The European Parliament, in March 2023, adopted draft amendments to the European Commission’s proposal to revise the Energy Performance of Buildings Directive (2010/31/EU)(EPBD).

The proposed revision of the EPBD seeks to substantially reduce greenhouse gas emissions and energy consumption in the EU building sector by 2030 and make it climate neutral by 2050. It also aims to increase renovations and retrofits of energy-inefficient buildings and improve information-sharing on energy performance.

These revisions to the EPBD form part of the EU’s Fit for 55 Package, which aims to make the EU’s climate, energy, land use, transport, and tax policies fit to reduce greenhouse gas emissions by at least 55% by 2030.

Key revisions to the EPBD

Zero Emission

• All new buildings should be zero-emission from 1 January 2028; the deadline for new buildings occupied, operated or owned by public authorities is 1 January 2026. Zero emission is a building that meets a certain energy target, where all energy is derived from onsite or nearby renewable sources, and no carbon is produced on site.
• This higher standard follows on from the nearly zero-emission building (NZEB) obligations which were introduced by the updates to the EPBD in 2018 (enacted in Ireland in 2019 as outlined here). NZEB requirements typically equate to an A3 BER rating for commercial buildings (B2 for residential), and 20% of the energy needs to be derived from onsite or nearby renewables.
• By 1 January 2025, the European Commission will adopt legislation to supplement the revised Directive setting out and harmonising across Member States thresholds for newly constructed zero emissions buildings, including a description of calculation methodology per building type and applied climate.

Changes to BER requirements

• BER Certificates and advisory reports are requirements in Ireland for sales, purchases, lettings, sub-lettings, agreements for lease (where works or fit-outs are planned), assignments of properties and associated design and construction contracts.
• Building Energy Ratings are currently classified with A to G ratings, with G rating being the worst performing and A1 the most energy efficient.
• Proposed changes to the BER regime under the revised EPBD include the following:

1. Non-residential and public buildings would have to achieve, at a minimum, a BER of E rating from 1 January 2027 and a D rating by 1 January 2030.
2. Residential buildings will have to achieve the same ratings from 1 January 2030 and 1 January 2033, respectively.
3. EU Member States, including Ireland, will need to establish various measures to achieve these targets through national renovation plans.
4. There will be a realignment across Member States of the BER system in 2025, with the worst-performing 15% being G rated.

Solar Technologies for Buildings

• Where technically suitable and economically feasible, existing public and non-residential buildings should be equipped with solar technologies; for new public and new non-residential buildings the deadline is 24 months after the EPBD comes into force. For new residential buildings and roofed car parks, the deadline is 31 December 2028; and 31 December 2032 for all buildings undergoing major renovation. Major renovation is defined as when more than 25% of the surface envelope of the building undergoes renovation.

Energy Poverty Support Measures

• National renovation plans will need to include support schemes to facilitate access to grants and funding, particularly for deep renovations for the worst-performing buildings. Appropriate financial support measures are to be provided targeting vulnerable households, middle-income households and people living in social housing.
• Technical assistance, information services, administrative support and integrated renovation services must also be provided. Ireland has already put some measures in place, including by legislation and through the Sustainable Energy Authority of Ireland (SEAI), as noted here.

Derogations

Exemptions from the regime include national monuments, buildings protected for their special architectural or historical merit, technical buildings (such as depots, industrial states, and transformer stations), buildings used temporarily (for two years or less), churches and places of worship, residential buildings used less than four months of the year; stand-alone buildings with less than 50 square meters floor area.

Member states may also exempt public social housing, where renovations are not cost-neutral or would lead to rent increases beyond the economic savings on energy bills. The European Commission may also decide, upon a reasoned request from a Member State, to adjust minimum energy performance standards for residential buildings and building units for economic and technical feasibility and availability of skilled workforce.

Next steps

The revised text is now back with its lead Committee to negotiate with the European Parliament, the European Commission and the Council of EU on the final text, before it is implemented into Irish law.

The main benefits of the proposed changes to the EPBD should include reduced energy bills, alleviation of fuel poverty, health improvements and reduced greenhouse gas emissions. This creates opportunities for increased energy efficiency and improved energy performance of buildings, through targeted acceleration of retrofits and renovation. This is particularly necessary in the public sector, including where property is leased. Balanced against this will be economic and practical delivery challenges for those acquiring, funding, managing, or delivering refurbished or new commercial buildings and tasked with monitoring delivery of their Environmental, Social and Governance (ESG) goals.

These changes, in turn, will need to be reflected in the supporting procurement cycles and contractual obligations, particularly in the context of works, purchases, sales, leases, sub-leases, assignments and material changes of use of buildings.

Contact Us

For more information or advice on the projects and construction contracts requirements relating to the recently proposed revisions to the Energy Performance of Buildings Directive, energy performance, and Building Energy Rating (BER) Certificates standards for buildings, please contact Cassandra Byrne, Jarleth Heneghan, or your usual William Fry contact.