Retrofitting quota and minimum standards needed in EU building efficiency regulation – analysis

A binding retrofitting quota and clear minimum standards for energy efficiency in buildings are needed in the EU to get the bloc on track towards reaching its emissions reduction targets in the sector, according to new findings from an analysis by the German Institute for Economic Research (DIW). The current quota to retrofit one percent of existing buildings in Germany is much too low to meet the sector’s emissions reduction targets, which could not be achieved by simply replacing fossil heating systems with renewables-based alternatives like heat pumps alone, the analysis found. The analysis showed Germany had been unable to increase the quota since 2010, while it managed to modernise about four percent of the building stock in the former East German states in the years following reunification. A binding EU quota would allow companies to plan their investments accordingly and ensure enough skilled workers and building materials are available, the DIW argued. By adding minimum standards to the legislation, the EU could ensure the most inefficient buildings in the stock are addressed first, a measure that not only leads to fast emission reduction but also benefits poorer households by permanently reducing their energy consumption and thus costs.

The German industry’s energy efficiency initiative DENEFF commented that an upcoming vote in the European Parliament, scheduled for 14 March, must deliver “concrete measures” for the energy performance of buildings. Parliamentarians are set to vote on the proposal to revise the Energy Performance of Buildings Directive, part of the 'Fit for 55' package of energy and climate legislation. The outcome of the vote will determine the parliament's position for the negotiations with member states over a final version of the directive. Too much leeway and a failure to establish minimum standards in the directive’s national implementation could undermine the effectiveness of the plans, the DENEFF warned. “Homeowners, industry and the skilled crafts and trades need planning security in how the climate targets in the buildings sector can be achieved,” said the initiative’s managing director, Henning Ellermann.

Heating and cooling of buildings accounts for about half of Europe’s energy consumption, more than a third of greenhouse gas emissions and 35 percent of gas consumption, according to DIW figures. Finding the right strategy for the decarbonising the heating sector has led to disputes within the German government coalition, which in its coalition treaty said “as of 2025, all new heating systems have to run on 65 percent renewable energy.” The government pulled the target forward to 2024 in response to the energy crisis, a measure that government party Free Democrats (FDP) criticised for disadvantaging owners of fossil heating systems.