In this new study, the European Sustainable Real Estate Initiative (ESREI), driven by OID, extends the analysis of EPCs in Europe that featured in its first publication, this time with a focus on residential EPCs. As housing was responsible for 27% of final energy consumption, 40% of gas demand, and 11.8% of CO2 emissions in 2020, this type of assets is a priority area for energy renovation and decarbonisation.
Residential EPCs in Europe: precise features but still differences
At the moment, residential buildings are the most documented assets type regarding the energy performance certification system. Every country in the studied sample shows an energy scale with defined bands and rather similar rules regarding requirements (like display, validity period or methodology).
In spite of this, these certificates still show a major lack of harmonisation and comparability from one country to another, making the different reference systems unreadable at the European level. While it has set down common principles since its establishment in 2002, the EPBD has left European countries considerable leeway to define their own methodology. Moreover, the thresholds of each energy class (A, B, C, …) is different in every country. Plus, some countries even extend their energy scale beyond the traditional A and G classes, reducing the global readability of energy scales.
As a result, energy performance certification varies widely in Europe and making a clear comparison of national residential building stocks constitutes a real challenge.
Residential EPCs are becoming key political tools to enact transition in residential buildings
Real estate players find themselves increasingly in need of reliable, comparable EPCs given that more and more regulations and political ambitions are making EPCs a key indicator to reach decarbonisation goals, both at European level and within the different countries. Indeed, the EU Taxonomy defines alignment criteria based on EPCs and national transition actions also build on these EPCs for the residential sector, such as the Energy White Paper in the United-Kingdom, or the Loi Energie Climat in France. However, their concrete translation in national regulations varies from one country to another.
This contradiction highlights the need to go further in standardising the energy certification system, both in order to satisfy established requirements, and to make comparisons easier across Europe. As these challenges arise, the EPBD recast proposal modifies EPCs to make them the cornerstone of the energy transition of buildings, by reducing the gap between countries regarding EPC notation and regulations.
Challenges regarding the evolution of energy prices
Following a summer of extreme climate events against the backdrop of a global energy crisis, and an autumn dominated by the question of reducing energy consumption, the issue of buildings’ energy performance is more relevant than ever. These questions also motivated the European Commission’s proposal to revise the EPBD, as the transition to be made on EPCs is all the more essential in view of the evolution of energy prices as well as the commitments made by different countries to reach decarbonisation goals.
The move towards standardisation is only in its early stages and constitutes a major project for EPCs, that will need to follow a common model so that the entire property value chain, in particular financers, can adopt them to carry out the sector’s ecological transition. With the spectacular hike in energy prices, the housing energy transition is as indispensable as it is complex! We therefore aim our study at pan-European actors managing residential portfolios, in order to help them to implement the housing transition.
The Green Building Observatory (OID in French) has launched a European programme in 2021, the European Sustainable Real Estate Initiative (ESREI), for a minimum duration of 2 years. This OID sponsored programme brings together real estate stakeholders to discuss ESG issues and the situation regarding ESG regulations across Europe.
The ESREI programme is now sponsored by Advenis REIM, AEW, Allianz RE, Amundi Asset Management, Aviva Investors France, Axa Investment Managers, BNP Paribas Real Estate, CBRE Global Investors, Icade, Ivanhoe Cambridge, La Française REIM, Mazars and PERIAL Asset Management. Contact the ESREI team at esrei@o-immobilierdurable.fr if you are interested to join us ! 
