Energy Performance of Buildings Directive Review

25 May 2018

BPF's Head of Insights and EU Engagement, Patrick Brown, provides an update on the latest iteration of the EU’s Energy Performance of Buildings Directive (EPBD III)

In chairing the European Property Federation’s Energy and Environment Committee, one of the key items on our agenda for the last year or so has been the revision of the Energy Performance of Buildings Directive.  By virtue of the Directive, the UK has developed its current approach toward energy efficiency requirements in building regulations, energy certificates for display in public buildings and for all buildings on construction, sale or let.  In recent days, the EU institutions have reached a political agreement on the EPBD III such that it now represents a done deal.

EPBD III risked being only an iterative step on its precursors, but has instead introduced new elements that property owners and investors and advisors would be wise to take note of.  In terms of its goals, whereas the original EPBD was designed as a means to address Kyoto Targets, the EPBD III is very much addressed at delivering the Paris Agreement.  Yet the EPBD III recitals also explicitly acknowledge the need to reduce gas imports to the EU (every 1 % increase in energy savings reduces gas imports by 2.6%), suggesting that renovation of buildings as a key consumer of energy can help with the EU’s energy security.  This also helps to justify the Directive’s update, since its provisions are now made under the Energy Union rather than general environmental provisions.

The requirement for nearly zero energy buildings as a deliverable in the last EPBD is swapped out in favour of a requirement for national governments to table long-term renovation strategies with measurable targeted actions.  The recitals also suggest that member states may wish to introduce energy targets for rental properties, which of course the UK has already adopted via the Minimum Energy Efficiency Standards regulations that came on stream in early April this year.

New features of the Directive include:

  • Requirements for new buildings and buildings on major renovation to install electric vehicle charging (subject to renovations including the car park or the electrical infrastructure relating to the building car park)
  • Building owners to retain and pass on to new owners the documentation from a building technical system upgrade or replacement to assist with compliance and member states will be entitled to determine whether or not to require that such upgrades do or do not trigger the requirement for a new EPC
  • The introduction of requirements for air conditioning (or combined air conditioning and ventilation systems) with an effective rated output of over 290kW to be equipped with building automation and control systems by 2025 designed to log data, benchmark efficiency and allow communication with connected building systems
  • The introduction of requirements for residential buildings to obtain electronic monitoring that measures system efficiency and informs building owners or managers when it has fallen significantly
  • The Commission to develop by 31 December 2019 a delegated act (read: piece of secondary legislation) that will establish a common optional scheme for rating the smart readiness of buildings.  This rating will be based on an assessment of the capabilities of a building or building unit to adapt its operation to the needs of its occupant and the grid to improve its energy efficiency and overall performance. However, seeing the Commission’s partially completed study in preparation for the delegated act, it does seem that the scope of the Certificate may be broader.  Yet, the Commission struggled to implement a common Energy Performance Certificate rating as mandated by the last EPBD
  • A feasibility study to be carried out by the Commission before 2020 on the inspection of stand-alone ventilation systems, and an optional building renovation passport that would set out the building’s energy efficiency renovation pathway (based on an energy audit, and  outlining relevant measures and renovations that could improve the building’s energy performance)
  • A non-binding recital that encourages member states to consider energy efficiency standards for rental properties (which indeed, the UK already has implemented in any case via MEES)
  • The Directive is to be implemented by 20 months following the entry into force of the Directive (some time before the end of week commencing 4th June).  Therefore the transposition period would fall within the window of the transition period intended by both EU and UK negotiators apropos Brexit

The implementation of the current EPBD was somewhat swift and took the industry by surprise.  As such we will be in touch with officials to ask what their plans are for scoping EPBD implementation, and asking if there are any opportunities to address some emerging issues that relate to the interface between the EPBD regime and the MEES regime. We will have further updates on this later in the summer following a workshop with officials.