The Low Carbon Kid: European Commission must be more ambitious in its energy efficiency targets says building sector

Tuesday, October 11, 2016

European Commission must be more ambitious in its energy efficiency targets says building sector

The European Commission should set a target for retrofitting all of the continent’s existing buildings to a “Nearly Zero Energy” standard by 2050. That is the request in a letter to the Commission signed by the chief executives of 42 major building firms and six industry trade associations.

The target would be enshrined in the upcoming revision of the Energy Performance of Building Directive and the Energy Efficiency Directive, which are currently under review.

Arguing that “businesses, investors, citizens, governments, all need a clear 2050 vision to put the ambition level of the Paris Agreement into practice”, they state that doing so would provide an opportunity to create jobs and economic growth.

The letter reads: “It is clear that the Paris commitment cannot be honoured without drastically reducing energy consumption in our buildings; the EU building stock emits over one-third of our CO2 emissions, three-quarters of our buildings are inefficient, and up to four-fifths will still be in use in 2050. We need EU wide action to drive the transformation of our inefficient building stock and make it a resilient component of the energy system of the 21st century.”

It continues: “EU wide leadership and action in the construction and building sector will spur European jobs and growth (in particular for SMEs, which make up 90 per cent of the construction sector). A high level political commitment for renovation will give industry the much needed signal and certainty to unlock investments, in turn removing some of the market failures.

“Most of all, making Europe’s buildings better through a mass EU-wide renovation movement will bring invaluable benefits to the whole of society by helping deliver something that every European citizen wants and deserves: a comfortable, safe and affordable home. This is a ‘win-win’ for Europe.”

This target is in line with the aims of the World Green Building Council’s Advancing Net Zero project to make all the world’s buildings ‘net zero’ of emissions by 2050. It builds on a push to double efficiency by 2030.

Launched in June, this program involves Green Building Councils from Australia, Brazil, Canada, Germany, India, Netherlands, South Africa and Sweden who will develop clear action plans, with an aim to launch a national net zero certification.

Energy efficiency package postponed

Despite the backing of the European Parliament, the European Commission appears reluctant to back energy efficiency.

At the beginning of this week it was slammed by the Coalition on Energy Savings for its announcement that the energy efficiency package will not be launched before the end of the year.

The package will define a target for energy efficiency for 2030 and extend the main elements of the Energy Efficiency Directive beyond 2020, as well as discuss buildings’ energy performance and financing.

“This delay undermines the credibility of the European Commission to drive forward the EU with big and compelling projects like energy efficiency, which delivers benefits for people and business and which is the EU’s first action to fight climate change,” secretary general of the Coalition for Energy Savings Stefan Scheuer said.

“[European Commission] president [Jean-Claude] Juncker must not hesitate to deliver on his promise to propose a more ambitious and binding energy efficiency target for 2030.”

The European Parliament has repeatedly called for a binding 40 per cent energy reduction target by 2030 in line with the already identified cost-effective potential for implementing energy saving measures. The target is currently set at a reduction of 20 per cent in energy use by 2020.

Energy efficiency mortgage scheme

Further backing the increasing desire for making European buildings more energy efficient, a new financing initiative, that would potentially offer better borrowing rates on mortgages for homebuyers purchasing more energy-efficient homes or carrying out energy-saving retrofits within properties, was presented by energy and building sector professionals from across Europe last week.

The European Energy Efficiency Mortgage was launched at the World Green Building Council’s “Build Upon” summit in Madrid by the European Mortgage Federation, which consists of the European Covered Bond Council with partners.

See EU residents set to get cheaper home loans for energy efficient houses

The scheme effectively creates a “pan-European mortgage financing system” in order to make energy efficiency measures more accessible and affordable for home-buyers.

For banks and investors, the mortgage could allow for loans that represent a lower risk on the balance sheet and could therefore qualify for a better capital treatment.

It could also ensure that banks are able to recognise “energy-efficient” assets in their risk-profiling, which would begin to help the market price-in the added value of energy-efficient real estate.

The project is the first time a group of major banks and mortgage lenders have sat down with businesses and organisations from the building and energy industries to address the concept of energy efficient mortgages.

Creating a private bank financing mechanism to encourage the energy efficient improvement of households would be a key means of helping the EU to meet its energy saving targets.

Alongside the EMF-ECBC, the project partners are the Ca’Foscari University of Venice, RICS, European Regional Network of Green Building Councils, E.ON, and SAFE Goethe University Frankfurt.

Over the coming months, they will begin a mapping exercise in relation to existing or past financing initiatives, energy efficiency indicators and valuation practices, with a view to identifying best practices with which to move the project forward. It will explore the link between energy efficiency and borrower’s reduced probability of default and the increase in value of energy efficient properties.

The experts will meet again in Brussels in February 2017, followed by a public event at which the next stage will be decided.

Europeans can also generate half their energy at home

Continuing the news from Europe on energy and buildings, it also emerged last week that half of EU citizens – including local communities, schools and hospitals – could be producing their own renewable electricity by 2050.

A study by Dutch consultancy firm CE Delft that evaluated the potential of decentralised power generation across the continent found that 264 million people in Europe could be producing their own renewable electricity by 2050 and meet 45 per cent of the EU’s energy demand, provided the right regulatory framework is put in place.

Sweden looks like leading the way, with an estimated 79 per cent of the population being able to produce their own energy in 2050.

Germany and other EU countries like the Netherlands already champion energy production by households, which can sell surplus electricity back to the grid at a guaranteed price.

“But in Spain, there is a ‘sun tax’ which makes it very expensive to install solar panels on your roofs or have energy storage at home. And there is only a handful of cooperatives,” said Sebastian Mang, climate change and energy officer at Greenpeace EU, which is among the organisations behind the study. “Yet across Germany, you see solar panels on the roofs and hundreds of energy cooperatives flourishing.”

The organisations are calling for the European Commission to enshrine so-called “energy citizens” at the centre of the EU’s Energy Union initiative.

David Thorpe is the author of: