/EU aims to regulate rush to renovate

EU aims to regulate rush to renovate

This article is the product of a POLITICO Working Group.

The private sector is champing at the bit to start renovating Europe’s buildings so that they consume less energy — but Brussels and national governments insist more training, legislation and data collection is needed first.

The opposing forces carry a dual risk — charging forward too quickly means not being able to measure progress and ensure maximum energy savings are obtained. But waiting around for politicians to chart the course means falling behind in the race to renovate.

The EU released its Renovation Wave Strategy on October 14, which set a goal of outfitting at least 35 million buildings over the next decade with solar panels, insulation and more efficient heating, cooling, water and power systems.

“We want everyone in Europe to have a home they can light, heat or cool without breaking the bank or breaking the planet,” Commission Executive Vice President Frans Timmermans said at the time.

Remodeling the EU’s 220 million old buildings so that they consume less energy and use power from green sources is also crucial to meet a proposed higher 2030 goal of cutting CO2 emissions by 55 percent compared to 1990 levels.

France, which has sought to position itself as a leader in the area, has made much of its 2019 Energy and Climate law, which will require residential buildings with the lowest energy efficiency ratings of F and G to be renovated to at least an E standard by 2028.

Looming deadline

That’s backloading the bulk of the work awfully close to 2030.

French MP Marjolaine Meynier-Millefert, a member of the majority La République En Marche party and vice president of the National Assembly’s sustainable development commission, defended the distant 2028 deadline.

“The idea with that timeline was to at the same time make it close enough to really bring attention to the subject, but at the same time not make it immediately compulsory because we wouldn’t have been able to organize the market,” she said, speaking at a recent POLITICO working group on innovative solutions to promote renovations. “We would have put an obligation on people to do it, but they wouldn’t have been able to find the workforce around them to really tackle it.”

Elise Bon, head of research and development and environment at Vinci Construction France, disagreed.

“We are ready now, actually,” Bon said. “It’s true the construction sector is very decentralized with lots of small players, but as a major player in the industry Vinci Construction is at the forefront of this Renovation Wave.”

Bon envisioned construction giants like hers acting as coordinators of large-scale social housing and public building projects, which could integrate hands-on training and implement the latest innovations to encourage wider adoption in the industry.

In such a scheme, she said, Vinci could source the latest low-carbon cements, install the energy retrofit system they developed in-house, and potentially make use of pre-fabricated building components for fleets of apartments or buildings to keep material waste to a minimum. It could also use digital technology to plan out the construction steps and assemble as much as possible offsite to reduce the duration of unsightly scaffolding on-location.

“These are innovations we are willing to disseminate in all the geographic locations in which we operate, which will of course lead to a step up within the broader construction industry,” Bon added.

Sorcha Edwards, secretary-general of the Housing Europe federation, said social and public housing groups aren’t waiting for a government go-ahead.

Her organization’s members aim to renovate 400,000 homes annually through 2030 starting this year.

The Energiesprong project in the Loire region is already reaching 2,000 homes with one renovation project, so we see it’s actually happening in France, and it’s really inspiring,” Edwards said.

Energiesprong, which started as an incubator for renovation solutions in the Netherlands, now carries out zero-energy retrofit demonstrators in France, Luxembourg and the U.K.

The Loire project put out a tender in November dividing the social housing to be upgraded into four batches of 500 units, to be renovated in phases so that both small businesses and construction majors could bid for a slice.

Calling on Brussels

Edwards said the model could be one that Brussels could replicate as part of the Renovation Wave Strategy’s Affordable Housing Initiative, which pledged to select 100 “lighthouse” districts across the EU to target for mass renovations.

But the European Commission is more keen to see what it’s working with before diving in. The EU Court of Auditors has said energy consumption and efficiency must be monitored to avoid past mistakes, and the Commission’s strategy has called for every building to have a passport — not unlike what is required for cars — so the EU can track and measure the success of each upgrade.

In a damning April report, the Court of Auditors found that from 2014 to 2020, EU countries happily spread around cash for green renovations without taking before-and-after efficiency measurements — and without verifying that upgrades would provide deep emissions cuts.

As a result, “it is not possible to know how much energy will have been saved by investing a total of €6.6 billion of 2014-2020 public spending in residential buildings,” the report reads.

Tjeerd Krumpelman, global head of advisory, reporting and engagement for Dutch bank ABN AMRO’s sustainability group, said if an EU-wide building emissions reporting standard could be rolled out quickly, it could speed the loans given out for green renovations in commercial and private property, as banks seek to green their balance sheets.

The Netherlands has already set an ultimatum that has spurred a wave of green renovation loan offers: By 2023 commercial office buildings must meet a minimum energy performance standard before being rented out.

“Dutch banks have said: ‘We’ll finance any renovation that will make commercial real estate more sustainable,'” Krumpelman said at the roundtable. “There is a standard methodology now, PCAF, on how to measure the carbon on the balance sheet of banks that they finance through their real estate portfolio. It’s a really practical tool, but what banks need for this tool is the right data.”

He noted that various countries have different data measuring tools and agencies for building emissions, and each European country seems to be developing its own standard.

“This is something where Europe could really help and just say, this level of CO2 per square meter is indicative for the label, similar to what we do with cars,” Krumpelman added. The rest, he said, would take care of itself. “This is a money-making opportunity that can be incentivized by governments and banks.”

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