Negotiations regarding the Energy Efficiency in Buildings Directive are ongoing in Europe, with significant implications. These negotiations focus on redesigning energy performance certificates and addressing the pressing need for mandatory improvement works on 15% of Spain’s buildings, which are currently the least energy-efficient.

Energy Efficiency Directive

The European Parliament reached an agreement last May to reform the Energy Performance of Buildings Directive (EPBD), initiating a complex legislative process involving the European Parliament, the European Commission, and the Council. These entities are advocating for nuanced implementations of the directive.

Raquel Díez, a Project Manager at Green Building Council Spain (GBCe), highlights that the main point of contention lies in establishing minimum energy performance standards across EU countries. Harmonizing energy certification standards is a priority, considering the diverse climates within Europe. However, determining how to implement these standards presents challenges.

While it’s premature to predict the final directive’s wording, understanding the institutions’ stances is vital. Once implemented into Spanish law, the directive may mandate property owners with the minimum rating to conduct improvement works up to the F label before selling or renting, mirroring the current Energy Performance Certificate requirement. If you are looking into the future for a good resale of your property, or investing in a rental property, buying an off plan development will offer you the most up to date emission compliance possible, rather than investing heavily in renovations of an existing property.

Common Rating System

The European Union aims to establish a rating system grounded in common objective criteria, while also considering the specific characteristics of each climate. For instance, the temperature variance between a Greek island and a northern Polish town inherently influences energy consumption patterns.

“The challenge lies in determining how to implement this standardization,” Díez elaborates. One potential solution is to adopt a country-specific, self-regulatory approach to grading energy labels. Under this scheme, the letter G would designate the poorest-performing 15% of housing in each country, while the letter A would signify a Zero Emission Building, as outlined in the Directive. This approach would ensure each country’s grading remains proportionate to the overall distribution of labels.

Amidst this technical adjustment, the three European institutions are deliberating on an initiative with significant ramifications for European housing. The pressing need for the EU to enact measures towards achieving climate neutrality in residential buildings by 2050 underscores the urgency of the situation.

To grasp the gravity of the situation, it’s essential to analyze the divergent positions on minimum energy efficiency standards:

  1. European Commission: The current proposal advocates for achieving a minimum rating of F for European houses by 2030, with an E rating targeted by 2033.
  2. Council of the European Union: Comprising the Heads of State or Government of the 27 EU Member States, this body favors a more relaxed approach. It suggests that each country should determine, through directive transposition, the percentage of housing requiring urgent action by 2030. Díez explains, “This approach maintains the G energy rating as the poorest performing segment of the housing stock, while affording more flexibility to individual countries in setting improvement targets.”
  3. European Parliament: Its housing proposal aims for an E label by 2030 (instead of F) and a D label by 2033, signaling a more ambitious timeline for energy efficiency improvements.

How Will Minimum Standards be Implemented?

Requiring a minimum rating of F by 2030 and E by 2033 for property sale or lease is a significant decision impacting the sector, one that observers like GBCe believe needs clarification. However, this isn’t the only issue with the proposed measures.

Díez notes an inconsistency: “There’s a requirement to renovate a property when selling it, yet comprehensive building renovation is touted as the most economically and technically viable option for homeowner associations.”

Timeline for Action

The chosen position will dictate the level of mandatory improvements, but there’s also a debate on when these changes should take effect across Europe. Once again, the three institutions are in disagreement:

European Commission advocates for standardized energy performance certificates, based on a common template, to be enforced by 2025.
Council of the European Union proposes implementing this standardization by 2026, granting states more time for approval of their renovation plans.
European Parliament aligns with the Commission, proposing approval by 2025, albeit linked to the reclassification of all energy certification levels.

Renewal Deadline for Energy Certification

Another point of contention in the negotiations is the validity period of energy performance certificates:

Currently, certification is valid for ten years, regardless of the property’s rating. If the Commission’s decision is enforced, this period would be reduced to five years for ratings below C (from D to G), while the top three ratings would retain the decade-long validity.

Once again, the Council of the European Union takes a more conservative stance, advocating for a ten-year renewal period in all cases.

This presents a new uncertainty in the EPBD trialogue process, requiring the EU to make decisions to align with Europe’s decarbonization goals and establish the pace and requirements of this fundamental law. The directive may mandate property owners with the minimum rating to conduct improvement works up to the F label before selling or renting, mirroring the current Energy Performance Certificate requirement. If you are looking into the future for a good resale of your property, or investing in a rental property, buying an off plan development may be the best option for you. Contact us today for a free consultation and see which is the best path forwards for you!