Key implications of the Energy Performance of Buildings Directive (EPBD)

In 2021, 42% of energy consumed in the European Union (EU) was used in buildings - approximately 80% of the energy used was for heating and cooling.

Therefore, achieving a fully decarbonized EU building stock by 2050 will rely significantly on the speed and scale of renovating non-energy efficient buildings.

What is the Energy Performance of Buildings Directive?

The Energy Performance of Buildings Directive (EPBD) is the EU's main legislative instrument for promoting the improvement of the energy performance of buildings within the EU. The directive focuses on both new and existing buildings and covers residential as well as non-residential structures.

In late 2023, the European Commission, European Council, and European Parliament reached a provisional agreement on a new version of the EPBD, which is expected to be approved in early 2024 and in force by 2026.

Key implications include: ?

• The residential building stock must reduce average energy consumption by 16% in 2030 and 20-22% in 2035, with 55% of this reduction achieved through renovating the worst performers.?
• For the non-residential building stock, the EPBD requires to gradually improve energy efficiency via Minimum Energy Performance Standards (MEPS). This will lead to renovating the 16% worst-performing buildings by 2030 and the 26% worst-performing buildings by 2033.?
• Zero-emission buildings will become the new standard for new public buildings from 2028 and for all other new buildings from 2030. Buildings will also have to be fit for photovoltaic (PV) or solar thermal installations.?
• Energy Performance Certificates (EPCs) will be introduced. These certificates provide standardized, transparent information on the energy efficiency of buildings across the EU.??
• The directive mandates life-cycle assessment (LCA) as per EN 15978 standards for all new constructions exceeding 2000 m2 once the directive is implemented. From 2030 onwards, this requirement will extend to all new buildings.?
• The EU has put a strong emphasis on the role of commercial banks in providing renovation loans, involving the introduction of a Mortgage Portfolio Standard. This standard requires any mortgage lender to increase the median energy performance of their portfolio in line with the EPBD?
• Each EU member state will adopt its own national implementation plan, allowing for sufficient flexibility to consider national circumstances.?
• Exemptions for certain buildings, like historical structures and vacation homes, are allowed.
• There remains ambiguity around the specific methods and standards for realizing a zero-emission building. A common zero-emission standard will be introduced at some point.??

Problems facing the Renovation Wave

Currently, the rate of energy renovations is low, around 1%.

To increase the renovation rate to 2-3% per year to meet EPBD objectives, we need to address several problems and obstacles like:

• Shortage of skilled labour: The construction workforce is largely occupied with new building projects. This imbalance between new construction and renovation work is notable, especially since new construction is generally less complex than renovation.?
• Technical Complexity: Many buildings, especially older ones, present technical difficulties in retrofitting them to modern energy standards. This includes issues with insulation, heating systems, and integrating renewable energy sources.?
• Financial Constraints: Renovation projects require significant investment. Securing funding and offering affordable financing options for homeowners and businesses are major challenges.?
• Regulatory and Policy Barriers: Diverse building codes and regulations across regions can hinder renovation efforts. Streamlining these and ensuring supportive policy frameworks is essential.?

Reach out to us at Kiilto Ventures to collaborate or receive funding

We're interested in learning more about innovations that improve the energy performance of #buildings and facilitate the green transition of our building stock ????

If you're a startup entrepreneur, send us your pitch!

Kiilto Ventures invests in and builds early-stage startups that future-proof the built environment and regenerate nature. Kiilto Ventures is the VC of Kiilto, a family-owned company based in Finland with a 100+ year-old history and 2080 vision, aiming to be an environmental leader in the areas of construction, industrial adhesives and fire proofing, professional hygiene and consumer goods.