.
Legal provision
As of 2021, all non-residential buildings are required to undergo a thorough energy
renovation within five years after purchase to reduce their climate footprint.14
From 2025
onwards, all Flemish large non-residential buildings are obliged to have an EPC. After
2030, they also need to reach a minimum energy label (yet to be defined). Public
buildings (owned by the government) will need to comply with these measures two years
in advance of private building owners.
Building typology
Non-residential buildings (tertiary sector)
Compliance mechanisms
The penalty will probably be monetary fines, but it is yet to be defined.
Key success factors
27
Draft Flemish Energy Plan. (2018). Flemish Government.
243
• The Flanders Energy Agency indicates that this policy is aligned with the
long-term goals of carbon neutrality for non-residential buildings.
• The buildings are assessed on actual energy consumption rather than
theoretical consumption.
• Transition measures could be considered in the form of no-regret or
renewable energy production. Additionally, a requirement for energy audits
including obliged implementation of cost-effective measures (like in Brussels)
or the adoption of energy management systems could contribute to realising
the potential of this policy.
Minimum Energy Efficiency Standard
England and Wales
The Minimum Energy Efficiency Standard (MEES)28
was introduced in March 2015 by
the Energy Efficiency Regulations.29
The MEES originates from the Energy Act of 2011,
which was a package of energy efficiency policies including the now defunded Green
Deal. The MEES has been designed to contribute to the legislative targets of reducing
CO2 emissions for all buildings to around zero by 2050.
The MEES is linked to the EPC framework and stipulates that a dwelling cannot be let if
it does not comply with EPC rating E. The EPC rating (‘SAP rating‘), which is the
infrastructure used to check compliance, gives a score from 1-100 based on the estimated
cost to heat and light the building compared to other buildings of the same size. One of
the main reasons for its implementation was to circumvent the split-incentive dilemma,
where the landlords are responsible for the building, yet the tenants pay the utility bills.
Status: Ongoing.
Legal provision
From 1 April 2018, the MEES requires private landlords of homes rated at EPC ratings F
or G to improve their property to E before issuing a new tenancy, unless they obtain an
exemption. From April 2020 the MEES was extended to include existing tenancies (as
long as the property has an EPC). Landlords are never required to spend more than
£3,500 on energy efficiency improvements (cost cap on investment).
Building typology
Privately rented properties. Around 7% of the targeted building stock has an EPC rating
worse than label E.
28
Domestic Minimum Energy Efficiency Standard Guidance Site (2017). United Kingdom
29
The Energy Efficiency (Private Rented Property)(England and Wales) Regulations (2015).
244
Compliance mechanisms
If a landlord does not provide the requested information or lets a substandard property,
they get a monetary fine. The fine ranges between £2000 and £5000 (≈ €2035 and
€5585).
Key success factors
• A mature and reliable EPC framework. In the UK and several other countries,
there is a lack of confidence in the quality and reliability of EPCs.
• An EPC database which enables the implementing public authorities to check
compliance.
• The implementing body must have resources to uphold and enforce the
legislation.
• Avoid too many exemptions to the regulations. In the UK, ‘the high-cost
exemption criteria are a major reason for not putting in much effort to enforce
the MEES to date’.30
Minimum standard for all office buildings
The Netherlands
The parties to the Energy Agreement, including the government, aim for an energy-
neutral built environment in 2050, with as an intermediate step at least an average level
of the (current) label A for all buildings in 2030. The 2018 amendment of the Dutch
Building Decree to require that office buildings have an Energy Efficiency Index of at
least 1.3 (equivalent to a ‘C’ EPC rating) by 1 January 2023 is part of a set of measures
to achieve these targets31
.
The Dutch coalition agreement of 2017 also set forward a target of a 49% reduction in
CO2 emissions by 2030 compared to 1990 levels, which for non-residential construction
(including office buildings) amounts to 3 MT CO2 reduction. This target has also been
incorporated in the Climate Agreement, which includes the ongoing commitments of the
Energy Agreement as well. The label C obligation for offices is therefore also the first
step to meet this CO2 target. A tighter target of an ‘A’ label by 2030 was considered but
not introduced. However, the ‘C’ requirement by 2023 is expected to be tightened to a
higher level in future. In response, commercial financial institutions (ING, ABN) have
indicated they will stop financing office buildings that do not meet the standard. This
illustrates the effectiveness of MEPS as policy instruments.
30
RSM. (2019). “Enforcing the Enhancement of Energy Efficiency Regulations in the English Private
Rented Sector”. RSM Consulting.
31
Climate Agreement. (2019). The Netherlands
245
Legal provision
From 1 January 2023, all office buildings are required to have an Energy Efficiency
Index of at least 1.3 (equivalent to a ‘C’ EPC rating)32
. As the minimum standard applies
to the use of the office building, the duty to comply can be with either the tenant or the
building owner.
Building typology
Existing office buildings, with a few exceptions33
, such as office buildings with a total
surface area of 100m2
or less, buildings in which less than 50% of floor area is used for
offices, and national, municipal or provincial historic buildings (except protected
townscapes and villages). Out of 62,000 offices falling within the scope of this
obligation, 56% do not yet have an EPC (no label registered). Of those that do have an
EPC, around one-quarter (7,000) has a label of D–G, and about 20,000 have an A-C
label. Since the beginning of 2016, the proportion of offices subject to the obligation with
a green label (A-C) has increased by an average of 8 percentage points each year.
Compliance mechanisms
Failure to comply will be addressed through administrative enforcement measures, such
as periodic penalty payments, a fine and, ultimately, the closure of the office building.
The standard is generally enforced by the municipality in which the building is located,
but it can also be delegated to another nominated ‘competent authority.’
Key success factors
• Enabling framework: (1) online tool providing information on investment
costs, energy cost savings and payback time; (2) government-approved energy
advisors; (3) grant for the cost of the advice if measures are taken following
that advice (in addition to existing financing schemes).
Mandatory final energy consumption reduction targets for tertiary buildings-
France
The French Energy - Climate law adopted in 2019 sets ambitious targets for French
climate and energy policy. The text includes the objective of carbon neutrality in 2050 to
respond to the climate emergency and the Paris Agreement.
32
Bouwbesluit (Building Code) (2012). The Netherlands
33
Explanatory note Bouwbesluit. (2012). The Netherlands
246
The Tertiary Decree entered into force in October 2019 and specified the implementation
of the article 175 of the “loi Elan”. It mandates an energy consumption reduction of
tertiary buildings.34
Status: Ongoing.
Legal provision
The decree proposes two methods to achieve the target:
- The buildings (i.e. tertiary sector) must reduce their energy consumption
(kWh/m²/year) compared to the reference year (which is a year between 2010 and
2020, chosen by the building manager), achieving at least35
40% reduction in
2030, 50% reduction in 2040 and 60% reduction in 2050.
- Or they shall achieve a threshold energy consumption per decade, defined
according to the category of the building.
The building managers need to provide, via a digital platform, yearly information on the
tertiary activity for which the building is used and its area in m². This information must
then be published by the building owner and made available to the general public.
This decree applies to both landlords and tenants (the responsibility of each is decided in
the rental contract).
The available action levers are: energy performance of buildings, installation of efficient
equipment & devices for the control and active management of these, performing
methods to operate the equipment, adaptation of buildings for energy-efficient use,
occupant behavior, etc.
Building typology
All non-residential buildings (with a tertiary use area ≥ 1,000 m²)
Few exemptions:
• Buildings with temporary construction permits
• Buildings used for religious activity
• Certain public buildings, including buildings of defence, civil security, or national
security
Compliance mechanisms
Non-compliance with this decree will be punished by:
• The publication, on a public website, of the non-compliance of the company
34
Decree 2019-771. (2019) Decree on the reduction of energy consumption of tertiary buildings.
35
Information website about the Décret Tertiare. (2019) Citron.
247
• Fine of €1,500 for a physical person
• Fine of €7,500 for legal entities.
Key success factors
 Public communication on (non)compliance.
 Obligation can be transferred to the tenant.
 Platform: needs to be clear and easy to use for building managers.
 Monitoring of the building managers’ compliance with the decree (there is a need
for a strong incentive and controls so that they all put their real consumption on
the platform every year).
Minimum Energy Efficiency Standard for residential buildings - France
The "Climate and Resilience law36
" resulting from the work of a Citizen's Convention for
the Climate establishes a ban on the worst-performing buildings (EPC G, F and E) to
reduce the emissions of the built environment.
Legal provision
Rent freeze for the worst performing buildings (art 159):
From 2022, owners of ‘energy sieves’ will have to carry out energy renovations if they
wish to increase the rent of their housing. This is an important first signal before the entry
into force of the rental bans on the most energy-consuming homes.
Prohibition on renting out poorly insulated housing: EPC G from 2025, F in 2028 and E
in 2034:
From 2025, it will be prohibited to rent the worst performing buildings (EPC G), and
from 2028 for buildings with EPC F. From 2034, housing with EPC E will be banned for
renting.
The tenant can require the owner to carry out work and several information, incentive
and control mechanisms will reinforce this right for the tenant.
All households, in particular those with the lowest incomes, will have access to a
financing mechanism to pay the remainder of their renovation work. In particular, this
could take the form of loans guaranteed by the state.
Building typology
The obligation applies to all residential buildings.
36
https://www.ecologie.gouv.fr/loi-climat-resilience
248
Compliance mechanism
The “Climate and Resilience” law updates the concept of decent housing, which will be
defined by reference to the energy class mentioned in the EPC. Rental offers must
mention the energy class of the property. Non-compliance with the inclusion of correct
information can result in financial penalties ranging from a maximum of €3000 (private
person) to €15,000 for legal entities. In addition, the judge may order the necessary work
to be carried out.
Key success factors
 Phasing out the worst-performing buildings based on energy performance.
 Building owners get sufficient time to prepare the renovation.
 The ‘Troisième ligne de quittance’37
allows landlords to (partially) share the
financial burden of energy-saving measures with tenants.
 The energy performance in the EPC of the building must be included in rental
advertisements after 2022.
United States of America
In the USA policymakers recognise the need for more ambitious policies to stimulate
energy efficiency in the built environment.38
MEPS are seen as an effective approach to
achieve climate targets. The development and implementation of MEPS in the USA is
just beginning. Different types of MEPS in terms of metrics, building segments targeted
and compliance are implemented and tested in various jurisdictions of the USA. An
overview of different types of compliance is presented in Figure F.3.
Recurring metrics for MEPS are energy use intensity (EUI), sometimes related to the
Energy Star Score, and carbon intensity. The first generation of MEPS implemented in
the USA suggests that operational rating is more suited for large (commercial) buildings
whereas asset rating is more suited for smaller or single-family residential buildings. In
certain jurisdictions, only audit obligations and requirements for cost-effective
renovation measures exist, rather than whole-building MEPS. The building segments
most often targeted by MEPS in the USA are commercial and multi-family buildings. In
contrast to Europe and Canada, single-family houses are often not targeted in the USA,
except in Boulder, Colorado.26
Compliance with MEPS is mostly based on compliance
37 Decree 2009-1438. (2009). Decree related to tenant contribution to energy saving work. France
38
Nadel, S & Hinge A (2020) Mandatory Building Performance Standards: A Key Policy for Achieving
Climate Goals. ACEEE (Available: Online)
249
cycles and in some cases pegged to trigger points like sale or major renovation. Some in-
depth examples are presented below in table F.3.
Table F.3: Overview of MEPS analysed in the USA
Name/description of requirement Locati
on
Building type Effe
ctiv
e
Complianc
e category
New York Building Emissions Law (Local Law 97
of 2019)
New
York
City
Larger
buildings
(>2300 m2
)
202
4
Enforceme
nt
calendar
(complian
ce cycle of
5 years)
Building performance goals Reno,
Neva
da
Residential
and non-
residential
buildings
(>2700 m2
)
202
6*
Enforceme
nt
calendar
(complian
ce cycle of
7 years)
Building Energy Performance Standards Washi
ngton
DC
Larger
buildings (>
4600 m2
)
202
6
Enforceme
nt
calendar
(complian
ce cycle of
5 years)
Clean Buildings for Washington Act Washi
ngton
state
Larger
buildings (>
4600 m2
)
202
6
Enforceme
nt
calendar
(complian
ce cycle of
5 years)
Boulder SmartRegs program (2010) City
of
Bould
er
Residential
buildings in
the rental
market
201
9
Enforceme
nt
calendar
(complian
ce cycle of
4 years)
Building Energy Performance Standard bill St
Louis,
Misso
uri
Residential
and non-
residential
large buildings
(>4600 m2
)
201
9-
202
5*
Enforceme
nt
calendar
(complian
ce cycle of
4-6 years)
Building Tune-up Ordinance Munic
ipality
of
Seattl
e
Non-
residential
buildings
201
8-
202
1*
Enforceme
nt
calendar
(complian
ce cycle of
5 years)
Mandatory seismic retrofit program Los
Angel
es
City
Seismically
vulnerable
buildings
(soft-story
buildings)
201
6-
201
7*
N/a
Building Energy Saving Ordinance Munic
ipality
of
Berke
Small
buildings at
trigger point
(<2300 m2
)
201
9-
202
2*
Enforceme
nt
calendar
(complian
250
ley Large
buildings
(>2300 m2
)
compliance
cycle
ce cycle of
5-10
years) +
trigger
point
(sale)
Existing Commercial Buildings Energy
Performance Ordinance
Munic
ipality
of
San
Franci
sco
Non-
residential
buildings
(>900 m2
)
All buildings
(>4600m2
)
202
0
Enforceme
nt
calendar
(Complian
ce cycle of
5 years) +
trigger
point
(sale)
Existing Buildings Energy and Water Efficiency
Program
Munic
ipality
of Los
Angel
es
Larger
buildings
(>1850 m2
)
201
9
Enforceme
nt
calendar
(complian
ce cycle of
5 years)
Energy Conservation Audit and Disclosure
(ECAD) Ordinance
City
of
Austi
n
All buildings 200
8
A trigger
point
(sale)
ECAD for residential Homes: Information for
Home Sellers, Buyers and Real Estate
Professionals.
Austi
n
Multi-family
buildings
200
8
If EUI is
more than
150% of
the
average
New York Sustainable Roof Laws (Local Law 94 of
2019)
New
York
City
Residential
and non-
residential
large buildings
(>2300m2
)
201
9
A trigger
point
(major
renovation
)
Boulder Building Performance Ordinance City
of
Bould
er
Non-
residential
buildings
202
0-
202
7*
Enforceme
nt
calendar
(complian
ce cycle of
10 years)
*Depending on the building segment/size, starting with public and large buildings
**Energy use intensity
New York Building Emissions Law (Local Law 97 of 2019)
New York City, USA
The law was developed to reduce the adverse impact of climate change and limit GHG
emissions. The New York City Council has proposed the Climate Mobilization Act,
which aims to reduce the GHG emissions of buildings by 40% in 2030 compared to 2005
levels, and by 80% in 2050.
Legal provision
251
Local Law No. 9739
provides a straightforward limit on the amount of GHG a building
can emit. It mandates that covered buildings 25,000 square feet (2322m2
) and larger
cannot emit GHGs at levels higher than the limits set by the law. It defines mandatory
emission intensity limits (metric tons of CO2/m2
) for different Building Code occupancy
groups, based on use and type of the building.
Building typology
It targets large buildings (larger than 2322m2
), both residential and non-residential. The
law incrementally expands the share of buildings that are covered by the requirement:
20% of buildings in 2024-2029 and 75% of buildings in 2030-2034.
Compliance mechanisms
Large-building owners must annually report energy and water consumption in
compliance with the NYC Benchmarking law (Local Law 84). In the Energy Start
Portfolio Management System, where this data is uploaded, the energy use is transposed
in kilograms of carbon equivalents (kgCO2eq). The building emission law specifies
carbon intensity limits per building segments in these terms. These reports will be
checked by the office for energy performance and emissions performance. When
buildings exceed the annual buildings emission limit, the owner is liable for a civil
penalty equal to the difference between the emission limit for that year and the reported
emissions in tonnes of CO2 multiplied by $268.
A separate office of building energy and emissions performance within the New York
City department of buildings has been created to oversee the implementation of the new
energy performance-related policies. This office is charged with monitoring buildings
energy use and emissions, reviewing building emissions assessment methodologies,
building emission limits, goals, and timeframes to further the goal of achieving the
emission targets.
Key success factors
• Low-interest loans available through a new Property Assessed Clean Energy
programme to finance energy efficiency and green energy through a special
assessment on a building’s property tax bill.
• Available financial subsidies to support the various measures, including ‘green
roof tax abatement’.
• The GPRO training programme, a national training and certificate program, trains
professionals in sustainable techniques and high-performance construction and
maintenance practices.
• City-owned buildings will lead by example and follow stricter rules, with a target
of 50% reduction in 2030.
39
Local Law 97. (2019). New York City Council.
252
Building Performance Ordinance
Boulder, Colorado, USA
The Building Performance Ordinance (Ordinance No. 8071)40
is important in the context
of the Boulder Building Performance Program.41
To reduce GHG emissions and increase
the energy efficiency of the building stock, the ordinance requires owners of commercial,
city and industrial buildings to:
• Annually report the energy usage of their buildings,
• Perform periodic energy assessments
• Perform periodic retro-commissioning and implement cost-effective energy
efficiency measures
• Implement one-time lighting upgrades.
Legal provision
The legal provisions part of the Building Performance Program can be divided into two
categories: the annual rating and reporting of building energy usage and the
implementation of energy efficiency requirements.
The implementation of energy efficiency requirements consists of three parts42
:
1. Implement one-time lighting upgrade in line with City of Boulder Energy
Conversation Code.
2. Perform a quality energy assessment every 10 years, tuning up buildings and
calibrating existing functional systems to run as efficiently as possible.
3. Implement cost-effective retro-commissioning measures. The ordinance obliges
building owners to implement cost-effective measures within two years after the
audit. Cost-effective is defined as each measure with a payback period of two
years or less with rebates.
Building typology
• All municipal buildings larger than 460m2
floor area
• New buildings with a floor surface larger than 930m2
• All commercial and industrial properties larger than 1850m2
.
40
Boulder Building Performance Ordinance. (2015). City of Boulder.
41
Boulder Building Performance Program. (2020) City of Boulder.
42
Boulder Building Performance Ordinance no. 8071. (2020). Buildingrating.org
253
Compliance mechanisms
Failure to report on energy data of buildings before the building typology related
deadlines results in fines of $0.027/m2
, up to a maximum of $1000 per building per day
of non-compliance.
Key success factors
• A wide set of support resources, including training programmes for portfolio
management, municipal training programmes, assistance for dealing with the
split-incentive dilemma and green leases.
• Rebates and other financial instruments to support the implementation, like
the level II Energy Assessment Rebates, Excel Energy Retro-commissioning
• Incentives, C-PACE Financing, Boulder County PACE Rebates, solar rebates
and grants, clean energy loans and Xcel Energy Prescriptive Rebates.
Oceania
In Australia and New Zealand different types of MEPS are being implemented (see table
14). Where some focus on public buildings, e.g. the Green Lease Schedules in Australia,
the recent adoption of new MEPS legislation focuses mostly on the rental sector to
improve the health and well-being of tenants, e.g. the Residential Tenancies Regulations
(AUS) and the Healthy Homes Guarantee Act (NZ). Metrics relate to minimum
insulation values (R-values) and the efficiency and capacity of installations. Compliance
is based on specific dates by which building owners must comply, as presented in the
below Table.
Table F.4: Overview of MEPS analysed in Oceania
Name/description of
requirement
Location Building
type
Metric Effect
ive
Compliance
category
Green Lease Schedules /
National Green Leasing
Policy
Australia Non-
residential
NABERS energy
rating
2010 Enforcement
calendar
Residential Tenancies
Regulations 2020
Victoria,
Australia
Residential To be confirmed 2021 TBC*
Healthy Homes Guarantee
Act
New Zealand Residential Minimum
-temperature
(°C)
-insulation
thickness (mm)
-ventilation
(openable
windows/mecha
nic ventilation)
-moisture
(effective
drainage)
2021 Enforcement
calendar
Green Lease Schedules,
254
Australia
To improve energy efficiency and environmental impacts of government operations, the
Australian government enacted the Energy Efficiency in Government Operations (EEGO)
policy. The policy aims to overcome traditional barriers to improve the energy efficiency
of buildings like the split-incentive dilemma by enabling parties with influence on the
building to benefit from implementing improvements. The aim of the policy is to:
1. Reduce energy intensity in operations by 25% in offices
2. Achieve a 20% reduction of energy consumption in office central services by
2021.
Legal provision
The introduced ‘Green Leases’43
contain mutual obligations for tenants and owners of
office buildings to achieve efficiency targets. The scheme aims to improve energy
efficiency by setting a minimum operational building energy performance standard (i.e
the Australian Building Greenhouse Rating – ABGR).44
Minimum energy performance requirements for premises above 2000m2
are a minimum
of 4.5 stars within ABGR, which is equivalent to ‘excellent’ energy performance.
Building typology
All leased government properties and other government buildings.
Compliance mechanisms
Yearly reports on the energy usage of operations made by agencies every financial year,
by fuel type and end-use category.
Key success factors
 Public buildings are leading by example.
 Templates for green lease schedules.
Healthy Homes Guarantee Act,
New Zealand
The aim of the Healthy Homes Guarantee Act45
is to ensure healthy, dry and warm rental
buildings in New Zealand. The Act includes requirements for rental buildings to have a
43
Green Lease Schedules. (2010). Forms and templates
44
Australian Government (2017). Factsheet - Green Lease Schedule
45
Healthy Homes Guarantee Act. (2017). Government of New Zealand.
255
fixed heating device with a specified capacity, minimum underfloor and ceiling
insulation, and ventilation requirements.
Legal provision
These objectives of the act are to be achieved through the ‘Healthy Home Standards’46
, in
which MEPS for heating, insulation and ventilation is specified. This ‘Residential
Tenancies (Healthy Homes Standards) Regulation’ became law in July 2019.
The standards prescribe that the heating system must be fixed and able to heat the living
space, have a minimum capacity of 1.5 kW, have a thermostat and meet a prescribed
minimum heating capacity based on living space building characteristics (Schedule 2)16
.
The insulation must have a minimum R-value (ranging between 2.9 – 3.3 for ceiling
insulation and 1.3 for underfloor) depending on the climatic zone. Ventilation
requirements relate to the presence of windows and doors that can be opened next to
requirements for mechanical ventilation in kitchens (>50L/s) and bathrooms (>25L/s).
Additional requirements exist for draught stopping and drainage.
Building typology
Rental buildings in the residential sector
Compliance mechanisms
Compliance dates are formulated for heating, insulation and ventilation and specified for
building typologies (e.g. social rent, private rent, etc.). Information about compliance is
available on the webpage of the government of New Zealand.47
Key success factors
 Addresses the whole rental market.
1.6.Detailed description of options for MEPS
In this section the options for MEPS which have been included in Chapter 5.2 are
described in more detail.
For the identification of options, three main criteria were identified: the target buildings,
the metric and the trigger point. As regards the target buildings, MEPS can apply to the
whole building stock or specific sectors, building types of privately or publicly owned
stock. One specific segment is that of buildings subject to transaction (being sold,
rented). Buildings could also be selected based on their size, with the advantage of
economy of scale resulting from renovations and interventions on larger buildings units.
46
Residential Tenancies (Healthy Homes Standards) Regulations. (2019). Government of New Zealand.
47
Healthy Homes Standards Webpage. (2020). Ministry of Housing and Urban Development New
Zealand.
256
As regards the metric for the setting of standards, the options are either based on the
energy rating based on EPC or on the energy performance applied to the technical
building systems in place in the building (e.g. heating and cooling appliances, HVACs,
etc.). While other options would be technically possible, there are clear advantages in
using the same performance metrics which are already enshrined in the EPBD. The EPC
framework is the most obvious reference point for introducing MEPS for existing
buildings, as all EU Member States have implemented and enforced national energy
performance certificate (EPC) schemes48
, and most building owners know about EPCs
and the infrastructure to roll them out (experts, compliance, databases etc.) is already in
place. The UK was first to set a minimum energy efficiency standard based on the EPC
rating, followed by France, Belgium and the Netherlands.
Figure F.10: Approach and key design criteria for MEPS49
As for trigger points, MEPS could be linked to specific moments of the life-cycle of
buildings (e.g. sale or rent, major renovation or new installations) or specific dates of
entry into force of the requirement could be established, which could tighten over time.
Thanks to gradual tightening, MEPS incrementally improve the performance of the stock
along a roadmap to decarbonisation. MEPS could therefore complement the requirements
already existing on minimum energy performance in case of major renovations (Art. 7)
or new installations (Art. 8). When introduced with a clear indication of the future
trajectory of rising standards, MEPS can also illustrate a pathway for building owners to
renovate towards climate-neutral buildings early. The clear standards and future
trajectory also provide the much-needed planning horizon for industry and building
trades to boost the supply of skilled professionals and innovative renovation solutions.
In the first option (MEPS1), the standard introduced in the EPBD will require MSs to
ensure that buildings will be sold or rented only if they respect a minimum energy
performance level. This approach exploits specific moments in the lifetime of
48
All MS have an EPC framework and a framework for setting minimum energy performance
requirements, based on a calculation of cost-optimal levels of energy performance.
49
Sunderland et al. (2021).
257
investments in buildings – trigger points – when the cost and hassle associated with
building renovation are less substantial, thus minimising the main barriers for increasing
renovation. It had been assessed that the hurdles to renovation can be diminished if these
are carried out in key moments in the life of a building, as renovations can become less
disruptive and more economically advantageous than at other moments50
.
More specifically, as regards the instrument and metric based on which to set the
standard, MEPS could be set on the basis of the EPC class rating in place in each MSs. In
the first compliance period, the energy performance standard could be set at the level of
performance as defined in the range for a specific class, for example at EPC class D
(depending on the specific ranges established by the national schemes). Alternatively, the
standard could refer to the phase out of the two lowest class(es) in the national rating.
The minimum performance standards could be tightened over time, in line with the goal
of driving the progressive upgrade of the buildings stock.
This approach will generate more effects (in terms of increased energy renovations and
overall reductions of energy consumption and carbon emissions) and more obligations to
upgrade the performance of the buildings in the countries in which the number of
transactions is high, and in which the overall energy performance of the building stock
subject to transaction is lower. On average, it has been estimated that each home in
Europe will be sold only once between now and 2050, with varying frequencies across
countries51
. The change of tenancy happens instead more frequently (on average every 18
years).
Figure F.11: Timeline of trigger points for renovations52
All buildings types (both residential and non-residential, including the public ones) will
be subject to the applicable standard. The obligated parties will be the buyer of the
buildings, in case of sales, and the building owner in the case of buildings being rented.
The ability to transfer the obligation from the seller to the buyer removes the burden of
renovation from those who are unable to afford or manage an energy renovation before
selling, and takes advantage of the trigger point of non-energy renovation, extension and
50
BPIE, 2017. Trigger points as a “must” in national renovation strategies.
51
Frequency of sales based on 221 million households in EU (Eurostat, 2020), 65% of homes are owner-
occupied (Housing Europe, 2017) and approximately 5 million house transactions per year (European
Central Bank, 2020). Frequency of change of tenancy based on 25-44% of tenants moved in five years
(Eurostat, 2017).
52
Adapted from Kruit et al., 2020
258
improvement undertaken by home buyers53
. The MEPS framework should in this case
foresee that a certain period of time is allowed to the obligated parties to comply with the
obligations, and to do the necessary renovation works which would allow to upgrade the
performance to the required level. This flexibility would allow obligated parties to plan
the renovation at the most convenient moment, and to distribute in time the demand for
renovations which will be generated with the entry into force of the standard.
Specific exclusions should be applied, to take into account of buildings that due to
technical constraints could not be renovated to achieve the standards set. The exemption
regime could mirror the provisions already in place under Article 4 of the EPBD, for
instance in relation to historical buildings.
Another consideration related to the building type, is that this approach for setting
standards would be difficult to apply as such to multifamily and multi-apartment
buildings. Currently 48,9%54
of the dwellings in the EU are multi-family buildings, of
which 70% are owner occupied while the remaining can be distinguished between
“tenant occupied dwellings, with rent at market price” (18,9%), and “tenant occupied
dwellings, with rent at reduced price or free (11%)55
. Specific application measures
should be foreseen for MEPS to promote collaboration of all unit owners to carry out
renovations in multifamily buildings and there could be difficulties in aligning that with
the transaction of the building. The need for specific provisions for buildings of the
residential sectors with a more complex ownership structure than single-family buildings
is likely to be present also for all other types of MEPS.
Figure F.12: Overview of LTRS provisions in the EPBD56
53
Sunderland L., Santini M. (2021); Next steps for MEPS: Designing minimum energy performance
standards for European buildings. Regulatory Assistance Project, June 2021.
54
Data from BSO, EU SILC.
55
Data from JRC (2018), Energy efficiency upgrades in multi-owner residential buildings. Review of
governance and legal issues in 7 EU Member States.
56
BPIE (2020): A review of EU MS’ 2020 Long Term Renovation Strategies.
259
Both options MEPS2 and MEPS3 foresee an approach to set standards that relies on
criteria and a timeline of implementation and compliance deadlines established in the
EPBD, while the level of ambition of the standards and the more specific implementing
provisions would be defined at national level. The national MEPS would have and be
coherent with the overall goal of decarbonisation and of achieving a highly energy
efficient and decarbonised building stock by 2050, which is also at the core of the
national Long-Term Renovation strategies. Also in this option it is foreseen that EPC
would be the main instrument of the national MEPS framework on the basis of which to
set the standard and to ensure compliance.
The EPBD should establish overall criteria and goals to be achieved by MEPS
respectively by 2030, 2040 and 2050, which could build on the milestones and numerical
pledges identified by MSs in their LTRS. In this way MEPS will become an instrument
supporting the achievement of the milestones identified and clearly driving the
deployment of investment towards them.
Figure F.13: Distribution of non-residential floor area by use (2013)57
57
Building Stock Observatory (BSO).
260
Source: Building Stock Observatory
The criteria for setting national MEPS could be based on an amount of savings (energy or
carbon) to be achieved under a clear timeline, or identify a number of buildings or floor
area to be renovated annually (fleet approach). National MEPS could establish the
gradual phase-in into the MEPS framework of different buildings segment, on the basis
of the specificities of the national building stock. As LTRS also define worst-performing
buildings segments, these could become the specific target of MEPS. National MEPS
schemes applying to all the building stock could also target buildings segments in such a
way to maximise the social benefits that their renovation entails, for instance by setting
standards first to buildings with a specific social function, e.g. social housing, schools or
hospitals.
The two options MEPS2 and MEPS3 differ for the target buildings, which are limited to
non-residential buildings above a certain size in MEPS3. Residential buildings make up
75% of the EU floor area, with non-domestic buildings making up the remaining 25%.
Public buildings make up around 2% share of non-domestic buildings in the majority of
Member States. This approach would leave out the vast majority of buildings in the EU
and would change significantly because the largest share of regulated entities would be
businesses or real estate owning buildings used in the commercial, services and buildings
sector, thus excluding households of home owners. The fact that the scope would be
limited to buildings above a certain size would also likely to exclude SMEs or very small
businesses with small facilities (start-up, micro-enterprises).
Differently from the other options which foresee that the metric is the overall energy
performance based on the EPC class, MEPS4 has a more narrow scope as it is based
instead on the performance of the heating and cooling appliance installed in the building
or dwelling. The trigger point of application is their planned replacement, which could be
261
done only with appliances which are best in class based on their Energy Label, or be
based on carbon emission performance levels. The rationale of this option is that a
significant energy saving potential and reduction in carbon emissions can be achieved
thanks to highly efficient heating and cooling appliances. On average, space heating
products are replaced every 17 years58
, therefore while planned replacements offer a good
opportunity and a natural “trigger point” to upgrade the energy performance of the
buildings, they still happen at a low pace and often they are replaced with a similar
appliance.
A drawback of this approach is that MEPS scheme targeting only appliances could lead
to lock-ins or suboptimal solutions in comparison to interventions which integrate also
interventions to the building shell. As indicated in a comprehensive study that looked at
energy savings potentials in the residential sector, by 2030, EU residential sector has a
technical saving potential of 33%, reducing BAU final energy consumption by 77 Mtoe,
and an economic saving potential of 15%, reducing BAU final energy consumption by 36
Mtoe59
. Space heating presents highest amount of technical and economic energy saving
potential and several of the energy savings opportunities identified combine improved
wall/attic/basement insulation, reducing air infiltration with high performance technical
systems and appliances. Uptake of efficient heat pumps presents the next most significant
energy savings amounting to 23% energy savings of space heating category.
This option can be implemented by specific requirements in the EPBD, building on the
existing provisions on technical building systems under Article 8 and compliance can be
ensured via the inspections mechanisms already foreseen. Another relevant provision in
this context is also Article 7 of the Energy Labelling Regulation (EU) 2017/1369 setting
a framework for energy labelling provides, which in its Article 7 foresees that where
Member States provide incentives for a product specified in a delegated act, those
incentives shall aim at the highest two significantly populated classes of energy
efficiency, or at higher classes as laid down in that delegated act.
Currently, several buildings installations are covered by ecodesign and Energy Labelling
requirements. As regards space heating, it has been estimated that 70% - 80% of the EU
heat load is covered by products which are currently covered by Ecodesign and Energy
Labelling provisions60
. District heating and very large appliances, e.g. boilers over 400
58
VHK (2020); Ecodesign Impact Accounting, 2019 Report.
59
ICF (2020, under publication).
60
The 'heat load' that space heating solutions have to deliver was estimated of around 2400 TWh and the
space cooling load around 220-260 TWh. The heat load is calculated looking at the surface area, climate
and average indoor temperature. As regards climate, almost two-thirds of the EU population lives in a
relatively mild climate. Around 10% live in a colder winter-climate, in Eastern and Northern regions or in
mountain areas. One quarter of Europeans live in a warm Mediterranean climate. Almost 70% live in a
city, which is 1-2°C warmer than the countryside and 41% live in coastal regions, which is also warmer in
winter. In Europe, the average outdoor temperature is 6.5°C during the 7 months buildings are heated (5
months in a warm climate, 9 months in a colder climate). The average indoor temperature, 24/7 and over
all rooms, is 18°C. This means that on average heating systems are required to offset a temperature
262
kW are not covered, but these are anyway not technologies which could be replaced
based on decisions from the buildings’ owner, and therefore it could be assumed that
Energy Label provides a solid base to set MEPS on heating and cooling installations.
difference of 11.5°C. The sun and the heat from people and equipment inside the buildings increase 3.5°C.
On average 8°C is needed from the heating system during the heating season, to compensate for the heat
dissipated through the building shell (60%) and the cold air entering the building from ventilation and
infiltration (40%). These are EU-averages, i.e. the proportion between transmission and ventilation losses
varies and depends on the insulation and type of ventilation (e.g. windows or mechanical). For individual
cases also the orientation, wind, etc. are relevant. VHK (2020); Ecodesign Impact Accounting, 2019
Report.
263
Annex G: Energy Performance Certificates (EPC)
1. THE EXISTING FRAMEWORK AND STATUS FOR EPCS
1.1 Background
The EPBD aims at creating a demand-driven market for energy efficient buildings, with
the provision of information through certification and other tools. Energy Performance
Certificates schemes must be in operation for the issue, hand-over to the buyer or tenant
and display of energy performance certificates (EPCs). EPCs intend to provide
information to building owners and tenants on the energy performance of their buildings
and on effective ways to improve these through building renovation works. Qualification
schemes for experts, quality control and enforcement must be ensured, in particular
through national independent control systems that Member States have set up in line with
the EPBD. Providing users with the relevant information help them to take the best
decisions.
However, energy performance certification of buildings should not be viewed as a goal in
itself, but as a key instrument to support and monitor the policy implementation and
enforcement. Building rating programmes are considered to have greatest impact when
integrated into a strategic and coordinated energy efficiency policy framework61
. The
relevance of such instrument is therefore conditioned to its better integration into the
regulatory framework (e.g. to minimum standards) and to broader initiatives designed to
tackle multiple barriers (information campaigns and financial support).
First initiated by the EU in the early 1990s, Energy Performance Certificates (EPCs)
have evolved as a core policy tool for driving energy performance and efficiency in the
building sector. Although this impact assessment focuses on the areas for improvement
of EPCs, it should not be underestimated that the current system is of great value, as it
sets a uniform EU legislation requiring that EPCs are available in all MS. For example,
the calculation of the energy performance of buildings is based on the same principles set
up in the EPBD. The EPC is further supported by the development of the Energy
Performance of Buildings Standards (EN) ISO 52000 series. Even if there are some
differences in implementation in different MS, it ensures that an energy performance
assessment method with a common ground is being used in all MS, which is not the case
for other assessment methods (i.e. commercial rating systems) which have different
coverage in different countries.
61
IEA, 2010, Policy Pathways, Energy Performance Certification of Buildings
264
An EPC must be issued for all buildings or building units which are sold, or rented out to
a new tenant. The EPC must include the energy performance of a building (in
kWh/(m2
year) and recommendations for improvement. EPCs must include the energy
performance of a building and its reference values as well as recommendations for the
cost-optimal or cost-effective improvements of the energy performance of a building or
building units. In regard to value and trustworthiness, Member States are mandated to
ensure that EPCs are carried out in an independent manner by appropriately qualified
and/or accredited experts. Furthermore, all Member States must develop independent
control inspections for EPCs (Annex II of the EPBD). The EPC may include additional
indicators such as CO2 emissions or the percentage of renewable from energy sources.
The idea behind EPCs is that they inform relevant actors, such as building owners,
tenants and real estate agents, about the energy performance of their buildings which in
turn shapes the building market. However, only around 10% of buildings in Europe
possess an EPC62
and the quality of EPCs varies considerably across the EU. It is
necessary to improve reliability and increase the scope of EPCs to include and display a
building’s CO2 performance, history and a more likely outlook of its energy use and
demand-side flexibility readiness. Upgrading EPC databases is important to improve
understanding of the overall performance of the built environment.
In the evaluation carried out in 201663 in preparation of the previous review of the
EPBD it was concluded that the certification schemes for the energy performance of
buildings have proven some effects in transforming the real-estate market. However, the
evaluation identified weaknesses and several ways of reinforcing the role that EPCs can
play, e.g. to facilitate compliance checking, to improve the efficiency of financing
schemes, and to contribute to gathering data and build statistics on national building
stocks.
1.2 Summary of main EPC provisions
EPCs are covered in the following articles in the EPBD:
 Art. 11 Energy Performance Certificates
 Art. 12 Issue of Energy Performance Certificates
 Art. 13 Display of Energy Performance Certificates
 Art. 17 Independent Experts
 Art.18 Independent Control System
EPCs are also covered in the following Annexes:
62
BPIE et al. (2020), Lessons learned to inform integrated approaches for the renovation and
modernisation of the built environment, ENER/C3/2019-468/03, December 2020.
63 SWD(2016) 408 final
265
 Annex I Common general framework for the calculation of energy performance
of buildings
 Annex II Independent control systems for energy performance certificates and
inspection reports
Article 10 (Financial incentives and market barriers), makes a specific reference to EPCs,
encouraging its use to prove the energy savings of energy performance improvements
that are subject to financial support.
An EPC must be issued upon construction, sale or rent of a building to the new owner or
occupier. The EPC must be shown to the prospective owner or tenant and its value must
be stated in advertisement media.
Multi-residential buildings (i.e. building blocks) are allowed to have a common EPC
based on the whole building (if it shares a heating system), or individual EPCs which can
be based on a similar unit with the same energy characteristics. Single-family homes may
have an EPC based on a building of similar design and performance, but only if this
similarity can be guaranteed by an accredited energy assessor.
Since 2010, buildings over 500 m2
occupied by a public authority public authority and
frequently visited by the public must issue an EPC. The size threshold fell to 250m2 after
9th July 2015. This EPC must be displayed in a prominent place clearly visible to the
public.
1.3 Coverage of EPCs
Based on publicly available EPC databases, together with overviews provided by public
authorities, the X-Tendo project gathered and compiled EPC label information for more
than 45 million residential EPCs. Information provided by national authorities suggests
that around six million residential EPCs are issued every year. In EU the most EPCs per
capita are achieved by Belgium, Ireland, Denmark and Portugal.
The relatively low number of EPCs in some countries can be explained by several
reasons64
:
 The EPC database is rather new and thus few EPCs have been registered (e.g.
Finland).
 In some countries, the compliance rate is still relatively low for residential
buildings which hampers the uptake of EPCs (e.g. Latvia, Bulgaria).
 The number of real estate transactions influences the number of issued EPCs. The
real estate market in the UK is one of the most liquid and has the highest number
of transactions (as well as the shortest ownership period), which triggers many
new EPCs.
64
Source: Concerted Action EPBD: https://epbd-ca.eu/. Based on information provided by Member States.
266
 In Bulgaria, the complex ownership structures in multifamily buildings (the most
common building type in the country) make it difficult to get an EPC. As a result,
EPCs are mainly attained if the building owners are planning to apply for a public
renovation grant for which the EPC is a prerequisite.
 The country is relatively small with a low total number of buildings (e.g. Malta
and Estonia).
Figure G.1: total number of EPCs (in thousands)6566
Figure G.2: Total number of registered EPCs per capita in EU and UK 67
66
Countries with * are estimates or based on partial information
67
Source: EPC numbers come from EPBD CA Key Implementation Decisions (KIDs) and information
provided by X-tendo partners. 2018 populations from Eurostat.
0
500.000
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
3.500.000
4.000.000
4.500.000
5.000.000
5.500.000
6.000.000
6.500.000
7.000.000
7.500.000
8.000.000
France
Spain
Belgium - FL
Greece
Romania *
Norway
Sweden
Denmark
Lithuania
Belgium - BR
Slovakia
Austria
Malta
Estonia
Latvia
267
1.4 Comparability of EPC classes
There are differences between EU member states with regards to the calculation of EPCs
and how results are presented. This variability in calculation and differences in results
has reduced the confidence of some stakeholders in the capacity of the EPC to establish
comparative energy efficiency analysis between MS. Moves across Europe to ensure
compliance with international targets are being reflected in a tightening of regulatory
frameworks68
.
The rating methodologies vary across Europe. In 2021, the JRC censed 29 EPC
methodologies used in the European Union (with individual methodologies in each
member state and then for the Flanders, Wallonia and Brussels regions within Belgium).
Consequently, the metrics for the grading of EPCs are non-standard. Most Member
States use primary energy in kWh/(m2
year) as the main indicator. However, there are
differences in how the different classes are defined. In some MS they are defined based
on bands of kWh/(m2
year), while in others they are defined based on a comparison with
NZEB values or on comparison with reference buildings (e.g. specific % of NZEB
value). For 2 Member States, there are no classes, but rather a continuous grading.
68
RICS (2019); Energy efficiency and residential values: a changing European landscape.
268
Further, in some jurisdictions (such as Germany, Spain and Italy), there are within-
country variations.
When the methodology for calculating energy performance and the scaling and labelling
differs from Member State to Member State, and sometimes from region to region, the
same building placed in different Member States, e.g. two different sides of a
national/regional border could differ in rating, with the same climate conditions. As a
result of varying methodologies, a residence in Ireland with an energy efficiency
performance of 75 kWh/(m2
year) would be given an EPC rating of A, whereas in
Germany a residence with the same performance metric would be given a rating of B.
This would be an issue for any cross-border financial institution.
EPC labels have been designed to reflect the existing building stock and the
characteristics of this building stock (particularly regarding energy performance). Even
when using the same methodology and scale, buildings between countries are not always
directly comparable, due to the differences in climate and use.
The 2016 evaluation concluded that EPCs had not yet succeeded in supporting a
comparable pan-European market for buildings energy efficiency investments nor led to
reduction of related transaction costs. The primary underlying reason is to be found in the
lack of harmonised national calculation methodologies that determine the energy rating
that is included in the EPC. This is equally true for investments into non-residential
buildings or for the bundling of smaller scales investments in the residential sector,
which need underlying standards to rate the quality of the bundle based on the quality of
its parts.
The 2016 evaluation concluded also that it could be questioned whether the requirement
to establish national EPC schemes has resulted in efficient implementation. Differences
in transposition and implementation have resulted in in different layouts for labels and
recommendations across Member States and regions. EPCs have a different layout and
content in different EU Member States, though most countries have implemented an A-G
scheme similar to the EU energy labelling for energy using products. Even when label
layouts are similar, the rating of the building cannot always be compared across Member
States as they are based on a different energy performance calculation methodology.
These differences result also in a loss of confidence on the reliability of the EPC,
regardless of the individual merits of the different EPC schemes. There is a case for
better comparability across Member States to drive investments in the most energy
efficient buildings.
For market participants in the non-residential sector, which are often multinational
property owners and development companies, the need for comparability is to some
extent being tackled through a voluntary common European Union certification scheme
for the energy performance of non-residential buildings (Article 11(9) of the EPBD).
This common scheme, based on CEN standards for calculating the energy performance
of buildings, would allow for a consistent comparison of different buildings' energy use
269
across borders. The adoption of this scheme was not considered a priority in 2018 as the
provisions for EPCs were not being substantially modified. The revision in 2018 instead
concentrated on implementation measures and renovation and modernisation of
buildings.
The EPC4EU data model, funded through Horizon 2020, is developing a tool for the
harmonisation and the interoperability of EPC databases across the EU. Table G.1 Values of
EPC labels for residential buildings across the EU (Values of A+++, I and J have been cut out for 3 MS)
Member
State A++ A+ A B C D E F
AT 60 70 80 160 220 280 340
BE-BRU 0 45 85 170 255 340 425
BE-FLA 0 100 200 300 400 500
BE-
WALL 0 45 85 170 255 340 425
BG 48 95 190 240 290 363
HR 15 25 50 100 150 200
CY 0,50 1,00 1,50 2,00 2,50
CZ 0,50 0,75 1,00 1,50 2,00
DK 20 30+1000/A 52,5+1650/A 70+2200/A 110+3200/A 150+4200/A 190+5200/A 24
EE 100 125 150 180 220
FI 75 100 130 160 190
FR 50 90 150 230 330
DE 25 50 75 100 135 165
EL 0,33 0,50 1,00 1,41 1,82 2,27
HU 40 60 80 100 130 160 200
IE 25 50 75 150 225 300 380
IT 0,60 0,80 1,00 1,20 1,50 2,00 2,60
LV 40 60 80 100 150
LT
C1 < 0.3;
C2 ≤ 0.70;
C1 < 0.5;
C2 ≤ 0.80;
C1 < 0.7;
C2 ≤ 0.85;
C1 < 1;
C2 ≤ 0.99;
C1 < 1.5; C1 < 2; C1 < 2.5;
LU --- --- 45 95 125 145 210
MT --- --- --- --- --- --- ---
NL 139 194 292 361 444 556 667
PL --- --- --- --- --- --- ---
PT 0,25 0,50 0,75 1,00 1,50 2,00
RO 82 115 228 344 459 574
SK 70 140 279 419 558 698
SI 10 15 35 60 105 150
ES 36 63 103 161 291
SE 25 42 69 109 227
:
1.4.1 Calculation of energy saving improvements across classes
Table G.2 (below) reports the energy savings necessary to improve the energy
performance class of buildings. This calculation is relevant with reference to the
application of MEPS and more specifically MEPS1 options.
In general, EPC schemes follow under one of these categories:
 Schemes that use (kWh/m2
year) as their indicator and have defined energy
classes by (kWh/m2
year).
 Schemes (e.g. ES, IT and PT) that use (kWh/m2
year) as their indicator and the
energy classes are dependent on the climatic region69
.
 Schemes that use (kWh/m2
year) as their indicator and use a continuous grading
system (no energy classes).
 Schemes that use relative or dimensionless values as their indicator and uses a
reference values to define the energy classes70
.
 Schemes that use reference buildings for the calculation of the performance and
use reference values to define the energy classes71
.
 Schemes for which the information available is limited and as a result it is not
possible to determine exactly how their systems operate.
The calculation makes the following assumptions:
 The value for the buildings in the lowest class is 10% worse than the absolute
limiting value between the lowest class and 2nd lowest class (e.g. in most cases
between G and E). The lowest class is always open ended, and existing buildings
can have values of energy performance which are much worse than the limiting
value. This is considered a conservative estimate.
 The upgrade takes the building to the absolute limit between class D and class E.
This is considered a conservative yet realistic estimate as many building owners
may not be willing to renovate the building beyond what is strictly necessary.
 For residential buildings, the calculation uses single-residential buildings or the
average between single and multi-residential buildings.
 For non-residential buildings, the calculation uses the value for offices or
commercial buildings.
69
For these MS the analysis refers to the label from their capitals. This may result in some differences for
other regions, but it is representative in terms of % of improvement.
70
For example: Class A is 25% of the national reference value or Class B is the NZEB value for the
country.
71
A reference building is a notional building with the same geometry, orientation and general
characteristics as the building under evaluation. The reference building has a series of pre-determined
energy performance characteristics. The class is determined by how much better the calculated building is
when compared to the reference building (e.g. 25% better). It is not always possible to transform this value
into a kWh/m2
figure. Where possible, the calculations has allowed for assumptions in order to provide
representative values (e.g. based on statistical information for the Member State).
271
Overall, these assumptions result in a conservative analysis, with a bias towards lower
energy savings. Where reference values or reference buildings are used, the calculation
has made specific assumptions based on available information.
Residential buildings
Available data:
 20 schemes with direct values
 3 schemes with estimated values using the capital as representative (ES, IT and
PT)
 3 schemes with estimated values based on reference buildings or reference values
(CY, CZ, EL)
 3 schemes with unclear information or continuous rating (LT, MT and PL)
Total: 26 MS with reliable information. The results are considered as representative at
EU level.
Table G.2: Energy performance classes in EPC, kWh/m2y (residential buildings)72
A B C D E F G Value
AT 80 160 220 280 340 400 >400 Direct
BE-BRU 85 170 255 340 425 510 >510 Direct
BE-FLA 100 200 300 400 500 >500 Direct
BE-
WALL 85 170 255 340 425 510 >510 Direct
BG 95 190 240 290 363 435 >435 Direct
HR 25 50 100 150 200 250 >250 Direct
CY 0,50 1,00 1,50 2,00 2,50 3,00 >3,00 Estimate
CZ 0,50 0,75 1,00 1,50 2,00 2,50 2,50 Estimate
DK
52,5+16
50/A
70+220
0/A
110+32
00/A
150+42
00/A
190+52
00/A
240+65
00/A
>240+6
500/A Direct
EE 100 125 150 180 220 280 340 Direct
FI 75 100 130 160 190 240 >240 Direct
FR 50 90 150 230 330 450 >450 Direct
DE 50 75 100 135 165 200 250 Direct
EL 0,50 1,00 1,41 1,82 2,27 2,73 >2,73 Estimate
HU 80 100 130 160 200 250 310 Direct
IE 75 150 225 300 380 450 >450 Direct
IT 1,00 1,20 1,50 2,00 2,60 3,50 >3,50 Estimate
LV 40 60 80 100 150 >150 Direct
72
Some countries also have A+++, A++, A+, H, I, J classes or sub-classes (e.g. B1 and B2). For simplicity
purposes, the table does not report these values.
272
LT --- --- --- --- --- --- --- No value
LU 45 95 125 145 210 298 395 Direct
MT --- --- --- --- --- --- --- No value
NL 292 361 444 556 667 806 >806 Direct
PL --- --- --- --- --- --- --- No value
PT 0,50 0,75 1,00 1,50 2,00 2,50 2,51 Estimate
RO 115 228 344 459 574 689 690 Direct
SK 140 279 419 558 698 837 >837 Direct
SI 15 35 60 105 150 210 >210 Direct
ES 36 63 103 161 291 367 367 Estimate
SE 25 42 69 109 227 247 247 Direct
Table G.3: Energy performance classes in EPC, kWh/m2y (residential buildings)73
EPC levels (kWh/m2) kWh/m2 %
C D E
Worst
class
+10%
Upgrade
to C
Upgrade
to D
Upgrade
to E
Upgrade
to C
Upgrade
to D
Upgrade
to E
AT 220 280 340 440 220 160 100 50% 36% 23%
BE-BRU 255 340 425 561 306 221 136 55% 39% 24%
BE-FLA 300 400 500 550 250 150 50 45% 27% 9%
BE-
WALL 255 340 425 561 306 221 136 55% 39% 24%
BG 240 290 363 479 239 189 116 50% 39% 24%
HR 100 150 200 275 175 125 75 64% 45% 27%
CY 150 200 250 330 180 130 80 55% 39% 24%
CZ 115 173 230 316 201 144 86 64% 45% 27%
DK 142 192 242 336 194 144 94 58% 43% 28%
EE 150 180 220 375 225 195 155 60% 52% 41%
FI 130 160 190 264 134 104 74 51% 39% 28%
FR 150 230 330 495 345 265 165 70% 54% 33%
DE 100 135 165 275 175 140 110 64% 51% 40%
EL 93 120 150 198 105 78 48 53% 39% 24%
HU 130 160 200 550 420 390 350 76% 71% 64%
IE 225 300 380 495 270 195 115 55% 39% 23%
IT 44 59 77 114 69 55 37 61% 48% 32%
LV 80 100 150 165 85 65 15 52% 39% 9%
LT --- --- --- --- --- --- --- --- --- ---
LU 125 145 210 583 458 438 373 79% 75% 64%
73
Some countries also have A+++, A++, A+, H, I, J classes or sub-classes (e.g. B1 and B2). For simplicity
purposes, the table does not report these values.
273
MT --- --- --- --- --- --- --- --- --- ---
NL 444 556 667 887 443 331 220 50% 37% 25%
PL --- --- --- --- --- --- --- --- --- ---
PT 97 146 194 267 170 121 73 64% 45% 27%
RO 344 459 574 759 416 300 186 55% 40% 24%
SK 257 342 428 564 308 222 137 55% 39% 24%
SI 60 105 150 231 171 126 81 74% 55% 35%
ES 86 135 259 338 252 203 79 75% 60% 23%
SE 69 109 227 272 203 163 45 75% 60% 17%
As a summary, at EU level74
the calculations suggest:
 - 60% energy savings to bring buildings to Class C
 - 46% energy savings to bring buildings to Class D
 - 29% energy savings to bring buildings to Class E
The results also show significant variability across countries, with a range of savings to
bring from worst Class to Class E between 9% and 41%.
Results for non-residential buildings
 15 schemes with direct values
 1 scheme with estimated values using the capital as representative (PT)
 7 schemes with estimated values based on reference buildings or reference values
 6 schemes with unclear information or continuous rating (BE-WAL, DE, LT,
MT, NL and PL)
The information is more limited than for residential buildings (Total: 23 MS with reliable
information). However, the number and distribution between MS would suggest that the
results are representative for the whole of the EU.
Table G.4: Energy performance classes in EPC, kWh/m2y (non-residential buildings)75
A B C D E F G Value
AT 80 160 220 280 340 400 >400 Direct
BE-BRU 62 155 248 341 434 527 >527 Direct
BE-FLA 100 200 300 400 500 >500 Direct
BE-
WALL --- --- --- --- --- --- --- No value
BG 140 280 340 400 500 600 >600 Direct
HR 25 50 100 150 200 250 >250 Direct
74
The calculation gives equal weight to all EPC schemes (i.e. there is no weight values according to the
size of the building stock)
75
Some countries also have A+++, A++, A+, H, I, J classes or sub-classes (e.g. B1 and B2). For simplicity
purposes, the table does not report these values.
274
A B C D E F G Value
CY 0,50 1,00 1,50 2,00 2,50 3,00 >3,00 Estimate
CZ 0,50 0,75 1,00 1,50 2,00 2,50 >2,50 Estimate
DK
71,3+165
0/A
95+220
0/A
135+32
00/A
175+42
00/A
215+52
00/A
265+65
00/A
>265+6
500/A Direct
EE 100 130 150 180 220 280 >340 Direct
FI 80 120 170 200 240 300 >300 Direct
FR 50 110 210 350 540 750 >750 Direct
DE --- --- --- --- --- --- --- No value
EL 0,50 1,00 1,41 1,82 2,27 2,73 >2,73 Estimate
HU 80 100 130 160 200 250 310 Direct
IE 0,50 1,00 1,50 2,00 2,50 3,00 >3,00 Estimate
IT 1,00 1,20 1,50 2,00 2,60 3,50 >3,50 Estimate
LV 45 65 90 110 150 >150 Direct
LT --- --- --- --- --- --- --- No value
LU 45 75 85 100 155 225 280 Direct
MT --- --- --- --- --- --- --- No value
NL --- --- --- --- --- --- --- No value
PL --- --- --- --- --- --- --- No value
PT 0,50 0,75 1,00 1,50 2,00 2,50 2,51 Estimate
RO 97 193 302 410 511 614 615 Direct
SK 122 255 383 511 639 766 >766 Direct
SI 15 35 60 105 150 210 >210 Direct
ES 0,40 0,65 1,00 1,30 1,60 2,00 2,00 Estimate
SE 0,50 0,75 1,00 1,35 1,80 2,35 >2,35 Estimate
Table G.5: Improvement required to upgrade buildings between classes (non-residential buildings)
EPC levels (kWh/m2
) kWh/m2
%
C D E
Worst
class
+10%
Upgrade
to C
Upgrade
to D
Upgrade
to E
Upgrade
to C
Upgrade
to D
Upgrade
to E
AT 220 280 340 440 220 160 100 50% 36% 23%
BE-
BRU 248 341 434 580 332 239 146 57% 41% 25%
BE-FLA 300 400 500 550 250 150 50 45% 27% 9%
BE-
WALL --- --- --- --- --- --- --- --- --- ---
BG 340 400 500 660 320 260 160 48% 39% 24%
HR 40 60 80 110 70 50 30 64% 45% 27%
CY 188 250 313 413 225 163 100 55% 39% 24%
CZ 122 183 244 336 214 153 92 64% 45% 27%
DK 138 179 220 299 160 119 78 54% 40% 26%
EE 150 180 220 375 225 195 155 60% 52% 41%
275
EPC levels (kWh/m2
) kWh/m2
%
FI 170 200 240 330 160 130 90 48% 39% 27%
FR 210 350 540 825 615 475 285 75% 58% 35%
DE --- --- --- --- --- --- --- --- --- ---
EL 93 120 150 198 105 78 48 53% 39% 24%
HU 130 160 200 550 420 390 350 76% 71% 64%
IE 375 500 625 825 450 325 200 55% 39% 24%
IT 136 181 235 348 212 167 113 61% 48% 32%
LV 90 110 150 165 75 55 15 45% 33% 9%
LT --- --- --- --- --- --- --- --- --- ---
LU 85 100 155 391 306 291 236 78% 74% 60%
MT --- --- --- --- --- --- --- --- --- ---
NL --- --- --- --- --- --- --- --- --- ---
PL --- --- --- --- --- --- --- --- --- ---
PT 273 410 546 754 481 344 208 64% 46% 28%
RO 302 410 511 677 375 267 166 55% 39% 24%
SK 360 480 600 792 432 312 192 55% 39% 24%
SI 60 105 150 231 171 126 81 74% 55% 35%
ES 156 203 250 344 188 141 94 55% 41% 27%
SE 100 135 180 259 159 124 79 61% 48% 30%
As a summary, at EU level76
the calculations suggest:
 - 59% energy savings to bring buildings to Class C
 - 45% energy savings to bring buildings to Class D
 - 29% energy savings to bring buildings to Class E
The results also show significant variability across countries, with a range of savings to
bring from worst Class to Class E between 9% and 64%.
1.5 Scope of information in EPCs
The EPC is defined in the EPBD as “a certificate recognised by a Member State or by a
legal person designated by it, which indicates the energy performance of a building or
building unit, calculated according to a methodology adopted in accordance with Article
3”. The calculation methodology in Article 3 is referring to Annex 1: Common general
framework for the calculation of energy performance of buildings.
76
The calculation gives equal weight to all EPC schemes (i.e. there is no weight values according to the
size of the building stock)
276
The EPC is required when buildings are newly constructed, sold or rented out and is
valid for a maximum of 10 years. The EPC must be shown to prospective buyers or
tenants and must be stated in advertisement media.
The main provisions regarding the information available in an EPC are described in
Articles 11 to 13 and Annex 1 of the EPBD:
 Requirement for EPCs to include the energy performance and reference values to
make it possible for owners or tenants of the building to compare and assess its
energy performance.
 Requirement that the energy performance of a building is expressed by a numeric
indicator of primary energy use in (kWh/m2
year). This is the same indicator for
EPCs and for compliance with minimum energy performance requirements.
 Possibility for EPCs to include additional information such as the energy
consumption, the percentage of renewable sources in the total energy
consumption, or the operational greenhouses gas emissions.
 Requirement to include recommendations for improvements of the energy
performance of buildings.
EPC recommendations should include specific building elements as well as major
renovations comprising multiple building elements and building systems. These
measures must be cost-optimal. EPCs must provide information about the work needed
to implement the recommendations and they must say where more detailed information
can be found. Estimates of cost savings resulting from improvements must also be
included, and a forecast of underlying energy prices.
1.5.1 Operational CO2
The calculation of operational GHG is based CO2-emission coefficients which are set by
MS for different energy carriers (e.g. gas, electricity and district heating). The
coefficients are applied to the primary energy consumption already calculated for the
EPC. A number of MS have already introduced operational CO2 elements in their
schemes.
According to the CA EPBD, 18 MS have set a CO2 emission coefficient for gas, and the
value varies between 160 and 252 g CO2 per kWh.
Similarly, 12 MS have set a CO2 emission coefficient for electricity, and the value varies
between 0 and 644 g CO2 per kWh. 6 MS are planning to update the CO2 emission
coefficient for electricity.
9 MS have set a CO2 emission coefficient for district heating, and the value varies
between 154 and 400 g CO2 per kWh. 3 MS plan to introduce a coefficient for district
heating.
277
6 MS are monitoring CO2 emission savings after the renovation of buildings receiving
public support, and 3 additional MS are planning to introduce this monitoring.
The introduction of indicators for operational CO2 would be a straightforward process,
even for MS that have not developed the coefficients. In addition, due to the fact that the
primary energy demand is one of the main elements of EPCs, in most cases, it would be
possible to calculate the operational CO2 for EPCs already stored in databases.
1.5.2 Embedded CO2
Embodied carbon is the carbon dioxide (CO₂) emissions associated with materials and
construction processes throughout the whole lifecycle of a building or infrastructure. A
Life cycle assessment (LCA) is used to calculate the whole-life carbon of a building. This
methodology makes it possible to assess environmental impacts and resource
consumption at each stage of the building’s lifecycle, from material extraction to
construction and use, to the demolishing of the building. The LCA can also include an
assessment of the potential benefits from the reuse or recycling of components after the
end of a building’s useful life.
Several Member States are considering or have regulated embodied carbon emissions.
The Commission has developed the Level(s) tool77
to assess and report on sustainability
aspects throughout the lifetime of buildings. The objective is to provide a common
language on sustainability and circularity for buildings. Level(s) offers an extensively
tested system for measuring and supporting improvements, from design to end of life. It
can be applied to residential buildings or offices.
The embedded carbon aspects are further developed in Annex H.
1.6 Cost of EPCs
EPC prices are generally set on a market basis with no maximum ceiling. A small
number of Member States, including Denmark, Croatia, Hungary and Slovenia, have
regulated the cost for an EPC. In Denmark, the cost is capped at €884 for larger single-
family buildings and in Slovenia at €170 for one-dwelling and two-dwelling buildings. In
Hungary, the cost of an EPC for apartments and single-family buildings is set by law
(€40 + VAT per unit). Experts have criticised this as unrealistically low, undermining the
quality of the certificate. The below Figure shows that the cost ranges from €20 to €1000
for a single-family house EPC across the EU. The variation can be explained by factors
such as quality/comprehensiveness of the EPC methodology, variation in labour cost
across the EU, number of competing actors on the market, cost of EPC software,
77
https://ec.europa.eu/environment/levels_en
278
involvement of trained experts, on-site audits, verification by an independent
organisation, registration or not in a national EPC database, etc.
Figure G.4: Cost range for an EPC for a single-family house78
Source: X-Tendo EU project based on own sources and CA EPBD
Figure G.4 shows the cost of an EPC in relation to the average net income in the country.
Building owners in Portugal, Lithuania and Denmark pay relatively the most for their
EPC, while owners in the Netherlands pay relatively less.
Figure G.5: Cost range for an EPC for a single-family house, based on per-capita income79
.
78
Sources: X-tendo based on own sources and CA EPBD
79
Sources: X-tendo based on own sources and CA EPBD.
279
Source: X-Tendo EU project based on own sources and CA EPBD
1.7 Use of EPCs by financial investors
The JRC80
assessed that financial investors currently use EPCs to a large extent. In
particular, EPCs are utilized to establish a rough baseline prior to conducting an
extensive building audit. They do not replace a building audit, but allow for a general
idea of what buildings might be of interest to audit. EPCs may also be used as a mapping
tool to identify clients with the largest investment potential in terms of environmental
and/or social impact. For example, investors named utilizing public EPC data (when
available) to find low rated households in order to offer them retrofits and maximise
social benefit as well as their return on investment. Investors will usually only pro-
actively seek out energy efficiency investments in this way when they also partially or
fully own a project developer. Therefore, the EPC is a useful mapping tool enabling them
to better target client outreach.
There are certain banks that are experimenting with providing green mortgages. This
means that they take into account the increased value of a home after a renovation and
energy efficiency upgrade when providing a mortgage. As a result, the mortgages may be
offered at lower rates. A home may be taken from an EPC grade E to a grade B;
however, the quantification of value is based on the energy cost reductions assumptions
provided by the building audit (not the EPC rating). The rating is a means of expressing
the improvement in the condition of the building.
80
Stromback, J., Hobson, D., Streng, E., Ribeiro Serrenho, T. and Bertoldi, P., Advanced quality and use
of energy performance certificates (EPCs) by investors and financial institutions, EUR 30886 EN,
Publications Office of the European Union, Luxembourg, 2021, ISBN 978-92-76-43380-4 (online),
doi:10.2760/151167 (online), JRC125031.
280
However, the following criticisms were made by investors interviewed, which were
considered as limiting substantially the potential more extended use of EPCs:
 Absence of mandatory use policies for financial institutions and funds81.
 Lack of consistency in the availability of EPCs (sometimes they are not available
or available too late in the process).
 Lack of set timeframes for improvements or buildings to reach certain rating, to
encourage definite refurbishments and increase finance.
 Lack of standardisation across European Union Member States, making
comparability of results difficult
 Lack of clear regulation around quality of EPC rating methodologies. Issues
around unreliability and inaccuracy. For example, self-reporting allowed in
certain Member States, (such as over the phone, without any visit from an
inspector to the property).
 Lack of assurance of qualified personnel performing the EPC audit. Unequal, low
or inconstant requirements and thresholds for becoming a licensed EPC
issuer/inspector. The implication for financial institutions is a consequent risk in
quality assurance.
 Lack of detail and robust quantification. EPCs are considered overly simplistic
for use in financial analysis. Out of all the flaws named in the course of this
study, lack of detail was the most frequently mentioned.
 Methodologies do not enable funds to quantify value or the impact on an EPC
rating of a specific renovation plan.
 Methodologies are not granular enough to consider the impact or value of
individual energy efficiency measures such as improved heating, cooling or
lighting.
A study by the Energy Efficient Mortgage Initiative suggests that EE ratings complement
rather than substitute borrower credit information and that a lender who uses information
from both sources (borrower credit information and EE ratings) can make superior
lending decisions compared to lenders who do not exhaust all available information82
.83
The introduction of the EU Green Taxonomy is an important recent development that is
likely to have a significant impact in the use of EPCs. In particular, the Taxonomy
requires the use of EPC to certify the necessary level of performance for new buildings or
real estate operations, or to certify the improvement in case of renovations.
Notwithstanding its identified weaknesses, the EPC presented a number of key elements
81 The same analysis from JRC had also identified that although not mandatory several national schemes already refer
to EPC class for eligibility or compliance with financial incentives.
82
EEMI, “Buildings’ Energy Efficiency and the Probability of Mortgage Default: The Dutch Case”
83
Zancanella, P., Bertoldi, P. and Boza-Kiss, B., Energy efficiency, the value of buildings and the payment
default risk, EUR 29471 EN, Publications Office of the European Union, Luxembourg, 2018, ISBN 978-
92-79-97751-0, doi:10.2760/267367, JRC113215.
281
for its use in the taxonomy: embedded in legislation in all EU MS, with the
administrative support this represents, most extensively use approach across the EU and
relative low cost.
1.8 EPCs and consumer’s behaviour
Evidence shows that there are multiple barriers that deter people from upgrading the
energy efficiency of their homes. These include the complexity of the renovation process,
the disruption to the household’s routine, the financial cost involved, as well as
homeowners’ lack of trust in new technologies and lack of confidence to engage
contractors as well as homeowners’ cognitive biases84
. While there are a large number of
households with savings potential, the combined effects of the barriers result in a much
smaller number of households actually retrofitting their homes. Each of these barriers can
be addressed through intervention in the form of incentives, information, communication,
and standards, leading to an increase the number of households undertaking home energy
upgrades each year. EPCs are an important information tool in this context.
Research shows that a well-designed EPC can influence homeowners to renovate85
.
Using graphics and colours to help the end-user grasp the information in the EPC can
increase its perceived usefulness. Italy and Portugal use this to highlight certain content
in the EPC86
.
Paying attention to the way information is provided is important. As an example, with
categorical-scales (like those in terms of A-G classes), according to a study, consumers
often value the class, but neglect the underlying differences in energy consumption87
.
Continuous-scales, by presenting information on energy efficiency more accurately and
avoiding the “class valuation effect”, can, according to a study, be more likely to enable
more rational decisions (that is consumers are more able to make comparisons of the
options available and finally decide to invest)88
.
Including information on environmental impact might grasp the attention of
environmentally concerned citizens who will understand that retrofitting is a way to
84
Boza-Kiss, B., Bertoldi, P., Della Valle, N. and Economidou, M., One-stop shops for residential building
energy renovation in the EU, EUR 30762 EN, JRC125380
85
V. Taranu and G. Verbeeck, “A closer look into the European Energy Performance Certificates under the
lenses of behavioural insights—a comparative analysis,” Energy Efficiency 11 (7), 1745-1761, 2016.
86
Italy: The energy performance of the building envelope is shown in the Italian EPC with qualitative
“smileys”, indicating its ability to thermally insulate the interior (in winter and summer conditions). The
rating scale is divided into three values: high quality, medium quality or low quality, represented by the
smileys. Portugal: Innovative indicators include renewable energy use and CO2 footprint, which are both
featured on the front page of Portugal’s EPC.
87
Andor, M. A., Frondel, M., Gerster, A., & Sommer, S. (2019). Cognitive reflection and the valuation of
energy efficiency. Energy Economics, 84, 104527
88
He, Shutong, et al. "Energy Labels and Heuristic Decision-Making: The Role of Cognition and Energy
Literacy." USAEE Working Paper Series (2020)
282
protect the environment89
. This has been shown from examples in Spain, where CO2
emissions are included90
In the public consultation, stakeholders raised concerns about citizens’ lack of
understanding of the EPCs. According to some stakeholders, homeowners or tenants
often have problems assessing the informative value of EPC or deriving specific action
from them. A possible solution put forward by stakeholders is that EPCs should provide
information on building’s actual energy performance, in addition to the calculated
performance.
A research study investigated this further for the case of Belgium, Wallonia91
, and
proposed modifications to the EPC calculation methodology to take into account user
behavior. The U-CERT project92
is currently working on a next generation EPC
including measured energy use and cost data and connected user behavior data. In some
MS, for instance in Sweden, the EPC is based on measured data accompanied with a
methodology to take into account the user behavioral aspects.
2 POLICY OPTIONS FOR EPCS
Overall the objectives are to increase the number of buildings with an EPC, as well as
their quality and comparability for investors across Member States. The increased
coverage should go hand in hand with higher quality of EPCs as fully digital tools. An
extended range of information should be included in all EPCs to be issued.
2.1 Strengthening quality, reliability and comparability
The table below summarises the options for improvement identified to ensure a better
quality, reliability, and comparability through a progressive harmonisation of EPCs.
Table G.6: Overview of policy options A.3 on Quality, reliability and comparability of EPCs
A.3 Quality, reliability and comparability of EPCs
No. Policy options Timeline Detailed description
EPCQ1
Voluntary measures to
increase quality93
and
harmonisation of
EPCs
Up to MS
 Introduce in the EPBD a voluntary common EU
template (Machine readable, Database compatible)
 Voluntary harmonisation of EPC classes (Best EPC
class needs to be 2050 compatible)
89
Della Valle, N. and Bertoldi, P., Mobilizing citizens to invest in energy efficiency, EUR 30675 EN,
Publications Office of the European Union
90
V. Taranu and G. Verbeeck, “A closer look into the European Energy Performance Certificates under the
lenses of behavioural insights—a comparative analysis,” Energy Efficiency 11 (7), 1745-1761, 2016
91
S. Monfils, J-M Hauglustaine “Introduction of behavioral parameterization in the EPC calculation
method and assessment of five typical urban houses in Wallonia, Belgium”, 2016
92
https://u-certproject.eu/
93
Modification to Annex II (improve Annex II, include references to targeted mechanisms, but still leave
significant flexibility).
283
No. Policy options Timeline Detailed description
EPCQ2
Mandatory measures
to increase quality and
voluntary
harmonisation
MS to
implement
by 2025
 Introduce in the EPBD a mandatory common EU
template (Machine readable, Database compatible)
 Voluntary harmonisation of EPC classes (Best EPC
class needs to be 2050 compatible)
EPCQ3
Mandatory measures
to increase quality and
harmonisation of
EPCs + Reporting
obligations
MS to
implement
by 2025
 Introduce in the EPBD a mandatory common EU
template (Machine readable, Database compatible)
 Mandatory harmonisation of EPC classes (Best EPC
class needs to be 2050 compatible)
Mandatory quality control measures amongst the following:
 Mandatory visits to produce EPC
 Improved quality control
 Minimum % of controlled EPCs (sample)94
 Possible use of metered data as control
Reporting obligations
2.1.1 Why is it necessary to improve quality and comparability?
As indicated in section 1.4 “Comparability of EPC classes”, the limiting values for EPC
classes attributed to buildings vary significantly across countries, thus limiting their value
to investors and financial actors that operate in multiple markets. The differences
between classes are also difficult to understand, which can undermine the confidence on
EPC schemes regardless of the actual quality of the schemes.
In the context of the 2016 evaluation, most of the Member States' experts agreed that
EPCs are important tools both for linking the energy efficiency investments with housing
prices and for checking compliance. However, experts agreed on the need for improving
EPC reliability. Experts agreed that developments in the product technologies can also
further facilitate compliance.
EPCs can be a valuable tool for assessing the level of compliance with building codes
and enable efficient compliance check by providing information to central bodies. EPCs
are already being used for this purpose (e.g. EPC at design face to obtain building
permits). This has been facilitated with the amendment introduced in the 2018 revision.
The amended EPBD required Member States to report their calculation methodologies
(including EPCs) in line with the ISO 52003-1, “Indicators, requirements, ratings and
certificates”. Several MS have taken this opportunity to improve their building
performance methodologies and existing indicators (CA EPBD). Examples of
94
Increase from “statistically significant” to e.g. 10%.
284
improvements are related to the energy performance requirements, energy performance
calculations and procedures, EPC label and scale, EPC layout, energy performance
indicators. 15 MS use calculated values for the assessment of the energy performance
and 12 MS use a combination of calculated and measured values. Around 40% of MS
have adopted or are expected to adopt ISO standards related to indicators, requirements
and ratings (ISO 52000-1, ISO 52003-1, ISO 52018-1).The evaluation also showed that
certification of the energy performance of buildings is delivering a demand-driven
market signal for energy efficient buildings and is achieving its aim to encourage
consumers to buy or rent more energy efficient buildings. However, national certification
schemes and independent control systems were at early stages in several Member States
and their usefulness could be enhanced.
The quality of EPCs as a reporting tool is directly linked to the national methodology and
the quality of the application and reporting process. This appears to vary widely. For
example, one Spanish investor stated that they do not use EPCs in Spain due to the fact
that metrics are self-reported by the developers or building owners. Others such as a
Belgium bank, find them to be useful benchmarking tools95
.
The recent adoption of the EU Green Taxonomy, which makes extensive use of the EPC
to certify the requirements on new buildings, buildings undergoing renovation and real
estate activities, puts additional pressure on the need for quality and reliable EPCs.
At a stakeholder workshop 19 May 2021 stakeholders in a poll replied that quality and
reliability of EPCs are the most important aspects to work on in the revision.
2.1.2 Current provisions on quality control
Requirements for quality control were first introduced in the EPBD in 2002 and then
updated in the EPBD Recast of 2010. The provisions regarding the independent control
system are establishes in Article 18, while Annex II provides further information on the
characteristics of the independent control system. The first provision is the obligation to
verify a random selection of at least a statistically significant percentage of all the EPCs
issued annually. The second provision describes the 3 different options in which the
verification must be based:
 Verification option 1: validity check of the input data.
 Verification option 2: check of the input data and verification of the results.
 Verification option 3: full check of the input data, full verification of results, and
on-site visit.
95
Stromback, J., Hobson, D., Streng, E., Ribeiro Serrenho, T. and Bertoldi, P., Advanced quality and use
of energy performance certificates (EPCs) by investors and financial institutions, EUR 30886 EN,
Publications Office of the European Union, Luxembourg, 2021, ISBN 978-92-76-43380-4 (online),
doi:10.2760/151167 (online), JRC125031.
285
The objective of this stepped verification is to determine if:
 The input data generates an EPC of a different value. This would identify if the
EPC or the software providing the EPC have internal errors or have been
tampered with.
 The input values for the EPC are within an acceptable range which corresponds to
the characteristics of the building (e.g. typology, age, type of systems, expected
performance of components. This would identify an EPC in which the input data
is incorrect (e.g. value of insulation too high, performance of boiler too high).
 The input values for the EPC are checked against evidence (e.g. building plans,
boiler specifications, on site inspection).
While the EPBD describes some elements and key provisions of an independent control
system, the EPBD does not:
 Define what is the minimum level of quality of an EPC (e.g. an EPC is correct if
it is within ± 10% of the value established by the independent control system)
 Define a level of confidence that schemes should achieve (e.g. the random sample
determines with 95% confidence that the EPCs in a given year are within
acceptable limits)
 Establish an obligation to report to the general public on the work carried out by
the independent control system
 Establish an obligation to report to the EC on the work carried out by the
independent control system
The EPBD recast in 2010 strengthened the quality assurance requirements. The 2018
amendments reiterates that “The current independent control systems for energy
performance certificates can be used for compliance checking and should be strengthened
to ensure certificates are of good quality”.
The implementation of effective systems of quality assurance is a challenging task. It
needs to be considered at every stage of the certification process i.e. training and control
of auditors, quality check in the software, verification of the certificates issued. At the
same time, the cost of the system should be balanced in order to avoid a significant
increase in the certificates’ cost. Data inaccuracies can be caused by lack of competence
of the EPC expert, procedures not being properly followed, incorrect on-site
measurements, incorrect assessment of building elements, application of wrong pre-
calculated values in the methodology or intentional miss-application to obtain specific
results (i.e. fraud)96
.
The lack of clear quality criteria and reporting results in poor perception of the required
quality levels that EPCs must achieve. In turn, this results in lack of confidence on EPC
96
X-tendo project.
286
schemes. The lack of public reporting or reporting to the European Commission results in
limited available information on the approach and results of the different independent
control systems. This also results in poor confidence in the overall EPC scheme.
Increasing trust and establishing a good reputation for the EPC among building owners,
potential tenants and other market actors is a challenge that needs to be further addressed.
Examples of control systems in Member States
Denmark: The Danish energy agency publishes a yearly report on the main results of the independent
control system. The Danish scheme defines a valid EPC as an EPC that is within the correct label. The
sample size is determined by a statistic uncertainty of ±7.5% and a confidence level of 95%. In 2018 the
Danish energy agency carried out a deep evaluation of 121 EPCs, representing 0.2% of the total of EPCs
issued in 2018 (60 320). This is in addition to a number of automated and other minor checks.
Proportion of checked energy labels for existing buildings correctly positioned
on the scale:
2016 2017 2018
69 % 79 % 77 %
In 2017 and 2018 just over 20% of the EPCs were incorrectly labelled, an improvement over the 30% of
incorrectly labelled EPCs in 2016. Upon enquiry by DG-ENER, the Danish energy agency informed that
the majority of incorrect EPCs very close in terms of the absolute value (kWh/m2). Due to the discreet type
of labelling (i.e. based on the label of EPC and not on the numerical value) a small change in value could
result in a change in the category.
In 2019, the Danish energy agency changed the approach for the analysis of EPCs. Instead of a random
sample, the agency took a targeted approach, selecting EPCs that were deemed more at risk. A total of
127488 EPCs were issued in Denmark in 2019. From these, the agency selected 215 for more detailed
evaluation, representing 0.17%. Out of the 215 EPCs evaluated, 200 were deemed incorrect.
Estonia: The Consumer Protection and Technical Regulatory Authority is tasked to randomly check the
quality of the issued EPCs. More checks are conducted on EPCs issued by experts where inadequate
quality or “foul play” is suspected.
Flanders: The Flemish Energy Agency executes random and targeted checks of the presence of an EPC
(when legally required), the credentials of experts and the EPC’s compliance with the defined
methodology.
Germany: An independent control system was introduced in 2014. A statistically significant sample of
certificates is randomly selected from the EPC register, which includes the EPC’s identification number
and the contact details of the EPC assessors. Checks at all levels can only be performed after the
responsible assessor of the selected EPC has provided additional input. Therefore, experts are required to
store all relevant data for at least two years after the EPC has been issued.
Greece: Quality control is performed at the first step through random checks on data entry. By law, the
randomly selected sample is 5% of the total of EPCs issued. Random checks are also conducted on-site,
whenever required, depending on desk check results and in case of complaint.
Italy: The quality control varies from region to region. All the regions and autonomous provinces with a
287
regional EPC database (i.e. Bolzano, Campania, Emilia Romagna, Friuli-Venezia Giulia, Lazio, Liguria,
Lombardia, Piemonte, Toscana, Trento, Valle d’Aosta, Veneto) perform at least an “input/ documentary
data control”. In seven of the regions on-site controls are performed, with different procedures and
different targets; some regions control randomly, while others control on-site every new building and deep
building renovation. Some regions control on-site when anomalies in the energy performance indexes are
found, or in the case of buildings with very high energy performance levels.
Romania: The State Inspectorate for Construction (ISC) has been assigned to randomly control 10% of the
EPCs and energy audits issued annually. So far, they have covered less than 1% (as reported in trimester
ISC reports). The Romanian Association of Energy Auditors for Buildings signed a voluntary agreement to
help ISC in assessing the technical quality of controlled documents, but this was rarely requested.
Source: European Commission and X-tendo project
2.1.3 Options for strengthening quality
On the basis on the recommendation of several project that have looked at possible
improvements of quality control measures, the following possible measures have been
identified:
 Mandatory visits to produce EPC
 Define a minimum level of quality for EPCs
 Define a minimum level of confidence for the independent control scheme
 Obligation to carry out automated and targeted controls
 Quality control to include site-visit
 Possible use of metered data as control
 Reporting of the independent control schemes
The EPBD does not require a site visit to produce an EPC. Although many aspects of an
EPC can be gathered through desk search, it is preferable in most cases to check that the
information coincides with the situation on site. For existing buildings, a site visit may be
particularly necessary as information may be missing, which would require the
independent expert to make on-site measurements.
As indicated above, the EPBD does not define what is considered a correct EPC. A
common definition with common criteria across the EU would support quality schemes,
allow for cross-comparison and increase the overall confidence in the scheme.
As regards sampling, the verification of EPCs can be carried out on a random or targeted
sample basis. Random verification, as the name suggests, implies a random selection of
EPCs which are then evaluated for their correctness. Random verification allows for the
determination of the quality levels of the overall EPCs for a given period. Sampling
could also be based on the building typology.
Targeted verification, as the name suggests, implies that the selection of EPCs for their
verification follows specific criteria. The criteria may include elements such as targeting
EPCs that include elements out of typically expected range (e.g. insulation too high for a
288
building of a certain age), foul play or systemic errors. Targeted selection offers the
advantage of being capable of detecting more defective EPCs for a given sample size.
This results in a more cost-effective (i.e. cost of inspection per defective EPC detected).
The disadvantage of targeted verification is that it only focuses on specific areas of the
overall population. If the selection criteria are not adequately selected and kept up to
date, the system may be miss-targeting areas.
In summary: random selection allows for the analysis of the overall quality level of the
sample (and the total population by example), while targeted selection is a more cost-
effective solution to detect defective EPCs. Both methods can be combined in a quality
assurance scheme.
The EPBD does not require site visits as part of the independent control system, although
they are indicated as one of the options. Site visits offer the best chance of detecting
inaccuracies in an EPC, particularly if there are differences between as designed (i.e.
what is on the plans) and as built (what is actually in the building). They also increase the
confidence in the system as they offer the most complete assessment and increase the
perception of involvement. Site visits, however, are more costly than automated or desk
checks. Overall, an obligation to include a minimum level of site visits would
significantly support the confidence in EPC independent control systems.
As indicated above, there is currently no obligation to report on the performance of the
EPC independent control systems. This results in perception of EPC being a “black box”,
where inputs and outputs are commonly misunderstood. This has a negative effect in the
quality and overall reliability of the EPC scheme. The reporting on the overall quality
levels and the corrective and improvement measures, would increase accountability and
transparency of the quality measures in place, the overall scheme.
2.1.4 Policy options for strengthening comparability
As shown in Table 1, there are large variations among MS as regards EPC classes. In
order to facilitate comparisons between countries and facilitate for investors it is
suggested that a gradual harmonisation of the classes is introduced. Also, for the
introduction of MEPS based on EPC classes a gradual harmonisation would be needed.
The EPBD does not include an obligation to define the classes in terms of kWh/(m2
year).
A number of MS do use this indicator, there are also examples of MS where the EPC
class is defined in relation to the current NZEB requirement or in relation to a reference
building (as a percentage of NZEB or reference building values).
The EPBD includes an obligation to indicate the buildings energy performance (kWh/m2
and year) in the EPC and some MS also include the NZEB value in the EPC to allow for
a comparison between the buildings actual energy performance and NZEB levels. One
option would be to require that all MS make this comparison between the buildings
actual energy performance and NZEB levels, this would allow for some comparisons
289
between MS. However, the value of NZEB is likely to change over time as minimum
energy performance requirements are regularly revised. To be noted that in the
Commission’s Recommendations on NZEBs, it was specifically advised to make a link
between NZEBs classes and highest EPCs classes97
.
An alternative option would be to define the A level based on future long-term
requirements (e.g. 2050). This would require rescaling in some MS, but would have the
advantage of making possible comparisons between MS. It is closely linked to the policy
option for defining the future zero emission building (2050 compatible).
A third option is that the classes are equally defined at EU level based on specific values.
For example, C level equalling 100 kWh/(m2
year). This could be combined with CO2-
levels for different classes. This option would allow for direct comparisons at EU level
and between individual MS, but would require rescaling.
In EPCQ1 and EPCQ2 a voluntary harmonisation is proposed, where the best EPC class
needs to be 2050 compatible. In EPCQ3 this harmonisation is mandatory. The timeline
proposed is 2025 for EPCQ2 and EPCQ3 whereas the timing is up to MS in EPCQ1.
Several EU-projects are investigating the possibilities of harmonising EPCs or providing
comparison tools, such as QualDeEPC, BuiltHub, EUB SuperHub, ALDREN and the
EPC4EU data model, see also chapter 3.
2.1.5 Options for strengthening visibility and availability of EPCs
The EPBD requires that:
 The EPC is shown to the prospective buyer, tenant or owner (in case of new
buildings)
 The EPC is shown in advertisement media.
While all MS have transposed these requirements in their legislation, compliance rates
vary98
.
A potential way to improve compliance is to make it easier for sellers or landlords of
buildings to carry out their obligations by providing them with concrete guidelines for
the use and presentation of EPCs and the legally required data in advertisements of
sales/rentals or buildings/dwellings. In some countries, such guidelines issued by energy
97
‘Some Member States have chosen to link the NZEB level to one of the best energy performance classes
(e.g. building class A++), as specified in an energy performance certificate. This approach, when
accompanied by a clear energy performance indicator, is recommended to give clear information to
investors and drive the market towards NZEB.’ Commission Recommendation (EU) 2016/1318 of 29 July
2016 on guidelines for the promotion of nearly zero-energy buildings and best practices to ensure that, by
2020, all new buildings are nearly zero-energy buildings.
98
QualDeEPC – High-quality Energy Performance Assessment and Certification in Europe Accelerating Deep Energy
Renovation
290
agencies/public authorities are already available. For example in Ireland, a detailed
guideline plus the respective energy class artwork files have been developed by SEAI
and are available for download and use. In France, examples of adverts are available;
indicating how the energy label should be presented. The use of a common template and
visual identity also supports the recognition of the EPC and the perception of reliability.
Member States check the availability of EPCs at different stages, but there is no
consistent approach across the EU. However, sometimes the check is carried out too late
in the process. For example, in Belgium, a notary checks the presence of the EPC when
finalising a sale operation. This check comes too late in the process as by the time it is
provided all decisions (by prospective buyers/tenants, assessors and valuators) have
already been taken. Property valuators in particular have identified the lack of
information at specific stages as one of the key barriers for a widespread use of EPCs as a
tool in property valuation99
.
Information on availability of EPCs in advertising media is scarce. As part of a study on
the effects of the EPC in real estate values, ECARES carried out an analysis in Brussels,
showing that the presence of the EPC in advertising media was below 15% in 2014100
.
Due to the prevalence of online real estate portals it is relatively easy and cost-effective
to carry out machine searches to detect the presence of EPCs. These tools can have great
effect on the implementation on the ground. In their 2014 study, BPIE identified that the
presence of automated checks in Belgium Flanders increased the presence of EPCs from
68% in 2010 up to 95% in 2015.
2.2 Increase the scope of information and coverage of EPC
Table G.7: Overview of policy options B2 on increase the scope of information and coverage of EPC
B.2 EPCs - Increase the scope of information and coverage of EPC
No.
Policy action -
general
Timeline Sub-options
EPCSI1
Additional trigger points
for issuing EPCs
(building type) +
Increase mandatory
indicators, with
flexibility
MS to
implement
by 2025
a) All non-residential (incl. public) buildings (Art. 12)
b) Contract renewal with existing tenants (residential
and non-residential) (Art. 12)
MS to choose of the following indicators: CO2,
envelope class (energy need), RES, IEQ, TBS class,
SRI
EPCSI2
Additional trigger points
for issuing EPCs
+
Increase mandatory
indicators and improve
MS to
implement
by 2025
Trigger points as in EPCSI1+
a) Following renovation (Art 7)
b) Changes in technical building system (Art. 8)
c) Access to public incentive/funding
99
Revalue – designing the next generation of valuation guidance for sustainability in residential property
100
ECARES – Working paper 2016-2017 - The Rent Impact of Disclosing Energy Performance
Certificates: Energy Efficiency and Information Effects
291
B.2 EPCs - Increase the scope of information and coverage of EPC
No.
Policy action -
general
Timeline Sub-options
recommendations, with
less flexibility
+
Shorter validity for
EPCs
Additional indicators:
Mandatory: operational GHG, total energy use, RES,
Voluntary: IEQ, TBS class, SRI, recharging points,
energy storage
Elements to include in EPC recommendations:
 Estimated costs of renovations, savings, other
relevant indicators (e.g. GHG, RES),
OR point to BRP instead of recommendations
Reduce the current 10 year validity (Art. 12)
EPCSI3
All buildings should
have EPCs
+
Increase mandatory
indicators and improve
recommendations, with
less flexibility
+
Shorter validity for
EPCs
MS to
implement
by 2025
Mandatory target for MS to create EPCs for all
buildings (fee-free obligation)
Reduce the current 10 year validity (Art. 12)
Additional indicators:
Mandatory: operational GHG, total energy use, RES,
Voluntary:, IEQ, TBS class, SRI, recharging points,
energy storage
Elements to include in EPC recommendations:
 Estimated costs of renovations, Energy and cost
savings, other relevant indicators (e.g. GHG,
RES),
OR point to BRP instead of recommendations
2.2.1 Why is it necessary to increase the scope of information and coverage
of EPCs?
EPCs are only required at specific moments in the lifetime of a building, which in some
cases may never occur across their lifecycle. In addition, the information in EPCs
remains limited and is not sufficient to illustrate all the qualities and technologies of the
buildings nor the full spectrum of benefit that improvements could bring. The overall
carbon performance is for instance not a compulsory element in EPCs. As a consequence,
these important aspects are also not adequately reflected in property values.
Currently the only mandatory indicator in the EPC is energy use expressed in
(kWh/m2
year). This is not enough for users such as home owners, investors and
policymakers to make the right decisions for the achievement of 2030 and 2050 targets
on emission reduction and other objectives in the Green Deal.
The need for additional indicators and improved recommendations in the EPCs is
strongly linked to the proposed introduction of Building Renovation Passports (BRP).
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BRPs are complementary to the EPC and can drive the uptake of EPCs, especially if
accompanied by financial measures.
To address the information barriers related to the current energy performance of
buildings that were identified in the problem definition, it is necessary to increase the
number of buildings that has an EPC. The uptake today is low and there is a big variation
between MS, as described in the first chapter of this Annex.
Increasing the scope of information and coverage of Energy Performance Certificates
will also help to ensure that public support such as EU funding can be better targeted
towards high-impact projects and qualitative investments; it will also facilitate the follow
up in terms of reporting and monitoring and long term impact of public support to
building renovation.
2.2.2 Policy options to increase the number of buildings with an EPC
The policy options to increase the diffusion of EPCs and therefore the share of the
building stock having an EPCs are the following:
 Require EPC for all non-residential buildings or Mandate MS to create EPCs for
all buildings: this is the most ambitious of all options and would allow a full
coverage of the building stock with EPCs. The massive roll-out of EPCs could be
facilitated by existing digital and on-line tools that allow building-owners to self-
assess energy performance, which could allow this option to be fee-free for the
obligated parties (building owners). However, trade-offs exist between high
quality of EPCs, increased information in EPCs and low-fees.
 Require EPC in case of contract renewal with existing tenants (residential and
non-residential)
 Require EPC for major renovation
 Require EPC for renovated building elements
 Require EPC for technical building system changes
 Require EPC for financial support: the idea is that an EPC would be required
once homeowners ask for financial support. To some extent this aspect is already
covered in the existing Art. 10 of the EPBD. Making a stronger the link between
financial support and EPCs will increase the coverage of EPCs.
Some additional ideas were raised at a workshop with FP7 research projects focusing on
EPCs in April 2021, regarding the additional and complementary use of EPC to raise
awareness of buildings occupants and the supporting actions needed:
• Utility companies with access to data from district heating and electricity (smart
meter) could alert owners if they use more energy than expected;
• Marketing campaign needed - most citizens do not know about EPCs;
• Optimal renovation times occur at certain points in the buildings lifetime, this
could be a trigger to require to issue an EPC;
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• Support financially that building owners receive a building renovation passport,
issuance of an EPC as a complementary tool.
• Trigger point when people inherit a building, but rather building renovation
passport than EPC.
2.2.3 Policy options for new indicators in the EPCs
The following aspects are being taken into account for new indicators in the EPCs:
Indicators that:
 bring valuable information to homeowners and buyers
 that are possible to implement
 that gives buyers a better idea of energy needs
 links energy efficiency and climate footprint
Additional indicators might increase the cost and complexity which could be affecting
user acceptance and degree of comprehension/ usefulness, therefore only the necessary
indicators for reaching the targets should be made mandatory. Too many indicators
would make the EPC more complex and possibly more difficult to communicate.
2.2.4 Operational GHG
Including an indicator of GHG during the operational phase of the buildings would
increase the awareness about the building’s carbon footprint; this is already possible now
and is planned or implemented in several Member States, such as Germany and France.
According to a CA EPBD report in May 2021, 16 MS have included operational carbon
in EPCs on a mandatory or voluntary basis.
Including CO2-emissions in EPCs could better demonstrate the fulfilment and
achievement of targets according for the reduction of greenhouse gas emissions. Space
heating is the main source of CO2-emissions in buildings, and it varies strongly across
countries, owing to both differences in heating demand (climate and building quality) and
the heating fuels used.
The CO2-emissions of a building are as important to consider as its energy consumption.
Similarly, CO2-emissions should be considered whether they occur outside or inside the
building perimeter (district heating or electricity generation, vs gas boiler).
In Germany, it is mandatory to include CO2-emissions in the EPC for information
purposes, expressed in CO2 per square meter and year. As in most other MS, the building
codes do not include regulations on the level of allowed CO2-emissions. The Building
Energy Act contains conversion factors for fossil fuels, biogenic fuels, electricity and
district heating and cooling. For electricity, the emission factor for electricity contains
one network related factor which is 560 g CO2 per kWh, the emission factor for
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renewable energy generated close to the building from photovoltaics or wind power is 0,
and a displacement mix for CHP which is 860 g CO2 per kWh.
The following table provides some examples.
Table G.8: Example of conversion factors from the German Building Energy Act
The German Building Energy Act includes an Innovation clause with the following
content:
 Fulfilment of the main requirements of the law not through the annual primary
energy requirement, but through a limitation of greenhouse gas emissions.
 New construction: equivalent limitation of greenhouse gas emissions and
compliance with the final energy requirement, which does not exceed 0.75 times
the annual final energy requirement of a reference building (residential and non-
residential buildings)
Number Category Energy Source emission factor (g CO2-Äquivalent/kWh)
1 Heating oil 310
2 Natural gas 240
3 Fossil Fuels Liquid gas 270
4 Hard coal 400
5 Brown coal 430
6 Biogas 140
7 Biogenic Fuels Bio oil 210
8 Wood 20
9 network related 560
10 Electricity
generated close to the
building (from
photovoltaics or wind
power) 0
11
Displacement mix for
CHP 860
12
Geothermal energy,
Solar thermal energy,
ambient heat 0
13
Earth cold, ambient
cold 0
14 Warmth, cold Waste heat 40
15
Heat from CHP,
integrated into the
building or close to the
building.
According to procedure B according to DIN
V 18599-9:2018-09 section 5.2.5 or DIN V
18599-9:2018-09 section 5.3.5.1
16 Municipal waste 20
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 Renovation: equivalent limitation of greenhouse gas emissions and that of the
maximum value of the final energy demand, which does not exceed 1.4 times the
year-end energy demand of a reference building (residential and non-residential
buildings)
 the specific transmission heat loss related to the heat-transferring surrounding
area of a residential building to be constructed must not exceed 1.2 times the
corresponding value of a reference building and a non-residential building to be
constructed 1.25 times the maximum values of the mean heat transfer coefficient
of the heat-transferring surrounding area.
 With this innovation clause, experience with a changed system of requirements is
to be gathered.
BE Wallonia is an example of a MS where the EPC includes a CO2 -indicator. It is used
only for information purposes, there are no requirements in the building codes as regards
CO2-emissions. The calculations are based on emissions from heating, cooling, domestic
hot water and appliances and can be compensated by emissions savings from using
photovoltaics or co-generation. The calculation is made on a monthly basis and then
summarised for the year (because of differences in heating and cooling needs over the
year). The CO2-emissions for heating is calculated using a CO2-factor in kg/MJ and a
conversion factor between net caloric value and gross caloric value.
In the EPC the yearly CO2-emissions are indicated, as a total and per square meter. There
is also an information included in the EPC that 1 000 kg CO2 corresponds to driving a
specific distance on diesel, petrol or travelling by plane.
Figure G.6
Another example is Hungary which also includes a CO2 –indicator in the EPC. In order
to calculate the CO2-emissions from district heating, the following aspects are taken into
accounts: the heat loss of the district heating network, the specific primary energy
conversion factors of the various district heating producing technologies, the specific
values of CO2-emissions of primary energy sources and power system, the share of RES
of primary energy sources. In average, CO2-emissions of district heating in Hungary,
with about 20% share of RES and 45% share of CHP is 46 kg/GJ. Hungary is planning to
introduce threshold limits for CO2-emissions for new buildings. For the assessment of
CO2-emissions from district heating and CHP, studies show that a thorough impact of the
effects of energy efficiency measures based on real national data Member State by
Member State – and not on average values – is needed101
.
101
https://doi.org/10.1016/j.rser.2020.110299
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2.2.5 Renewable energy sources
Although not being mandatory to include, several MS include it in the EPCs. It is
necessary to take into account renewable energy in the calculation of the energy
performance of the buildings.
BE, Wallonia includes RES in the EPC in the form of a graphic:
Figure G.7
2.2.6 Indoor Environmental Quality (IEQ)
A great number of scientific studies show that indoor environmental quality (IEQ) has a
direct effect on health, comfort, wellbeing and productivity. Considering that people
spend approximately 90% of their time indoors, it is crucial that building legislation
ensures adequate levels of IEQ to promote healthy and comfortable indoor environments.
Indoor air quality, thermal and acoustic comfort and sufficient levels of daylight are the
major determinants of IEQ, and play an important role in ensuring the quality of life and
general wellbeing of building occupants.
The main elements and impacts of IEQ are102
:
• Indoor air quality (IAQ) refers to the air quality within buildings and structures.
A space with good indoor air quality is low in contaminants and odours and has
reasonable levels of CO2 and moisture. The restriction and control of indoor air
pollutant sources, in combination with adequate ventilation, are critical in
ensuring good indoor air quality [2] [3].
• Thermal comfort refers to the individuals’ perception of the thermal
environment; they should feel neither too hot nor too cold [4].
• Daylight and artificial lighting should provide enough illumination to enable
building users to do their tasks safely and comfortably, without interference from
glare and shadows [5].
• Acoustic comfort includes the capacity to protect building occupants from noise
and provide a suitable acoustic environment to fulfil the purposes that the
building is designed for
One of the reasons for proposing to include indoor environmental quality in the EPC is
that the 2016 evaluation concluded that the EPBD could do more to improve the quality
102
BPIE 2018, Linking indoor environmental quality and energy performance in building regulation.
297
of the indoor environment103
. Although ensuring adequate levels of indoor air quality,
thermal comfort, lighting and acoustics within buildings are among the most potent
drivers for renovation, they are rarely covered by EPCs. Indicators of comfort would
enable assessment of the levels of comfort in terms of indoor environmental quality for a
specific building through reliable and evidence-based inputs.
The EPBD requires energy performance to take indoor climate into account, but leaves to
EU Member States the way to regulate and ensure that the improvement of the energy
performance of buildings adequately takes into account and efficiently implement indoor
environment quality (i.e. indoor air quality, thermal comfort, noise and lighting) and
ventilation requirements at national level. However, gaps in the national regulatory
framework can be observed, in particular for existing buildings where health-based
mandatory minimum IEQ requirements can hardly be found in national/regional building
codes.
It is essential that meeting minimum energy performance requirements and achieving the
required level of indoor environmental quality (IEQ) receive the same level of attention
and are mutually and consistently reinforced in plans and actions of EU Member States
for renovating the European building stock. Renovation can improve indoor
environmental quality, but attention is needed to avoid that more airtight and less glazed
buildings deteriorate the indoor environmental quality.
Indoor Environmental Quality (IEQ) is proposed to be a voluntary indicator because
there are no harmonised calculation methodologies or mandatory IEQ requirements
across Member States.
Some existing EPC schemes incorporate requirements for minimum fresh air rates and
protection thresholds for concentrations of indoor air pollutants, offering aspects to
replicate. EPCs have the potential to become effective instruments by not only tracking
the energy performance of a building but also characterising its overall IEQ through
evidence-based information. An important driver of healthy buildings is sustainable
commercial building certification systems which support the provision of health and
wellbeing at different levels, favouring the indoor environment, ecology, socio-cultural
aspects, active and healthy lifestyles, and safety. Certifications for certain commercial
and municipal new buildings includes IEQ. Level(s) includes health and comfort among
its target areas and uses indicators for indoor air quality, and thermal, acoustic and
lighting comfort.
To address the need for benchmarking IEQ in buildings, an index has been proposed
within the framework of ALDREN104
. The index is used to document IEQ in a building
103
SWD(2016) 409 final.
104
The importance of indoor air quality: ALDREN TAIL | ALDREN
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before and after renovation. The index is called ALDREN-TAIL, in short TAIL. It
embraces four major components of IEQ, namely:
• thermal environment (T),
• acoustic environment (A),
• indoor air quality (I),
• luminous (visual) environment (L).
2.2.7 SRI indicator
The SRI is intended to raise awareness about the benefits of smart buildings, including
energy efficiency, optimised mix of various energy sources, grid flexibility and user
occupancy experience and wellbeing. A well-coordinated implementation of the two
instruments, EPC and SRI, will allow for complementarity of the information provided.
In particular, the demand-side flexibility indicator of the SRI would allow the buyer to
assess if the building can be managed proactively to participate in the energy market.
Adding a reference to the existence of an SRI assessment in EPCs will also increase
awareness and visibility of the SRI. It could also possibly ease the compilation of both
the EPC and the SRI by drawing on common data. The ALDREN project is working on
the possible integration and presentation of the SRI in EPC schemes.
2.2.8 Electric vehicle charging points
The availability of recharging for e-vehicles is an important information for users and
investors and it is needed for policymakers as there is a lack of data on the number of
recharging points in private buildings. (The reporting obligations under AFID covers
mainly publicly available infrastructure and during the revision of the AFID a lack of
data for recharging stations in residential and non-residential buildings was identified.
According to CA EPBD, 5 MS have included electric vehicle charging points in their
EPCs.
2.2.9 Embedded carbon
Several MS including France, Denmark, Finland, the Netherlands, Ireland and Sweden
have already introduced or are planning to introduce lifecycle GHG in building
regulations. There are also several private initiatives to promote sustainable construction
through different certification schemes, such as from the members of the WGBC105
.
However, there are no examples of national EPC schemes including embodied carbon.
105
World Green Building Council, www.worldgbc.org
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Some stakeholders have suggested that EPC should include lifecycle GHG and that the
recommendations should include measures to reduce lifecycle GHG. Other stakeholders
have warned against overloading the EPC with information which would make it
complex and expensive.
Due to the different situation in MS related to the availability of data for performing
lifecycle-analysis it is proposed that lifecycle GHG is considered mainly in the definition
for new construction (see Annex H) instead of in the EPC. In the EPC the policy option
being considered is to include a reference to if an LCA-calculation has been made or not
(yes or no) or similar, with the possibility of providing links to where more information
can be found.
2.2.10 Historical and actual energy use, total energy use
History and likely outlook of actual energy use would give a better indication of the
evolution of the energy needs of the building. Total energy use can be easily calculated
and included in EPCs in addition to energy use per m2. Stakeholders have stressed that
since EPCs need to provide information that is relevant for the user, total energy is a
relevant indicator because of its link to annual energy costs. A common point mentioned
by several stakeholders is the fact that the certificate presents estimated energy
consumption (asset rating) which frequently is different from the actual energy use
(operational rating). This is caused by the fact that for the estimated energy use a typical
consumption profile is used, which is makes the result behaviour-independent. However,
the discrepancies are also caused by lack of quality of the national energy performance
calculation methodologies in some cases.
2.2.11 Other indicators
Other indicators that have been suggested by stakeholders are energy use per inhabitant,
energy storage, power demand of the building, e-vehicle charging points, accessibility,
asbestos, fire safety, seismic aspects. The list could be made even longer, and different
aspects are important for different stakeholders and different MS depending on for
instance building stock characteristics, climate zone and related legislation. It is therefore
important to allow MS to complement the mandatory indicators with indicators that are
necessary in their country. There are also trade-offs between the quality and
completeness of EPCs and their costs and competences necessary for assessors to be able
to issue EPCs. It is also important to keep the number of mandatory indicators to a
minimum and only use those that are necessary and justified for reaching the EU targets
and are within the scope of the EPBD.
2.2.12 Improve EPC recommendations
All EPCs include as mandatory element a recommendation section to provide tailor-made
advice on how to improve the energy performance of buildings. The majority of EPCs
feature recommendations like this ranging from no-cost measures, like changing
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behaviour, to medium- and high-cost measures, like enforcing thermal insulation or
changing service systems. Individual renovation recommendations are provided for
domestic buildings and commercial establishments in countries like the UK, Austria and
Denmark as additional advice accompanying the EPC reports.
In most cases, standardised recommendations are provided to reduce the cost of a
customised approach. The EPCs themselves have not been effective in driving
renovations. Cost and time constraints often result in EPCs containing poorly tailored
recommendations. Evidence suggests that an on-site visit, including the chance for the
user to interact with the expert, influences the perceived quality and reliability of the
recommendations and the chance that they will be implemented106
.
The following assessment of the EPC recommendations was made in the 2016
evaluation: “After several years of implementation, the contribution of the EPC
recommendations towards stimulating renovation is limited. The global economic
context is certainly a limiting factor but some respondents to the public consultation
challenge any causality between the recommendations that are provided in EPCs and
action taken to upgrade the energy efficiency of buildings. This is backed-up by studies
bringing evidence that EPC recommendations had a weak influence, especially pre-
purchase. While it is required by Article 11 that EPCs must include recommendations for
the cost-optimal or cost-effective improvement of the energy performance of a building
or building unit, and although most Member States have this in place in legislation, little
evidence exist today of whether these recommendations actually lead to increased
renovation rates as intended. This could be due to “lack of requirements for reporting
potential measures that has been done due to the recommendations, or it could be due to
the absence of appropriate accompanying measures and limited trust in the certificates
in some Member States, which leads to little attention being paid to the recommendations
included in the certificates.”
The evaluation also stated that “Certification is sometimes seen as an administrative
burden, and there is limited willingness to pay higher prices for high quality EPCs and it
is generally agreed that the reliability of EPCs must be significantly improved. In
particular, concerns were expressed, although not fully grounded by evidence, with the
quality and possible benefits of systematic recommendations, when compared to their
costs. Today EPCs for single family houses/apartment are typically sold for 85-140€, but
lower prices below 50€ are also observed on the market. Such prices hardly leave the
time to provide tailor made recommendation that could be trusted and taken up by
building owners.”
- During a workshop with EPC projects in April 2021 the following ideas were
raised for improving recommendations in the EPCs: Adding costs, adopt a
106 X-tendo project.
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standardised approach, link the recommendations to goals of the national long
term renovation strategies.
- Link the recommendations to BRP and the building logbook107
.
A specific area that could be improved in the recommendation is the buildings’ readiness
for alternative heating systems. For instance, to assess the feasibility of replacing a gas
condensing boiler with a heat pump requires some additional technical information such
as the peak heat demand, the availability of a heating distribution system in the building,
the availability of mechanical ventilation for exhaust air heat recovery etc. The
recommendation could include a checklist of the readiness to change heating system.
Some other stakeholders have suggested to relax the requirements on measures being
cost-effective and focus more on the energy savings that the measures can provide.
2.3 Enhance the role of EPCs as digital tools
Table G.9: Overview of policy options C1 on enhancing the role of EPCs as digital tools
C1. Enhance the role of EPCs as digital tools
No. Policy action - general Timeline Sub-options
EPCD1 Mandatory national EPC
databases
MS to
implement
by 2025
 Open access at least for rented properties
(in line with GDPR rules),
 Benchmarking capabilities
EPCD2
Mandatory national EPC
databases + Reporting
MS to
implement
by 2025
As in EPCD1 +
 Regular reporting to EC from EPC
databases
 Mandatory public reporting from EPC
databases
EPCD3
Mandatory national EPC
databases + Reporting + Link
with other databases
MS to
implement
by 2025
As in EPCD2 +
 Mandatory regular information transfer from
national EPC databases to Building Stock
Observatory (BSO) with common template
 Link EPC to other digital databases with
building information
2.3.1 Why is it necessary to enhance the role of EPCs as digital tools?
Due to the diversity and disaggregation of the buildings sector, it remains challenging to
acquire good data on building characteristics, energy use, and financial implications of
renovation in terms of cost savings or asset values. This lack of data has negative
consequences on the market perception of the cost-effective energy saving potential of
107 Regarding the logbook it was also observed that while EPC gives a picture of the building at a certain time, the
logbook can be updated. Data in the logbook could be reused for the EPC. Standardised approach to logbooks is
needed. The final output should be easy to understand. Today more stakeholders than before are interested in the
results.
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the EU building stock, on enforcement tracking, on monitoring and evaluation. EPC
registers/databases can be a key instrument for reinforced compliance, improve the
knowledge on the building stock and better inform policy makers and support the
decisions of market players.
2.3.2 Current provisions on EPC databases
As regards the EU legal provisions related to EPC databases, the EPBD does not include
a requirement for MS to implement EPC databases. The EPBD does stipulate the main
functions of EPC databases:
1- “Databases for energy performance certificates shall allow data to be gathered on
the measured or calculated energy consumption of the buildings covered (...)
2- “Least aggregated anonymised data compliant with Union and national data
protection requirements shall be made available on request for statistical and
research purposes and to the building owner.”
While it is not compulsory under EU legislation to establish a centralised EPC register,
almost all Member States have gone beyond the obligations and have set up systems to
collect EPC data at national and regional level. In most cases, the main motivation for
creation of the EPC register, beside buildings data collection per se, was to support the
quality control of the energy certification processes required by the EPBD, Article 18. A
system of data collection can be created at national or regional level according to the
country specific administrative organisation. In 2005 some regions of Austria set up the
firsts EPC register and by 2014 the number of MS that introduced EPC register increased
to 24108
. As of June 2021 all MS have some sort of EPC register. However, this EPC
register may not be centralised. This is particularly the case for MS where the EPC
scheme has an important regional component.
As remarked by REQUEST2ACTION109
investigation, lack of guidance on design and
implementation of EPC registers resulted in a large variety of data available in the
registers across Europe. The main differences are related to: databases format, data
upload method, data accessibility and functionalities of EPC databases and also
development of EPC databases distinct per building typology. The tables below provide
an overview on existing EPC databases data and characteristics available at the moment
in selected EU countries.
The CA-EPBD has collected some information on the type of information contained in
EPC databases:
- 28 databases store different inputs of data related to the EPC
- 11 databases perform the calculation of the EPC inside and register the EPC
108 Source: D2_6.pdf; ALDEREN project
109 https://www.buildup.eu/en/explore/links/request2action-project-6
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- 19 databases are capable of generating an EPC based on the information collected
in the database
- 2 databases collect only a copied version of the EPC (but no data)
In all cases, the EPC database should retain the underlying EPC data, making it easier to
access the building information and to perform verification and quality checks. In order
to do so, the EPC database should store the full information required to produce
information for a given building (allowing for replication of the EPC).
Responsibility for storing the EPCs also varies across Europe. Some countries have
centralised national databases, while others have regional databases (e.g. Italy, Austria),
and/or additional national databases with more limited content than the regional ones.
Figure G.7: Type of data collected in the databases for EPCs – Awaiting approval from the CA EPBD for
publication.110
110
Concerted Action EPBD: https://epbd-ca.eu/. Based on information provided by Member States.
30
29
29
28
27
26
26
25
24
23
20
19
19
15
15
11
6
2
EPC ID
Expert that issued the EPC
Calculated energy consumption
Building ID – Address
TBS – Heating
TBS – Cooling
TBS – Domestic hot water
Recommendations
Building envelope – Opaque
Building envelope – Windows
Economic assessment
TBS – Lighting
TBS – Automation and control
Building ID – Geospatial data
Real energy consumption
Inspection reports on TBS
Other
BIM data
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Table G.10: Number of variables and size of EPC databases – Awaiting approval from the CA EPBD for
publication.111
Member State
Average # of variables per EPC EPC DB size
(in GB)
Size per EPC
(in kB)
Residential Non-residential
Austria 500 600 5 52
Belgium - BR 200 --- 130 592
Belgium - FL 750 750 950 550
Belgium - WL 400 --- 1.300 2.363
Bulgaria 221 221 14 1.881
Denmark 240 240 2.000 3.322
Estonia --- --- 430 14.903
Finland 80 80 64 580
Greece 95 190 2 2
Ireland 70 --- 935 1.134
Italy 100 100 81 77
Lithuania 123 123 0 1
Luxembourg 165 --- --- ---
Malta 100 100 --- ---
Netherlands 150 150 2 0
Portugal 250 300 3.500 2.191
Rep. of Cyprus 31 31 1 13
Romania 30 30 600 629
Slovakia 168 210 2 18
Slovenia 70 80 99 1.483
Spain 150 180 --- ---
Sweden 200 200 196 294
In this context, EPC databases can play a major role in the quality assurance of the EPC
scheme. This is particularly important because if the data is made available for the public
and/or used for other purposes (including policy design), it has to be reliable and
trustworthy.
The information from the EPC databases can be shared with other databases. This has the
benefit of allowing for the information contained in it to be cross checked. For example,
building area can be compared with information in the Land register (to detect errors).
The general public can access many of the databases available, but sometimes the access
is limited for special groups like energy advisors etc. The ways to access databases are
also different across the countries. Sometimes inserting the street plus housing number is
sufficient (e.g. Sweden), while sometimes the complete EPC identification number needs
111
Concerted Action EPBD: https://epbd-ca.eu/. Based on information provided by Member States.
305
to be provided (e.g. Ireland). Furthermore, the amount of data accessible from a public
database is different. In some of the countries a full EPC along with the
recommendations can be accessed, while in the others, the publicly available information
is limited to key values, such as EPC rating class, energy consumption and the full EPC
is only available for the building owner (like in the Netherlands).
Figure G.8: Interoperability – Type of DB/service connected and main flow of data (in our out) for different
MS112
A key element since 2018 is the introduction of the General Data Protection Regulation
(GDPR), which regulates data protection and data privacy. The entry into force of the
GDPR has caused a general decrease in the level of available information as public
bodies were in the process of clarifying the legal basis. A legal requirement to store EPC
information and develop EPC databases would facilitate the gathering and sharing of
information related to building energy performance (Article 6 of GDPR).
Figure G.9: Overview on existing EPC database in EU countries and UK and of the data e collected in the
EPC database register
112
Concerted Action EPBD: https://epbd-ca.eu/. Based on information provided by Member States.
0 2 4 6 8 10 12 14 16
Utilities
Building licensing
Fiscal authorities
One-Stop-Shops
Real state agencies
Financial entities
Renovation roadmaps
Statistical offices
Academia
Cadaster/Land register
Governmental offices
INTO EPC DB
OUT OF EPC DB
306
EPC databases offer opportunities to leverage the instrument’s impact and perceived
usefulness. Some Member States (e.g. Bulgaria, Germany, Greece and Finland) have
EPC registers that store the input data used to calculate the EPC result, while others (e.g.
Denmark, Estonia, Ireland, Netherlands, Portugal) have made the data publicly available.
Denmark made its database public in 1997 and the breadth, quality and accessibility of
the Danish EPC database set an example to other countries and regions. These more
advanced national registers also allow for improved quality control of EPCs, as well as
statistical analyses of the building stock.
Figure G.10: Examples of information contained in EPC and EPC databases113
113
X-tendo project.
307
2.3.3 Policy options to enhance the role of EPCs as digital tools
It is acknowledged that high quality data on the building stock is needed, and that this
data could be partially generated by EPC registers/databases that practically all Member
States are developing and managing.
BPIE concluded that strengthening energy performance certificates could create multiple
benefits. In implementing the EPBD, EU Member States have established national EPC
schemes. Improved and better-aligned EPCs could be beneficial to many strategic areas.
They could include information on the carbon performance and provide information on
renovation costs and thereby help to better capture trigger points. They could also be a
dynamic data repository once digitalised, online and accessible, and prove compliance
308
with policies (e.g. with mandatory minimum performance requirements; proof of
eligibility for financial support, etc.)114
.
The abovementioned study also concludes that available digital technology should be
rolled out to enable promising approaches to support the creation of a sustainable built
environment.
Digital technology development is advanced e.g. in reaping flexibility gains from the
demand side, but it is not yet fully exploited for the creation of a sustainable built
environment. For example, while BIM is ready to be used in constructing new buildings,
it is not yet mainstream in most markets, only a few solutions exist for the renovation of
existing buildings and the cost for BIM remains a barrier in some markets. New
opportunities to utilise digital innovations to decarbonise the existing building stock are
still not fully explored, due to path-dependency or the remaining profitability of
traditional practices. Better data collection and the use of digital solutions (e.g. making
use of blockchain technology, digital building logbooks, or at least improved and web-
accessible EPC databases) can steer the reorganisation and optimisation of construction
and renovation processes. The availability of robust data enables new business models
and better-targeted building renovation policies. Subsequently, building renovation could
be organised along with priority areas, compliant with long-term targets and delivered at
a faster pace.
The options to strengthen the accessibility of data include that EPC databases should be
mandatory. An EPC database has different potential uses, such as data mining for
country/sector reports, interoperability with other databases and publication of market-
relevant information, to different stakeholders: building owners, construction companies,
real estate actors, public authorities, etc. In this context, the quality assurance of the EPC
databases can contribute significantly to improving trust in EPC data.
The main function of EPC databases is the storage of EPCs and of the underpinning data
which makes these a very important source of building stock information, especially if
relevant parts of the information is made available to stakeholders such as building
owners, construction companies, real estate actors, public authorities etc. When dealing
with the question of how the performance of EPC databases may be improved, numerous
topics can be highlighted. These usually include aspects such as how to set up an EPC
database, how to gather the data, how to establish the interoperability of different
databases, and how to use data and extract relevant insights from it. Last but not least,
ensuring the reliability and accuracy of the information stored in the database through
quality assurance processes and data verification remains a key requirement common to
all EPC schemes. Current practices of setting up and operating EPC databases show
significant differences among EU Member States in terms of the above requirements.
114
BPIE, Lessons learnt study.
309
3- RELEVANT EU-FUNDED RESEARCH, INNOVATION AND COORDINATION AND SUPPORT
ACTION PROJECTS ADDRESSING IMPROVEMENTS TO EPCS.
1. U-CERT (2019-2022) aims to introduce a next generation of user-centred Energy
Performance Assessment and Certification Scheme that includes new indicators for
asset rating, operational rating and smart readiness, allowing to value buildings in a
holistic manner. The scheme is based on CEN standards and supported by an EU-
wide training and certification process for building professionals. Moreover, the
project wants to encourage innovative solutions, including the SRI, and support end-
users in decision-making, e.g. with a view to deep renovation. https://u-
certproject.eu/
2. X-tendo (2019-2022) aims to support public authorities in the transition to a next-
generation of EPC-schemes. In this, the project creates a knowledge hub with
innovative EPC features. These features are for example innovative technical
elements for the EPC assessment methodologies; new indicators, such as Smart
Readiness, Comfort, Outdoor Air Pollution, Real Energy Consumption, District
Energy; and approaches to maximise the value of EPC data, e.g. by collecting and
using them in EPC Databases, Building Logbooks, as part of Financing Options and
Offers and for One-stop-shops. https://x-tendo.eu/
3. QualDeEPC (2019-2022) aims to enhance the quality and cross-EU convergence of
Energy Performance Certificate schemes, and to strengthen the link between EPCs
and deep renovation. In this, the project will work on EU-wide convergence of the
building assessment and the issuance, design, and use of quality-enhanced EPCs as
well as on the consistency of the recommendations for building renovation. A key
corner stone in this strategy is the QualDeEPC Network, a "Community of Interest",
gathering experienced practitioners, researchers and standardisers from the national
and EU-level. https://qualdeepc.eu/
4. BuiltHub (2020-2024) aims to put in place a robust web-based platform that allows
for collecting and extracting building performance and characteristics related data,
with the overall objective to map and characterise the EU building stock. In this, the
platform will complement existing repositories, such as the EU Building Stock
Observatory, and will offer a hub for an active community of data users. The
platform will be based on a standardised building data management approach. One
important rationale of the platform is to contribute to the design of more effective
renovation programmes. https://builthub.eu
5. D^2EPC (2020-2023) aims to develop a calculation methodology for a novel set of
energy, environmental, financial and human comfort/wellbeing indicators. It has a
clear focus on digitalisation, large-scale data collection, development of digital twins
and SRI indicators. One of the main outputs of the project is a digital platform for
issuing and updating EPCs, integrating GIS and user-centred recommendations,
benchmarking/forecasting of buildings’ performance and verification services.
310
Standardisation/certification bodies as well as a member of the CA EPBD inside the
consortium help to ensure the robustness of the developed approach.
https://www.d2epc.eu
6. EPC RECAST (2020-2023) aims to develop a scheme for next generation of Energy
Performance Assessment and Certification that focuses on existing residential
buildings, combined with renovation roadmaps. The project pays specific attention to
the needs of end-users, building owners and EPC assessors, as well as to comfort
levels, and provides personalised and tailor-made recommendations on renovation
options and related costs. https://epcrecast.wordpress.com/
7. ePANACEA (2020-2023) aims to develop a “Smart Energy Performance Assessment
Platform” (SEPAP) with 3 modules: a smart and data driven energy performance tool
using inverse modelling and operational data; a simplified monthly based calculation
aligned to ISO52016; and an advanced hourly simulation model aligned to
ISO52017. It will develop a “Decision Matrix” to assist end-users to select the
appropriate module(s) for their use. The project includes five Regional Exploitation
Boards covering EU27 + UK + NO. https://epanacea.eu/
8. E-Dyce (2020-2023) aims to develop a dynamic certification of buildings, following
real time optimization of energy consumption and comfort, and linking it to
renovation roadmaps. It combines smart technologies with low-tech solutions and the
free running potential of buildings, which should allow to extend the scope of EPC
labelling towards historical buildings and buildings in the Mediterranean that rely on
natural ventilation. The project has a strong focus on end-user behavioural change
and provides tenants and building operators with feedback on building performance
and recommendations how to adapt behaviour to increase energy performance.
https://edyce.eu/
9. EUB SuperHub (2020-2023) will develop a scalable methodology to view, assess
and monitor buildings throughout their lifecycle, including for aspects such as
embedded energy, costs etc. It will contribute to improving the certification process
and promote the use of harmonised indicators in national and regional EPCs, towards
allowing to better evaluate the impact of transnational policies, such as structural
funds and public building renovation, in the EU. EUB SuperHub will tie the
fragmented assessment and certification schemes across Member States together
through a digital one-stop shop platform.
10. CrossCERT (2021-2024) aims to create a product testing methodology for new EPC
approaches that will improve accuracy, usability and homogeneity of EPCs across
Europe while ensuring people-centric designs. The project will organise cross-testing
of current EPCs and new concepts among energy authorities in 10 European
countries and establish a repository of test cases. Moreover, the project provides
guidelines for the training of certified EPC issuers and works towards a better
integration of next-generation EPS with energy audits, logbooks and Building
311
Renovation Passports as well as with the needs of investors and one-stop shops-
initiatives. The project will engage with networks towards a better endorsement and
outreach.
11. TIMEPAC (2021-2024) will review existing barriers in the certification process
(technical, methodological, legislative) and propose improvements to existing EPC
schemes, including for the links between EPC databases and other data sources, such
as BIM, cadastre, socioeconomic data, BACS, etc. Moreover, it will support
standardised procedures for data collection, contribute to the transformation of static
EPCs into dynamic ones considering SRI-related aspects and use EPC databases and
other data sources to assess the impact of building renovation scenarios. Finally, the
project will provide elements to improve the training materials for professional
certifiers.
12. iBRoad2EPC (2021-2024) builds on the results of the iBRoad project (2017-2020)
which developed a model for the Building Renovation Passport. iBRoad2EPC aims
to bridge the Building Renovation Passport with the EPC. In this, it will improve and
expand its format and scope to consider additional features and new target groups and
sectors, notably multi-family and public buildings. The project will assess the
potential and practicability of merging the EPC with the Building Renovation
Passport and adapt the iBRoad concept accordingly. The validity of the iBRoad2EPC
will be tested in six countries and complemented by training programmes for energy
auditors and EPC issuers.
13. EPC4EU data model, is a tool for the harmonisation and the interoperability of EPC
(Energy Performance Certificates) databases across Europe.
14. ALDREN – is an EU performance rating on EPCs alongside national EPC rating. An
EU energy rating for offices and hotels has been developed. Set of indicators to high-
light non-energy benefits of building renovation (health and wellbeing, SRI, market
value, financial risks etc.).
15. RENOVALUE – The project developed a training toolkit for property valuation
professionals on how to factor energy efficiency and renewable energy issues into
valuation practices, understand the impact of building performance and property
values and advise their clients accordingly.
16. RE-VALUE –was a project to develop international guidance for property
appraisers, incorporating the collection and easy analysis of relevant evidence. The
ambition was to encourage valuers to reflect the value of energy efficiency (EE), in
their valuations of social and private housing stock. REVALUE focused primarily on
revising and strengthening the requirements of due diligence and reporting in relation
to the energy efficiency and sustainability characteristics of residential properties.
The project included provision for the creation of targeted training material for
valuers.
312
Annex H: Zero Emission Buildings
1. OVERVIEW ON NZEB REQUIREMENT AND THEIR CURRENT IMPLEMENTATION IN
MEMBER STATES
Pursuant to Article 9 of the Energy Performance of Building Directive 2010/31/EU
(EPBD), all new buildings must be nearly zero-energy buildings (NZEB) since the
beginning of 2021, while all new public buildings already must be NZEB since the
beginning of 2019. 115
The requirement for all new buildings to be NZEB was introduced in 2010 and aimed at
the time at setting a 'future-proof' vision for the building sector and mobilise the market
and stakeholders accordingly, towards a long-term vision and a higher ambition
compared to the progressive tightening of the minimum energy performance
requirements through the cost-optimal process.
Figure H.1: Share of NZEB in the total EU construction market, JRC116
A NZEB is defined as a building “with a very high energy performance, where the nearly
zero or very low amount of energy required should be covered to a very significant extent
by energy from renewable sources produced on-site or nearby” (Article 2(2) EPBD).
115
NZEB standards were defined by EU Member States at different points in time. Most Member States
introduced the definitions well before the date of application of the NZEB obligations (2021 for all new
buildings and 2019 for all new public buildings). Some Member States, ahead of the actual implementation
and based on the second round of the cost-optimal calculations (in accordance with Article 5 of the EPBD),
decided to amend the definitions, and some others postponed the introduction of NZEB requirements due
to the COVID-19 pandemic.
116
JRC report: Monitoring Member States progress towards Nearly Zero-Energy Buildings (NZEBs),
under development.
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
PL SE RO UK CZ HU BG MT SK IE HR ES PT SI FI NL BE FR IT DE EL DK LV EE LT CY AT LU
313
While the EPBD provides the NZEB criteria that must be defined (including a numerical
indicator of primary energy use expressed in kWh/m2.y), it allows a high degree of
flexibility to Member States to reflect national, regional or local conditions in the
national NZEB definitions, such as targets, climate, construction methods and other
factors. The heterogeneity of NZEB levels also reflects different calculation
methodologies for the energy performance, different cost-optimal levels and building
typologies, while the treatment of on-site and off-site renewable energy and the
determination of primary energy factors can also lead to significant differences.
For that reason, the definitions of NZEB significantly diverge across Member States for
different building typologies. The differences relate to the metrics used, the extent to
which residual energy requirements are covered by renewable energy, the establishment
of additional requirements, etc. 18 Member States have defined an EPC class which is
equivalent to NZEB requirements, while the NZEB definition in 16 Member States
includes an obligation for a minimum share of energy demand to come from renewable
sources.
While NZEB levels are a requirement for new buildings, in some Member States, the
same or similar requirements are applied to the renovation of existing ones. Several
Member States have in fact also defined NZEB levels for existing buildings undergoing a
major renovation (with 10 Member States having exactly the same requirements for new
and existing buildings).
The number of NZEBs in Europe has increased significantly in the last decade. The share
of NZEB in the total construction market has increased during the period 2012-2016 in
EU (from 14% in 2012 to 20% in 2016, on average). Almost 1.25 million buildings were
built or renovated to NZEB (or similar) levels from 2012 to 2016, mostly residential.117
Besides the establishment of technical regulatory measures to define NZEBs, national
policies have also been set up in several Member States to stimulate the uptake of
NZEBs, through regulatory measures, followed by financial and fiscal measures. Most of
the measures target the envelope and heating systems. The NZEB requirements are also
well addressed in the Long-Term Renovation Strategies, in which several Member States
set targets for retrofitting to NZEB levels and deep energy renovations.
It has been assessed that on average across the EU the current NZEB requirements are
currently 70% more ambitious than the national minimum energy performance
requirements for new buildings in place in 2006. This was achieved through progressive
legislative steps at all levels (European, national, regional) over the last 15 years. Figure
117
Comprehensive study of building energy renovation activities and the uptake of nearly zero-energy
buildings in the EU, 2019
https://ec.europa.eu/energy/studies_main/final_studies/comprehensive-study-building-energy-renovation-
activities-and-uptake-nearly-zero-energy_en
314
H.2 shows the main regulatory steps for some countries in terms of maximum primary
energy demand for the average residential building (per type, dimension and climate).
Figure H.2: Improvement of minimum energy performance requirements for residential buildings in some
Member States, since the entry in force of the EPBD118
The development of NZEB definitions has been often carried out by Member States in
parallel with the calculation of cost-optimal levels pursuant to Article 5 of the EPBD
(carried out twice, in 2013 and 2018). The cost-optimal framework allows Member
States to identify the lowest total costs over a building’s lifetime by comparing different
energy efficiency and renewable energy measures and to define NZEB requirements
accordingly. As new technologies are deployed in the market and related costs are
reduced, each five-year cost-optimality cycle presents an opportunity to amend energy
performance codes and close the gap to cost-optimal levels.
Table below presents an overview of the different NZEB levels based on national
definitions, noting that in many cases different assumptions and estimations were applied
aiming to provide a comparable framework. Indicatively, one can estimate that NZEB
energy performance levels vary from 20 kWh/m2
.y (Belgium Flanders) to 132 kWh/m2
.y
118
JRC report: Monitoring Member States progress towards Nearly Zero Energy Buildings (NZEBs), in
progress.
0
45
90
135
180
225
01-2004
10-2006
07-2009
04-2012
12-2014
09-2017
06-2020
03-2023
Primary
energy
demand
[kWh/m2y]
DE
DK
ES
FR
IT
NL
315
(Estonia) in new residential buildings, and 30 kWh/m2
.y (Belgium Flanders) and 176
kWh/m2
.y (Malta) in new non-residential buildings.119
Table H.1: Estimations for NZEB levels per Member State based on national definitions or other sources,
JRC
NEW BUILDINGS
(kWh/m2
.y)
EXISTING
BUILDINGS
(kWh/m2
.y)
RES EPC Specificities
Residential
Non-
residentia
l
Residential
Non-
residentia
l
AT 41 84 68
BE-BRU 45 85 55 100
BE-FLA 20 30 20
15 kWh/m2
.y
(residential),
20 kWh/m2
.y
(non-
residential)
without RES
share
BE-WA 85 A
BG 43 63 43 63 55% A+
without RES
share
CY 75 94 75 94 25% A
CZ 80 80
DE 40 75 65
KWh efficiency
house 55/70
DK 37 51 A
EE 132 85 157 136
A for new,
C for existing
without
appliances share
EL 37 92 75 138
15-60%
depending on
building type
A for new,
B+ for
existing
ES 31 112 31 112 50%
Average of 6
different
climatic zones
values
119
JRC report: Monitoring Member States progress towards Nearly Zero Energy Buildings (NZEBs),
under development. To be noted that the figures in many cases are estimated based on assumptions (e.g.
averages for different building typologies and climatic zones, calculations based on reference buildings,
consideration of energy uses, etc.) as the national definitions cannot be directly compared.
316
FI 94 85 94 85 B
Residential:
Average of
different types
of detached
houses
FR 60 110 100 150
Same as cost
optimal since
2014
HR 28 21 28 21 30% A+
Average of
continental-
coastal, without
RES share
HU 100 90 100 90 25% BB
Residential:
without lighting,
non-residential:
with lighting
IE 33 35 100 99
20% (new
residential)
A2 (new
residential),
A3 (new
non-
residential),
B2 (existing
residential)
IT 35 117 35 117 50%
Average of 6
different
climatic zones of
IT
LT 60 80 50% A++
LU 45 60 45 60
LV 95 95 95 95 A
MT 56 176 56 176
25%
residential
20% non-
residential
Without RES
share
NL 30 28 30-50%
Without RES
share
PL 75 107.5 75 107.5
EP = EPH+W +
ΔEPC + ΔEPL
PT 35 130 55 140
50%
(residential)
A
RO 78 40 78 40 30%
Values for the
most
representative
climatic zone
according to RO
CA report
Without RES
share
SE 90 70 A-C
SI 70 55 95 65 50%
A1, A2, or
B1
SK 54 61 54 61 A0
Without RES
share
317
Source: JRC
Comparing the NZEB definitions (where possible) with the benchmark provided in the
Commission’s Recommendation120
for different climate zones reveals that the NZEB
values for energy performance (kWh/m2
.y) in most Member States exceed the
recommended EU values in both residential (single family houses) and non-residential
buildings (offices).
Figure H.3: Comparison of national NZEB values (kWh/m2.y) for single family houses and offices with the
Commission’s recommendations benchmark range, BPIE121
120
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32016H1318&from=EN
121
BPIE, 2021: Nearly Zero: a review of EU Member State implementation of new build requirements
https://www.bpie.eu/wp-content/uploads/2021/06/Nearly-zero_EU-Member-State-Review-
062021_Final.pdf.pdf
318
Figure H.4: Indicative comparison of the national NZEB definition for single-family houses and the values in
the Commission’s Recommendations, JRC122
Almost a decade after the establishment of the NZEB concept in the European legislative
framework and several years after the establishment of the relevant national measures,
the NZEB standards, which are the current construction standards for new constructions,
can be reached using appropriate technologies and best practices, combining high
efficient solutions to minimise the energy demand for building operation and supplying
122
JRC report: Monitoring Member States progress towards Nearly Zero Energy Buildings (NZEBs), under
development, based on national long-term renovation strategies, Concerted Action EPBD reports,
clarifications by Member States and other sources. It has to be noted that many Member States do not
include a specific indicator of primary energy use (in kWh/m2.y) as part of the definition of NZEB
requirements, but the definition is based on minimum performance levels as compared to reference
buildings.
319
the remaining demand to a large extent with renewables produced onsite (such as PV,
solar thermal, biomass, heat pumps) together with building automation control systems
(BACS).
The most implemented solutions rely on both passive (e.g. envelope insulation, solar
gains, natural ventilation, daylighting, thermal mass, night cooling), and active (e.g.
mechanical ventilation with heat recovery, heat pumps or district heating, BACS)
measures. Indicatively, U-values123
are found between 0.15 – 0.20 W/m²K for walls, 0.10
– 0.25 W/m²K for roofs and approximately 0.85 – 1.0 W/m²K for windows. For heating,
the most widespread measures are heat pumps and district heating. The minimum
contribution from renewable sources varies per Member State and presents a wide range
of RES both in terms of share of RES and the technologies used. PV, heat pumps, solar
thermal and biomass are the most commonly implemented technologies. In some cases,
the share of renewable energy is not quantified.
As mentioned before, reaching NZEB levels is required for the construction of new
buildings and in many case for existing buildings too. The analysis of different case
studies developed before the actual entry into force of the NZEB requirements, showed
that investment costs were on average 11% higher compared to conventional
constructions124
. However, over the last years significant cost reductions in key NZEB
technologies could be observed, especially for renewable energy solutions, while in some
cases they benefit from financial incentives. This will further reduce the gap. It also has
to be noted that if the total life-cycle costs (including also operational energy costs) are
considered, NZEBs are already cost-effective.
For instance, over the past decade, the falling costs of PVs and the competing cost of
generated electricity made this technology more attractive. In 2020 over half of Europe’s
PV capacity was installed on buildings125
. PVs are further expected to show the highest
cost decrease, between 41% and 56% towards 2050, while the costs of solar thermal are
expected to decrease between 22% and 51% towards 2050. Stationary batteries are
foreseen to have a substantial cost reduction potential of around 65% until 2050. Some
Member States also give incentives for the wider use of biomass boilers, which could
potentially reduce their cost by 10-20% between now and 2050. The cost of heat
recovery systems is also expected to decrease significantly (by 35-60%) between
now and 2050.126
123
The thermal transmittance (U-value) of a building element is the heat flow rate in a steady state divided
by area and by the temperature difference between the surroundings on each side of a system. The units of
measurement are W/m²K.
124
https://epbd-ca.eu/wp-content/uploads/2018/04/CA-EPBD-CT1-New-buildings-NZEBs.pdf
125
International Energy Agency, 2020 https://www.iea.org/reports/renewables-2020/solar-pv
126
JRC report: Monitoring Member States progress towards Nearly Zero Energy Buildings (NZEBs), under
development.
320
The concept of NZEB has also developed and has been applied in pilot projects at district
level, shifting the focus from the single building to the district scale, creating Net Zero-
Energy District (NZED).127
The concept of NZEB has received support by 84% of the respondents to the public
consultation. However, many stakeholders pointed out that the current definitions of
NZEBs are not ambitious enough to contribute towards a fully decarbonised building
stock. In addition, definitions need to be harmonised across EU Member States.
Stakeholders also raised the issue of future updates of the NZEB definition and its
interplay with zero emission buildings. Some argue that the NZEB definition should be
replaced with a definition of energy positive buildings, which should be based on energy
demand and focus on life-cycle emissions performance, indicate a minimum share of
renewable energy and make a link with EPC classes.
2. DEFINITIONS OF ZERO EMISSION BUILDINGS
2.1. OVERVIEW OF LITERATURE/INTERNATIONAL DEFINITIONS
The buildings sector is a major source of greenhouse gas (GHG) emissions and one of the
hard to decarbonise due to its multi-stakeholder and heterogeneous structure. To meet the
longer-term climate goals, it is necessary to significantly reduce the operational energy
consumption, which represents the biggest part of the GHG emissions of the current
building stock, and to start addressing buildings’ full life cycle GHG emissions.
The concepts of low-energy and low-carbon buildings have been comprehensively
addressed over the last decades and several low-energy and low-carbon definitions and
concepts have been developed and applied worldwide.
Table H.2: Low-energy and low-emission buildings definitions around the world (non-exhaustive list)
Name Definition Region
Nearly zero-
energy
A building that has a very high energy performance
and the nearly zero or very low amount of energy
required should be covered to a very significant extent
by energy from renewable sources, including energy
from renewable sources produced on-site or nearby
European Union
127
For more information see (a) JRC report: Enabling Positive Energy Districts across Europe: energy
efficiency couples renewable energy (2020), (b) JRC report: From nearly-zero energy buildings to net-zero
energy districts (2019).
321
Passive
house
A Passive House is a building that fulfils the
following criteria:
1. The space heating energy demand ≤15
kWh/m2
/year (roughly the same for space cooling
demand in warm climates)
2. Primary energy demand, total energy to be used for
all domestic applications must be ≤ 60 kWh/m2
/year
3. Airtightness, ≤0.6 air changes per hour at 50 Pa
pressure both outwards and inwards
4. Thermal comfort must be met for all living areas
during winter as well as in summer, with not more
than 10 % of the hours in a given year over 25 °C
Developed by Passivhous
Institut128
, now
international with some
variations
Zero carbon
ready
A zero‐carbon‐ready building is highly energy
efficient and either uses renewable energy directly, or
uses an energy supply that will be fully decarbonised
by 2050, such as electricity or district heat. This
means that a zero‐carbon‐ready building will become
a zero‐carbon building by 2050, without any further
changes to the building or its equipment.
Zero‐carbon‐ready buildings should adjust to user
needs and maximise the efficient and smart use of
energy, materials and space to facilitate the
decarbonisation of other sectors.
International Energy
Agency129
Zero
emission
A zero emission building produces enough renewable
energy to compensate for the building's greenhouse
gas emissions over its life span which depends on
how many phases of a building's lifespan are counted
in. The 5 most important definitions, in rising
ambition level, are:
ZEB – O: The building's renewable energy
production compensates for greenhouse gas emissions
from operation of the building.
ZEB – O + EQ: The building's renewable energy
production compensates for greenhouse gas emissions
from operation of the building and the energy use for
equipment (plug loads).
ZEB – OM: The building's renewable energy
production compensates for greenhouse gas emissions
from operation and production of its building
materials.
ZEB – COM: The building's renewable energy
Norway, The Norwegian
Research, ZEB Centre130
128
https://passivehouse.com/02_informations/02_passive-house-requirements/02_passive-house-
requirements.htm
129
IEA 2020: Net Zero by 2050. A Roadmap for the Global Energy Sector
130
http://zeb.no/index.php/en/
322
production compensates for greenhouse gas emissions
from construction, operation and production of
building materials
ZEB – COMPLETE: The building's renewable
energy production compensates for greenhouse gas
emissions from the entire lifespan of the building.
Building materials – construction – operation and
demolition/recycling.
Low-
emissions
and positive
energy
Powerhouse Paris Proof is a new standard based on
the Paris Agreement’s 1.5 degree target. The standard
lists maximum and total CO2 emissions per square
metre, including the construction phase, energy in
operation, materials and disposal. The building
follows the Futurebuilt’s energy positive buildings
definition and shall during its lifetime produce more
energy than it uses for materials, production,
operation, renovation and demolition.
Powerhouse Norway131
Net zero
emission
The overall goal of a net zero emission building
(NZEB) is that all emissions related to the energy use
for operation as well as embodied emissions from
materials should be offset by on-site renewable
energy generation. The addition of the word “net”
indicates that energy can be exported from and
imported to the building, and that the net energy or
emission balance is calculated over a specific period
of time, usually a year. In practice, this usually means
that the building is connected to the energy grid.
Good et al., 2014132
Zero
emission
house
(ZEH)
A ZEH is a detached residential building that does not
produce or release any CO2 or other greenhouse gases
to the atmosphere as a direct or indirect result of the
consumption and utilisation of energy in the house or
on the site
Australia133
131
https://www.powerhouse.no/en/what-defines-the-powerhouse-standard/
132
Good, C., Georges, L., Kristjansdottir, T., Houlihan Wiberg, A., Hestnes, A.G., 2015. A Comparative
Study of Different PV Installations for a Norwegian NZEB Concept, in: Proceedings of the EuroSun 2014
Conference. Presented at the EuroSun 2014, International Solar Energy Society, Aix-les-Bains, France, pp.
1–10. https://doi.org/10.18086/eurosun.2014.20.03
133
Riedy, C., Lederwasch, A., Ison, N., 2011. Definition of zero emission buildings, Review and
recommendations: Final report, DOI: 10.13140/RG.2.1.4470.5520
323
Zero net
CO2
emissions
(also zero
carbon, zero
net carbon)
For new buildings and major renovations - “When the
amount of carbon emissions associated with a
building’s product and construction stages up to
practical completion is zero or negative, through the
use of offsets or the net export of on-site renewable
energy.”
For all buildings in operation - “When the amount of
carbon emissions associated with the building’s
operational energy on an annual basis is zero or
negative. A net zero carbon building is highly energy
efficient and powered from on-site and/or off-site
renewable energy sources, with any remaining carbon
balance offset.” The Energy Use Intensity target
defined includes all of the energy consumed in the
building (regulated and unregulated).
United Kingdom134
Carbon
zero, carbon
positive
Carbon zero buildings are defined by the Australian
Sustainable Built Environment Council (ASBEC) as
having no net annual emissions from direct fuel
combustion (e.g. burning natural gas) and electricity
use from operation of building incorporated services.
Carbon positive moves beyond carbon zero by
making additional ‘positive’ or ‘net export’
contributions by producing more energy on site than
the building requires and feeding it back to the grid.
Australia135
Zero Energy
Ready
Homes
100% reduction in net operational energy use
compared to the HERS Reference Home and fulfil a
set of standard criteria (such as Energy Star).
United States136
Net zero
energy
A net-zero energy home is capable of producing, at
minimum, an annual output of renewable energy that
is equal to the total amount of its annual
consumed/purchased energy from energy utilities.
Canada137
, International
Net zero site
energy
Produces at least as much energy as it uses in a year,
when accounted for at the site.
National Renewable
Energy Laboratory
(US)138
Net zero
source
energy
Produces at least as much energy as it uses in a year,
when accounted for at the source. Source energy
refers to the primary energy used to generate and
National Renewable
Energy Laboratory (US)
134
Government Property Agency, 2020: Net Zero and Sustainability: Design Guide – Net Zero Annex
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/925231/
Net_Zero_and_Sustainability_Annex__August_2020_.pdf
135
https://www.yourhome.gov.au/housing/carbon-zero-carbon-positive
136
https://www.energy.gov/eere/buildings/guidelines-participating-doe-zero-energy-ready-home-program
137
https://www.nrcan.gc.ca/energy-efficiency/energy-efficiency-homes/buying-energy-efficient-new-
home/netzero-future-building-standards/20581
138
Torcellini, P., Pless, S., Deru, M., 2006. Zero Energy Buildings: A Critical Look at the Definition
324
deliver the energy to the site.
Net zero
energy
emissions
A net-zero energy emissions building produces at
least as much emissions-free renewable energy as it
uses from emissions-producing energy sources.
National Renewable
Energy Laboratory (US)
Carbon
neutral
Zero net greenhouse gas emissions United States,
Australia, International
Climate
positive
Reduce amount of on-site CO2 emissions to below
zero, i.e. generate more renewable energy than total
net greenhouse gas emissions, recycle and export
more water than used and reuse, reduce and recycle
more waste than is generated.
International
Nearly zero-/Net zero-/positive-energy building definitions are focused mainly on the
reduction of the operational energy demand through increasing energy efficiency and use
of renewable energy carriers. These energy-centred definitions are due to the fact that
energy demand is high especially in old buildings and can be reduced with energy
efficiency measures. Its reduction generates benefits from the security of supply and
energy expenditure perspectives. At the same time, zero-energy buildings also deliver
significant reduction of the GHG emissions since primary energy use of a building
accurately reflects the depletion of fossil fuels and is sufficiently proportional to CO2
emissions.139
Stricter energy performance requirements introduced in the building codes
over the last two decades led to a decrease of the energy demand and the proportion of
life cycle GHG emissions that results from operational energy is diminishing. Therefore,
the reduction of the overall life cycle emission became progressively more relevant
Net zero emission/carbon neutral definitions target instead the reduction of CO2 or GHG
emissions through energy efficiency and onsite renewable energy (over-)compensation of
the operational or whole lifecycle emissions of the building.
When defining a zero emission building, there are several criteria that should be taken
into account, such as:
 System boundaries over the building’s emissions lifecycle
 Emission reduction options
 Emission balance boundaries (net, economic, technical)
139
B. Atanasiu, T. Boermans, A. Hermelink, S. Schimschar, J. Grozinger, M. Offermann, K. Engelund
Thomsen, J. Rose, S. O. Aggerholm: Principles for nearly zero energy buildings. Paving the way for
effective implementation of policy requirements. BPIE 2011.
325
 “Energy efficiency first” principle
 Methodological boundaries (onsite, offsite, renewables)
 Timeframe over which the building’s emission impact is assessed
 Indicators and metrics
 Spatial boundaries (building, neighbourhood, city, region)
Each of these criteria will be examined in the following sections.
2.2. SYSTEM BOUNDARIES OVER THE BUILDING’S EMISSIONS LIFECYCLE.
Generally, the system boundary may limit to the operational (in use) part or go beyond,
over the lifecycle of the building (including the embodied emissions). So far, the focus is
only on the operational phase of a building, specifically, on the regulated energy use
(heating, cooling, ventilation, domestic hot water preparation, built-in lighting and
auxiliary energy) as in the case of the NZEB definition. The NZEB definition leaves
aside the un-regulated energy uses (such as elevators, escalators, appliances, IT
equipment) which could be a significant source of greenhouse gas emissions and could
be further included into the system’s boundaries. The effects of some of these un-
regulated energy uses (e.g. computers) are only considered with regards to their effects
on the internal environment (e.g. cooling needs). The inclusion of the energy use for the
provision of drinking water as well as the emissions associated with building-induced
mobility was recently discussed in several studies140
.
The life cycle emissions consider additionally the greenhouse gas emissions from before
and after the operation phase of a building. It includes the extraction and processing of
the raw materials, manufacturing of materials and equipment, transport to the site, the
construction process of the building, the installations of equipment as well as the end-of
life (e.g. demolition) process and transport and disposal of waste141
. Furthermore, the
maintenance, repair and replacements is also included. Special attention should be given
to the embodied emissions associated to replacement since many technical systems
(including onsite renewable systems) require replacements during the lifetime of a
building which could represent additional embodied emissions comparable with those of
the construction phase142
.
140
D’Agostino, D., Mazzarella, L., 2019. What is a Nearly zero energy building? Overview,
implementation and comparison of definitions. J. Build. Eng. 21, 200–212.
https://doi.org/10.1016/j.jobe.2018.10.019
141
Idem Riedy
142
Satola, D., Balouktsi, M., Lützkendorf, T., Wiberg, A.H., Gustavsen, A., 2021. How to define (net) zero
greenhouse gas emissions buildings: The results of an international survey as part of IEA EBC annex 72.
Build. Environ. 192, 107619. https://doi.org/10.1016/j.buildenv.2021.107619
326
Figure H.4: system boundaries of a building
The inclusion of the embodied emissions into the system boundaries definition provides a
complete picture of the greenhouse gas emissions during the life cycle of building.
However, calculating the embodied emissions is new to many projects and a complete
and more accurate evaluation of the embodied emission may prove challenging,
especially in the case of existing buildings for which data about the incorporated
materials may not be anymore available. However, databases of average or product
category data are usually available in the absence of a full Environmental Product
Declaration from the manufacturer. Based on EN 15978 (CEN 2011), system boundaries
are defined by a modular structure of the operational emissions which should provide
transparency regarding the covered operational energy use in the emissions calculation
(figure H.4)143
.
According to the system boundaries definition, zero-emission buildings can be structured
in several categories according to the extent they cover one or more phases of the
building lifecycle (as shown in figure H.5 below):
143
Lützkendorf, T., Frischknecht, R., 2020. (Net-) zero-emission buildings: a typology of terms and
definitions. Build. Cities 1, 662–675. https://doi.org/10.5334/bc.66
327
 Zero carbon building, which includes the building emissions over the
use/operational phase (e.g. Space heating, cooling, etc.)
 Zero carbon occupied building, which includes the building related emissions
and the occupant emissions (e.g. appliances, other not regulated) ;
 Zero carbon embodied, occupied building, which includes the embodied
emissions on top of the above;
 Zero carbon life cycle, which includes the emissions over all building phases,
i.e. the above plus renovation and deconstruction emissions
Figure H.5: Conceptual breakdown of a building life cycle (adapted from the source)
2.3. EMISSION REDUCTION OPTIONS
The existing concepts of “zero-emission buildings” distinguish several emission
reduction options, the most common ones are absolute zero-emission and net zero-
emission.
Both options may either be limited to the operational emissions or cover the lifecycle of
the building.
An absolute zero-emission building should have no emission associated to fuel or
electricity to cover at all times the energy use in the operational phase or over the full
328
lifecycle. When considering the whole life cycle emissions, the building materials should
be from zero emission supply sources and the transport of the materials and the
construction process should be characterised by no emission. Although absolute zero
emissions during the operation phase of buildings would be technically possible with
comprehensive energy efficiency measures and appropriate on-site renewable energy, it
is not possible or at least it is very challenging to reach absolute zero life cycle emission
buildings.
A net zero emission approach offers more flexibility since it implies a zero balance of
the greenhouse gasses emissions over a period of operational time (typically a year) or
over the lifecycle. In practice, this usually means that the building is very efficient and
compensate the emissions by onsite over generation of renewable energy. Most net zero
emission definitions allow for grid connection and count on it to counterbalance the
emissions.
2.4. EMISSION BALANCE BOUNDARIES
In literature there are two main approaches to identify the allowable emissions
reduction144
.
- To focus mainly on the reduction of the energy needs of the building through
energy efficiency measures as the main step in achieving zero emissions in
buildings (in line with the energy efficiency first principle145
).
- To target mainly the emission balancing options and not necessarily giving
priority to the reduction of the energy needs of a building.
Consequently there are several approaches to compensate the greenhouse gas emissions:
net balance approach, economic approach and technical approach.
The net balance approach implies that the building produces and exports the excess
renewable energy to the grid although the potential benefits are attributed to the building.
The approach is in line with the “energy efficiency first” principle as it is feasible for
energy efficient buildings with low energy use and capacity to produce renewable energy
onsite or nearby. However, the latter case is very often identified as a combination
144
Idem 133, 138, 142, 143, and Sartori, I., Napolitano, A., Marszal, A., Pless, S., Torcellini, P., Voss, K.,
2010. Criteria for Definition of Net Zero Energy Buildings, in: Proceedings of the EuroSun 2010
Conference. Presented at the EuroSun 2010, International Solar Energy Society, Graz, Austria, pp. 1–8.
https://doi.org/10.18086/eurosun.2010.06.21
145
Directive 2012/27/EU on energy efficiency, Art 1: https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=CELEX%3A02012L0027-20210101 and Energy efficiency first: accelerating
towards a 2030 objective of 32.5%, September 2019, https://ec.europa.eu/info/news/energy-efficiency-
first-accelerating-towards-2030-objective-2019-sep-25_en
329
between a net balance and an economic approach since not always nearby is precisely
defined.
The economic approach implies the offset of the operational or the whole lifecycle
emissions by purchasing CO₂ emissions certificates. Although purchasing emissions
allowances is a straightforward process (e.g. through a trading scheme such as ETS),
only financial compensation does not lead to zero emission in buildings so this approach
should be combined with other options to counterbalance the emissions.
The technical approach assumes technologies to extract and store the greenhouse gases
from the atmosphere. Basically after the operational emissions or the whole life cycle
emissions are evaluated, it should be extracted from the atmosphere an equivalent
amount of emissions. Some of the available negative emissions technologies are
afforestation and reforestation, land management to increase and fix carbon in soil and
bioenergy production with carbon capture and storage146
. Although the approach
technically results in a reduction of greenhouse gas emissions, many aspects related to
the reliability of these technologies are still under discussion, including long-term costs
and liabilities as well as the risk of CO₂ leakage or release.
2.5. ENERGY EFFICIENCY ROLE
It is generally easier and cheaper to avoid energy use than to produce energy, so
prioritising energy efficiency is a logical approach to zero emission buildings. The wide
majority (if not all) existing zero energy and zero emission definitions stress the
importance of energy efficient design and construction and prioritise energy efficiency
improvements, in line with the energy efficiency first principle. The absence of energy
efficiency requirements may lead to oversized renewable energy systems which would
not be cost-effective and would result in wasted energy.
2.6. METHODOLOGICAL BOUNDARIES
In line with the “energy efficiency first” principle, a zero emission building should be
designed to minimise energy needs and improve energy efficiency. The residual
operational emissions associated with the low amount of energy still required by the
building could be completely offset by renewable energy produced by the building or
even overcompensated if this will exceed the energy needs of the building.
Therefore, one key aspect that should be taken into consideration in the definition of a
zero emission building is which type of renewable energy generation can be attributed to
146
Courvoisier, T.J., European Academies Science Advisory Council, Deutsche Akademie der
Naturforscher Leopoldina (Eds.), 2018. Negative emission technologies: what role in meeting Paris
Agreement targets?, EASAC policy report. EASAC Secretariat, Deutsche Akademie der Naturforscher
Leopoldina, Halle (Saale).
330
the building and within which system boundaries. There are several options to assess the
emissions of a building by considering renewable energy generated:
 Onsite147
i.e. renewable energy is produced on the cadaster limits of the
property;
 Onsite and nearby: as above but also including nearby generation, e.g.
common shared facilities built in conjunction with a larger group of buildings;
 On-site, nearby and off-site: including all renewable energy produced on-site,
nearby or off-site, i.e. in the grid.
The advantage of using a calculation method based only on on-site energy production is
that it ensures that any renewable energy taken into account in the initial calculation is
strictly related to that particular building, i.e. changes in grid connections do not
influence CO2 emissions for the building. The disadvantage of this approach is that, e.g.
for larger building projects, excludes a common renewable system which is not installed
“onsite” from each building perspective. Another disadvantage is the risk of missing the
obvious synergies that lie in sharing an installation where one building can produce
energy while another uses energy. Moreover, by following only the onsite approach, it
will be more challenging to reach a zero emission level from a building owner’s
perspective (micro perspective). A possible approach to overcome the above challenges
could be to focus on the ownership of the renewable energy installation, rather than on
its location. However, in any case, the approach should be designed carefully, with a
view to avoiding the risk of double counting (i.e. counting avoided emissions both in the
balance sheet of the building and in the balance sheet of the purchaser of exported
energy).
The advantage of including nearby renewable energy production is that a larger group
of buildings or district could benefit from a common centralised RES production (e.g.
district heat or cold) and this could also help even out some peak demands in the system.
However, in order to avoid any changes in emissions, it will be necessary to define
specific boundaries as to how the use of nearby renewable production can be expanded to
other future new buildings which may be constructed in the same neighboring in order to
not undermine the emission levels of the initial group of buildings.
The further inclusion into the definition of the offsite renewable energy distributed
through the grid it allows the possibility to purchase renewable energy supplied to the
building via a district heating network, generated with geothermal, solar (PV or thermal)
and biomass or from the electricity grid. This might become increasingly relevant with
the blending of biogas and, in future, of hydrogen in the natural gas grid, thus leading to
147
Including biomass transported to and used on-site.
331
lower emission factors for natural gas. This option has the advantage of an open and
flexible zero emission concept accessible to all buildings despite the local spatial
limitations. At the same time, it will be necessary to set-up a solid system to account the
renewable energy to be attributed to each building and avoid fraud or double counting of
renewable energy coming from the grid.
2.7. TIMEFRAME FOR THE ASSESSMENT OF THE BUILDING’S EMISSION IMPACT
To evaluate the operational energy balance of a building and then the associated
emissions, two type of calculation methods are commonly used: steady-state (static)
methods and dynamic methods. In the steady state methods the calculation is
performed in a stationary regime overlooking the real dynamic behaviour of the building.
The heating and cooling season have relatively fixed lengths. On the other hand, the
dynamic methods take into account the actual dynamic behaviour of the environment, the
variability of heat gains, the ventilation and infiltration rate as well as the thermal-mass
of the building. Dynamic methods produce results that are closer to the real behaviour of
the analysed building and are also best suited to take into account changing climate.
However, the dynamic approach requires more input data and is generally more costly.
As regards timeframes, the existing definitions uses annual timeframes, although
theoretically also monthly/seasonal timeframes could have advantages but their
implementation is highly complex.
2.8. INDICATORS AND METRICS
The operational part of a life cycle assessment is based on the calculation of the final
energy demand of the building, generally including heating, cooling, hot water supply,
ventilation or air conditioning, auxiliary energy for pumps, and fixed lighting, sometimes
also covering occupants’ use of plug-in appliances (so-called plug loads). Using primary
energy factors (PEF), it is possible to determine the primary non-renewable energy
demand. By using emission factors, the final energy demand of a building can be
converted into GHG emissions148
. Energy demand is often considered as a proxy for
carbon emissions and several building assessment frameworks use energy demand to
measure the performance of buildings with respect to climate change. However the
relation between energy demand and carbon emissions is not so straightforward in an
energy system which is becoming more and more decarbonised.
148
The ISO 16745-1:2017 standard on Sustainability in buildings and civil engineering works – Carbon
metric of an existing building during use stage provides a set of methods for the calculation, reporting,
communication and verification of a collection of carbon metrics for GHG emissions arising from the
measured energy use during the activity of an existing building, the measured user-related energy use, and
other relevant GHG emissions and removals. The carbon metric used is the sum of annual greenhouse gas
emissions and removals, expressed as CO2 equivalents, associated to the use phase of a building.
332
Moving from PEF to carbon emissions coefficients, there is a strong link between these
coefficients and PEFs for non-renewable energy sources such as fossil fuels. However,
this link becomes weaker for energy sources that are less clearly defined as non-
renewable.
2.8.1. SPATIAL BOUNDARIES (BUILDING, NEIGHBOURHOOD, CITY, REGION)
A mandatory first step in having a clear picture of a zero emission building is to define
the space boundaries which may limit to a single construction or go beyond to a group, a
neighbourhood, a city or even the whole national building stock.
In most of the cases, the zero emission definition focuses on a single building. Several
large scale zero energy projects address also the greenhouse gases emission (GHG)
reduction. Although it is clear that having broader spatial boundaries implies more
substantial impact in the emissions reduction, a more complex methodology is needed.
3. DIFFERENCES BETWEEN NEARLY ZERO-ENERGY BUILDING (NZEB) AND ZERO-
EMISSION BUILDING (ZEB) DEFINITION
Article 2 of the EPBD defines “nearly zero-energy building” as “a building that has a
very high energy performance” and “the nearly zero or very low amount of energy
required should be covered to a very significant extent by energy from renewable
sources, including energy from renewable sources produced on-site or nearby”.
Annex 1 of EPBD indicates that “the energy performance of a building shall be “be
expressed by a numeric indicator of primary energy use in kWh/m2
.year” and “shall be
determined on the basis of calculated or actual energy use and shall reflect typical energy
use for space heating, space cooling, domestic hot water, ventilation, built-in lighting and
other technical building systems”.
In the table below it is presented an overview of the potential differences between the
NZEB definition and possible zero emission building definitions.
Table H.3: Comparison between NZEB and ZEB
Criteria Nearly zero-energy building Zero-emission building
Metrics A numeric indicator of primary
energy use in kWh/m2
.year
Numeric indicators of greenhouse gas
emission produced in kgCO2eq/(m2
.y)
System
boundaries
Regulated energy i.e. for
heating, space cooling,
domestic hot water, ventilation,
built-in lighting and other
technical building systems.
Although not compulsory, in
several Member States the
emissions associated to the
Typically emissions from all energy
consumption of the building i.e. regulated
and non-regulated energy consumption.
In its extended scope, it covers embodied
emissions in materials and equipment,
emissions from energy consumed in the
construction, renovation & maintenance
and end-of-life phase and it may covers
333
energy scope is calculated and
indicated on the energy
performance certificates.
emissions from other energy uses in
operational phase, e.g. for the provision
of drinking water, for mobility and e-
mobility.
Energy efficiency
first principle
Clearly follows the energy
efficiency first principle (“a
very high energy performance”,
"nearly zero or very low
amount of energy")
This is the overarching principle. There is
a wide agreement that measures to reduce
the energy needs of the building are of a
high importance in order to reach zero
emission buildings. Generally it is easier
and more cost-effective to ensure low
energy needs than to produce additional
clean energy.
Renewable
energy
Clearly stipulates that "energy
required should be covered to a
very significant extent by
energy from renewable
sources"
Renewable energy is necessary to supply
the energy needs of the building and
potentially to also offset partially or
entirely other direct or embodied
emissions.
Balance
boundaries
Renewable energy produced
"onsite" or "nearby", although
the overall balance is in
primary energy
Exclusively renewable energy to supply
the energy needs of the building and
potentially to also offset partially or
entirely other direct or embodied
emissions. It may be any combination
between onsite, nearby and offsite, but
the latter should be accompanied by a
clear framework to avoid double
counting.
Timeframe for
counting
energy/emissions
On annual basis Usually on annual basis (at least for
operational emissions)
Spatial
boundaries
At building level At building level
NZEBs represent today the current construction requirements for new buildings, and in
some Member States also for existing building undergoing major renovations too. As
mentioned before, the development of NZEB definitions has been often carried out
within the calculations of cost-optimal levels, according to Article 5 of the EPBD. While
more time is needed to fully assess the NZEB uptake in the EU following their official
entry into force (2021 for all new buildings and 2019 for all new buildings), evidence
shows that NZEBs are becoming cost-optimal (noting that it is difficult to reflect the
evolution of cost-optimal level as the third round for the cost-optimal calculations from
Member States are foreseen for March 2023), as new technologies are proven and their
334
market upscale is expected to reduce their costs. The type of technologies deployed will
be similar for both NZEBs and ZEBs (e.g. renewable sources solutions, high-efficiency
appliances and improved insulation and glazing of building envelope)However, a notable
difference between the two concepts is the fact that applying a whole life cycle emission
calculation means choosing technologies and materials based on their embodied
emissions alongside other criteria.
Some studies indicate that there is no significant difference between zero energy building
costs and modeled conventional building costs, noting that the magnitude of cost
difference is affected by the size of the building, type of the building and location of the
building149
. From a life-cycle perspective, and taking into considerations that ZEBs could
reduce energy needs, emissions and costs compared to conventional buildings, the total
cost needed for a ZEB may be comparable150
.
3.1. TOWARDS A ZEB DEFINITION IN THE EPBD
A zero emission buildings definition should fulfil several general principles such as:
- To be feasible and simple to transpose and implement;
- To be ambitious, avoid lock-in effects, be aligned with the 2030 climate and
energy targets and to the long-term decarbonisation goals enshrined in the
Climate Law;
- To build on synergies with other existing legislation or planned initiatives
contributing to the decarbonisation of the buildings stock;
- To ensure comparable implementation across the European Union and be
sufficiently flexible and acknowledge the subsidiarity principle leaving the
Member States to shape it in the most suitable way according to their context.
Taking into account the technical challenges and options presented in the previous
chapters, the zero emission building definition for the EPBD can be based on the
following general criteria:
- System boundaries over the building’s emissions lifecycle. The operational
emissions of buildings are clearly within the EPBD scope and should be fully
addressed. Non-regulated energy of the building could be also considered,
particularly regarding its effects on the building performance. On embodied
149
Does zero energy building cost more? – An empirical comparison of the construction costs for zero
energy education building in United States, 2019
https://www.sciencedirect.com/science/article/pii/S221067071831237X
150
UK Green Buildings Council: Building the Case for Net Zero: A feasibility study into the design,
delivery and cost of new net zero carbon buildings, September 2020
335
emissions, the definition should be associated to other legislative acts and
initiatives which address embodied emissions over the building lifecycle.
- Emission reduction options. The definition could be based on a net emission
balance. This is the option that can best guarantee the necessary decrease of
emissions in order to achieve the EU’s decarbonisation goals.
- Energy efficiency first principle. A zero emission building definition should be
in line with the “energy efficiency first principle” since it is generally agreed that
reducing first the energy needs of the building is a more sustainable and cost-
effective way to reduce emissions than investing in additional clean energy
generation to compensate the low energy performance of the building. However,
the definition should provide a sufficiently flexible balance between energy
efficiency and renewable energy supply. This is particularly relevant for existing
buildings that, due to their characteristics and local context, may present a higher
reliance on RES to compensate for their lower performance.
- Methodological boundaries. The definition could emphasise onsite renewable
energy production. Renewable energy from energy communities or district
heating could also be considered. Under certain conditionality related to specific
technical constraint of the buildings or due to their location, it could allow
renewable energy coming from the grid to supply the remaining need of the
buildings. The rules to calculate emission factors for the electricity coming from
the grid should reflect properly the exchange between on-site and on-grid to the
grid.
- Indicators and metrics The definition should be primarily based on the
operational use of the building and include requirements and cross-references to
other related legislation to report whole life-cycle carbon emissions. As concerns
the metric, the definition could use both an energy performance indicator (e.g.
kWh/m2
.y) and a carbon metric such as kgCO2eq/(m2
.y).
- Space boundaries. The definition should be at level of building.
336
4. WHOLE-LIFE CYCLE EMISSIONS OF BUILDINGS AND OTHER ENVIRONMENTAL &
SUSTAINABILITY ASPECTS
Figure H.6: Environmental impacts of the building sector151
4.1. THE CURRENT STATE OF PLAY
With new buildings being constructed and existing buildings renovated, embodied
carbon is emitted during extraction and manufacturing of construction materials,
transport and construction. The embodied carbon in construction is estimated to account
for about 10% of total yearly greenhouse gas emissions worldwide152
.
The relative importance of embodied emissions compared with operational emissions
will gradually increase over time, as buildings are constructed and renovated to high
levels of energy performances, this reducing direct emissions. On the building level, the
share of embodied carbon as a part of the whole life carbon (including the full life cycle)
varies greatly: while the average share of embodied emissions from buildings is
approximately 20–25% of life cycle GHG emissions, this figure is higher for highly
energy-efficient buildings153
.
It should also be noted that the legislative development for more stringent operational
performance requirements may increase embodied carbon emissions from buildings in
absolute but also relative terms. This is explained by the fact that in some cases, high-
performance buildings require more materials and services154
. It is, however, possible to
build high-energy performance buildings with low embodied emissions. An analysis of
151
Level(s) https://ec.europa.eu/environment/levels_en#ecl-inpage-261
152
IRP, Resource Efficiency and Climate Change: Material Efficiency Strategies for a Low-Carbon Future,
2020. UN Environment Emissions Gap Report 2019.
153
Röck, M. et al. (2020) “Embodied GHG emissions of buildings – The hidden challenge for effective
climate change mitigation”.
154
Ibid.
337
more than 650 global lifecycle assessment (LCA)155
case studies demonstrated the
possibility to design buildings with low lifecycle emissions regardless of the building
regulations they have to comply with156
.
Improving energy efficiency will deliver significant carbon emissions reduction but not
necessarily up to zero emissions. Measures addressing embodied emissions will pave the
way for new buildings maximising the efficient and smart use of materials which will
facilitate the decarbonisation of other sectors. 68% of the respondents to the public
consultation want the EPBD to include measures to report on whole life-cycle carbon
emissions from buildings.
4.2. OVERVIEW OF EXISTING POLICIES IN MEMBER STATES ACROSS EUROPE
European regulations for energy performance in new buildings have been transposed
across the continent leading to low energy demands in the operational phase. Some
Member States are thus starting to consider embodied carbon in their national building
regulations.
In its publication of May 2021 ‘Whole-life Carbon: Challenges and solutions for highly
efficient and climate-neutral buildings’157
, Buildings Performance Institute Europe
(BPIE) has identified countries that have implemented such advanced regulations.
According to BPIE, three countries have introduced CO2 limits for a large share of new
buildings, while two other countries have plans to do so. Three additional countries have
Life Cycle Analysis (LCA) requirements for public buildings.
The national policies are detailed in the BPIE report as follow:
• Denmark’s new regulation sets whole-life carbon emissions for new
buildings, encompassing both operational and embodied emissions, based
on LCA. Plans for the progressive tightening of CO2 limits.
• The Netherlands has since 2017 required all new residential and office
buildings whose surface exceeds 100m2 to account for and report their
embodied impacts based on a simplified LCA using a national method.
All impacts are converted into a monetary value, which since 2018 is used
to set a “mandatory environmental impact cap” for new buildings.
• Finland and Sweden have developed simplified LCA methodologies and
whole-life carbon databases, intending to facilitate whole-life carbon
155
LCA applied to buildings aims to assess the potential environmental of buildings over the complete life
cycle, from materials production to the end-of-life and management of waste disposal.
156
Röck, M. et al. (2020)
157
https://www.bpie.eu/wp-content/uploads/2021/05/BPIE_WLC_Summary-report_final.pdf
338
accounting and regulation in the future. Finland plans to introduce CO2
limits for new buildings by 2025 and Sweden by 2027.
• France’s pending new building regulation (RE2020 foreseen for July
2021) aims to reduce the climate impact of new buildings by integrating
enforced energy efficiency requirements and whole-life carbon
considerations. Base on European standards, the LCA methodology has
been further developed together with the industry and features both energy
and whole-life carbon emissions.
• Germany, Switzerland and the UK have all introduced LCA requirements
for public buildings/projects.
4.3. INTERLINKAGES WITH OTHER POLICIES.
The reduction of lifecycle emissions of buildings remains largely unregulated at
European level. A number of policies have started to tackle some aspects necessary to
address embodied carbon, however an overall strategy has yet to be defined with a view
to achieving the Union’s decarbonisation objectives. The EPBD by setting a vision for
the building stock for 2050 can help to draw up a timetable giving Member States and the
construction industry visibility on the measures planned over the next years.
Figure H.78: Scope of various EU regulatory and non-regulatory measures against the building lifecycle158
158
The references in the table are as follow: 6
the basic requirements for construction works set out in the
Construction Products Regulation (CPR) include sustainable use of natural resources; however, the
regulation does not impose minimum performance requirements for the whole product lifecycle, including
embodied carbon. The ongoing revision could possibly introduce recycled content requirements for certain
construction products (Circular Economy Action Plan). - 7
Waste Framework Directive – 8
The emissions
trading scheme (ETS) covers the power sector and energy-intensive industries, such as concrete, which
means that buildings are indirectly affected. The Commission’s forthcoming June package of energy and
climate laws may include a proposal to extend the ETS to sectors such as building and road transport. - 9
Level(s) embraces a full lifecycle approach and the methodology to calculate the GHG emissions of the
building follows the relevant global and EU standards for sustainable construction (ISO 14040/44, EN
15804 and EN 15978). – 10
The current EU Taxonomy only recognises improvements to the energy and
carbon performance of buildings during the use phase (climate change mitigation and adaptation efforts).
In going forward, the eligibility criteria will also include the “do no significant harm” requirement in
relation to four other environmental objectives – water, circular economy, pollution prevention and
biodiversity – for which full taxonomy systems are yet to be developed.
339
Figure159
H.7 presents the main EU policy instruments, existing and proposed, and the
corresponding lifecycle stages of buildings they address. The modules are based on the
commonly used European standard (EN 15978) for the assessment of the environmental
performance of buildings.
The EU Sustainable Finance Taxonomy sets “Do No Significant Harm” (DNSH)
requirements for different activities, including for buildings. In its delegated act160
,
technical screening criteria for new constructions have been defined: for buildings larger
than 5000 m2, the life-cycle Global Warming Potential (GWP)161
of the building
159
BPIE (2021); ‘Whole-life Carbon: Challenges and solutions for highly efficient and climate-neutral
buildings’.
160
COMMISSION DELEGATED REGULATION (EU) …/... supplementing Regulation (EU) 2020/852
of the European Parliament and of the Council by establishing the technical screening criteria for
determining the conditions under which an economic activity qualifies as contributing substantially to
climate change mitigation or climate change adaptation and for determining whether that economic activity
causes no significant harm to any of the other environmental objectives C/2021/2800 final.
161
The GWP is communicated as a numeric indicator for each life cycle stage expressed as kgCO2e/m2 (of
useful internal floor area) averaged for one year of a reference study period of 50 years. The data selection,
scenario definition and calculations are carried out in accordance with EN 15978 (BS EN 15978:2011.
Sustainability of construction works. Assessment of environmental performance of buildings. Calculation
method). The scope of building elements and technical equipment is as defined in the Level(s) common EU
framework for indicator 1.2. Where a national calculation tool exists, or is required for making disclosures
340
resulting from the construction has been calculated for each stage in the life cycle and is
disclosed to investors and clients on demand.
In the current revision of the EED, Member States could be encouraged to require
contracting authorities to take account of wider sustainability in public procurement
practices, in particular whole life-cycle of carbon emissions of buildings.
Under the Renovation Wave, an initiative to set up a 2050 whole life-cycle performance
roadmap to reduce carbon emissions from buildings and advancing national
benchmarking with Member States is under preparation.
For all these initiatives, the introduction of indicators and measures on embodied carbon
will be based on the European framework for sustainable buildings, Level(s)162
, which is
designed to assess and report on sustainability aspects throughout the lifetime of
buildings
4.4. DESCRIPTION OF OPTIONS FOR THE INTRODUCTION OF WHOLE-LIFE CYCLE
EMISSIONS OF BUILDINGS AND OTHER ENVIRONMENTAL & SUSTAINABILITY
ASPECTS
Unlike building’s operational energy use, which is more visible and easier to measure,
“embodied” environmental impacts are hidden and often overlooked. The introduction of
a definition of “zero emission buildings”, enriched with further criteria on embodied
carbon and other sustainability indicators (ZEB3) would be an important step toward
reducing the significant environmental impacts associated with construction materials
and raising awareness on whole-life cycle emissions of buildings in Europe and beyond.
Considering the lifecycle of buildings, new buildings should not need to undergo major
renovation by 2050 and they will not constitute most of the overall building stock by
mid-century. However, requisites for new buildings are likely to become a benchmark for
renovation as well and to foster the decarbonisation of the overall existing stock.
Requirement to disclose whole life-cycle carbon
The introduction of reporting on embodied carbon linked to “zero emission buildings”
represents a significant opportunity to begin integrating “whole-life carbon” in the
EPBD, and more broadly in the European regulatory framework. ZEB3 should enable
consistent, predictable, efficient and transparent accounting of operational and whole life
carbon within a clear timeline.
or for obtaining building permits, the respective tool may be used to provide the required disclosure. Other
calculation tools may be used if they fulfil the minimum criteria laid down by the Level(s) common EU
framework (https://susproc.jrc.ec.europa.eu/product-bureau/product-groups/412/documents), see indicator
1.2 user manual.
162
https://ec.europa.eu/environment/levels_en
341
For embodied carbon, this timeline could start from a voluntary to a mandatory
disclosure of information for certain categories of buildings (new buildings above a
certain size, all new buildings.), with all buildings covered by 2030. Large new buildings
could lead the way, first in the disclosure of information and then in the consideration of
limit values, which will be set gradually from 2030 and onward. These limit values will
be developed based on a range of studies and a first set of such limit values could be
presented in a next EPBD revision.
Voluntary disclosure of information on embodied carbon could also be included in other
instruments, such as Energy Performance Certificates. It shall also be considered that
long-term renovation strategies encompass an overview of whole life carbon for new
buildings and substantially renovated buildings.
Methodology and indicators to be used
The calculation of embodied carbon in buildings present several technical and analytical
challenges, also due to the availability of source data. There is currently no uniform
methodology, although various efforts are in place. The most appropriate approach seems
to be that based on LCA (Life-Cycle-Assessment), the well-established methodology to
assess environmental impacts and resource consumption at each stage of the building’s
lifecycle, from material extraction to construction and use, to the demolishing of the
building.
In this regard, the European Level(s) framework shall be used for the calculation of the
life-cycle Global Warming Potential (GWP). This framework is also referenced in the
EU Sustainable Finance Taxonomy. Some flexibility should be left to Member States to
use equivalent methodologies. EN standards EN 15978 and EN 15804 also provide a
methodology framework. EN 15804 is developed for whole life cycle environmental
impact of construction works and is adopted in most parts of the EU, by the industry and
by governments.
Based on comments received from the open public consultation, the vision for new
buildings should include life-cycle emissions and refer to a timeline. It should also
include a minimal renewable energy shares. Any reporting obligations introduced in the
EPBD should be based on a harmonised EU methodology. 163
163
Some initiatives (e.g., Level(s)) and standards (EN 15978 and EN 15804) are already working in this
direction. EN 15804 is developed for whole life cycle environmental impact of construction works and is
adopted in most parts of the EU, by the industry and by governments.
342
Annex I: E-mobility
1. Introduction
The European Green Deal has set the key objective to deliver a 90% reduction in
transport-related greenhouse gas emissions by 2050 to support the EU’s aim to become
the first climate-neutral continent. The provisions on e-mobility in the EPBD supports
the CTP, the Renovation Wave Strategy, the Smart and Sustainable Mobility Strategy
and the Energy System Integration Strategy.
The deployment of private charging is as important for the growth of electromobility164
and the decarbonisation of transport as that of charging accessible to the public. The
Commission’s Communication on a Sustainable and Smart Mobility Strategy confirms
this and include the ambition to have at least 30 million zero-emission vehicles on the
road by 2030 and that by 2050 nearly all cars, vans, buses as well as new heavy-duty
vehicles will be zero-emission
The electrification of transport is of pivotal importance for decarbonising the transport
sector and raising the share of renewable energy in the energy system. The impact of
electric vehicles will be important in this regard. Since the previous EPBD review in
2016, the electric vehicles market has strongly matured. Electric cars have seen a rapid
increase in terms of total vehicle registrations and in 2020, sales of electric cars
accounted for 10.5% of all new vehicle registrations, compared to 3% in the year before
(www.acea.be).
In 2050 all passenger cars should be zero emission. In the Fit for 55-scenario, the
expectation for the number of EVs in the EU in 2030 is 35 million and in 2050 more than
200 million (compared to 1 million EVs in 2020)165
. For electric 2wheelers (e-scooters
and e-motorcycles) the expectation is 1,6 million vehicles in 2030 and 42 million
vehicles in 2050.166
A rapid increase is also expected for e-bikes, where the growth rate between 2019 and
2017 was 64%. The sales in EU in 2019 amounted to 3,4 million e-bikes in 2019167
. A
164
Including the entire range of road vehicles from those with electric assist to human power (like electric
bicycles, tricycles, and similar, including cargo-bikes) to fully electrically propelled road-vehicles
(typically electric cars or vans).
165
Fit for 55 MIX scenario, electric private cars.
166
Fit for 55 MIX scenario, electric 2wheelers.
167
European EPAC Sales (EU28).
343
forecast for 2030 is 17 million e-bikes.168
An interesting sub-category is e-cargo bikes
which currently represent 4% of the total electric bicycle sales in Germany.169
1.1 Publicly accessible versus private recharging infrastructure
The total number of recharging points in private buildings in the EU is not known since
there are no reporting obligations. The National Plans submitted under the AFID mainly
contains information on publicly accessible recharging points.
The total number of publicly accessible recharging points in the EU was approximately
165 000 in 2019170
, representing a growth of almost 40% between 2018 and 2019. The
growth was concentrated in very few member States and approx. 70% of all publicly
available recharging infrastructure is today located in Germany, France and the
Netherlands.
In terms of number of registered electric vehicles per publicly accessible recharging
point, in 2020, Member States had ratios between the number of registered electric
vehicles per recharging point ranging from 3.6 and 20.7. 171
Lack of infrastructure is a
major barrier to the uptake of EVs, and the 2030 and 2050 targets will not be reached
unless an appropriate recharging infrastructure is in place.
For publicly accessible recharging infrastructure, the AFIR IA concluded that it could be
considered sufficient if for each battery electric vehicle a total of 1 kW recharging power
was installed and for each plug in hybrid a total of 0.66 kW recharging power was
installed. Assuming an average power output of 11 kW per recharging point, this would
correspond to an infrastructure – electric vehicle ratio of 1-12.
In the AFIR IA it was also assumed that around 40% of all recharging events for battery
electric vehicles will take place at publicly accessible recharging points towards 2030,
leaving an important part of all recharging events within the scope of the EPBD (or in
smaller private buildings not covered by the EPBD nor by AFIR). However, the need for
recharging infrastructure in private buildings could be higher as it is likely that a majority
of users consider recharging overnight at home as a desired and convenient way of
recharging. There is also a need for publicly accessible over-night recharging in cities for
residents without a private parking place in or near their home.
For recharging in private buildings the number of recharging points depend to a high
degree on the usage pattern of the EV owner. Some EV owners own or rent their own
168
European Cyclists Federation, www.ecf.com
169
https://www.ziv-zweirad.de/fileadmin/redakteure/Downloads/Marktdaten/PM_2021_10.03._ZIV-
Praesentation_10.03.2021_mit_Text.pdf
170
SWD(2021) 631 final AFIR Impact Assessment
171
SWD(2021) 631 final AFIR Impact Assessment
344
parking space where the car is usually parked overnight and they would need a
recharging point at this parking place. In this use case one recharging point per parking
space/EV would be needed. Another case is an EV owner who parks overnight on the
street, in different parking places depending on availability. For this case the EV owner
depends on publicly accessible recharging in the street which could be combined with
private recharging in the workplace if the EV is used for commuting172
. The necessary
shift to more sustainable modes of transport is also a reason to facilitate charging for e-
bikes and e-scooters.
All this implies that estimating the number of recharging points needed in private
buildings will depend to a high degree on how the usage patterns evolve, and it will be
very different from country to country and also different between dense city centres,
suburbs, small cities or rural areas. Even if the number of private recharging points
needed is difficult to estimate, it is clear that access for consumers to recharging points at
home or at work is crucial for encouraging the move away from ICEs.
Stakeholders, for instance cities, have signalled that they are increasingly looking for
ways to get infrastructure off their streets and into the private domain, for reasons of
visual pollution, occupancy of public space and the nuisance caused by road works
necessary to deploy public infrastructure.
On the other hand, many citizens in city centres rely on parking on street for overnight
parking, so there is a need also for publicly accessible recharging infrastructure in city
centres. Some cities are mitigating the need for roadworks by making best use of existing
infrastructure when deploying recharging points, e.g. by integrating them in existing
electrified structures such as lamp posts (in this way, the existing ducting can be
exploited and cable replacement can be accompanied by the replacement of inefficient
lighting with LEDs) or on-road telecom distribution boxes, or coupling them to existing
electrified networks, such as rail, metro or tram lines.
Anyhow sufficient private infrastructure in cities will be key for the uptake of e-mobility
in urban areas. Installation of recharging points in private parking spaces, typically inside
or flanked to buildings, is essential to support the market of electric vehicles,
complementing the AFIR. In multi-apartment blocks and non-residential buildings, the
freedom to install recharging points may be limited by the necessity to get an agreement
from the other co-owners to intervene on the building infrastructure or to cross private
spaces. Measures to facilitate this have been adopted in some Member States, such as
France and Spain but barriers still exist in the majority of MS, with the assembly
172
However, and as raised in the public consultation, with a shift to sustainable mobility, where EVs are
one part of the solution, the aim is not to replicate use patterns from ICE vehicles, but instead take the
opportunity of shifting to more sustainable modes of transport (walking, cycling, e-scooters, public
transport etc) and also promote car sharing.
345
blocking requests by single owners even with disputable objections (e.g. visual pollution
of ducts or of the charging station itself). Furthermore, the construction and the major
renovation of buildings are special opportunities to install recharging points, or at least
facilitate their later installation.
The availability of safe and easily accessible bike parking is an important incentive to
drive behavioral change towards more sustainable transport modes in line with the
Climate Target Plan. Bicycle sales are increasing in the EU with about 22 million units
sold in 2020, up from about 20 million units in 2019. During the pandemic there was a
raise in biking and the Resilience and Recovery Facility include support for sustainable
mobility including cycling infrastructure which is likely to promote further growth.
Promoting green mobility is a key part of the European Green Deal and buildings can
play an important role in providing the necessary infrastructure, not only for recharging
of electric vehicles but also for bikes including ebikes and cargobikes.
For the vast majority of electric bikes, batteries can be removed from the bike and
charged in the apartment or in an office space through a standard household power
socket. However an important barrier to cycling is lack of safe bike parkings. The
Commission recommendation on Energy Efficiency First principle suggests obligations
to provide bike parking and e-bike charging points through buildings codes173
.
The Commission recommendation on building modernization174
states that Member
States without requirements or guidelines on bicycle parking should develop as a
minimum, guidelines to local authorities on the inclusion of bicycle parking requirements
in building regulations and urban planning policies. These guidelines should include both
quantitative (i.e. number of parking spaces) as well as qualitative elements.
2. Interlinkages with other policies
In the “Fit for 55” package, electro-mobility is supported through a number of legislative
measures across different proposals:
 CO2 and cars175
The CO2 emission performance standards provide a strong push for
deployment of zero- and low-emission vehicles.
173
C(2021) 7014 final, Annex
174
COMMISSION RECOMMENDATION (EU) 2019/1019
175
COM (2021) 556. Proposal for a regulation of the European Parliament and of the Council amending
Regulation (EU) 2019/631 as regards strengthening the CO2 emission performance standards for new
passenger cars and new light commercial vehicles in line with the Union’s increased climate ambition.
346
 AFIR proposal176
AFIR contain provisions for Member States to ensure minimum coverage of
publicly accessible recharging points dedicated to light- and heavy-duty road
transport vehicles on their territory, including on the TEN-T core and
comprehensive network.
It also provides further provisions for ensuring user-friendliness of recharging
infrastructure. This includes provisions on payment options, price transparency
and consumer information, non-discriminatory practices, smart recharging, and
signposting rules for electricity supply to recharging points.
 Electricity Regulation and Electricity Directive177
 Energy Efficiency Directive Art.7178
 The revision of the Renewable Energy Directive179
The proposal include provisions to facilitate system integration of
renewable electricity by the following means:
 TSO and DSOs are required to make available information on
the share of RES and the GHG content of the electricity they
supply, in order to increase transparency and give more
information to electricity market players, aggregators, consumers
and end-users
 Battery manufacturers must enable access to information on
battery capacity, state of health, state of charge and power set
point, to battery owners as well as third parties acting on their
behalf;
 Member States shall ensure smart charging capability for non-
publicly accessible normal power recharging points, due to their
relevance to energy system integration;
 Member States shall ensure that regulatory provisions
concerning the use of storage and balancing assets do not
discriminate against participation of small and/or mobile storage
systems in the flexibility, balancing and storage services market.
 ETS extension to road transport180
176
COM(2021) 559 Final.
177
Recast electricity Regulation 2019/943 and the recast electricity Directive 2019/944 (not part of the ‘Fit
for 55’ package).
178
Directive 2012/27/EU.
179
COM(2021) 557 Final.
347
3. Current provisions on e-mobility in the EPBD
The current EPBD includes the following provisions on e-mobility:
 Article 8(2) mandates the installation of recharging points (one in every ten
parking spaces) and ducting infrastructure (one in every five parking spaces) in
the car parks of non-residential buildings with more than 10 parking spaces. This
provision applies to all new non-residential buildings and major renovations.
 Article 8(3) requires Member States to lay down requirements for the installation
of a minimum number of recharging points for all non-residential buildings with
more than twenty parking spaces, by 1 January 2025.
 Article 8(5) mandates ducting infrastructure for all parking spaces in new built
and major renovation of residential buildings with more than ten parking spaces.
The objective of the provisions is to ensure that a share of the total planned or already
available parking spaces is not limited to petrol or diesel cars but also compatible with
electric vehicles. The provisions are therefore compatible with urban sustainable
transport policies aiming to reduce the total number of parking spaces or to regulate the
role of individual vehicles in densely populated urban areas.
4. Current implementation in the Member States.
The provisions on e-mobility in the EPBD were introduced in the 2016 review and the
deadline for transposition was 10 March 2020. In the first progress report made in
January 2021, only 3 MSs had fully implemented the e-mobility provisions of the EPBD
(Art 8.2-8.8). However, at the CA EPBD meeting in November 2020, 13 MSs reported
that they had made substantial progress on implementation.
180
COM 2021 (551).
348
Further conclusions from the CA EPBD meeting were that most Member States will stick
to the EPBD minimum requirements. A few, however, have set their own requirements,
based on analysis of the local electro-mobility market. A majority of MSs is of the view
that the minimum implementation of recharging points will not be enough in the future.
It is the hope that based on local demand more than the minimum number of recharging
points will be installed. Several MS have taken additional initiatives to support e-
mobility such as:
• tax exemption/reduction for EVs
• procurement support
• free parking in public areas, free municipal charging stations, free access
to limited traffic areas, use of shuttle lanes
• charging points integrated with PV and metering system
• roll out of highway recharging points
• support to residential owners for installation of recharging points
• public co-funding of private and publicly accessible recharging points
The following additional type of elements were discussed:
 specifications for ducting infrastructure
 specifications relating to fire safety
 specifications for recharging points including relating to accessibility for persons
with disabilities
 requirements related to dedicated parking infrastructure for electrical bicycles,
including (electric-) cargo- bikes, and for special vehicles of people with reduced
mobility
 requirements related to smart/intelligent metering
 requirements related to smart charging
 requirements which would facilitate the use of car batteries as a source of power
(vehicle to grid)
 for publicly accessible recharging points, requirements related to ad hoc
recharging and transparency of recharging prices
349
MS have chosen to a varying degree to implement these additional measures. For
instance, two MS (Austria and Romani) have incorporated references to cycling in the
EPBD implementing legislation. France has implemented fire safety regulations.
5. Policy options for e-mobility
The requirements present in the EPBD since its 2016 revision are not fit anymore to
provide a number of recharging points aligned with an increased uptake of electric
vehicles, as the requirements are too low because they only cover buildings with more
than 10 parking spaces.
Table I.1: E-mobility policy options
C1. Remove building-related barriers to e-mobility
No. Policy action -
general
Timeline Sub-options
E-M1
All new buildings or
major renovations have
to be prepared for
electric recharging
MS to
implement
by 2025
 Preparedness via pre cabling, but reducing from
10 to 5 (or lower) the minimum number of parking
spaces triggering the obligation
 Pre-cabling to be “smart-ready”
E-M2
All new buildings or
major renovations have
to be prepared for
electric recharging
+ measures to
enhance “Right to plug”
MS to
implement
by 2025
As in E-M1+
MSs to implement right to plug :
 MS shall remove barriers that hinders e-vehicle
owners to have access to a recharging point in
parking adjacent to buildings (multi-family
residential buildings or rented single family
buildings mainly)181
 Enhance availability of technical assistance for
households wishing to install recharging points
E-M3
As in E-M2+
bike parking
Additional measures for
non-residential
buildings
MS to
implement
by 2025
As in E-M2+
 Compulsory bike parking in new and major
renovated buildings
 Existing non-residential buildings with more than
20 parking spaces at least 10% equipped with
recharging points by 2027
 Increased ambition for number of recharging points
in new and major renovated office buildings
Policy option E-M1 enlarges the scope of the current provisions to ensure preparedness
to electric recharging for all new buildings and buildings undergoing major renovation.
This is a cost-effective measure and it ensures the building's parking spaces are ready,
181
There is an example in the US ”Right to Charge” law which requires building owners to allow tenants to install EV
recharging points if they want to. The Massachusetts Legislature passed a “Right to Charge” law, which requires
building owners in Boston to allow tenants to install EV charging if they want to. Session Law - Acts of 2018 Chapter
370 (malegislature.gov)
350
when and if the need arises, for the installation of recharging points. The threshold is
lowered from 10 parking spaces to 5 parking spaces (or lower) which significantly
enhances the number of parking places prepared for electric recharging.
One option is to strengthen the requirement even further and remove the threshold of
number of parking spaces for new construction. This would mean that preparedness is
required for all new construction with parkings, independently on how many parking
spaces (i.e also newly constructed single-family house with one parking would have to be
prepared for e-vehicles).
In addition, the current EPBD Article 8(3) requires that Member States lay down
requirements for the installation of a minimum number of recharging points for certain
non-residential buildings with more than 20 parking spaces. Article 8(2) mandates the
installation of recharging points (one in every ten parking spaces) and ducting
infrastructure (one in every five parking spaces) in the car parks of non-residential
buildings with more than 10 parking spaces. This provision applies to all new non
residential buildings and major renovations.
The reason why the policy option for residential buildings requires preparedness and not
the installation of the specific recharging point is to avoid costs for infrastructure which
may be not used, especially in residential buildings where the take-up is difficult to
estimate. Moreover different owners and tenants may have different needs and desires,
e.g. in terms of max delivered power or of smartness of the charging station. Finally,
some vehicle offers include the provision of a fixed charging station (on top of the
mobile one, usually provided). The aim is to ensure that recharging stations are installed
when they are needed. If there would be a requirement to install a recharging station in a
residential building where it is not needed at a certain moment, it would entail additional
costs and there is a risk that the recharging station would be obsolete or out of
order/damaged before it is needed.
In the public consultation respondents were asked if there was a need to strengthen the
existing provisions on e-mobility in the EPBD. For new buildings (non-residential and
residential) 60% see a need for strengthening the requirements. For refurbished buildings,
53% (non-residential) and 49% (residential buildings) see a need for strengthening the
requirements. Some stakeholders also suggested that there should be requirements for all
buildings to be pre-equipped for recharging.
One MS that has already strengthened the e-mobility provisions is Finland. New
legislations introduced 11 November 2020, which state for residential buildings (new and
buildings undergoing major renovations) for areas with more than 4 parking spaces they
must all have electric conduits (or cables) for all parking spaces. For the new building
and major renovation is in effect from 11 March 2021, when building permits are
requested. Existing buildings have to have charging points installed by 31st December
2024. It is estimated that 73,000 – 97,000 new charging points and 560,000–620,000
parking spaces with electric ducts or cables by the year 2030. The requirements are not
351
applied to buildings owned and occupied by micro-sized enterprises (<10 employees),
this differs from the directive where this exemption is for SME. For residential buildings,
Finland is more ambitious than the Directive in that it has set requirements for electric
conduits (or cables) for all parking spaces on buildings with more than 4 parking spaces.
To enhance the “right to plug”, E-M2 foresees that barriers are removed and measures
are undertaken to enhance the availability of technical assistance for households wishing
to install recharging points. The aim is to guarantee for owners and tenants smooth and
quick approval procedures to install recharging points in existing multi-tenant residential
and non-residential buildings.
Article 8(7) of the EPBD requires Member States to provide for measures to simplify
deployment of recharging points in new and existing residential and non-residential
buildings and to address possible regulatory barriers, including permitting and approval
procedures. This obligation must be fulfilled by transposing the EPBD into national
legislation by the transposition deadline at the latest. This provision is however deemed
not enough to remove the administrative barriers encountered, especially in multi-family
buildings.
Lengthy and complex approval procedures can be a major barrier to owners and tenants
installing recharging points in existing multi-tenant residential and non-residential
buildings. For instance in properties under shared ownership such as condominiums the
installation of recharging stations in some cases require the agreement of all co-owners
and in others the majority of the assembly182
.
There are examples in several countries such as Spain, the Netherlands and Norway of
legislations to ensure the “right to plug”. See below for more details.
Obtaining the necessary approvals can create delays or prevent installation. ‘Right to
plug’ or ‘right to charge’ requirements ensure that any tenant or co-owner is able to
install a recharging station without prior (potentially difficult) consent from the landlord
or from the other co-owners. In Spain and Italy, for example, legislation allows a co-
owner to install a recharging point for private use when located in an individual parking
place and when the association of co-owners has been informed in advance. The co-
owners cannot block the installation. The cost of the installation and of the subsequent
electricity consumption is assumed by the individual who has installed the recharging
point. Only installation in a common area requires prior approval by the assembly.
In the public consultation, 62% of respondents suggested to introduce a right to plug in
multi-dwelling buildings. The right to plug should ensure the right for owners/occupants
of apartments to install a recharging point for their parking spot in a shared parking.
Some respondents also suggested that the right to plug should apply to non-residential
182
Usually meeting once a year.
352
buildings. Some stakeholders raised concerns as to the readiness of the grid for the
recharging points and the large investment needs.
However, as regards administrative barriers, only one third of respondents reported that
they were aware of administrative barriers preventing the deployment of charging points
in their country.
E-M3 extends the readiness also to parking space for bikes, including e-scooters and e-
bikes183
.184
In the public consultation, 52% of respondents suggested the inclusion of
provisions for vehicles other than cars. In the current EPBD, there are no requirements to
provide recharging for e-bikes, however recital 28 and Article 8.8 refers to e-bikes in the
requirement for MS to consider the need for dedicated parking infrastructure for electric
bicycles and to consider the need for coherent policies for buildings, soft and green
mobility and urban planning185
.
Recharging for e-bikes is different from recharging for electric cars as the battery can
easily be removed from the bike and be recharged at another location than the parking
(also, many e-bike owners prefer to remove the battery to minimise the risk for theft).
Also, the e-bike can be charged in a normal socket, a specific recharger is not needed.
However a problem for many e-bike owners, especially in city centres, is access to a safe
bike parking. In the context of the EPBD, the main avenue for promoting sustainable
transport and emission reductions through e-bikes would be to require bike parkings in
building codes. Updating parking norms to also cater for electric bikes, eventually using
car stalls, would be a step in promoting sustainable infrastructure and emissions
reduction and air quality, health and congestion in urban areas.
The suggested policy option in the EPBD is a requirement for MS to introduce minimum
bicycle parking requirements in new buildings and buildings undergoing major
renovation (residential and non-residential). The level of ambition should be at least one
bike park per dwelling for residential buildings. For non-residential at least one bike park
for every car parking space.
For major renovation the number of bike parking spaces can be increased through the
conversion of car parkings to bike parkings. Examples from MS include the Bulgarian
183
The private bicycle as well as private e-bike are the most energy-efficient of all vehicles, both for
vehicle-km as well as person-km (International Transport Forum (ITF) 2019: Lifecycle Assessment of
Emerging Urban Transport Business Models )
184
An estimated 5.1 million e-bikes were sold in the EU-27 in 2020, bringing total stock to about 20
million e-bikes in the EU. (https://www.ziv-zweirad.de/uploads/media/PM_2021_10.03._ZIV-
Praesentation_10.03.2021_mit_Text.pdf)
The European bicycle industry forecasts strong growing demand for e-bikes over the next decade and will
reach annual sales of 17 million units in 2030. (New European Cycling Industry Forecast shows huge
growth in bike and e-bike sales | Cycling Industries Europe - The voice of cycling businesses in Europe)
185
Incorporating electromobility early in the development of mobility plans adopted under SUMP can help
to realise the objectives of Article 8(8) of the EPBD.
353
Regulation for bike parking, requiring 1,5 spaces per household in multifamily residential
buildings
Large non-residential buildings, such as offices and workplaces, will be key for the
uptake of evehicles, as they give the opportunity to charge during the day at the
workplace. For this category of buildings, the proposal is to include a requirement for
existing buildings to equip at least 10% of parking places in 2027 with recharging
stations. The requirement will apply to existing non-residential buildings with more than
20 parking places. In the existing EPBD there is already a requirement for MS to set out
requirements for the installation of a minimum number of recharging stations in this
category of buildings. The suggested policy option is strengthening the existing
requirement.
6. Estimation of impacts and costs
In the Fit for 55 Mix-scenario, the total cost for the electricity recharging infrastructure in
the EU is estimated to EUR 31,6 billion for the period 2026-2030 and EUR 69,5 billion
for the period 2046-2050. This is the total amount, including accessible both publicly
available and private infrastructure.
In order to assess the impact of the proposed policy options E-M1 to E-M3 for electro
mobility the following table shows the differences between the current EPBD and the
proposed options.
Table I.2: E-mobility policy options – comparison with current requirements
Building
type
Current EPBD E-M1
E-M2 and E-
M3
Residential
Buildings
New and major renovation with
more than 10 parking spaces186:
Ducting infrastructure for every
parking space
All new and
major
renovation
with more
than 5
parking
spaces:
Precabling
E-M1 plus
MS implement
“Right to plug”
and therefore
trigger more
purchases of
recharging
points in
residential
buildings
(assumption
20% by 2050,
especially
SMFH)
All non-
residential
buildings with
more than 20
parking spaces:
Non-
residential
Buildings
New and major renovation with
more than 10 parking spaces187:
1. ≥ 1 recharging point
2. Ducting infrastructure for ≥
1/5 of the parking spaces
All non-residential buildings with
more than 20 parking spaces188:
by 2025: Minimum number of
recharging points to be defined
by MS
186
EPBD Article 8(5)
187
EPBD Article 8(2)
188
EPBD Article 8(3)
354
by 2027:
Recharging
points for 1/10 of
all parking
spaces
Therefore, the differences between a) numbers of parking spaces with recharging points
and ducting infrastructure for the proposed policy options, and b) numbers incurred by
the current EPBD need to be evaluated to quantify the impacts of the policy option. To
determine these differences, estimations on the total number of parking spaces in Europe
and additional assumptions (e.g. the shares of buildings per building type with more than
10 parking spaces or the average major renovation rates) is needed.
Estimation of the number of parking spaces in Europe
The following table reflects the space floor area development by building categories.
Table I.3: Floor Area (per building type) in million square meters189
Building
type
2020 2025 2027 2030 2050
SFH 11,060 11,427 11,577 11,808 13,495
SMFH 2,929 3,010 3,043 3,093 3,459
LMFH 3,818 3,934 3,982 4,055 4,594
OFB 1,501 1,574 1,605 1,653 2,026
TRB 1,486 1,561 1,593 1,642 2,029
EDB 1,111 1,169 1,193 1,230 1,527
TOB_HEB 1,304 1,365 1,390 1,429 1,728
ONB 905 950 968 997 1,225
To convert these values into a number of parking spaces, additional assumptions must be
taken as regards the number of parking spaces per unit of floor area. For this purpose, it
is assumed:
 1.25 parking spaces/100m² (1 parking space per household of 80m² on average) in
residential buildings;
 1.00 parking space/100m² in non-residential buildings.
As the different options and the current EPBD apply for buildings with parking areas
with more than 5, 10 and 20 parking spaces, assumptions must be taken in this respect.
For residential buildings, the distribution directly results from the residential buildings’
sub categories. For non-residential, assumptions in were established based on the
reference building cases taken for each sub-category. For example the representative
building for “Education” (EDB) and “Touristic and Health” (TOB_HEB) is well above
189
Source: Guidehouse et al.
355
1,000m² and therefore is assumed a higher share of such buildings being above 5, 10 or
20 parking spaces.
Average renovation rates190
were also assumed to observe what share of the 2020
existing stock would be covered by the application to the major renovation191
clause.
Table I.4: Additional assumptions
Building
type
Number of
parking space
for 100m²
Share of
buildings with
more than 5
parking space
Share of
buildings with
more than 10
parking space
Share of buildings
with more than 20
parking space192
Average major
renovation rate378
SFH 1.25 0% 0% 0% 1.50%
SMFH 1.25 50% 0% 0% 1.50%
LMFH 1.25 100% 100% 50% 1.50%
OFB 1.00 75% 50% 25% 2.70%
TRB 1.00 75% 50% 25% 2.70%
EDB 1.00 90% 75% 38% 2.70%
TOB_HE
B 1.00
90%
75%
38% 2.70%
ONB 1.00 75% 50% 25% 2.70%
This set of assumptions allows the determination of the number of parking spaces for
different cases as reflected in the table below. Between 2020 and 2050:
 83.1 million parking spaces in new buildings would be constructed (27.9 million
in parking areas with more than 10 parking spaces),
 190.3 million parking spaces would be located in building that undergo a major
renovation (67.0 million in parking areas with more than 10 parking spaces),
 81.3 million parking spaces would remain unchanged.
Table I.5: Number of parking spaces (in million units) by cases, cumulated between 2020 and 2050
In buildings
with less than
10 parking
spaces
In buildings
with more than
10 parking
spaces
In buildings
with more than
20 parking
spaces
All
New buildings (between
2020 and 2050)
55.2 27.9 (13.9)193 83.1
Major renovations
(between 2020 and 2050
123.3 67.0 (33.5) 190.3
Others 67.9 13.4 (6.7) 81.3
Total 246.5 108.2 (54.1) 354.7
190
Following Esser et al., 2019 (assumption for major renovations = deep renovations + medium
renovations/2; reason: only half of the medium renovations will qualify as major renovation)
191
Major renovation in the context of Article 8 of the EPBD proposal is as defined in Article 2(10) of the
EPBD.
192
Assumption: Share of buildings with more than 20 parking space = 50%* Share of buildings with more
than 10 parking space.
193
Subset of more than 10 parking spaces but needed for the determination of the recharging points for the
current EPBD variant
356
Estimation of the number of recharging points and ducting infrastructure in
Europe
The below table shows the results for the differences of recharging points and ducting
infrastructure/pre-cabling of the proposed policy options compared to the current EPBD
as described above.
Table I.6: Difference of number of recharging points and ducting infrastructure (in million units) by cases
to current EPBD, cumulated between 2020 and 2050
Building
category
E-M1
E-M2 and E-
M3
Residential
Buildings
Recharging
points
0.0 10.2
Ducting
infrastructure/
pre-cabling
13.8 13.8
Non-
Residential
Buildings
Recharging
points
0.0 3.9
Ducting
infrastructure/
pre-cabling
4.1 4.1
In E-M1 the number of parking spaces with ducting infrastructure is estimated to increase
by roughly 18 million compared to the current EPBD until 2050 (13.8 in/adjacent to
residential and 4.1 in/adjacent to non-residential buildings), which is due to obliging
significantly more smaller buildings to have ducting infrastructure, too. E-M2 and E-M3
do not pose additional requirements for ducting infrastructure, which keeps those 18
million unchanged.
While E-M1 does not require to add recharging points, the ‘right to plug’ required in E-
M2 and E-M3 will motivate and enable owners and tenants, especially in multi-family
buildings, to actually use the ducting infrastructure for installing a recharging point.
As illustrated in the above tables, it is assumed that 20% of all parking spaces with
ducting infrastructure (especially in SMFH) will be used for installing a recharging point.
This adds another roughly 10 million recharging points in residential buildings compared
to the current EPBD.
Also in E-M3, for existing non-residential buildings with more than 20 parking spaces, it
requires that 1 in 10 parking spaces should be equipped with a recharging point from
2027 on, and 2 in 10 from 2030 on. For 2050 a share of 3 in 10 is assumed.
Compared to current EPBD requirements this adds roughly 4 million recharging points.
Estimation of costs
357
The total CAPEX of a Type2 smart 22kVA charging point can be estimated around
€2,500/unit194
. This cost includes the full installation (cabling and recharging point itself)
assuming simple configurations (no structural work, i.e. no drilling of walls or slabs).
These cost estimates are valid for indoor recharging points (outdoor recharging points are
typically more expensive).
Table I.7: Difference of costs for recharging points and pre-cabling (in billion Euros) by cases, cumulated
between 2020 and 2050
E-M1
E-M2 and E-
M3
Recharging
points 0 35,326
Precabling
8,923 8,923
E-M1 creates additional pre-cabling infrastructure in both residential and non-residential
buildings, creating an additional investment need of approximately EUR 9 billion until
2050.
As described above, E-M2 and E-M3 will create additional recharging points in
residential buildings and in non-residential buildings, with an estimated EUR 35 billion
of investment until 2050.
7. Experiences in Member States on “right to plug”
Several countries have implemented some sort of Right to Plug in their national
legislations:
Spain
Ley de Propiedad Horizontal art. 17.5): “The installation of an electric vehicle recharging
point for private use in the building's car park, provided that it is located in an individual
garage space, will only require prior communication to the community. The cost of said
installation and the corresponding electricity consumption will be fully assumed by the
direct interested party (s).”
France
Code of Construction and Housing (Code de la construction et de l'habitation)
 Article L.111-6-4 provides that a community of owners may not oppose the
equipment of private parking spaces with charging equipment for electric or plug-in
hybrid vehicles, without serious and legitimate reasons.
194
The pre-cabling infrastructure can be assumed at 500 €.
358
 Article L. 111-6-5 specifies the conditions for the installation, management and
maintenance of electric charging equipment within a multi-unit building and serving
one or more end-users.
Decree 873 of 2011 outlines the terms of application of these two articles. The owner is
required to request the approval of the Community of Owners.
 If the request is rejected, the Community of Owners has 6 months after receiving the
approval request to bring it before a judge. If the request is not brought before a judge
within 6 months, the owner can install the charging equipment.
 If the request is reviewed by a judge, it may only be rejected is there are serious
motives, e.g. if the installation represents the “execution of impossible work“
(exécution des travaux impossibles).
Portugal
Property Law:
 In order to install a charging station the condominium administration must be
contacted at least 30 days prior in according to Decree Law n.º90/2014 Article 26/29
(Decreto Lei n.º90/2014), which alters Decree Law n.º39/2010 (Decreto Lei
n.º39/2010)
 Any condominium member, tenant or legal occupier may install, at their own
expense, charging points for electric vehicle batteries or electrical outlets that meet
the technical requirements defined by the DGEG (DGEG).
 Opposition by the administration is possible if a charging station is already installed
or planned in the next 90 days or if it causes safety risks to persons or property or
harms the architectural line.
 New buildings or rebuilt buildings are required to have a charging point or electrical
outlet at parking spaces.
Italy
Il Vademecum per le Ricariche Condominali e Private :
“1) If you have a private parking space it is necessary to distinguish how the
electricity supply takes place: a) By installing a electricity meter in the name of
that neighbour, a written communication to the administrator of condominium
which will have to take act of the decision taken since not special authorizations
are required. The works must be carried out in accordance with the technical
regulations.”
359
There is also a regulation that states that a co-owner has to ask the assembly (if
there are shared costs). If the assembly refuses or if no answer is given within 3
months, the owner has the right to install the station at his/her own expenses.195
Netherlands
The Dutch government is preparing a legislative proposal to implement Right to Plug.
Letter from the Government to the Parliament with the formal announcement (in
English).
In addition, as regards experiences outside the EU, In Norway the right to plug is
legislated for condominiums and owner-owned properties196
: § 25a i eierseksjonslove
and § 5-11 a i borettslagsloven. There is also technical support available to support the
recharging installation process in multi-family buildings, covering the following aspects:
 Own or rent the recharging infrastructure?
 Costs (investment and operational)
 Future-proof technologies
 Ensure enough power-supply to the building
 How to handle existing rechargers
 Legal aspects
 Payment solutions
 Maintenance and support
 The need for fast chargers
8. Fire safety concerns in in-door car parkings
Some stakeholders, including in the public consultation, have put forward fire safety
concerns related to parking of EVs in underground car parks. Although electric cars do
not catch fire more frequently than conventional vehicles, they behave differently in the
event of fire. A great deal of water is needed to extinguish the fire, and the cells in the
battery packs can reignite hours or days later. The fire brigade therefore uses special
water containers in which electric cars are immersed. However, these do not fit into all
underground or multi-storey car parks. In addition, the chemical fire of a battery releases
toxic gases and generates such extreme heat that reinforced concrete can burst and iron
can melt, leading to the risk of the structure collapsing.
195
DECRETO LEGISLATIVO 16 dicembre 2016, n. 257
196
§ 25a i eierseksjonslove and § 5-11 a i borettslagsloven
360
There are local examples, for instance in Germany (Kulmbach, Leonberg), where the use
of city-owned underground car parks is prohibited for electric vehicles. Also, in the
opinion of the German Fire Prevention Association (Vereinigung zur Förderung des
Deutschen Brandschutzes – VFDB), such fires do indeed bear ‘significant potential
risks’.
There are no policy options foreseen in the EPBD revision that addresses fire safety of
electric vehicles in underground parks, as this would be mainly within the competence of
national administrations. In an EU context, but outside the scope of the EPBD, one
option could be to develop European recommendations for the fire-safe deployment of
recharging points in buildings, to be developed together with European fire brigade
associations. Another could be to allocate specific funds to better training and equipping
fire brigades in Europe to deal with these kinds of problems (e.g. procuring specialised
towing equipment, to tow extreme heated EVs after a fire out of an underground garage).
The Commission has been for years actively involved in the work of technical experts
related to the safety of electric vehicles. Rules are already in place197
and are relevant for
EU type approval of vehicles. The Commission will continue its work on the
international harmonisation of technical requirements in UNECE198
, thus further
improving the safety of electric vehicles and will remain actively involved in the
activities of international and European standardisation organisations, with a particular
focus on the charging interfaces for electric vehicles. Also, the Batteries Partnership will
make significant efforts to further address safety concerns for battery systems199
.
As regards the handling of fires, the adoption of potential fire safety guidelines related to
electric vehicle fires remains the responsibility of national, regional and local fire and
rescue services and associations. The International association of fire and rescue services
(CTIF200) regularly organises seminars and trainings for first and second responders as
regards the handing of electric vehicles. A number of reports201 contain information on
fire safety of parking garages with electric vehicles.
197
E /ECE/324/Rev (unece.org)
198
United Nations Economic Commission for Europe
199
The objective of the partnership to be launched under Horizon Europe is to develop different monitoring
features for current generations of batteries (embedded sensors to monitor the state of health and isolation
of defective cells, advanced cooling systems preventing thermal runaway…), as well as to develop
inherently safer and more robust solid-state batteries.
200
https://www.ctif.org/index.php/
201
An example worth mentioning is a recent report published by the Dutch Institute for Safety (Het
Instituut Fysieke Veiligheid (IFV)) on fire safety of parking garages with electrically-propelled vehicles
(20201208-IFV-Brandveiligheid-parkeergarages-met-elktrisch-aangedreven-voertuigen.pdf).
361
Annex J: Climate Target Plan Policy Conclusions
1. 2030 CLIMATE TARGET PLAN POLICY CONCLUSIONS
The Communication on stepping up Europe’s 2030 climate ambition - the Climate Target
Plan (CTP)202
and its underpinning impact assessment are the starting point for the
initiatives under the Fit for 55 package.
The plan concluded on the feasibility - from a technical, economic and societal point of
view - of increasing the EU climate target to 55% net reductions of greenhouse gases
(GHG) emissions by 2030 compared to 1990. It also concluded that all sectors need to
contribute to this target.
In particular, with energy supply and use responsible for 75% of emissions, the plan put
forward ambition ranges for renewables and energy efficiency, which correspond in a
cost-efficient manner to the increased climate target. The CTP also established that this
increase in climate and energy ambition will require a full update of the current climate
and energy policy framework, undertaken in a coherent manner.
As under the current policy framework, the optimal policy mix should combine, at the
EU and national levels, strengthened economic incentives (carbon pricing) with updated
regulatory policies, notably in the field of renewables, energy efficiency and sectoral
policies such as CO2 standards for new light duty vehicles. It should also include the
enabling framework (research and innovation policies, financial support, addressing
social concerns).
While sometimes working in the same sectors, the policy tools vary in the way they
enable the achievement of the increased climate target. The economic incentives
provided by strengthened and expanded emissions trading will contribute to the cost-
effective delivery of emissions reductions. The regulatory policies, such as the
Renewable Energy Directive (RED), the Energy Efficiency Directive (EED), the
Regulation on CO2 standards for vehicles supported by the Directive on the alternative
fuels infrastructure, and the Re(FuelEU) aviation and maritime initiatives, aim at
addressing market failures and other barriers to decarbonisation, but also create an
enabling framework for investment, which supports cost-effective achievement of
climate target by reducing perceived risks, increasing the efficient use of public funding
and helping to mobilise and leverage private capital. The regulatory policies also pave
the way for the future transition needed to achieve the EU target of the climate neutrality.
Such a sequential approach from the CTP to the Fit for 55 initiatives was necessary in
202
COM (2020) 562 final.
362
order to ensure coherence among all initiatives and a collective delivery of the increased
climate target.
With the “MIX” scenario, the impact assessment included a policy scenario that largely
reflects the political orientations of the plan.
The final calibration between the different instruments is to be made depending, inter
alia on the decision on the extension of emissions trading beyond the maritime sector and
its terms.
The table below shows the summary of the key CTP findings:
Table J.1: Key policy conclusions of the CTP
POLICY CONCLUSIONS IN THE CTP
GHG emissions
reduction
 At least 55% net reduction (w.r.t. 1990)
 Agreed by the European Council in December 2020
 Politically agreed by the European Council and the European Parliament in
the Climate Law
ETS  Corresponding targets need to be set in the EU ETS and the Effort Sharing
Regulation to ensure that in total, the economy wide 2030 greenhouse gas
emissions reduction target of at least 55% will be met.
 Increased climate target requires strengthened cap of the existing EU ETS
and revisiting the linear reduction factor.
 Further expansion of scope is a possible policy option, which could include
emissions from road transport and buildings, looking into covering all
emissions of fossil fuel combustion.
 EU should continue to regulate at least intra-EU aviation emissions in the
EU ETS and include at least intra-EU maritime transport in the EU ETS.
 For aviation, the Commission will propose to reduce the free allocation of
allowances, increasing the effectiveness of the carbon price signal in this
sector, while taking into account other policy measures.
ESR  Corresponding targets need to be set in the Effort Sharing Regulation and
under the EU ETS, to ensure that in total, the economy wide 2030
greenhouse gas emissions reduction target of at least 55% will be met.
LULUCF  Sink needs to be enhanced.
 Agriculture forestry and land use together have the potential to become
rapidly climate-neutral by around 2035 and subsequently generate
removals consistent with trajectory to become climate neutral by 2050.
CO2 standards
for cars and
vans
 Transport policies and standards will be revised and, where needed, new
policies will be introduced.
 The Commission will revisit and strengthen the CO2 standards for cars and
vans for 2030.
 The Commission will assess what would be required in practice for this
sector to contribute to achieving climate neutrality by 2050 and at what
point in time internal combustion engines in cars should stop coming to the
363
203
The Impact Assessment identifies a range of 35.5% - 36.7% depending on the overall design of policy
measures underpinning the new 2030 target. This would correspond to a range of 39.2% - 40.6% in terms
of primary energy consumption.
market.
Non-CO2 GHG
emissions
 The energy sector has reduction potential by avoiding fugitive methane
emissions. The waste sector is expected to strongly reduce its emissions
already under existing policies. Turning waste into a resource is an
essential part of a circular economy. Under existing technology and
management options, agriculture emissions cannot be eliminated fully but
they can be significantly reduced while ensuring food security is
maintained in the EU. Policy initiatives have been included in the Methane
Strategy.
Renewables  38-40% share needed to achieve increased climate target cost-effectively.
 Renewable energy policies and standards will be revised and, where
needed, new policies will be introduced.
 Relevant legislation will be reinforced and supported by the forthcoming
Commission initiatives on a Renovation Wave, an Offshore Energy
strategy, alternative fuels for aviation and maritime as well as a Sustainable
and Smart Mobility Strategy.
 EU action to focus on cost-effective planning and development of
renewable energy technologies, eliminating market barriers and providing
sufficient incentives for demand for renewable energy, particularly for end-
use sectors such as heating and cooling or transport either through
electrification or via the use of renewable and low-carbon fuels such as
advanced biofuels or other sustainable alternative fuels.
 The Commission to assess the nature and the level of the existing,
indicative heating and cooling target, including the target for district
heating and cooling, as well as the necessary measures and calculation
framework to mainstream further renewable and low carbon based
solutions, including electricity, in buildings and industry.
 An updated methodology to promote, in accordance with their greenhouse
gas performance, the use of renewable and low-carbon fuels in the
transport sector set out in the Renewable Energy Directive.
 A comprehensive terminology for all renewable and low-carbon fuels and a
European system of certification of such fuels, based notably on full life
cycle greenhouse gas emissions savings and sustainability criteria, and
existing provisions for instance in the Renewable Energy Directive.
 Increase the use of sustainably produced biomass and minimise the use of
whole trees and food and feed-based crops to produce energy through inter
alia reviewing and revisiting, as appropriate, the biomass sustainability
criteria in the Renewable Energy Directive,
Energy
Efficiency
 Energy efficiency policies and standards will be revised and, where
needed, new policies will be introduced.
 Energy efficiency improvements will need to be significantly stepped up to
around 36-37% in terms of final energy consumption203
.
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 Achievement of a more ambitious energy efficiency target and closure of
the collective ambition gap of the national energy efficiency contributions
in the NECPs will require actions on a variety of fronts.
 Renovation Wave will launch a set of actions to increase the depth and the
rate of renovations at single building and at district level, switch fuels
towards renewable heating solutions, diffuse the most efficient products
and appliances, uptake smart systems and building-related infrastructure
for charging e-vehicles, and improve the building envelope (insulation and
windows).
 Action will be taken not only to better enforce the Energy Performance of
Buildings Directive, but also to identify any need for targeted revisions.
 Establishing mandatory requirements for the worst performing buildings
and gradually tightening the minimum energy performance requirements
will also considered.
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Annex K: The EPBD and its linkages with other instruments
and policies
1. The EPBD revision in the Renovation Wave Action Plan
The Renovation Wave communication integrates climate, energy and environmental
objectives, industrial strategy and circularity objectives, as well as skills, consumer
welfare and fair and social transition goals. It links with ongoing work on green finance
and sustainable investments and includes targeted actions at EU, national and local level.
It focuses especially on tackling energy poverty and worst-performing buildings, on
renovating public buildings and social infrastructure and on decarbonising heating and
cooling. The holistic approach to building renovations outlined by the Renovation Wave
can open up numerous possibilities and generate far-reaching social, environmental and
economic benefits. With the same intervention, buildings can be made healthier, greener,
interconnected within a neighbourhood district, more accessible, resilient to extreme
natural events, and equipped with interoperable, standardised recharging points for e-
mobility and bike parking.
To achieve its far-reaching and holistic ambitions, the Renovation Wave has identified 23
implementation action points, including regulatory measures as well as financing and
supporting actions. The current EPBD revision addresses 3 of the 23 key Commission
actions to implement the Renovation Wave and some of its main regulatory measures.
This entails the introduction of mandatory minimum energy performance requirements
for buildings (MEPS), and the revision of the EPCs framework, the proposal to introduce
building renovation passports (BRPs) and to consider the introduction of a deep
renovation standard. Other regulatory and supporting measures for the implementation of
the Renovation Wave are being addressed by strengthening of the EU legislative
framework of the Energy Efficiency Directive (EED), the Renewable Energies Directive
(RED), Ecodesign Directive and Energy Labelling Regulation, as well as by the New
European Bauhaus initiative204
.
Here below is an overview of the Renovation Wave Action Plan as published on 14
October 2020:
Strengthening information, legal certainty and incentives for renovation
204
Established to ideate, incubate, accelerate and realise innovative projects demonstrating the right
balance of sustainability (comprising circularity), quality of life (comprising aesthetic) and inclusion
(comprising accessibility and affordability), the New European Bauhaus is called to support the objectives
of the Renovation Wave while going beyond buildings. Form will follow Planet, making the necessary
beautiful too in a more sustainable and just built environment.
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Revision of Energy Performance Certificates and proposal to introduce
mandatory minimum energy performance standards for all types of
buildings in the EPBD
2021
Revision of requirements on energy audits in the EED 2021
Proposal on Building Renovation Passports and introduction of a single
digital tool unifying them with Digital Building Logbooks
2023
Developing a 2050 whole life-cycle performance roadmap to reduce
carbon emissions form buildings and advancing national benchmarking
with Member States
2023
Reinforced, accessible and more targeted funding supported by technical assistance
Proposed strengthened financing for the ELENA facility from the
InvestEU advisory hub and possibly from other European programmes
2021
Consider the introduction of a ‘deep renovation’ standard as part of the
EPBD revision
2021
Revising the climate-proofing guidelines for projects supported by the
EU
2021
Supporting de-risking energy efficiency investments, and proposing to
incorporate environmental, social and governance (ESG) risks into the
Capital Requirements law and the Solvency II Directive
2021
Reviewing the General Block Exemption Regulation and Energy and
Environmental Aid Guidelines
2021
Creating green jobs, upskilling workers and attracting new talent
Supporting Member States to update their national roadmaps for the
training of the construction workforce through the Build Up Skills
Initiative and helping implement the 2020 European Skills Agenda
2020
Sustainable built environement
Reviewing material recovery targets and supporting the internal market
for secondary raw materials
2024
Presenting a unified EU Framework for digital permitting and
recommending Building Information Modelling in public procurement
2021
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Supporting digitalisation in the construction sector through Horizon
Europe, Digital Innovation Hubs and Testing and Experimentation
Facilities
2021
Placing an integrated participatory and neighbourhood based approach at the heart
of renovation
Setting up a creative European Bauhaus platform to combine
sustainability with art and design
2020
Supporting sustainable and decarbonised energy solutions through
Horizon Europe and the R&I co-creation space
2020
Facilitating the development of energy communities and local action
through the European Smart Cities Marketplace
2020
Supporting the development of climate-resilient building standards 2020
Tackling energy poverty and worst-performing buildings
Launching the Affordable Housing Initiative piloting 100 renovation
districts
2021
Public buildings and social infrastructure showing the way
Proposing to extend the requirements for renovation to buildings in the
EED to all public administration levels
2021
Based on Level(s), developing green public procurement criteria
related to life cycle and climate resilience for certain public buildings
2022
Decarbonising heating and cooling
Developing ecodesign and energy labelling measures 2020
Assessing the extension of the use of emission trading to emissions
from buildings
2021
Revising the RED and the EED and considering strengthening the
renewable heating and cooling target and introducing a requirement for
minimum proportions of renewable energy in buildings. Also
facilitating access of waste and renewable heat and cool into energy
systems
2021
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2. Interactions with the key ‘Fit for 55’ legislation/initiatives
Achieving at least 55% net greenhouse gas (GHG) emission reductions by 2030
compared to 1990 at an economy wide scale require a significant scale up of ambition of
all relevant policy instruments – as analysed in the CTP.
Because by far most GHG emissions originate in the energy system205
(including end-
use sectors such as transport, buildings and industry), an enhanced energy policy
framework, addressing energy efficiency (EE) and renewable energy (RES) is key to
achieve the climate target in a cost-efficient manner in addition to contributing to other
European Green Deal objectives. The need for increased ambition, addressing identified
weaknesses and intensifying the relevant measures has guided the preparation of the
proposals included in the first “Fit for 55” package adopted in July 2021, while the
EPBD revision and other reforms have been planned for adoption at a later stage. This
approach avoids the risk of incoherence or regulatory overshoot with the initiatives.
The current EU climate and energy policy framework already presents several elements
of synergies. Energy efficiency and renewable energy policy both reduce fossil fuels use
and thus are strong drivers for GHG emissions reduction. The existing mix represents a
combination of regulatory policies and economic incentives, as well as other enabling
conditions such as research and innovation or financing and also strategic planning
instruments such as NECP and LTRS. In developing the current policy framework, the
complementarity of the instruments has been ensured.
The “Fit for 55” package has been outlined to ensure an optimal policy mix, addressing
in a targeted manner market failures and non-market barriers, following the indications
provided in the Climate Plan which highlighted the need for a mix of instruments to
achieve the goal of reducing GHG emissions by -55% by 2030 in comparison to 1990
levels. It also provides economic incentives to take action. The approach proposed in the
F55 is to deploy various complementary policy instruments to address distinct challenges
in the pursuit of climate neutrality.
The proposals to review the REDII and EED aim at creating an enabling framework for
investment which supports cost-effective achievement of the climate and energy targets
by reducing perceived risks, increasing the efficient use of public funding and helping to
mobilise and leverage private capital. Both the investment challenge and fairness
considerations are also captured in the EU budget with the requirement that at least 30%
of the expenditure under the Multiannual Financial Framework 2021-2027 and 37% of
the NextGenerationEU Recovery Instrument support climate objectives. The appropriate
use of these resources will contribute to spur the transition to climate neutrality.
205
Based on the analysis underpinning the Climate Target Plan, around 75 % of the GHG emissions are
related to energy production and use.
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Moreover, the Effort Sharing Regulation (EU) 2018/842206
supports the implementation
of the Renovation Wave strategy, as it sets binding GHG emission reduction targets for
Member States covering several sectors, including the building sector.
The EPBD revision in turn addresses the specific and mainly non-economic barriers that
prevent the energy renovation of buildings at a scale, speed and depth which would be
sufficient to achieve the GHG reduction goal of -55% by 2030. It introduces specific
standards for new and existing buildings, requirements for certain buildings and
information tools to ensure that the finance available for renovation achieves maximum
results and benefits, enhancing the price signal from ETS.
2.1. Interactions with the legislation on energy efficiency, renewables and the
hydrogen and Gas markets Decarbonisation Package
The Energy Efficiency Directive (EED), adopted in 2012 and last amended in 2018 by
means of Directive (EU) 2018/2002, establishes a common framework of measures for
the promotion of energy efficiency within the EU, in view of achieving the Union’s
headline targets on energy efficiency. The energy efficiency target for 2030 amount to a
reduction of final and primary energy consumption of -32.5% by 2030 in comparison to
scenario projections. The EED includes horizontal provisions to promote energy
efficiency across the economy. As regards the provisions most relevant for the buildings
sector, under the EED EU countries must make energy efficient renovations to at least
3% of the total floor area of buildings owned and occupied by central governments each
year. In addition, national governments shall only purchase buildings that are highly
energy efficient, where this is cost-efficient and feasible. There is a strong interaction
with the EPBD because the standards on new buildings and energy renovations set in the
EPBD contribute to the energy savings in the building sector which are necessary to
achieve the 2030 goals set in the EED. The sectoral measures on buildings also include
information tools, technical inspections and requirements in relation to finance
instruments, which all are enablers removing specific barriers preventing energy
efficiency gains in the building sector.
Another provision in the EED closely linked to the EPBD is Article 7 on energy savings
obligations. Almost half of the savings notified under Article 7 are reported to be
generated in the buildings sector thus contributing to an accelerated rate of renovation
thanks to the specific measures (i.e. financing schemes and programmes) introduced by
Member States to target renovation of residential and tertiary buildings.
Within the Fit for 55 package, the proposed changes to the EED related to buildings
policy aim at increasing the level of the 2030 target for energy efficiency and its annual
savings obligation, thus providing a higher incentive, but at the same time requiring
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increasing efforts from the building sector, in line with higher climate ambition. The
proposed enlargement of the scope of the renovation obligation to all public bodies, and
its alignment to the NZEB national standards, will contribute to an increased renovation
rate. The proposed introduction of a framework for MEPS in the EPBD is coherent with
that as it applies to the entire building stock. Specific national implementation measures
could identify additional goals for buildings of the public sector, complementary to those
in the EED.
Similarly, extending the EED obligation to only purchase buildings with high energy
efficiency performance from central governments to all public bodies will contribute to
the decarbonisation of public buildings. The new obligation for public bodies to assess
the feasibility of using energy performance contracting for the renovation of large non-
residential buildings (above 10 000 m2) will increase the role of ESCOs in promoting
renovations and the energy services market in the Member States. The EED revision also
aims to strengthen the role of advisory bodies and independent market intermediaries
including one stop shops or similar support mechanisms to stimulate market development
on the demand and supply sides, which are vital for developing a strong renovation
market. New provisions on ensuring the appropriate level of competences for energy
efficiency professions will have a positive impact on the quality of building renovation.
The Renewable Energy Directive establishes an overall policy for the production and
promotion of energy from renewable sources in the EU. First adopted in 2001 and last
amended in 2018, the Directive establishes a binding renewable energy target for the EU
for 2030 of at least 32%. The Directive obliges Member States to require the use of
minimum levels of energy from renewable sources in new buildings and in existing
buildings that are subject to major renovation in so far as technically, functionally and
economically feasible.
Within the Fit for 55, the proposed changes to the REDII related to buildings policy aim
at increasing ambition in the 2030 target for renewables and the annual target for heating
and cooling and district heating and cooling. In order to ensure an adequate contribution
of buildings, which account for around 60% of all heating and cooling consumption, the
revised REDII also proposes to introduce a goal for the share of renewables in the gross
final energy consumption related to buildings. These goals are accompanied by an
extended list of measures Member States can use to reach these targets. The list includes
planned replacement schemes of fossil heating systems or fossil phase-out schemes,
installation of highly efficient renewable heating and cooling systems in buildings,
renewable heat planning requirements at local and regional levels and strengthened
requirements on installers’ training and certification.
As regards e-mobility, the proposed revision of the RED II includes provisions on the
integration of EVs, in order to facilitate higher penetration of renewable electricity in the
system, reduce the needs for additional storage and flexible generation assets and to
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alleviate potential system congestion. The proposed changes in RED II follow a system
integration approach rather than being based on mobility needs only and intend to
establish a framework that is applied universally, regardless of the location or type of
recharging infrastructure, i.e. including in structures and areas within the scope of the
EPBD as well as all other recharging points covered by AFID. The proposed provisions
would require that newly installed recharging points have smart functionality and that
MS ensure that the deployed recharging infrastructure is adequate (in terms of number,
geographical distribution and supported technology) to enable the integration of EVs to
the level needed to benefit from their flexibility and storage potential, based on regular
assessments. Since recharging points in buildings form part of the overall system, this
measure would affect the required number of recharging points in buildings’ parking
facilities, based on the number of EVs that use the premises on a regular basis.
The Hydrogen and Gas markets Decarbonisation Package207 implements the EU
Strategy for Energy System Integration208
and the Hydrogen Strategy209
and aims at
contributing to the EU´s decarbonisation by facilitating the creation of a competitive
market for decarbonised gaseous fuels. A review of the legislative framework to design
competitive decarbonised gas markets is identified as an action in both strategies as a
means to facilitate the gas sector’s contribution to the overall energy system
decarbonisation. The reforms should enable direct participation of renewable and low-
carbon gases on the market, improve efficiency of the energy system through
strengthening synergies among decarbonisation technologies and energy carriers and
contribute to cost-efficient pathway toward achieving decarbonisation targets. The
revision of the EPBD aims at increasing the energy renovation rate of buildings thus
reducing the energy demand in the building sector, and to support the decarbonisation
and electrification of heating and transport (thanks also to specific measures on e-
charging for vehicles and sustainable mobility). The Hydrogen and Gas markets
Decarbonisation Package will enable the availability of decarbonised energy supplied to
buildings. On the other hand, the reform takes into account the expected reduction of
energy demand in the building sector as a result of the initiatives in the F55 packages, as
it is aligned to the future scenarios for the energy system outlined in the CTP.
2.2. Interactions with climate legislation and carbon pricing mechanisms
207
Revision of Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009
concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC;
Revision of Regulation (EC) No 715/2009 of the European Parliament and of the Council of 13 July 2009
on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No
1775/2005
208
https://ec.europa.eu/energy/sites/ener/files/energy_system_integration_strategy_.pdf
209
https://ec.europa.eu/energy/sites/ener/files/hydrogen_strategy.pdf
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The Effort Sharing Regulation (EU) 2018/842210
provides for Member State-specific
GHG emission reduction targets for the sectors covered by this Regulation, including the
building sector for the period 2021–2030. The EPBD supports the achievement by
Member States of their ESR targets by incentivising energy efficiency investments in the
building sector. As part of the “Fit for 55” package, it has been proposed to increase the
ambition level of the Effort Sharing Regulation and Member States’ national binding
targets in line with the net -55% GHG reduction 2030 climate target. Member States are
thus expected to increase the GHG emission reduction efforts in the sectors covered by
the Effort Sharing Regulation, for instance by further reducing emissions in the buildings
sector. The EPBD incentivises such emissions reductions by specifically addressing
barriers to renovation.
As regards the linkages with the Emission Trading Scheme (Directive 2003/87/EC),
within the current framework the EPBD ensures reducing emissions both outside the
scope of the existing ETS and within the ETS (i.e. electricity generation) by setting cost-
optimal minimum energy performance standards for new buildings and existing buildings
undergoing major renovation and other supporting energy efficiency measures related to
buildings211
.
As part of the revision of the EU emissions trading system (EU ETS) under the Fit for 55
legislative package, the European Commission is proposing to extend emissions trading
to the building and road transport sectors. Emissions from these sectors will not be
covered by the existing EU ETS but by a new, separate emissions trading system.
The revision of the EPBD is complementary both to the existing ETS in its current
setting and to the introduction of a new emission trading to buildings and road transport.
It contributes to an effective policy mix between market-based instruments and
regulatory tools, which has been assessed in the CTP as necessary to reduce carbon
emissions in buildings of around 60% by 2030. The revised EPBD would significantly
contribute to the achievement of climate goals for the building sector. The EPBD will
enable to overcome market failures that impede emissions abatement and that cannot be
overcome by a price signal alone (see also section 2.4.3 The complementary role of
regulatory measures and carbon pricing to address the barriers to energy renovations).
The EPBD would not have any specific impact on the operation of ETS. The competent
authorities in the Member States and the regulated entities are in fact different, and no
overlapping reporting requirement would exist. Under an upstream approach as proposed
for the extension to the ETS, the new regulated entities would not be directly involved in
buildings renovations.
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211
The interlinkages between the ETS proposal to introduce an emissions trading to buildings and road
transport and the EPBD have been already assessed in the Impact Assessment accompanying the proposal
amending Directive 2003/87/EC ( SWD(2021) 601 final, Sections. 6.3.5 and Annex 5 section 16.2).
373
In the current ETS framework, a carbon price signal is already applied to the energy
consumed in buildings, although limited to the use of electricity. However, the increased
efficiency of buildings would over time reduce emissions in the building sector, which
would have to be factored in the design of the ETS, both for what concerns the
strengthening of ETS applying to the power generation sector and the proposed extension
to buildings and road transport. The 2030 cap of the new ETS has taken into account the
complementarities, with an ambition level reflecting the combination of current
legislation with a strengthened policy mix. It is based on a scenario which includes
additional energy efficiency policies in the building sector which are however only
approximated, and which will be complementary as regards the combined effect in
achieving the 2030 55% goal. The revision of the EPBD information tools to include also
a carbon metric in the energy performance certificates, renovation passports and the
introduction of a deep renovation definition would enhance the carbon signal of ETS and
make it more effective in reaching investors and other actors responsible for emission
abatements, like manufacturers of heating appliances and other buildings technical
systems.
With the introduction of emissions trading to buildings and road transport, the price
incentive will contribute to the goals set in the Renovation Wave and be complementary
to the instruments set in the EPBD. The carbon price signal will have an effect in
ensuring a level playing field between energy carriers and in making certain low-carbon
solutions for renovations and renewable heating in building more cost-effective (e.g. heat
pumps). It can therefore provide an additional incentive to switching to decarbonised
heating and cooling appliances in new and existing buildings, but even at high carbon
price levels, analysis showed that due to low elasticities to energy prices, it is unlikely
that a carbon price alone will have an effect in accelerating energy renovations. It can
however reduce their pay-back time, especially for light renovations.
By introducing a carbon price and therefore increasing the energy costs, energy
efficiency measures would become more cost effective and higher renovation rates and
deeper renovations could be achieved.
Another important area of complementarity relates to the financial support to energy
renovations and energy efficiency investments in buildings. In that context, the
earmarking of financial revenues from ETS to provide social safeguards and to support
investment in renovation of low-income households would facilitate the socially
responsible deployment of minimum energy performance standards, thus contributing to
the goals of the Renovation wave strategy.
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In addition, to address any social impacts that arise from the new ETS system, the
Commission has proposed to introduce the Social Climate Fund212, with a twofold
objective:
- To finance temporary direct income support for vulnerable households;
- To support measures and investments that reduce emissions in road transport and
buildings sectors and as a result reduce costs for vulnerable households, micro-
enterprises and transport users.
The Fund should provide funding to Member States to support measures and investments
in increased energy efficiency of buildings, decarbonisation of heating and cooling of
buildings, including the integration of energy from renewable sources, and granting
improved access to zero- and low-emission mobility and transport. These measures and
investments need to principally benefit vulnerable households, micro-enterprises or
transport users. Strong interlinkages therefore exist between the SCF and the EPBD
revision, as by supporting buildings renovations of low-income households, the fund
would help making renovations more affordable for vulnerable consumers, thus
supporting the goals of the EPBD revision and more specifically the roll-out of minimum
energy performance standards.
The ongoing revision of the Energy Taxation Directive (Directive 2003/96/EC).
includes as one possible option for discussion, taxation rates based on a carbon content to
the sectors not covered by the ETS, on top of the energy content. This option would
incentivize products with low or zero content (as hydrogen, advanced biofuels and
renewable electricity) and would allow to differentiate among various fossil fuels, such
as less CO2 intensive natural gas and more CO2 intensive coal. As such the EPBD
revision does not have any particularly impact on the ETD but similarly to the extension
of ETS, increased carbon taxation on fuels would make the technologies and solutions
reducing their use more cost-effective.
The ongoing review of the F-gas Regulation (Regulation on fluorinated greenhouse
gases (Regulation (EU) No 517/2014)) will further promote the use of climate friendly
refrigerants in the heating and cooling systems of buildings. Notably since the
improvement of the climate footprint of buildings is relying on an increased use of heat
pumps that may contain strongly warming fluorinated gases, it is important that the
future F-gas Regulation is ambitious in this regard to avoid locking in future F-gas
emissions. Currently, all F-gases systems must be installed and maintained by a certified
212
EUR-Lex - 52021PC0568 - EN - EUR-Lex (europa.eu).
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persons and it is considered to require more elaborate skills regarding energy efficiency
aspects in the certification programmes.
2.3. Interactions with transport legislation.
AFID
The Alternative Fuels Directive (AFID, Directive 2014/94/EU) and EPBD are
complementary legislative instruments. Both include provisions on recharging points for
electric vehicles but their scope and the obligations they put upon Member States differ.
AFID sets the overall legislative framework for the standardisation and deployment of
alternative fuels infrastructure, including publicly available recharging infrastructure for
electric vehicles, and user information.
EPBD covers private recharging infrastructure in parkings adjacent to residential and
non-residential buildings. The EPBD already requires that a certain number of parking
spaces are prepared for recharging for new and renovated buildings with parkings over a
certain size. The rationale for the provision in the EPBD is that the cost of ducting for
recharging infrastructure is much lower if the work is made during construction or
renovation, compared to adding it at a separate moment. Buildings can effectively
promote e-mobility, targeting deployment of recharging infrastructure in the private
domain (private buildings' car parks), and as such supplement the AFID which sets
targets for the deployment of publicly accessible recharging infrastructure. Evidence
shows that the majority of recharging of electric vehicles would take place in the private
realm, in areas that are not publicly accessible.
AFID is being revised as part of the Fit for 55 package and policy options include setting
a fleet based target at national level and a distance based target for publicly accessible
recharging infrastructure (in particular along the TEN-T network). AFID establishes
technical specification for recharging infrastructure as well as the general market rules
for the operation of publicly accessible recharging infrastructure while fully recognising
that the operation of recharging points for electric vehicles should be developed as a
competitive market.
2.4. Interlinkages with other relevant legislations
The Ecodesign Directive213
provides a framework for setting mandatory product-specific
energy efficiency and other environmental performance requirements before products can
be placed on the Union market. It is implemented through product-specific regulations,
directly applicable in all EU countries. Currently, such requirements are in place for 30
213
Directive 2009/125/EC of the European Parliament and of the Council of 21 October 2009 establishing
a framework for the setting of ecodesign requirements.
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product groups. Ecodesign is an effective tool for improving the environmental
performance of products by setting mandatory minimum standards for their energy
efficiency. This eliminates the least performing products from the market. Under the
Ecodesign Directive, eco-design requirements have been established for technical
building systems (e.g. boilers, heat pumps or light sources) and equipment used in
buildings (e.g. household appliances).
The Energy Labelling Regulation ((EU) 2017/1369) provides a framework for
establishing mandatory product-specific labelling requirements. Currently, such
requirements are in place for 14 product groups. The EU energy labels provide a clear
and simple indication of the energy efficiency of products at the point of purchase,
allowing end-consumers to identify the better-performing products, via the well-known
A-G/green-to-red scale.
Ecodesign contributes to the achievement of the energy performance levels set in the
EPBD and in the national implementation measures by taking away inefficient products
from the market. Energy Labelling contributes to that as well by steering consumers
towards more energy-efficient products and heating and cooling appliances, while Article
7(2) of the Energy Labelling Regulation steers financing towards the most efficient
appliances.
Of particular relevance for the increased synergies with EPBD are the reviews of the
Ecodesign and Energy labelling requirements (including rescaling) for central/hydronic
space and water heaters which are ongoing. Reviews for other types of (local or solid
fuel) space heaters are also ongoing or are to be launched in 2021, with the aim of
adopting rescaling measures by August 2023, so that fossil fuel appliances will be pushed
down the scale which will incentivise consumers to move away from such appliance to,
for example, compared to, for example, heat pumps.
The Construction Product Regulation (Regulation (EU) No 305/2011 of the European
Parliament and of the Council of 9 March 2011) lays down harmonised rules for the
marketing of construction products in the EU. The Regulation provides a common
technical language to assess the performance of construction products, including on
energy related aspects (e.g. energy economy and heat retention). It ensures that reliable
information is available to professionals, public authorities, and consumers, so they can
compare the performance of products from different manufacturers in different countries.
The harmonised assessment methods of the CPR, which are available in the form of
harmonised European standards, are reflecting and/or complementing requirements of
other EU legislations.
The particularity of the rules on construction products results firstly from their
characteristic as intermediate products. Buildings and building elements consist of
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several products. For example, a wall (building element) generally consists of several
layers of material with various insulation properties. The energy performance of an
integrated building element is more than the sum of the energy performance of the
individual products involved. Proper design and installation, taking into account internal
and external systemic interactions, have a big influence on the resulting performance of a
building element.
Secondly, with respect to the division of powers between the EU and Member States,
construction is a field of clearly identified subsidiarity. Member States have exclusive
competence for building regulations (i.e. the rules on design and construction of
buildings and civil works). Member States retain full control of construction design rules
in their respective territories, relating in particular to public safety and security, energy
efficiency and the protection of workers.
Given this background, the CPR does not lay down product requirements but contains a
set of harmonised rules for assessing the performance of construction products in relation
to the principal characteristics of those products. A proposal to review the CPR is
currently planned for the fourth quarter of 2021. In addition to improving the
implementation of the common technical language by making the standardization process
more efficient, the revision will potentially aim to address the sustainability aspects of
construction products. This revision should allow better information on construction
products and thus facilitate the achievement of the climate objectives supported by the
EPBD.
State Aid – General Block Exemption Regulations and Energy and Environmental
Aid Guidelines
Lack of financing is one of the major barriers to building renovation. Public funding,
where applicable compliant with well-targeted State aid rules, is essential to overcome
this barrier. The ongoing revisions of the Energy and Environmental Aid Guidelines
(EEAG) and the related section 7 of the General Block Exemption Regulations (GBER)
aim inter alia to establish criteria ensuring that public support for building renovation
qualifying as State aid, can be considered compatible with State aid rules.
Taxonomy
The taxonomy delegated act adopted on 4 June 2021 defines requirements for building
renovation and individual renovation measures214
to be considered sustainable. The deep
renovation standard would complement the taxonomy requirements, establishing a gold
standard for building renovation that goes beyond the taxonomy requirements.
214
Energy efficiency equipment such as insulation, windows and heating systems, as well as on-site
renewable energy, recharging stations, building automation control systems.
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3. Policy initiatives and instruments with links to the EPBD revision
Energy System Integration Strategy
The objective of the of the EU strategy on energy system integration215 is to build the
energy system for a climate neutral economy thanks to a more holistic planning and
integration of the different end-use sectors (buildings, industry, transport) and of energy
carriers (electricity, heat, liquid and gaseous fuels). Some of the main areas identified in
this strategy are of particular importance for building policy..
Circular Economy
Other policy areas of relevance for buildings are those related to circular economy: a new
Circular Economy Action Plan (CEAP) was adopted in March 2020216
. It includes
measures that will help stimulate Europe's transition towards a circular economy and
encompasses the entire life cycle of products and key value chains, including
construction and buildings. It provides a roadmap with actions to boost the efficient use
of resources by moving to a clean, circular economy. It acknowledges that reaching
climate neutrality by 2050 requires highly energy and resource efficient buildings
equipped with renewable energy, considering life cycle performance and a more efficient
use of resources for building renovation and construction. The Commission will draw up
a 2050 whole life-cycle performance roadmap to reduce carbon emissions from buildings
and is revising the Construction Products Regulation.
Climate Adaptation Strategy
The second EU strategy for adaptation to climate change, adopted in February 2021217
,
considered there was a need to do more to prepare Europe’s building stock to withstand
the impacts of climate change. Extreme weather and long-lasting climatic changes can
damage buildings and their mitigation potential e.g. solar panels or thermal insulation
after hailstorms. It also recognised that buildings can contribute to large-scale adaptation,
for example through local water retention that reduces the urban heat island effect with
green roofs and walls. It pointed out that the Renovation Wave and the Circular Economy
Action Plan identified climate resilience as a key principles. The strategy committed the
Commission to explore options to better predict climate-induced stress on buildings and
to integrate climate resilience considerations into the construction and renovation of
buildings through various upcoming initiatives, naming specifically the revision of the
EPBD.
The Zero Pollution Ambition for a toxic-free environment
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216
Circular economy action plan (europa.eu)
217
EU Adaptation Strategy (europa.eu)
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The Zero Pollution Action Plan218
sets out an ambition level complementing the climate
objectives. The zero pollution ambition for a toxic-free environment for 2050 goes
alongside the drive for decarbonisation reducing pollution by
 phasing out polluting coal and fuel oil heating, while pollution from biomass
burning remains a challenge, notably when using outdated, inefficient
installations;
 promote the integration of the zero pollution ambition with clean energy and
energy efficiency objectives;
 addressing the issue of healthy temperatures and levels of humidity in new
buildings and in buildings undergoing major renovations, whilst tackling the issue
of decontamination of toxic substances, including asbestos;
 better application of the ‘polluters pays’ principle.
These actions are often creating synergies and can be implemented effectively and most
efficiently alongside the improvement of the energy efficiency of buildings.
European Pillar of Social Rights & European Skills Agenda
The European Pillar of Social Rights sets out 20 key principles and rights to support fair
and well-functioning labour markets. These principles are the beacon towards a strong
social Europe that is fair, inclusive and full of opportunity. The current EPBD framework
already contribute to the creation of social and economic impact, but this effect is
strengthened by the proposed provision which would provide additional stimulus to the
job creation in the construction sector across its value chain. At the same time actions
under the Skills agenda can help addressing skills shortages and upskilling and reskilling
needs in the construction sector.
The New European Bauhaus initiative
The New European Bauhaus was launched in October 2020 with the ambition to translate
the principles and objectives of the Green Deal into cultural, human-centred and tangible
experiences while accelerating a sustainable greening and digitalisation of the built
environment. Everyone should be able to feel, see and experience the green and digital
transformation and the way it enhances our quality of life. Its objective is to articulate, in
an innovative way, three key dimensions:
o sustainability (including circularity),
o aesthetics (and other dimensions of the quality of experience beyond
functionality)
o inclusion (including accessibility and affordability).
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The New European Bauhaus is about our daily lives, focusing on better living together in
more beautiful, sustainable and inclusive places while respecting the boundaries of our
planet. Delivering on the New European Bauhaus means reaching to local places, at
district, neighbourhood or village level, where transformation responding to global
challenges make sense for people and contribute to improve their lives.
While the New European Bauhaus has a wider focus than the built environment, a
revised EPTB framework can contribute to the sustainability dimension of the initiative
when integrated in a broader holistic approach.
The European Industrial Strategy
In March 2020, the Commission laid the foundations for an industrial strategy that would
support the twin transition to a green and digital economy, make EU industry more
competitive globally, and enhance Europe’s open strategic autonomy. This was updated
in May 2021 in light of the coronavirus pandemic219
. The Industrial Strategy
encompasses 14 industrial ecosystems, of which one is construction. The construction
ecosystem covers contractors for building and infrastructure projects, some
construction product manufacturers220
, engineering and architectural services as well
as a range of other economic activities (e.g. rental and leasing of machinery and
equipment, employment agencies). Starting in 2021 the Commission will co-create
jointly with industry and stakeholders, transition pathways to identify the actions needed
to achieve the twin transitions, giving a better understanding of the scale, benefits and
conditions required.
LEVEL(s)221
is a common European approach to assess and report on the sustainability
of buildings. It is an important tool to help architects, builders and public authorities
designed to improve the sustainability of buildings throughout their lifecycle, helping
professionals deliver better buildings – while also speeding Europe’s transition towards a
more circular economic model. The LEVEL(s) framework covers energy, material and
water use, quality and value of buildings, health, comfort, resilience to climate change
and life-cycle cost. Level(s) could form a basis for renovations as well as new
constructions to assess and report their sustainability in a consistent and coherent manner,
using established indicators.
Roadmap for the reduction of Whole Life Carbon of buildings
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https://ec.europa.eu/info/strategy/priorities-2019-2024/europe-fit-digital-age/european-industrial-
strategy_en
220
Some categories of products which are essential to construction, such as cement, glass, ceramics
and tiles, plastic pipes are covered under the Energy Intensive Industries ecosystem.
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The Renovation wave strategy includes an action setting out how the European
Commission will develop, by 2023, a roadmap leading up to 2050, for reducing whole
life-cycle carbon emissions in buildings.
This roadmap shall be able to serve as a basis and guidance to future policy and market
developments for a long period of time and at different geographical levels - EU as well
as national. It shall be directly linked to and consistent with other relevant existing EU
strategies and policies and support the achievement of the overall climate objectives. It
shall provide a vision and in this way set out the direction of travel for the sector and
public authorities. In this way, it will support future work linked to the EPBD, in setting
targets as well as minimum values, for new built and renovation.
The EU Framework Programmes for Research and Innovation
The Energy Efficient Buildings (EeB) Horizon 2020 Public Private Partnership has
developed technical solutions and innovative technologies that are relevant for the
EPBD222
. Following the EeB, Horizon Europe will support a Public-Private Partnership
on People-centric Sustainable Built Environment (Built4People) that will deliver
innovation to the buildings and construction industry. Horizon Europe supports also a
dedicated Mission on Climate-Neutral and Smart Cities that aims to showcase 100 cities
in their systemic transformation towards climate neutrality by 2030 together and for the
citizens. In addition, the Horizon Europe Clean Energy Transition Partnership, co-funded
with Member States, will contribute to developing climate-neutral solutions for heating
and cooling systems in buildings.
The Technical Support Instrument
The Technical Support Instrument supports Member States in designing, developing and
implementing reforms. The support is provided upon request and covers a wide range of
policy areas, including building renovation, also in the context of the Recovery and
Resilience Facility. In particular, such support of reforms and capacity building
comprises the thematic areas highlighted in the Renovation Wave communication, the
development and implementation of the national long-term renovation strategies, as well
as the improvement of building renovation financing conditions and the implementation
of available funding instruments.
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EeB searching engine: http://e2b.ectp.org/project-database-list/