EPBD revision: EU directive drives energy efficiency and sustainability in buildings

The European Union has taken decisive steps to increase energy efficiency in buildings. In March 2024, the EU Parliament voted in favor of the recast of the Energy Performance of Buildings Directive (EPBD). The recast marks a turning point for the real estate sector. The initiative aims to reduce energy consumption and accelerate the transition to renewable energy, which promises both environmental and economic benefits. The following article looks at the ambitions, key innovations and the impact of the directive on the real estate sector, as well as the challenges and opportunities that arise.

EU vision: zero-emission buildings by 2050

With the new version of the EPBD, the EU is aiming to achieve an emission-free building stock by 2050. This ambitious goal sets clear targets for new and existing buildings, with a focus on renewable energies and the exclusion of fossil heating systems. The initiative includes the introduction of renovation passports and the requirement of a life cycle assessment for new buildings from 2030, paving the way for a more sustainable construction and real estate industry.

The updates at a glance:

The EPBD update brings significant innovations for energy efficiency in buildings within the EU:

• Zero-emission buildings in new construction: From 2030, all new buildings must be emission-free, public buildings already from 2028.
• Phasing out fossil fuel heating systems: No more subsidies from 2025 and a ban from 2040.
• Requirements for solar use: Promotion of the installation of solar systems in new buildings and public buildings from 2027.
• Promotion of renovations: Provision of EU and national funds to support renovation projects.
• Renovation obligations for the worst non-residential buildings in terms of energy efficiency (minimum energy performance standards – MEPS).
• Reduction in primary energy consumption: Objective to significantly reduce the energy consumption of buildings by 2030/2035.

All of these measures are aimed at improving energy efficiency and supporting the transition to a climate-neutral EU by 2050.

Impact on the real estate industry – opportunities and challenges

The new version of the EU directive confronts owners and developers with the challenge of investing in energy-efficient technologies and the refurbishment of existing buildings. These requirements initially mean higher expenditure. At the same time, the directive opens up opportunities by promoting sustainable construction and improved energy efficiency, leading to long-term cost savings and increased property value. Support from EU and national funds facilitates the implementation of the required measures.

Funding and financing

The EPBD update offers various funding and financing options at EU and national level to improve energy efficiency in buildings:

• EU level: Cohesion Fund, Recovery and Resilience Facility, Social Climate Fund support renovation projects.
• National level: Funding is also available for the financing of renovations.

These subsidies are intended to facilitate investment in energy-efficient renovations and promote the transition to renewable energies.

CONCLUSION

The new version of the EPBD Directive is of considerable importance for the real estate sector and will help to make the building stock in Europe emission-free by 2050. This poses major challenges for the real estate sector, as considerable investments and changes in the planning, construction and operation of buildings are required. At the same time, however, the EPBD also offers opportunities, such as protection against energy cost volatility, increasing the investment value and attractiveness of buildings and promoting sustainability. Overall, the recast represents a positive challenge that must be actively addressed.

Do you want to ensure that your properties meet the new energy efficiency standards?
Feel free to contact our expert and DGBNB ESG Manager Klaus Nützl for future-oriented advice!