The European Union sets its sights on the complete decarbonization of the building stock by 2050

Directive (EU) 2024/1275 of the European Parliament and of the Council of 24 April 2024 on the energy performance of buildings was published in the Official Journal of the European Union on May 8, 2024. The new directive, in force since May 28, is a recasting of Directive 2010/31/EU, which had already been substantially amended several times to adapt it to the EU’s climate and energy targets for 2030 and 2050, to the “Renovation Wave” strategy (aiming to result in the renovation of 35 million buildings before 2030) and to the European Green Deal.

Under the “energy efficiency first” principle, the directive lays out the target for all new buildings to be zero emission buildings by 2030, meaning they will have very high energy performance with very low energy demand, zero on-site carbon emissions from fossil fuels and zero or a very low amount of operational greenhouse gas emissions. This target that has been brought forward to 2028 in relation to new buildings owned by public bodies. The aim provided for existing buildings is to have zero emissions by 2050 at the latest.

The directive notes that 75% of EU buildings are still energy-inefficient and that the renovation rate for buildings stands at 1% a year, which prompts recognition of the need to renovate at least 3% of the worst-performing residential buildings every year and to improve at least 43% of the worst-performing buildings by 2030.

The measures prescribed for achieving these targets notably include:

• Calculating the global warming potential over the whole life cycle of new buildings, which includes emissions embodied in construction products and direct and indirect emissions from the use stage.
• Putting in place regular reviews of minimum energy performance requirements for buildings and building elements in light of technical progress and a cost-optimal balance between the investments involved and the energy costs saved throughout the life cycle of the building.
• Phasing out fossil fuels in heating and cooling, which account for two thirds of the energy used in buildings. As a first step, starting in 2025 member states will not be able to provide financial incentives for the installation of stand-alone boilers powered by fossil fuels, with the exception of those selected for investment before 2025 under the Recovery and Resilience Facility, the European Regional Development Fund, and the Cohesion Fund.
• Improving the methodology for calculating the energy performance of buildings, which must be based on the current European standards, take into account outdoor climate conditions and local conditions, and cover the annual energy performance of a building.
• Reducing fine particulate matter emissions of buildings, which are responsible for roughly half of these types of emissions in the EU.
• Fostering major renovations of existing buildings, regardless of their size, as mechanisms which provide an opportunity to take cost-effective measures to enhance energy performance, without disallowing the minimum energy performance requirements to be restricted to the renovated parts that are most relevant. A major renovation is one where the total cost of the renovation relating to the building envelope or the technical building systems is higher than 25% of the value of the building (excluding the value of the land) or one where more than 25% of the surface of the building envelope undergoes renovation.
• Considering the minimum energy performance standards as the essential regulatory tool for triggering the renovation of existing buildings on a large scale and leading to a gradual phasing out of the worst-performing buildings. In particular:
  
  • Introducing minimum energy performance standards at EU level for non-residential buildings focusing on the need to renovate the worst-performing buildings as a priority due to having the highest potential in terms of decarbonization and extended social and economic benefits.
  • The ability to exempt individual non-residential buildings from EU level minimum energy performance standards, for reasons such as planned demolition, an unfavorable cost-benefit assessment or serious hardship.
• Member states putting in place a national trajectory for the progressive renovation of the national residential building stock.
• Promoting solar energy installations in new buildings and in those undergoing deep renovations, together with other renovation measures, such as improving the building envelope, replacing technical building systems and installing recharging infrastructure for electric vehicles, heat pumps or building automation and control systems.
• Recommending staged deep renovations as a solution to address high upfront costs and hassle that may arise when renovating in one go. Deep renovation means one that transforms buildings into zero-emission buildings but, as a first step, transforms buildings into nearly zero-energy buildings.
• Introducing a renovation passport and requiring it as a tailored roadmap for staged deep renovations of a specific building, helping owners and investors plan the best timing and scope for interventions.
• Strengthening the role of energy efficiency certificates as tools for reporting on the energy performance of buildings and to provide incentives for improvements. They should be available for all buildings or building units that are offered for sale or rent, and the energy performance class and indicator should be stated in all advertisements.
• Introducing a common scale of energy performance classes and a common template as a means of ensuring sufficient comparability between energy performance certificates across the EU. Certificates should provide information on energy consumption, greenhouse gas emissions, life-cycle global warming potential and recommendations for the improvement of the energy performance of the building.
• Recommending the use of concepts such as a building’s digital twin, consisting of an interactive and dynamic simulation that reflects the real-time status and behavior of a physical building which can be used to monitor and manage the building’s energy consumption and to support the smart readiness indicator.

Member states are called upon to bring into force the laws, regulations and administrative provisions necessary to comply with most of the requirements introduced by the directive by May 29, 2026.

In the 2nd Renovation Conference (II Congreso de Rehabilitación), Garrigues and G-Advisory underscored the importance of the renovation of buildings as a key tool for achieving decarbonization, energy efficiency, climate neutrality targets and reporting on them under the CSRD.