EPBD Recast: Trilogue Negotiations Yield Provisional Agreement, Paving the Way for 2025 Enforcement

A step closer to the finish line

The European Commission's legislative proposal to revise the EPBD was adopted in December 2021. Since then, the Council of the EU and European Parliament also drafted their own proposals. Each institution proposed a slightly different approach to reach the European objective and enact the transition.

In our previous pieces “Energy Performance of Building Directive review: Major renovations ahead” and “Energy Performance of Building Directive review: how will banks be affected?” we looked into both the Commission’s and the Council’s proposals and their expected impacts on the banking sector.

After months of Trilogue negotiations, a provisional agreement was reached on 7 December, 2023. The Trilogue sessions aimed to develop a common text reviewing the current EPBD. The last step of the legislative process will be for the European Parliament and Council to vote on the provisional agreement to formally endorse it. If the vote is successful, the policy should be enforced in 2025

 

Four main changes to the current EPBD

This section dives into the main changes the recast makes to the EPBD and how that diverges from the previous policy versions.

 

Renovation goals

Starting with residential buildings, the provisional agreement states that each Member State (MS) will adopt their own national trajectory to reduce its building stock’s average primary energy use. This should be in line with the 2030, 2040, and 2050 targets contained in the MS building renovation plan and should identify the number of buildings, building units, and floor areas to be renovated annually.

This is a significant change from the previously proposed policies as these were including renovation targets based on minimum energy performance criteria. Instead, the agreement focuses on diminishing energy consumption across all houses rather than only the worst-performing buildings.

The agreement states that the reduction in average primary energy use should be 16% by 2030 and 20-22% by 2035 relative to 2020 levels. MS must reach these reduction targets but are free to choose which buildings to target as well as which political measures to enforce (i.e., minimum energy performance standards, technical assistance, and financial support measures).

However, to ensure that the Union’s worst-performing buildings are gradually refurbished, the EPBD review specifies that at least 55% of the decrease in average primary energy use should stem from the renovation of the worst-performing buildings nationally.

Worst-performing buildings are defined as buildings which are within the 43% of buildings with the lowest energy performance in the national building stock.

 

Moving to non-residential buildings, the agreement keeps the reduction target as proposed before the negotiations. Non-residential buildings will, therefore, need to follow Minimum Energy Performance Standards (MEPS) set by Member States.

This gradual improvement should lead to the renovation of at least 16% of the worst-performing buildings by 2030 and 26% of those by 2033. Member States will be able to express this threshold in either primary or final energy use.

In the case of a seriously damaging natural disaster, a Member State may temporarily adjust the maximum energy performance threshold so that the renovation of the damaged non-residential buildings replaces the renovation of other worse-performing buildings. This should, however, be done whilst ensuring that the percentage of stock undergoing renovation remains stable.

 

Additionally, all new residential and non-residential buildings will have to have zero on-site emission of fossil fuels as of January 2030 and January 2028 for publicly owned buildings.

MS will, nonetheless, be able to exempt certain categories of buildings from the previously explained requirements. For non-residential buildings, they should communicate the criteria for such exemption in the National building renovation plan and compensate the exempted stock with renovation in equivalent improvement elsewhere in their non-residential building stock.