Europe’s president Ursula von der Leyen has called for “NextGenerationEU to kickstart a European renovation wave and make our union a leader in the circular economy”.
She promised to set up “a new European Bauhaus – a co-creation space where architects, artists, students, engineers, designers work together to make that happen”.
At her first State of the Union address in front of the European Parliament on Wednesday she focused on the recovery from the corona crisis, updated green targets and outlined a path towards a “digital decade” for Europe.
She said the renovation wave “is not just an environmental or economic project: it needs to be a new cultural project for Europe. Every movement has its own look and feel. And we need to give our systemic change its own distinct aesthetic – to match style with sustainability.”
Ms von der Leyen indicated that the European Parliament will push for a 55 per cent cut in greenhouse gas emissions by 2030 and for higher shares of renewable energy as part of an ambitious plan to achieve net-zero emissions by mid-century.
“We need to go faster and do things better,” she said. “Our impact assessment clearly shows that our economy and industry can manage this. And they want it too. Just yesterday, 170 business leaders and investors – from SMEs to some of the world’s biggest companies – wrote to me calling on Europe to set a target of at least 55 per cent.
“Meeting this target would put the EU firmly on track for climate neutrality by 2050 and for meeting our Paris Agreement obligations. And if others follow our lead, the world will be able to keep warming below 1.5 degrees Celsius.”
She said the 37 per cent of NextGenerationEU budget “will be spent directly on our European Green Deal objectives, to change how we treat nature, how we produce and consume, live and work, eat and heat, travel and transport…everything from hazardous chemicals to deforestation to pollution.”
EuroACE, the European Alliance of Companies for Energy Efficiency in Buildings, called this 55 per cent target “ambitious, achievable, beneficial” and said a couple of days before von Leyden’s speech that next generation EU recovery money should be spent on ‘lighthouse projects’ like building renovation.
In December 2019, the renovation wave was announced as a key European initiative to support the European Green Deal. It will be driven by Building Energy Performance Standards.
These are regulations requiring existing buildings to meet a specific standard. For example, in the Netherlands there’s one for office buildings, to reach EPC standard C by 2023. Standards like this can drive the rate and depth of insulation.
Standards contain either a date for compliance or a trigger opportunity. There are different terms for the standards in different countries around the world, not just Europe. There’s interest in some US cities, Australia and New Zealand.
“The interesting thing is that they’re driven by local priorities,” according to Louise Sunderland, senior advisor at Regulatory Assistance Project in the UK. “In the [United] States they’re driven by stretching carbon targets. In Australia and New Zealand, and Great Britain, they’re driven by concern on housing standards and energy policy.”
Ms Sunderland was speaking at a renovation wave webinar co-organised by European Climate Foundation and EURIMA, the European Insulation Manufacturers Association a week ago.
“We’re struggling with driving a sufficient renovation rate,” she said. “It’s always said this rate is 1 per cent in Europe but it is an overstatement: most renovations are not reaching the depth needed. We need to double or triple it and deepen it. Actually, it should really be a 10 or 15 times increase.
“For me it’s been a lifelong struggle to encourage renovation. Even in countries with lots of practical support and money, the rate is not high enough,” she complained. “We need new policies.”
Ms Sunderland is the co-author of the comprehensive report, Filling the policy gap: Minimum energy performance standards for European buildings.
In reference to this she said, “We find we now have evidence of impact – we’re more confident than ever because of our experience. Enforcement does drive demand and align supply chains. And we need a good lead time – four to 10 years before enforcement happens, to give time for this alignment. We must ensure the worst performing buildings don’t get left behind.”
She also recommended the use of “one stop shops” to streamline the journey for the people who want to do a renovation. They should be locally available using local skills, and called for alignment with other incentives such as tax, and for low income energy poor households to received free or massively subsidised renovation.
Financing the wave
Finally, she called for standards for individual houses that are able to help guarantee results because this can help find the necessary finance for smaller renovation projects.
In the Netherlands there has been a trend for new office buildings of A to C performance standard. The new policy states that in order for all office buildings in the Netherlands to be let after 2023 they have to reach the minimum C standard.
Speaking on behalf of the financial sector, Tjeerd Krumpelman, global head of business advisory, at ABN AMRO, said that such policy announcements are important because they send a clear signal to building owners, that if they don’t start renovating they will lose their income. “Equally, for banks, it is a risk to have buildings on their books that are not equipped to this standard.”
He feels that social housing is lagging behind because banks aren’t having the opportunity to finance them, since the policies aren’t there.
“We focus on the technical state of the building, but we also need the data on the real energy usage of the building – how occupants actually behave – to use this as a driver for improvement. We also need to look at whether the energy source for the building is sustainable which can compensate for poorly performing buildings.”
Mr Krumpelman said even if finance is there and there’s a great business case it doesn’t mean that renovation will happen – “we need all the other barriers to be removed”.
The importance of Minimum Energy Performance Standards
Paula Rey Garcia, deputy head of Unit for Energy Efficiency: Buildings and Products in DG ENER. argued that the European Commission, Minimum Energy Performance Standards can be very impactful in setting out a route to better buildings, tackling the most important barriers such as split incentives, creating more awareness and boosting the economy.
“We’ve analysed the barriers; for example in performance standards you need clear information for the public and building owners.” Ms Rey Garcia said the renovation wave will be linked to the green recovery and coming EU budgets which means money will be available to states if they take it up.
Pernille Weiss, a Danish Conservative People’s Party Member of the European Parliament, stated that “we still need more evidence on building typologies. We do know what to do but we need to put the technologies together”.
While she does see a lot of enthusiasm in Denmark, she laments that only six of the 27 countries in the EU have so far implemented energy efficiency policies for buildings.
Energy efficient building renovation still has a long way to go before it scales up to meet the demand of the climate emergency. The commission intends to revise the Energy Efficiency Directive in 2021. Ursula von der Leyen clearly hopes the green recovery targets and finance will boost the renovation rate. Whether it does is entirely up to nation states.
David Thorpe is the UK based author of Passive Solar Architecture Pocket Reference, Energy Management in Buildings and Sustainable Home Refurbishment. He teaches an online Post-Graduate Certificate in “One Planet” governance.