German industry welcomes EU buildings renovation wave but houseowners lament high costs

Germany’s industry has welcomed the European Commission's planned "renovation wave" in the buildings sector, calling it an overdue push for emissions reduction, but it also criticised high costs for houseowners. The Commission on Wednesday presented plans to facilitate the renovation of 35 million buildings across Europe by 2030. According to the Commission, buildings consume up to 40 percent of the EU's energy production and emit about 36 percent of the bloc's greenhouse gases. As merely one percent of the building stock is currently being renovated each year, this would not be enough to meet the target of achieving a greenhouse gas-neutral economy by the middle of the century. 

The head of the German Association of Energy and Water Industries (BDEW), Kerstin Andreae, said a renovation wave would be indispensable for reaching greenhouse gas neutrality. "Current renovation rates are much too low. This means we're squandering considerable CO2 savings potential," she argued, calling for a "fuel switch" in heating systems towards less emissions-intensive heating technologies, for example gas-fired condensation boilers, heat pumps, bio methane or green hydrogen.

Holger Lösch, vice head of the Federation of German Industries (BDI), called the renovation wave a "prudent" initiative that could result in "a real boost" for modernising the building stock. "The buildings sector allows for very cost-efficient climate action. Due to the high local value creation, modernising buildings can also be a growth engine," Lösch said. According to the Commission, the renovation wave could create up to 160,000 additional "green jobs" in Europe. However, the industry lobbyist cautioned that Germany already had an emissions reductions gap of 17 million tonnes for 2030 and tightened EU emissions reduction goals would push the target in the sector by another 17 million tonnes.

The German Industry Initiative for Energy Efficiency (DENEFF) welcomed the plan, calling it "a pillar of the Green Deal." While coming with high costs initially, a renovation wave would ultimately lead to lower costs for consumers and offer investors a clear incentive to put their money into energy efficient refurbishment. DENEFF head Christian Noll argued that Germany had already launched a first renovation wave with its Climate Action Programme at the beginning of the year, which had provided "important growth support" in the coronavirus-induced recession. "This shows that investments in the building stock combine economic recovery with effective climate action in a smart way."

Homeowner association Haus & Grund was more critical of the EU's plans, arguing that it would be "unaffordable" and that "enforced renovations" could not lead to more jobs, growth and lower energy bills. "The Commission's plans would massively increase housing costs and steer investments into activities that make no sense from a climate policy perspective," said association head Kai Warnecke, adding that a renovation wave would not be compatible with Germany's planned carbon pricing system in the heating sector. He argued that the integration of the heating sector in the European Emissions Trading System (ETS) would be a better alternative that would not coerce citizens to renovate their buildings.