Publication
Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
Global | Publication | June 2024
The Energy Performance of Buildings Directive (the Recast EPBD) entered into force on 28 May 2024. The Recast EPBD repeals the Energy Performance of Buildings Directive 2010 (the Repealed EPBD). The Repealed EPBD will remain as transposed in the laws of England and Wales, and the Recast EPBD will only be transposed into the national legislation of EU Member States.
The overarching aims of the revisions set out in the Recast EPBD reflect the common themes of European climate legislation to speed up the transition to renewables and rapidly reduce energy consumption. We set out below a summary of the key provisions under the Recast EPBD, when the provisions take effect and a comparison with the Repealed EPBD.
National building renovation plans |
The national building renovation plan will set out the ten-year long targets up to 2050 for the annual energy renovation rate, targets for the primary and final energy consumption of buildings, greenhouse gas emission reductions, a comprehensive heating and cooling assessment, and expected energy savings and wider benefits, including indoor environmental quality. The plan should ensure the renovation of existing buildings into decarbonised buildings and eventually zero-emission buildings. The contents of the plan will be comparable to the contents of the long-term renovation strategies established under the Repealed EPBD. Before 2026, each Member State must draft a plan. The plan should be revised every five years. Before 2027, each Member State must issue the first plan. |
Zero-emission buildings |
Zero-emission buildings require a very low amount of energy and produce a very low amount of greenhouse gas emissions, which builds upon the concept of the ‘nearly zero-energy buildings’ under the Repealed EPBD. Member States must establish maximum thresholds for energy demand and operational greenhouse gas emissions that zero-emission buildings must comply with. From 2028, all new buildings owned by public bodies must be zero-emission buildings. From 2030, all new buildings must be zero-emission buildings. Member States may decide not to apply these rules to new buildings for which planning applications have already been submitted by these dates. |
Life-cycle global warming potential |
A novel term under the Recast EPBD is the life-cycle global warming potential (GWP), which is an indicator that quantifies the GWP contributions of a building along its full life-cycle. By 2027, Member States must publish a roadmap detailing the introduction of limit values on the total cumulative life-cycle GWP of all new buildings and they must set life-cycle GWP targets for new buildings from 2030. From 2028, the GWP for all new buildings with a useful floor area over 1000 sqm must be disclosed in the energy performance certificate (EPC). From 2030, the GWP for all new buildings must be disclosed. Member States may decide not to apply these rules to new buildings for which planning applications have already been submitted by these dates. |
Minimum energy performance standards |
Member States must establish minimum energy performance standards (MEPS) for existing buildings, akin to the minimum energy performance requirements under the Repealed EPBD. The MEPS can be adapted or exemptions can be applied for historical buildings, places of worship and buildings used for defence purposes. By 2030, the average primary energy use of residential buildings must decrease by at least 16 per cent compared to 2020. From 2030, all non-residential buildings must be above the 16 per cent worst performing non-residential buildings. From 2033, all non-residential buildings must be above the 26 per cent worst performing non-residential buildings. By 2035, the average primary energy use of residential buildings must decrease by at least 20-22 per cent compared to 2020. By 2040 and every five years thereafter, the average primary energy use of residential buildings must be at least equivalent to the nationally determined value derived from a gradual decrease in the average primary energy use from 2030 to 2050. |
Solar energy |
There is a particular focus in the Recast EPBD on solar energy. To ensure that all buildings are designed to optimise their solar energy generation potential, Member States must deploy suitable solar energy installations. Before 2027, installations must be deployed on all new public and non-residential buildings with useful floor area over 250 m2. Before 2028, installations must be deployed on all existing public buildings with useful floor area over 2000 m2 and all renovated non-residential buildings with useful floor area over 500 m2. Before 2029, installations must be deployed on all existing public buildings with useful floor area larger than 750 m2. Before 2030, installations must be deployed on all new residential buildings. Before 2031, installations must be deployed on all existing public buildings with useful floor area larger than 250m2. |
Renovation passports |
The Recast EPBD establishes the concept of a renovation passport, which is a tailored roadmap for the deep renovation of a specific building in a maximum number of steps that will significantly improve its energy performance. By 29 May 2026, Member States shall introduce a scheme of renovation passports for voluntary use by building owners. Member States can opt to make this a mandatory scheme. |
Technical building systems |
Analogous to the Repealed EPBD, under the Recast EPBD a technical building system (TBS) is technical equipment of a building for space heating, space cooling, ventilation, domestic hot water, built-in lighting, building automation and control, on-site renewable energy generation or energy storage. It can be supported through automatic controls by a building automation and control system. Before 2025, non-residential buildings must be equipped with building automation and control systems if the effective rated output for the TBS is over 290 kW. Before 2028, non-residential buildings must be equipped with automatic lighting controls if the effective rated output for the TBS is over 290 kW. Before 2030, non-residential buildings must be equipped with building automation and control systems and automatic lighting controls if the effective rated output for the TBS is over 70 kW. Member States must set indoor environmental quality standards in buildings in order to maintain a healthy indoor climate. Non-residential zero-emission buildings must be equipped with measuring and control devices for the monitoring and regulation of indoor air quality. By 29 May 2026, the building automation and control system must be capable of monitoring indoor environmental quality. |
Infrastructure for sustainable mobility |
Parallel to the Repealed EPBD, pursuant to the Recast EPBD Member States must ensure compliance with various rules relating the number of electric vehicle recharging points, car parking spaces with pre-cabling and ducting, and bicycle parking spaces available relative to the number of car parking spaces per building. |
Energy performance certificates |
Like the Repealed EPBD, the Recast EPBD retains the requirement for EPCs to be issued when buildings are constructed, renovated, sold or when a rental contract is entered into or renewed, and when existing buildings are owned or occupied by public bodies. In addition, landlords will be required to issue an EPC upon renewal of a rental contract. Unlike the Repealed EPBD, the Recast EPBD introduces a requirement that by 29 May 2026 EPCs must have an A class that corresponds to zero-emission buildings. They must also have an A+ class that corresponds to buildings with a maximum threshold for energy demand which is at least 20 per cent lower than the maximum threshold for zero-emission buildings, and that also make a positive net annual contribution to the energy grid from on-site renewables. |
Inspections |
Similar to the obligations under the Repealed EPBD, pursuant to the Recast EPBD Member States must establish inspections of the accessible parts of heating, ventilation and air conditioning systems with an effective rated output of over 70 kW and issue an inspection report at least every five years. Systems with generators of an effective rated output of more than 290 kW must be inspected at least every three years. The inspection must include an assessment of the efficiency of the generator and consider the capabilities of the system to optimise its performance using available energy saving technologies, using more efficient temperature settings, and using less on-site fossil energy. |
The Recast EPBD forms part of the Fit for 55 package, which is a set of proposals to revise EU legislation to enable the EU to reduce its emissions by at least 55 per cent by 2030 (for further information on the Fit for 55 package, please see our earlier article). Measures to encourage energy efficiency in the buildings sector also contribute towards the EU’s wider ambition of climate neutrality by 2050. Buildings contribute 40 per cent of energy consumed and 36 per cent of energy-related direct and indirect greenhouse gas emissions in the EU, so building developers will have a pivotal role in responding to the challenge to reach climate neutrality.
The extensive changes mandated by the Recast EPBD aim to address the issues by setting out more comprehensive requirements, and specifying how these requirements are to be assessed. The next stage in the regulatory development process is for Member States to incorporate the provisions of the Recast EPBD into their national legislation within the next two years, subject to some exceptions. Penalties for infringements of the Recast EPBD will be set out in the domestic legislation of respective EU Member States and therefore may vary.
If you have any questions or would like any further information on this development, please contact the Environment team.
Publication
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
Subscribe and stay up to date with the latest legal news, information and events . . .
© Norton Rose Fulbright LLP 2023