The Commission published a recommendation for the member states on tackling energy efficiency in construction and renovation; construction has been the most active sector in the member states’ development: more than 220 million buildings, i.e. about 85 percent of the EU’s “building stock”, were constructed during the last two decades. They will be mostly still in the real estate market by 2050, the time of the EU’s climate neutrality. However, these houses are unprepared for the ongoing and future climate changes with an increasing temperatures, extreme weather events and outdated isolation. Hence is the “renovation wave” to help in funding and in technical assistance in the whole renovation value chain to meet EU’s targets.
Buildings are responsible for about 40% of the EU’s energy consumption, and 36% of greenhouse gas emissions. However, only one percent of buildings undergo energy efficient renovation every year, so effective action is crucial to making Europe climate-neutral by 2050. With nearly 34 million Europeans unable to afford keeping their homes heated, public policies to promote energy efficient renovation are also a response to energy poverty, to support the health and wellbeing of people and reducing their energy bills.
The COVID-19 crisis has turned the decision-makers’ attention to the construction sector and the real estate market; throughout the pandemic, the resident houses have become a focal point of daily life for millions of Europeans; for many a hub for online shopping or entertainment, for children and pupils – a new classroom.
Renovation towards buildings’ energy efficiency can be a source of much-needed investment into the construction sector and the national economy, in general. Renovation works are labour-intensive: they create jobs and improve local supply chains, generate demand for highly energy-efficient equipment, increase climate resilience and bring long-term value to properties.
The EU proposed this September to achieve at least 55% emissions reduction target for 2030; it means that the member states must reduce buildings’ greenhouse gas emissions by 60 percent, their energy consumption by 14 percent and the energy consumption of heating and cooling by 18 percent.
European funding has already had a positive impact on the energy efficiency of new buildings, which now consume only half the energy compared to houses built over 20 years ago. However, 85 percent of buildings in the EU were built over 20 years ago, and 85-95 percent are expected to still be standing in 2050.
Hence, the EU suggested a “renovation wave” in the states to help the construction sector meeting modern challenges as renovated homes will be energy and resource efficient, they will reduce energy bills while improving peoples’ health, increasing comfort and general wellbeing. Renovation is an opportunity for the 34 million Europeans who are unable to afford keeping their home adequately warm.
Besides, at the core of the new “renovation’s initiative” is the energy issue: the Commission’s recommendations and guidance to the states facilitate their efforts to define and monitor energy poverty and help spread best practices. The Commission estimates the potential for an additional 160 000 green jobs in the construction sector in the EU by 2030.
The Commission will review in 2021 the Energy Efficiency and the Energy Performance of Buildings Directives. It will propose to introduce a stronger obligation to have Energy Performance Certificates alongside a phased introduction of mandatory minimum energy performance standards for existing buildings. It will also propose to extend the requirements for building renovation to all public administration levels. The impact assessments accompanying these legislative revisions will consider different options in terms of the level, scope and timing of these requirements.
The strategy’s priority areas
The Commission aims to at least double renovation rates in the next ten years and make sure renovations lead to higher energy and resource efficiency. This will enhance the quality of life for people living in and using the buildings, reduce Europe’s greenhouse gas emissions, foster digitalisation and improve the reuse and recycling of materials. By 2030, 35 million buildings could be renovated and up to 160,000 additional green jobs created in the construction sector.
Renovation is, generally, a better way to achieve optimal energy performance standards, with encouraging green mortgages and support for renewables in heating and cooling.
EU priorities in policy and financing have been concentrated on the following:
- tackling energy poverty in the worst-performing buildings,
- activate renovation in public buildings, including educational, healthcare and administrative facilities, and
- decarbonisation of heating and cooling
In line with a net 55 percent emission-reduction target, the Commission expects that the “renovation wave” will help to reduce buildings’ greenhouse gas emissions by 60 percent (from 456 Mtoe to 161 Mtoe), their final energy consumption by 14 percent (from 374 Mtoe to 321 Mtoe) and energy consumption for heating and cooling by 18 percent (from 318 Mtoe to 259 Mtoe) as compared to 2015.
To achieve the proposed 55 percent climate target by 2030, around €275 billion of additional investment in building renovation is needed every year. Therefore, a series of dedicated initiatives under different financial instruments have been taken by the EU.
For example, the Recovery and Resilience Facility will provide funding for building renovations: presently, the European Council agreed to endow with € 672.5 billion (37 percent of which would be targeted to climate-related expenditure) to support renovation investment and energy efficiency related reforms in the member states. In the Annual Sustainable Growth Strategy 2021 the Commission has proposed the “renovation intervention” shall be included by all EU states in their national recovery and resilience plans.
Then, public guarantees to mobilise private investment will be assured under InvestEU progam; assistance to regional and local authorities in designing and implementing their plans for building renovations is addressed in the cohesion funds under REACT-EU, or through ELENA (European Local Energy Assistance) for project development assistance.
Dedicated support to the coal regions in transition for capacity building, up-skilling and re-skilling initiatives in the field of energy efficiency is foreseen under the Just Transition Mechanism.
Horizon Europe will support innovation and development of new technologies, including a dedicated partnership on Sustainable Built Environment (Built4people).
Removing market barriers for the uptake of technologies and new approaches to speed up renovation will be supported under the LIFE programme.
Finally, the Commission is revising the “General Block Exemption Regulation” to simplify combining EU programs and instruments, national funds and private funds for renovation projects.
New European Bauhaus
The New European Bauhaus will match style with sustainability and promote sustainable design and nature-based materials. This will be an interdisciplinary project, co-steered by an advisory board of external experts including scientists, architects, designers, artists, planners and civil society that will create experimental spaces where art, culture, science and technology can imagine, test and demonstrate new solutions.
The New European Bauhaus will be an accelerator for affordable and aesthetically promising green and digital solutions, technologies and products. After the calls for proposals under the next Multi-Annual Framework, the “delivery” of the first European Bauhaus’ construction or transformation will start in the second half of 2021.
All Bauhaus’ projects would deal with the built environment as a whole but would focus on different aspects such as climate challenges, accessibility, social cohesion, digital construction, sustainable bio-resources etc, and be in different countries. Finally, further Bauhaus’ projects can be added across the EU states and even globally.
Until summer 2021, the Commission will conduct a broad participatory co-creation process followed by the setting up of a network of five founding Bauhaus in 2022.
The new European Bauhaus will “nurture” a new European aesthetic that combines performance with inventiveness in order to make livable environments accessible to everyone, and marry the affordable with the artistic in a new and sustainable future.
The Commission will review the Renewable Energy Directive in June 2021 with an idea of strengthening the renewable heating and cooling targets and introducing a minimum renewable energy level in buildings. It will also examine how the EU budget resources alongside the EU Emissions Trading System (EU ETS) revenues could be used to fund national energy efficiency and savings schemes targeting lower income populations.
The Ecodesign Framework will be further developed to provide efficient products for use in buildings and promote their use.
Thus, the “renovation wave” is not only about making the existing buildings more energy efficient and climate neutral; it can trigger a large-scale cities’ transformation and a sustainable construction sector.
The renovation’s strategy includes the following lead actions:
- Stronger regulations, standards and information on the energy performance of buildings to set better incentives for public and private sector renovations, including a phased introduction of mandatory minimum energy performance standards for existing buildings, updated rules for Energy Performance Certificates, and a possible extension of building renovation requirements for the public sector;
- Ensuring accessible and well-targeted funding, including through the ‘Renovate’ and ‘Power Up’ Flagships in the Recovery and Resilience Facility under NextGenerationEU, simplified rules for combining different funding streams, and multiple incentives for private financing;
- Increasing capacity to prepare and implement renovation projects, from technical assistance to national and local authorities through to training and skills development for workers in new green jobs;
- Expanding the market for sustainable construction products and services, including the integration of new materials and nature-based solutions, and revised legislation on marketing of construction products and material reuse and recovery targets;
- Creating a New European Bauhaus, an interdisciplinary project co-steered by scientists, architects, designers, artists, planners and civil society: until summer 2021 the Commission will conduct a broad participatory co-creation process, and will then set up of a network of five founding Bauhaus in 2022 in different EU countries.
- Developing neighbourhood-based approaches for local communities to integrate renewable and digital solutions and create zero-energy districts, where consumers become prosumers selling energy to the grid; this approach also includes an “affordable housing initiative” for 100 districts in the states.
More information in the following websites: – Renovation Wave Strategy; – Annex and Staff Working Document on the Renovation Wave Strategy; – Memo (Q&A) on the Renovation Wave Strategy; – Factsheet on the Renovation Wave Strategy; – Factsheet on the New European Bauhaus; – Energy poverty recommendation.