Policy paper 271

Addressing the climate and social emergencies with minimum energy performance standards

| 18/11/2021

Introduction

This autumn 2021, as the COP26 dampened hopes for ambitious global climate action[1], soaring fossil fuel prices in the EU worsen energy poverty and highlight the need to speed up the clean energy transition[2]. The upcoming revision of the Energy Performance of Buildings Directive (EPBD) gives the EU an opportunity to kill two birds with one stone, addressing both the climate and social emergencies. The buildings sector is the single largest energy consumer in the EU, representing 40% of our energy consumption.

EU climate objectives require a fully decarbonized building stock by 2050. The success of building decarbonization rests on mass-deployment of existing techniques and products such as deep renovation methods, highly-efficient and renewable heating systems, insurance and financial products[3] for quality renovation.

Yet, EU and national policy-makers have so far failed to scale-up energy efficient renovation rate and depth. Despite growing awareness of the multiple benefits[4] of energy efficiency actions, most EU buildings remain energy inefficient. As part of its Renovation Wave Strategy[5], the European Commission announced a revision of the EPBD in December 2021, five years ahead of the planned review. It is a unique opportunity for the EU to increase the quality of life of millions of Europeans.

The European Commission should use the EPBD revision to introduce minimum energy performance standards (MEPS)[6] to address the lack of information, create legal certainty and incentives for renovation. To solve the buildings’ decarbonization challenge, the added value of EU coordination lies in bringing visibility to all stakeholders about the long-term objective (climate neutrality by 2050), and how to get there (decarbonization pathways). MEPS would require concerned buildings to reach minimum performance levels by a specified deadline or trigger point (e.g. sale or change of tenancy). It would guarantee that renovations result in buildings reaching minimum standards and allow links with public support and compliance, hence making sure that public incentives really translate into effective energy savings. The ambition of such MEPS will depend on the target stock, compliance deadlines, and performance levels.

This brief argues that EU MEPS will be a key driver for a deep renovation market which has the potential to be a decisive contribution to both EU climate action, by drastically reducing energy consumption and greenhouse gas emissions of the buildings sector, and social justice, by eradicating energy poverty[7]. To maximize benefits, MEPS should cover all building segments (public and private, residential and service) and align with the long-term objective of a decarbonized building stock by 2050. The particular focus of this paper is the residential sector, which accounts for 70% of buildings emissions but remains insufficiently addressed by EU and national policies.

To start off, the brief explains the rationale and obstacles of scaling up deep renovation. It then turns to describing MEPS as a key tool to create a stable demand for renovation and to unleash the high potential to create synergies between EU climate objectives, increased well-being and social justice.

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[1] Niranjan, A. 2021. COP26: wolrd leaders fail to honor climate pledge. Deutsche Welle, news article. 14/11/21

[2]Nguyen, P. Pellerin-Carlin, T. 2021 The European Energy Prixe Spike. Overcoming the Fossil Fuel Crisis. Jacques Delors Institute. Policy Brief. October 2021.

[3] Climate Strategy and Partners, 2021. Underwriting the Renovation Wave with Mortgage Portfolio Standards for Energy Efficiency. Report. June 2021.

[4] climate change mitigation, reduced import dependency, energy poverty alleviation, public health improvement, job creation. refereetool.eu/

[5] European Commission. 2020. A Renovation Wave for Europe – greening our buildings, creating jobs, improving lives. COM(2020)662 final.

[6] European Commission. 2020. A Renovation Wave for Europe – greening our buildings, creating jobs, improving lives. COM(2020)662 final.

[7] For an overview of the state of energy poverty in the EU, see Magdalinski, E., Delair, M., Pellerin-Carlin, T. 2021. Europe needs a political strategy to end energy poverty. Jacques Delors Institute. Policy paper #259. February 2021.

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