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The European Green Deal and its Massive Building Renovation Program within the European Union

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What is the European Green Deal, and what are its goals for the European Union? In simple terms, the European Green Deal is a series of policy proposals by the European Commission requiring all 27 European Union Member States to commit to implementing a transformative strategy to achieve climate neutrality by 2050, with a target emission reduction of 55% by 2030 compared to 1990. The European Green Deal’s goals are to examine all existing laws for their climate benefits and introduce new legislation across all stages and value chains. These include the circular economy (based on the three principles of waste and pollution elimination, product and material circulation, and natural regeneration), building renovation, construction, biodiversity (or biological diversity), energy, transportation, innovation, and farming. As a result, they are creating profoundly transformed economies and communities.

This article focuses mainly on the announcement made by the European Commission dated 15 December 2021 regarding its proposals to reduce greenhouse gas emissions and energy bills. It highlights the building renovation industry, one of Europe's largest energy consumers, which expends considerable non-renewable resources and is enormously expensive to renovate.  

The Renovation Wave is a fundamental pillar of the European Green Deal, which argues for a significant acceleration and doubling efforts to restore private and public buildings. Renovation milestone proposals at a European level for all new buildings must be zero-emissions by 2030 and all new public buildings by 2027. In addition, national building renovations should include eliminating fossil heating and cooling by 2040 and zero emissions by 2050. What does this imply in terms of application and environmental performance? In a nutshell, buildings must cut greenhouse gas emissions. Moreover, they need to be propelled by renewables (to the extent practicable), and fossil fuels are not used to generate carbon emissions on-site. Energy Performance Certificates will be given for the complete emission cycle of the property (including design, construction, and innovation). They will show you how much it will cost to heat and light the property and how much carbon emissions it generates. It can also provide you with advice on making your home more energy-efficient.

In terms of renovation, it is suggested that the worst-performing 15% of each Member State’s Energy Performance Certificates of public and non-residential building stock be upgraded from Grade G to at least a Grade F by 2027 and to a Grade E by 2030. In addition, residential buildings will be upgraded from Grade G to F by 2030 and Grade E by 2033, with A the most efficient and G the least efficient. As a result, the higher the grade, the lower the property's operating costs.

Energy Performance Certificates will provide critical information and property classification on energy consumption. They will serve as important indicators to drive financial investing, purchasing, and considering property for rent. As a result, the energy performance class must be mentioned when structures or building units are promoted for sale or rent. All certifications must be graded on a standardized A to G scale by 2025.

Homes and buildings are remodelled with energy and waste-efficient alternatives as a first step toward reducing carbon-intensive heating and cooling systems. Consequently, energy is saved, temperature extremes are avoided, and fossil fuels are phased out.

The new guidelines for buildings encourage a transition into digitalization databases and systems, for example, the Internet of Things (IoT), which involves collecting and exchanging data over a network without human interaction, including Artificial Intelligence (A.I.), which requires computer systems capable of performing tasks generally without the need for human intelligence or discernment. Digitalization would be seen as a must for competitiveness, creativity and innovation. In terms of transportation, the idea encourages the installation of electric vehicle charging infrastructures in homes and at the workplace and designated and secure parking spaces for bicycles.

A building ‘Renovation Passport’ proposal has been introduced for owners to plan more energy-efficient properties. The challenge is encouraging the necessary upgrades and making the investments more attractive. There is an emphasis on financing mechanisms and incentives for building renovations to stimulate public and private investments and find new sources of growth.

The information provided should not be interpreted as exhaustive. From a policy perspective, the changeovers and transformations suggested are long-term targets with corroborated national strategies that also offer the Member States the opportunity of adding their standards.

The content of this article is valid as of the date of its first publication. It is intended to provide a general guide to the subject matter and not constitute legal advice. We recommend that you seek professional advice on a specific topic before acting on any information provided. For further information, please get in touch with Elizabeth Michael at Elizabeth.Michael@kyprianou.com Executive Assistant at Michael Kyprianou & Co LLC.