On November 2023, the OID’s ESREI programme published a fourth study on Energy Performance Certificates across Europe. This study is drawing on the lessons learned from the 3 previous parts, and adding new analysis, to offer pan-European players a dynamic overview of EPCs across Europe and over time.
What’s at stake in the recast of the EPBD?
Aiming for the decarbonisation of the building stock by 2050, the European Commission proposed a recast of the Energy Performance of Building Directive (EPBD). The text was partially approved in March 2023 by the European Parliament. The revision aims to clarify the EPC through a “common general framework”. A set of definitions necessary to understand the future requirements, like Nearly Zero-Emission Buildings (NZEB), Zero-Emission Buildings (ZEB) and worst performing buildings, along with thresholds of performance in kWh/m2.year, are given.
According to the targets set by the EU, the ZEB constitutes the new yardstick for energy-efficient buildings in Europe, superseding the NZEB standard previously used as a reference. The proposal also introduces the obligation to establish minimum energy performance thresholds for the entire EU building stock, including existing buildings. For example, the target is to achieve 35 million deep renovations by 2030, that should transform buildings into NZEBs by the end of 2026 and ZEBs from 2027. Finally, the carbon impact of a building must be calculated and displayed in the EPC. The GWP (global warming potential) indicator, expressed in kgCO2eq/m2 must group GHG emissions included in construction products and direct and indirect emissions related to building usage.
Energy performance certificates in Europe: the main conclusions of the ESREI studies
The first conclusion of ESREI studies are the lack of harmonisation among European EPCs, for residential as well as non-residential buildings. Despite the successive recast of the EPBD, these certificates still vary greatly from one country to another, making them incomparable at the European level. This observation can be made on the thresholds of each energy class (A, B, C, …), the existence of a carbon scale, the calculation method (based on bills or estimated), the number of energy bands or the consumption perimeters taken into account. As a result, making a clear comparison of paneuropean EPCs or building stocks constitutes a real challenge.
Figure: Lower threshold of label C for office (or non-residential buildings) EPCs in Europe.
Nevertheless, the OID produced comparisons of the distribution of EPC labels on the sample of 9 countries covered by the studies. The Zebra2020 data have been used, although their perimeter only covers EPCs ranked from A to E. The general trend shows, not surprisingly, that the performance of newbuilds is better than that of the existing stock. The good performance of some countries, such as Denmark, in terms of construction standards, can also be noted (95% of new non-residential with A label). On the other hand, a country like Spain has a poor performance on these energy labels for new buildings, with 39% of new non-residential buildings having an E label. In the case of the Netherlands, the entire new housing stock had an A label or better (A+ or A++) in 2013, which could lead one to believe that Dutch building standards are far ahead of the European average. However, it must be taken into account that the lower threshold of label A of the Dutch EPC is 160 kWh/m2.year today (an equivalent value can be estimated in 2013), which corresponds to the average label C in other countries.
Figure: Share of EPC label for new residential buildings in 2013. The data for UK and NL are for 2012. No data for BE, SP, DE and LU. Source: Zebra2020 Data tool
A great expectation around the recast of the EPBD
As more and more regulations and standards emerge in the regulatory context of the European Union, the call has been made to recast this directive. Indeed, the energy performance certificates (EPCs) has become the cornerstone for promoting energy-efficient buildings, as it features in the EU Taxonomy and other regulations as a key indicator. The upcoming revision aims to make these EPCs more consistent in the long-term. But will the efforts made on the legal framework be sufficient?
Even though EPCs are a powerful tool, the methodology is perfectible. Despite knowing the lack of harmonisation, the EU based structuring and game-changing texts on this document. This new regulatory pressure creates an urgent need to achieve harmonisation, leading to a great expectation around the EPBD. Nevertheless, the proposed recast is very demanding and constitutes a major step forward for all actors of the building sector. This may complicate its implementation, especially in Member States where current regulations are not sufficiently binding. These countries will have to overhaul their legal framework to comply with the requirements of the EPBD, expected to enter into force in 2025.
The existing building stock is at a great risk of obsolescence. Indeed, buildings that do not comply with the new requirements could eventually suffer a value discount. The regulatory obsolescence may even lead to unusable assets in the current conditions, which puts a lot of pressure on Member States, and therefore on the European authorities.
The Green Building Observatory (OID) has launched a European programme in 2021, the European Sustainable Real Estate Initiative (ESREI), that brings together real estate stakeholders to discuss ESG issues and the situation regarding ESG regulations across Europe.
ESREI is now sponsored by Advenis REIM, AEW, Amundi Asset Management, Axa Investment Managers, BNP Paribas Real Estate, CBRE Global Investors, Ivanhoe Cambridge, La Française REIM, Mazars, Ofi Invest and Pimco Prime Real Estate. Contact the ESREI team at esrei@o-immobilierdurable.fr if you are interested to join us!
