Real estate: Vote on EU renovation requirements for buildings

Real estate: Vote on EU renovation requirements for buildings

The EU Parliament wants to give the green light for new renovation requirements. This is intended to save energy and protect the environment – homeowners should now keep an eye on the federal government.

Today, the European Parliament wants to approve restructuring measures that will help ensure that the EU meets its climate goals. The energy consumption of residential buildings is expected to fall by an average of 16 percent by 2030 and by 20 to 22 percent by 2035. For non-residential buildings, the regulations require 16 percent of the least energy efficient buildings to be renovated by 2030 and 26 percent by 2033.

In December, negotiators from Parliament and the EU states also involved agreed on the new law. Now Parliament wants to formally approve it. The content at a glance:

Will I be forced to renovate my house?

According to EU chief negotiator Ciarán Cuffe, there are basically no obligations for individual buildings. The specific impact the requirements have on homeowners and the economy depends primarily on how Germany implements them. The Federal Association of the German Construction Industry announced that the federal government would face a major challenge. It must therefore be clarified exactly which buildings need to be renovated and when. This is important for construction companies in order to be able to plan their capacities in the long term.

The requirement that energy consumption in residential buildings must decrease by 16 percent by 2030 and by at least 20 percent by 2035 is an overarching goal. In other words: Even if buildings that are already well insulated are raised to an even better standard, this will help ensure that the goals are achieved. However, a good half of the savings should be achieved by renovating buildings with the worst energy efficiency. The Federal Ministry of Construction did not want to comment in advance on the effects of the law. The Ministry of Economic Affairs said that the need for implementation would be examined. The federal government has advocated that there are no individual obligations to renovate residential buildings.

Will my house lose value due to the new law?

This also depends on how Germany implements the directive. Kai Warnecke, President of the Haus & Grund owners’ association, sees it as very ambitious that 50 percent of the savings should be achieved by working on particularly poorly insulated buildings. This will financially overwhelm many owners. If the federal government introduces minimum standards that all buildings must meet, the association believes there is a risk of a significant loss in value for numerous properties.

“We have already seen with the so-called Heating Act that buildings that have heating systems powered by fossil fuels lose significantly in value,” says Warnecke. The federal government should not make the same mistake and proceed with extreme caution.

How expensive will the project be?

Citing figures from the Working Group for Contemporary Building from 2022, Haus & Grund announced that the 15 percent of the most inefficient buildings in Germany correspond to around 2.4 million residential buildings. Even a partial modernization of these buildings could cost around 17.2 billion euros per year. By 2030, this corresponds to a total expenditure of almost 140 billion euros. On average it is almost 60,000 euros per building. According to the law, EU states should take measures to ensure that people who are financially worse off have access to support. Cuffe said: “Member states must make EU funds available to households in need.”

The construction industry sees opportunities to work cost-effectively by renovating entire blocks of flats. If a larger number of apartments and houses are renovated at the same time, economies of scale could occur, said the Main Association of the German Construction Industry. This could reduce the average cost per housing unit. This in turn is the basis for affordable rents. At the same time, the industry criticizes the fact that the requirements of the project make new buildings more expensive. The law hardly provided any impetus to alleviate the current housing construction crisis in Germany.

Are there exceptions?

Yes. According to the EU Parliament, agricultural and listed buildings can be exempt from the new regulations. Member States can also exempt buildings from obligations if they are uneconomical to renovate. The same applies to buildings that are protected because of their special architectural or historical value. Churches and other places of worship can also be exempt from the requirements. According to the EU Commission, EU states can, for example, also exempt holiday homes from their obligations.

What further measures are planned?

Oil or gas heating should no longer be used by 2040. Parliament announced that the EU states would also have to stop subsidies for heating using fossil fuels such as oil or gas from 2025. However, incentives for hybrid systems, such as a combination of fossil heating and a heat pump, should still be possible.

In addition, solar systems must be gradually installed on public buildings and non-residential buildings from 2027, provided this is technically, economically and functionally feasible. In addition, from 2030 onwards, only buildings should be built that do not emit greenhouse gases from fossil fuels on site. According to the Commission, exceptions are possible.

Why is there a need for action?

The project is based on a proposal from the EU Commission. She presented this almost two years ago because, according to her, buildings are responsible for around 40 percent of energy consumption and around a third of greenhouse gas emissions in the EU. If houses are better insulated or modern heating systems are used, this can reduce energy requirements and thus reduce energy costs and environmental impact.

Source: Stern

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