On 12 March 2024, the European Parliament formally adopted and approved revisions to the Energy Performance of Buildings Directive (recast) (EPBD) that are intended to reduce carbon emissions and improve energy efficiencies in buildings across the EU.

These revisions had already been agreed on by the Council.

William Fry has been tracking the development and debate of the various proposals to amend the EPBD since they were launched in December 2021 as part of the ‘Fit for 55’ legislative package. This set a vision to achieve a zero-emission building stock by 2050. The consolidated text of the EPBD has since been published in the Council Register on 3 April 2024, and the Council formally approved this on 12 April 2024. See our earlier article: Changes to BER and energy performance of buildings standards.

Ireland has two years to implement these changes, which will have implications for those acquiring, developing, funding or managing buildings, and monitoring ESG targets. What do you need to know?

Emission Reduction Targets

• All new buildings should be zero-emission from 1 January 2030; the deadline for new buildings owned by public authorities is 1 January 2028. Where a public body intends to occupy a new building, it does not own (via lease or licence, for example), it must aim for that building to be zero-emission.
• This higher standard follows on from the nearly zero-emission building (NZEB) obligations introduced by the updates to the EPBD in 2018 (enacted in Ireland in 2019). 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.
• When calculating the emissions, EU Member States will take into account the whole life-cycle global warming potential of a building, including the production and disposal of the construction products, design options and choices of materials used to build it. This applies from 1 January 2030 to all new buildings and from 1 January 2028 for all new buildings with a useful floor area larger than 1000m2. Issues of optimal indoor environmental quality, adaptation to climate change, fire safety and accessibility for persons for disabilities will also need to be addressed for new buildings.

Minimum Energy Performance Requirements

• For non-residential buildings, EU Member States will have to put in place measures such as minimum energy performance standards, technical assistance, and appropriate financial support measures, to support owners to renovate the 16% of the worst performing buildings by 2030 (and 26% by 2033). For residential buildings, Member States will have to put in place such measures to ensure a reduction in the average primary energy used by at least 16% of the worst performing buildings by 2030 and at least 20% to 22% of the worst performing buildings by 2035, with a particular focus on vulnerable households. The Commission has been tasked to assess by 2028 whether further binding measures are needed to achieve these goals.
• EU Member States, including Ireland, will need to establish various measures to achieve these targets through national building renovation plans. Each national plan will have to include a roadmap with national targets for 2030, 2040 and 2050 for the annual energy renovation rate.
• The BER system will be realigned across EU Member States by 30 June 2025 for new buildings and existing buildings undergoing major renovation, and for individual building elements, taking into account different categories of building. Flexibility has been given to Member States to choose the distribution of scales at national level for energy performance certificates.

Solar Technologies for Buildings

Where technically suitable and economically feasible, existing public and non-residential buildings should be equipped with solar technologies within certain timeframes:

• new public and new non-residential buildings with useful floor area larger than 250 m2 – by 31 December 2026;
• existing public buildings with useful floor area larger than:
  • 2000 m2- by 31 December 2030
  • 750 m2 – by 31 December 2028
  • 250 m2 – by 31 December 2030;
• existing non-residential buildings with useful floor area larger than 500 m2 undergoing major renovation (>25% of the building surface undergoes renovation) or needs a permit for the work, including on the roof or installation of a technical building system- by 31 December 2027;
• all new residential buildings – by 31 December 2029; and
• all new roofed car parks (more than three spaces) – physically adjacent to buildings – by 31 December 2029.

Phasing-out Fossil Fuel Boilers

Two-thirds of the energy used for heating and cooling of buildings still comes from fossil fuels. Member States will have to outline how they will adopt measures to decarbonise heating systems, with a view to phasing out fossil fuels in heating and cooling by 2040. Subsidising stand-alone fossil fuel boilers will be prohibited from 2025. Financial incentives will still be possible for hybrid heating systems that use a considerable share of renewable energy, such as those combining a boiler with a solar thermal installation or a heat pump.

The revised proposal also identifies different options are available to cover the energy needs of a zero-emission building, including energy generation on site or nearby from renewable sources such as solar, thermal, geothermal, solar photovoltaics, heat pumps, hydroelectric power and biomass, renewable energy provided by renewable energy communities, efficient district heating and cooling and energy from other carbon-free sources.

Sustainable Mobility

New residential buildings will have to have at least 1 recharging point for infrastructure for sustainable mobility, such as electric vehicles. In existing non-residential buildings, a choice between installing 1 recharging point for every 10 parking spaces or ducting for at least 50% of the spaces will be possible. Pre-cabling and ducting will facilitate later deployment of recharging points as and when needed. The text notes that the potential of EVs to integrate with the electricity system, contribute to system efficiency and further absorption of renewable electricity should be fully exploited.

The electrification of buildings, such as through the deployment of heat pumps, solar installations, batteries, and recharging infrastructure, brings along changed risks with regard to fire safety of buildings, which need to be addressed by Member States. It is intended that the Commission will publish non-binding guidance for Member States in relation to fire safety in car parks.

Exemptions

EU Member States have the discretion to exempt buildings protected for their special architectural or historical merit, or other heritage buildings from the new rules, in so far as compliance with the standards would unacceptably alter their character or appearance, or if their renovation is not technically or economically feasible. They will also have discretion to exclude buildings used as places of worship and for religious activities, temporary buildings, industrial sites, and workshops. Member States may also exempt non-residential agricultural buildings with low energy demand or where covered by a national sectoral agreement on energy performance. Residential buildings used or intended to be used for less than four months of the year, stand-alone buildings with a total useful floor area of less than 50m2 and certain buildings owned or used by the armed forces or for national defence purposes may also be exempted.

EU Funding & Skills

The European Commission expects to require over a quarter of a trillion euro (€275bn) to be invested annually by 2030. EU funding will be available for the transition, but private investments will also be sought. Funders will be encouraged to promote financial products, grants and subsidies, including green mortgages and loans to support reducing carbon emissions including through deep renovations and staged deep renovations. The European Commission has been tasked to adopt a delegated act establishing a comprehensive framework portfolio, for voluntary use by financial institutions to encourage them to increase volumes provided for energy performance renovations.

The European Commission also acknowledges that significant energy renovation services or facilitators will also be required to provide the right enabling framework and break barriers to roll out the required level of renovation to meet the EPBD’s requirements. This will require a skilled workforce in addition to financial incentive, and technical assistance facilities to be provided by EU Member States.

Contact Us

For more information or advice on the infrastructure, renewables, and construction contracts relating to the recent revisions to the Energy Performance of Buildings Directive, including developments on energy performance of buildings requirements, please contact Cassandra Byrne, Jarleth Heneghan, Liam McCabe, Fergus Devine, or your usual William Fry contact.