Towards a Zero-emission Building Stock: Strengthening the Enabling Framework for Deep Renovation

The building sector is responsible for more than one third of the EU’s energy-related greenhouse gas emissions. The Renovation Wave Strategy^[1] has set the goal of at least doubling the annual energy renovation rate of buildings by 2030 and to increase the level of energy savings delivered by building renovations, in particular by fostering deep renovation. The proposal for a recast EPBD^[2] provides legal definitions of ‘deep renovation’ and ‘staged deep renovation’ as the long-term target for building renovations, allowing to reach the objective of a zero-emission building stock by 2050.

Deep renovation, in particular in worst performing buildings, has a relevant role to play in the framework of the REPowerEU plan^[3] to phase out EU dependence on fossil fuels imports, by drastically reducing energy demand, in particular for heating purposes. Deep renovation can also be the opportunity to switch to efficient renewable-based heating and cooling systems.

This topic aims to increase the level of energy performance reached after building renovation and the number of ‘deep renovations’. This requires addressing the obstacles to deep renovation, which are present at different levels.

When deep renovation cannot be implemented in one step, staged deep renovation is an option which should be promoted through public policies. It implies that the measures implemented comply with a long-term deep renovation strategy for the building, thus avoiding lock-in effects. Renovation passports are essential to support staged deep renovation and the proposal for an EPBD recast sets up a framework for their introduction by Member States. Their roll-out needs to be supported in close link with energy performance certificates and one-stop-shops for building renovation.

The legal framework (including but not limited to deep renovation) can also be an obstacle for energy renovation projects. This may be linked for instance to legal status and decision-making rules in co-ownerships, permitting rules and procedures for external insulation, tenant-landlord split incentive, etc. Whereas some solutions have been implemented in different regions and Member States, there is still a need to support public authorities in upgrading legal frameworks for building renovation so as to allow an increase in the renovation rate and the level of energy savings achieved.

Many public funding programmes for building renovation are not designed to promote (staged) deep renovation, and deliver mostly low or average energy savings. The allocation of public funds needs to be assessed and improved in order to focus on the long-term objective of a zero-emission building stock in 2050, in particular aspects related to the eligible measures and the involvement of private finance in order to maximise the use of public funds. There is a need for benchmarking and expert support at national, regional and local levels.

Deep renovation requires coordinating all trades involved in a renovation project. Depending on local market structures (general contractors vs individual craftspeople), the lack of coordination may lead to higher costs, higher burden for the building owner and suboptimal energy performance, thus generating counter-examples for deep renovation. Small and medium-sized enterprises need support to develop joint offers with other trades.

Proposals should increase the uptake of deep renovation, by addressing one of the following areas; addressing several areas does not necessarily increase the relevance of the proposal.

Regardless of the area(s) chosen, proposals should be well tailored to the action context in terms of building segment(s) and typology(ies), climatic zone(s), and legal, administrative, economic, market related or social conditions, and well aligned with the national and/or local initiatives in place or under development. Proposals should also involve the key stakeholders relevant to the activities and demonstrate the endorsement of the approaches proposed.

1. Building renovation passports:

Proposals should facilitate the introduction of renovation passports for buildings, providing a clear roadmap for staged renovation, helping owners and investors plan the best timing and scope for the interventions. Proposals should ensure staged renovation approaches and solutions are reliable, cost-competitive and affordable, with minimised users’ disturbance. Non-energy related aspects such as healthy indoor conditions, comfort or fire and seismic safety aspects should also be considered. Proposals should coordinate with existing support and funding schemes, one-stop-shops for renovation, and consider industrialised renovation approaches where possible and relevant.

Proposals should align with the EU and national frameworks for the introduction of renovation passports. The interrelation of the renovation passports with the revision of energy performance certificates in line with the proposed EPBD recast should be addressed.

2. Adapting legal, administrative and funding frameworks for deep renovation:

Proposals should promote evolutions in order to remove barriers to building energy renovation. This could include for example, but not limited to: adapting legal and regulatory frameworks; adapting administrative procedures; adapting procurement rules, adapting existing support schemes, funding frameworks, including energy efficiency obligations (recast EED^[4]), in order to deliver the 2030 and 2050 targets on building renovation.

Proposals should clearly identify the specific barriers and the territories (local, regional or national levels) which will be addressed. The relevant public authorities should be involved in the project activities in order to ensure implementation of the proposed changes. Proposals should analyse and support authorities in estimating the effectiveness of the frameworks and changes to be introduced, in terms of potential for energy savings and other impacts.

Actions should focus on deep renovation, but when relevant should also address energy renovation in general.

3. Improved coordination of market actors to deliver deep renovation:

Proposals should address barriers to deep renovation linked to the lack of coordination between the different actors involved in the supply side of renovation works, targeting in particular SMEs and individual craftspeople. Actions should promote the establishment of partnerships and consortia able to deliver business models and long-lasting collaboration models between companies / craftspeople which enable deep renovations, including the switch to efficient renewable-based heating and cooling, by reducing risks and transaction costs for companies. This could include, for example but not limited to, standardising contractual liabilities in case of low quality work, training different trades to deliver joint quotes and projects, ensuring a more robust information sharing between companies, showcasing integrated offers for deep renovations to potential customers, etc. Proposals should ensure uptake of the results in the targeted regional or national markets, for example through the involvement of professional organisations.

The Commission considers that proposals requesting a contribution from the EU of up to EUR 1.75 million would allow the specific objectives to be addressed appropriately. Nonetheless, this does not preclude submission and selection of proposals requesting other amounts.

Proposals should result in increased rollout of building renovation passports supporting staged deep renovations; improvements in the legal, policy and funding frameworks for building deep energy renovations; improved and/or new collaborations, partnerships and consortia across different trades and professional groups to deliver high quality deep renovations, including the switch to efficient renewable-based heating and cooling.

Proposals should quantify their impacts using the indicators listed below, where relevant, as well as other project-specific performance indicators:

• Increased renovation rate and number of deep renovations in the territories addressed.
• Number of buildings equipped with a renovation passport.
• Number of public authorities adapting their legal, policy and funding frameworks and associated population.
• Number of private companies benefiting from improved coordination for deep renovation projects.
• Primary energy savings triggered by the project (in GWh/year).
• Renewable energy generation triggered by the project (in GWh/year).
• Investments in sustainable energy renovation triggered by the project (cumulative, in million Euro).

The impacts of the proposals should be demonstrated during the project and within 5 years after the project lifetime.

[1]Communication from the Commission to the European Parliament, the European Council, the European Economic and Social Committee and the Committee of Regions, A Renovation Wave for Europe - greening our buildings, creating jobs, improving lives, COM(2020) 662 final

[2]Proposal for a Directive of the European Parliament and of the Council on the energy performance of buildings (recast), COM(2021) 802 final

[3]Communication from the Commission to the European Parliament, the European Council, the European Economic and Social Committee and the Committee of Regions, REPowerEU: Joint European Action for more affordable, secure and sustainable energy, COM(2022) 108 final

[4] Proposal for a Directive of the European Parliament and of the Council on energy efficiency (recast), COM(2021) 558 final