EU adopts rules on upgrading buildings

The European Commission on Friday adopted the Energy Performance of Buildings Directives, opening the way for mandatory upgrading of older residential and non-residential buildings to enhance their energy efficiency.

The legislation sets the framework for member states to reduce emissions and energy consumption in buildings across the EU, encompassing homes, workplaces, schools, hospitals, and other public buildings, while considering national specificities.

“It leaves in member states’ hands which buildings to target and which measures to take,” an announcement said.

Each member state will adopt its own national trajectory to reduce the average primary energy use of residential buildings, by 16 per cent by 2030 and 20-22 per cent by 2035.

For non-residential buildings, they will need to renovate 16 per cent of worst-performing buildings by 2030 and 26 per cent of worst-performing buildings by 2033.

Member states will have the possibility to exempt certain categories of residential and non-residential buildings from these obligations, including historical buildings or holiday homes based on an unfavourable cost-benefit assessment.

The EU pledges funding for incentives to renovate buildings or to facilitate vulnerable homeowners, along with easier rules for obtaining ‘green mortgages’ to upgrade homes. The Commission said that buildings are responsible for around 40 per cent of the EU’s energy consumption, more than half of EU gas consumption mainly through heating, cooling and domestic hot water.

At present, about 35 per cent of the EU’s buildings are over 50 years old and almost 75 per cent of the building stock is energy inefficient. At the same time, the average annual energy renovation rate is only about 1 per cent, the Commission said.

Former Finance Minister Constantinos Petrides told the Cyprus Mail last year that top-certified homes use 75 per cent less energy.

However, the prospect of mandatory renovation may pose challenges, especially for older homeowners, who may struggle to repay green loans over an extended period without seeing a return on their investment.

By 2030, all G-class buildings must be upgraded to an F, yet this is still far from achieving an A rating on the EU’s ‘Renovation Passport.’

Petrides suggested that without upgrades, low-energy buildings could steadily lose value in the property market.

Petrides conceded that even though the subsidies offered by the ministry of energy would “contribute significantly to resolving the issues for some households”, they would “not be enough to finance a big-scale energy upgrade of the building stock”.

The directive requires the establishment of one-stop shops for building renovation advice and provisions on public and private financing to make renovation more affordable and feasible. However, concerns have been raised about potential shortages in skilled construction workers due to the ‘renovation wave.’

According to the directive, all new residential and non-residential buildings must have zero on-site emissions from fossil fuels, as of January 1, 2028 for publicly-owned buildings and as of January 1, 2030 for all other new buildings, with a possibility for specific exemptions.

The directive also contains new provisions to progressively phase-out fossil fuels from heating in buildings and boost the deployment of solar power installations, considering the national circumstances. In this respect, subsidies for the installation of stand-alone boilers powered by fossil fuels will not be allowed as of January 1, next year and be phased out altogether by 2040. At the same time, member states will also have to ensure that new buildings are ‘solar ready‘.