After a long dispute, the EU agrees on future rules for building renovation. There should be no obligation for private homeowners to renovate – but some still have to take action.
The European Union (EU) has agreed on new requirements for the energy efficiency of buildings – but not on a renovation obligation. The EU Parliament and the EU Commission had been arguing for a long time about what the exact form should be when reforming the so-called Building Energy Efficiency Directive. Now the agreement is in place. Lobby groups and Union politicians from the conservative EPP faction, among others, opposed an obligation to renovate private houses.
Each country decides for itself how it will implement the directive
In plain language: Each country now clarifies how it will implement the directive; there are no longer any mandatory standards or time rules for everyone. The opponents of a general Obligation to renovate Comment on the decision as expectedly positive: “This is reassuring news for millions of owners and tenants in Germany,” said CDU European politician Dennis Radtke. His party colleague Markus Pieper emphasized that the directive now contains little to no European binding force.
The reform of the building guidelines looks loud EUParliament now proposes that from 2030 all new buildings should be climate neutral in order to minimize the emission of harmful CO2 emissions. The entire building stock should be climate-neutral by 2050. According to EU statistics, more than a third of greenhouse gas emissions and around 40 percent of energy consumption currently come from residential buildings.
So is there no obligation to renovate private houses?
Nope. The general obligation to renovate private houses, as the EU Commission originally proposed, is now off the table. But: The energy consumption of residential buildings in the respective EU countries should still be reduced by an average of 16 percent by 2030, and even by 2035 fall by 20 to 22 percent, as the EU states announced.
The obligation to renovate was also the most controversial point in the reform discussion because an obligation to renovate would mean high costs for homeowners. Energy renovations are quite expensive if they are supposed to lead to significant savings, especially since construction and tradesman costs have increased by up to 30 percent in the last three years alone. The German owners’ association Haus & Grund had therefore warned of a dramatic loss in value, especially in older buildings, in view of the impending obligation to renovate.
That would be the case in the current situation on the German real estate market – in which old buildings are already difficult to find a buyer because buyers and… Salesperson Rarely agree on the price – an additional risk, both for the seller and for the financing banks.
The EU Commission has often emphasized that energy renovations pay off in the long term because they can reduce energy consumption. But firstly, this is mostly only true for owner-occupiers – who then really benefit from lower heating and hot water costs.
But expensive renovations are often not worth it, especially for many private landlords who would have to make financial advance payments for energy renovations; especially if the properties are in structurally weak regions where no significant rent increases are possible. If the rent level is only manageable anyway, the renovation costs can hardly be passed on to the tenants so that the renovation is amortized for the landlord. In other words: Where the rent is at the level of the German average rent of around 6 euros per square meter, you cannot simply increase the price to the theoretically possible 8 euros per square meter without overburdening the existing tenants and risking future vacancies.
In addition, individual studies have shown that houses with poor energy performance in this country are primarily inhabited by people who only have a low income. They will probably have a hard time getting the necessary loans from the banks for restructuring – or they would have to be supported by the state with generous subsidies.
Which houses and apartments are affected by the directive?
Previous information puts the total number of properties that would have to be converted to new energy goals in Europe at several million buildings. It was always said: Each country should develop its own roadmap according to which criteria which buildings have to be renovated and by when this should happen. The problem is that there is currently no uniform scale for measuring energy consumption. In some countries it is divided into levels from A to E Germany it ranges from A to H.
It is likely that the “worst performing buildings” should be renovated first, i.e. levels G and H in this country. That would also make sense because they are responsible for the highest energy losses. So before you have to carry out a lot of very complex conversions that lead to comparatively small savings (from level E to D, for example), you should bring the large energy guzzlers to a better standard.
If you want to know how well your property is doing, you should look at the energy certificate, it usually provides a good indication. However, the consumption or demand values stated there are not always identical to the energy values that are determined in energy renovation plans.
What deadlines now apply for renovations?
In order to meet the EU emissions targets, some owners with very poor energy-efficient apartments will have to renovate as soon as possible: the current EU agreement is based on an earlier reform proposal from the EU Commission. And it says unequivocally: If older houses were better insulated or modern heating systems were used, energy requirements would be noticeably reduced.
The EU is also sticking to the “Fit for 55” climate package. This is intended to reduce net greenhouse gas emissions by at least 55 percent by 2030 – compared to consumption in 1990. The planned change in the law is part of this climate package. The targeted 55 percent of energy savings must be achieved by 2035 at the latest by bringing those buildings with the worst energy performance into shape. However, many detailed questions remain open.
What specifications should there be for heating?
The EU also wants to stick to the gradual abolition of fossil fuel boilers. The EU Commission and the EU Parliament agreed to include a roadmap for the conversion in the respective national building renovation plans. The aim is to ensure that newly installed systems are increasingly operated with renewable energy sources. Existing fossil fuel boilers should be replaced by new systems by 2040.
In addition, from 2025 the installation of gas or oil heating will no longer be financially supported by states. However, it is possible that there will be financial incentives if hybrid solutions are installed. So if the gas boiler is also operated with a supplementary solar thermal system or a heat pump, there could be money for it. There is also an obligation to install solar systems if this makes technical and economic sense.
Are there exceptions for certain types of buildings?
Yes, public buildings already need to be renovated more quickly. There will be an obligation to renovate buildings in public hands from 2028. For these non-residential buildings, the requirement remains that the 16 percent of the worst renovated properties must be renovated by 2033.
This means that the federal government, states and municipalities will soon have to ensure that energy renovations are carried out in government buildings, hospitals, fire departments and schools. It’s exciting to see where the money and skilled workers will come from.