Decoding the EU’s Energy Performance of Buildings Directive (EPBD).
The European Union (EU) has been leading globally in terms of legislation aimed at reducing carbon emissions and achieving the consequential goal of net-zero by 2050. One of the key directives the bloc has imposed is the Energy Performance of Buildings Directive (EPBD).
EPBD aims to improve the energy efficiency of buildings in the EU, many of which are old and energy-inefficient. According to the European Commission, 85% of EU buildings were built before 2000. Of those, a staggering 75% show poor energy performance.
Now, with the latest, revised EPBD, the EU plans to decarbonise all of its buildings by 2050. Ambitious? Absolutely. But achievable – and that’s exactly what the EPBD sets out to make happen. In this article, we’ll cover the EPBD in detail with its requirements and explore how it will impact stakeholders.
EPBD and its history
The original EPBD 2002/91/EC was approved in December 2002 and entered into force in January 2003. At the time, the directive established the foundation for energy performance certification and heating and air conditioning system inspections. The purpose was (as it is today) to make buildings energy-efficient.
Subsequently, Directive 2010/31/EU, the "EPBD recast," replaced the original in June 2010. This recast broadened the focus to include nearly zero-energy buildings (nZEBs) and cost-optimal levels of energy performance. The directive was once again revised in 2018 to increase the renovation rate in the bloc.
The EU has continued to strengthen the directive, and most recently, in 2024, an updated EPBD came into force. With the latest revision, the directive further pushes for building stock decarbonisation.
Now, the EPBD will gradually introduce new minimum energy requirements. It also set targets to improve building energy performance by 2030 and 2035. And for the first time, the directive also calls for better air quality, digitisation of energy systems, and sustainable mobility. Translation: buildings can’t coast on old wiring and leaky windows anymore.
Key requirements of the current EPBD
The latest version of the EPBD has listed the following key requirements for all member states:
- Minimum energy performance requirements: EPBD requires the introduction of minimum energy performance levels for non-residential buildings nationally. This will be according to the climatic conditions and national building stock and enforced through building regulations. Energy Performance Certificates (EPCs) will play an essential role in implementing this measure
- Zero-emission buildings: All new residential and non-residential buildings in the EU will be zero-emission from January 2028
- Smart Readiness Indicator (SRI): This was actually introduced with the 2018 changes. SRI assesses a building's capacity to adapt its operation to the occupant's and the grid's needs. It evaluates smart technologies and their benefits
- Electro-mobility infrastructure: The EPBD requires the installation of charging points for electric vehicles in new and renovated buildings
- Phasing out fossil fuels in heating and cooling: The directive establishes timelines and goals for phasing out fossil fuels in heating and cooling systems. For instance, boilers that sound like steam engines from the 1800s would be no more
- Promoting renewable energy sources: The EPBD encourages the integration of renewable energy sources into buildings, including solar thermal, photovoltaic, and biomass systems
- National building renovation plans: Member states are required to create national building renovation plans that provide a roadmap for achieving the directive's goals and upgrading the national building stock
- Data collection and sharing: It encourages the collection of relevant data and sharing it so that knowledge on energy consumption in the building stock is common and increases awareness
How will EPBD impact the real estate sector?
The EPBD has been in force for over a decade. However, the recent updates are sweeping, which means big changes are about to happen in the building sector. Here’s how we believe the latest EPBD requirements and recommendations will impact the real estate sector:
- Retrofits and renovations: Introducing the minimum energy performance requirement is a game-changer. While there’s some leeway for the countries on exactly how much it will be, the gist is that many building owners and investors may need to pour money into retrofits and renovations to meet the minimum requirement. So yes, the days of charming-but-freezing heritage buildings might be numbered
- Improving energy performance: Of course, the most obvious impact the EPBD will have is on the energy performance of buildings, making them more energy-efficient and, by extension, cost-effective. Good energy performance can cut costs and boost rental income and long-term property value
- Smart meters installation: Building owners and managers may need to install smart meters if they haven’t already. The EPBD is data-driven. And to implement it, stakeholders will need data on consumption, which smart meters can conveniently provide
- Rethinking heating and cooking: Building stakeholders might need to reconsider heating or cooking with fossil fuels. Instead, they may need to switch to low-emission alternatives to optimise energy usage
- Investing in tools: Strategising and implementing changes according to the EPBD will require investment in the right technology. No one wants to guess their way through compliance (with tools like comundo, you don’t have to)
EPBD and the EU’s climate goals
EPBD and other legislations like CSRD (Corporate Sustainability Reporting Directive) are part of the EU’s strategy to go net-zero by 2050 and its near-term 2030 goals. It’s essentially a critical component in a bigger scheme of legislation that aims to make the EU’s emissions zero by 2050.
These climate goals align with the Paris Agreement and are on par with the scientific findings for stopping climate change from having drastic effects. That goes to show just how important such directives are, even if some might dismiss them as unnecessary red tape.
Challenges in implementing EPBD
Stakeholders, especially building owners and investors, may have to deal with some setbacks in realising the requirements of the EPBD:
1. Financing
As many buildings in the EU are old, they may require significant renovations to be energy-efficient. And those renovations may not be cheap. Investors may need to pour in their own money or apply for loans to finance those renovations.
The good news? There are low-interest loans specifically designed for exactly this. We’re talking about green loans, which can finance any retrofits or renovations resulting in better energy performance.
2. Labour shortages
Both new constructions and renovations of existing buildings require a construction crew. And the EU has been facing a labour shortage in the construction industry for a while now. It’s one of the sectors in the region with the highest labour shortages.
In other words, the EPBD’s goal to make old buildings energy-efficient and new ones with nearly zero emissions may be thwarted by the availability of construction workers. Because energy efficiency doesn’t install itself.
3. Complexity of building stocks
The EU bloc is made up of 27 countries. There are different climates, structures, and styles in these EU countries. A building in Stockholm may not face the same conditions as one in Madrid. Those complexities can put an additional burden in some cases where energy efficiency may be hard to achieve.
The latest iteration of the EPBD acknowledges this challenge and leaves room for such differences to be accounted for.
4. Data collection
Collecting data on energy can be challenging, mainly because in most cases it’s staggered and fragmented. Gathering energy data can be tedious for organisations with multiple real estate assets in their portfolio.
This issue can be addressed with solutions like comundo that streamline energy data collection and bring everything together. All the data is current, verified, and actionable, meaning you can use it to strategise renovations for greater efficiency. No more spreadsheets – just clean, digestible insights.
Begin already!
Real estate stakeholders, particularly those managing extensive portfolios, should proactively initiate EPBD compliance. This requires energy data collection and analysis to assess current performance and identify upgrade opportunities accurately.
Implement Building Energy Management Systems (BEMS) and use platforms like comundo (which facilitates data exchange and collaboration) to embrace EPBD requirements.
Ready to decode your building’s energy profile? Let comundo do the heavy lifting.
FAQs
Who is affected by the EPBD?
The EPBD affects many stakeholders, including building owners, developers, architects, engineers, construction companies, investors, and all EU citizens who occupy or use buildings.
What are Nearly Zero-Energy Buildings (NZEBs)?
NZEBs are buildings with very high energy performance. In these buildings, the small amount of energy required comes from renewable energy sources, often produced on-site or nearby.
How does the EPBD address existing buildings versus new buildings?
For new buildings, the EPBD mandates that they meet NZEB standards. For existing buildings, it focuses on major renovations, requiring minimum energy performance upgrades.
What is an Energy Performance Certificate (EPC)?
An EPC is a document that provides information on a building's energy performance, rating it on a scale. It helps to make energy performance transparent. Buildings with a higher rating are energy-efficient.
What are the minimum energy performance requirements under the EPBD?
These are nationally determined standards, meaning each country may differ. The authorities in EU countries may consider climate and building stock when setting the minimum requirements.
What is the Smart Readiness Indicator (SRI)?
The SRI is a tool to assess a building's capacity to use information and communication technologies (ICT) and electronic systems to optimise its operation and interaction with occupants and the energy grid.
What are the penalties for non-compliance with the EPBD?
Penalties may vary by EU member state for non-compliance. However, no penalty was announced in the directive itself. Non-compliance threatens to leave the EPBD’s goal in jeopardy. Also, it can affect the valuation of the property.
