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Out-Law Guide 17 min. read

EU law on the energy performance of buildings

EU law impacting what businesses in the real estate sector need to do ensure buildings are energy efficient, decarbonised, and constructed and operated in a sustainable way, was updated in May 2024 when the revised Energy Performance of Buildings Directive (EPBD) came into force.

In this guide, we look at the standards that the EPBD sets – and the actions EU member states and businesses need to take to meet its requirements.

Zero-emission buildings (Article 11)

The revised EPBD introduces the concept of ‘zero-emission’ buildings (ZEBs) into EU law and requires both new and existing buildings to be ZEBs, in time.

ZEBs are defined as buildings which have very high energy performance – a measure that can be met under a framework set out in the directive – requiring zero or very low amounts of energy, producing zero carbon emissions from fossil fuels, and with zero or very low operational greenhouse gas (GHG) emissions.

The directive requires that zero-emission buildings do not cause any on-site carbon emissions from fossil fuels and, where economically and technically feasible, that they offer the capacity to react to external signals and adapt their energy use, generation, or storage.

What constitutes a ZEB will differ from member state to member state. This is because the EPBD provides for – indeed, requires – each EU member state to set thresholds for levels of maximum energy demand for such buildings based on at least the latest applicable “cost optimal levels of minimum energy performance requirements”, a concept which is defined in and pre-dates the revised directive. It is the job of the European Commission to set a new methodology for calculating these.

Member states must then calculate national cost optimal levels, taking account of their country’s climatic conditions and its energy infrastructure, and update the levels every five years. Whenever they update these, member states must also update the maximum level of energy demand for ZEBs, meaning the energy demand of ZEBs should progressively reduce. Cost optimal levels were last set in 2023 and must be re-set based on the new Commission methodology in 2028. In addition, the maximum energy demand levels must be set at least 10% below those for “nearly zero energy buildings” (NZEBs), a concept that pre-dates the revised EPBD. Member states can set different maximum energy demand thresholds for new and renovated ZEBs.

ZEBs’ energy use is to be from specified local renewable sources, from carbon free sources, or from an “efficient district heating and cooling system”. All of these sources are defined in technical terms. 

New buildings (Article 7)

From 1 January 2028, all new public buildings must be ZEBs. For all other new buildings, the ZEB standard must be met from 1 January 2030.

Before the ZEB standard deadlines take effect, new buildings must be at least NZEBs and meet minimum energy performance requirements set by the relevant member states. Public bodies are required to aim for zero-emission buildings.

The EPBD also requires, for the first time, “the life-cycle global warming potential” (life cycle GWP) to be calculated and included in the EPC for new buildings – from 1 January 2028 for new buildings with “a useful floor area” over 1,000m2 and from 1 January 2030 for all other new buildings. Life cycle GWP is a measure that relates to the whole life carbon of a building. The Commission is required by the end of 2025 to set out a framework for the national calculation of life cycle GWP. By 1 January 2027, member states must publish limits on life cycle GWP for new buildings and apply these limits from 2030, taking into account different climatic zones and building types.

Member states can choose not to apply the above requirements to new buildings where building permits or equivalent consents have been granted prior to the relevant dates the standards begin to apply from.

Solar energy in new buildings (Article 10)

Member states must ensure that new buildings are designed to optimise their solar energy generation potential, so they are solar ready for cost effective solar installations. They need to go further to “ensure the deployment of suitable solar installations, if technically suitable and economically and functionally feasible” in accordance with certain set deadlines:

  • By 31 December 2026 for all new public and non-residential buildings with useful floor areas of over 250m2;
  • By 31 December 2029 for all new residential buildings; and
  • By 31 December 2029 for all new roofed car parks adjacent to buildings.

Member states must publish the criteria for the technical assessment of the potential for solar installations – and involve stakeholders from the electricity networks in deciding these criteria – and any exemptions and need to put in place a framework for administrative, technical and financial measures to support the deployment of solar installations.

E-mobility and technical systems in new buildings (Articles 13 and 14)

The revised EPBD strengthens existing requirements for e-mobility infrastructure and technical systems. The requirements apply both to new buildings and renovations. More detail on the requirements in these contexts is set out below.

Renovating national building stock

Included in the EPBD is the aim that all existing buildings are ZEBs by 2050 (rather than NZEBs, as previously) by provisions for renovation plans at national level and for a concept of “deep renovation” at building level. The main mechanisms to achieve this aim are national renovation plans and, for the first time in the EU, minimum energy performance standards (“MEPS”)

National renovation plans (Article 3)

Member states must produce national renovation plans for their entire building stock to ensure all buildings are ZEBs by 2050. A template for such plans is provided in the EPBD and the legislation also makes broad provision for what such plans should cover. This includes a roadmap to 2050 and national targets for annual renovation rates, covering all building types as at 2030, 2040 and 2050; the introduction for the first time in the EU of minimum energy performance standards (MEPS) – see more below – for non-residential buildings, a trajectory for residential renovation; and national targets for 2030, 2040 and 2050 for annual residential renovation rates.

The first draft plans must be submitted to the Commission by 31 December 2025 and then every five years thereafter as part of each national draft integrated energy and climate plan, which member states must prepare under separate EU legislation. The national renovation plans can only be drafted after national public consultations have been held. When national renovation plans are being updated, they must be accompanied by details of implementation of the previous plan and whether targets have been met.

The Commission must assess draft plans for adequacy and can issue recommendations to a member state, which is obliged to take due account of them or give reasons why it hasn’t.

Deep renovation and renovation passports (Article 12)

The EPBD has introduced the concept of “deep renovation” into EU law. It promotes the upgrading of the envelope of a building and its technical systems making the building either NZEBs before 1 January 2030 or into a ZEB after that date.

The concept of a “staged deep renovation” has also been introduced with the EPBD. It is defined as a deep renovation carried out in stages.

To support staged renovations, member states must, by 29 May 2026, establish a scheme – voluntary, or mandatory if they wish – for “renovation passports”.

Renovation passports would provide information about a building’s current energy performance, set out a roadmap for staged deep renovation, and more granular details relevant to each step – including what the energy savings associated with renovation measures are expected to be. An annex to the EPBD sets out all the information that would need to be included in renovation passports.

The legislation envisages that renovation passports could co-exist with existing energy performance certificates (EPCs) – and provides for the two to be potentially issued at the same time.

Where issued, renovation passports would need to be in digital form and be uploaded onto the national database for energy performance of buildings, which member states are to set up.

Renovation passports are designed to help property owners plan the best timing for any renovation works required to bring their existing buildings to the required NZEB or ZEB standards. They should enable properly sequenced work and avoid cases where interim work needs subsequently to be re-done.

Minimum energy performance standards (Article 9)

New minimum energy performance standards (MEPS) are set out in the EPBD in respect of both residential and non-residential buildings.

Non-residential buildings: Member states must set MEPS for non-residential buildings at a level which ensures the buildings do not exceed a specified maximum energy performance threshold – a measure which is expressed as energy use in kWh / (m2.y). Member states must set two maximum energy thresholds: the first at a level based on available information about the national non-residential building stock in January 2020 that ensures at least 16% of its non-residential building stock is above the threshold; and the second at a level which would mean 26% of its non-residential building stock is above the threshold.

Member states must then use MEPS to ensure that, by 2030, all non-residential buildings are below the first threshold level and, by 2033, below the second threshold. These requirements are designed to lift standards in the worst performing buildings over time.

In the roadmaps in their national renovation plans, member states must then set timelines for non-residential buildings to meet lower maximum energy performance thresholds by 2040 and 2050, in line with the trajectory for the transition to ZEBs.

Members states can provide for exemptions from these standards based on the expected future use of the building, or in cases of serious hardship or on cost benefit analysis grounds – but this is subject to achieving equivalent energy performance improvements in other parts of the non-residential stock and the equal treatment of different categories of non-residential buildings. Where there are exemptions on cost benefit analysis grounds then, for any building, elements of the work which do have a positive cost benefit analysis must be carried out. In addition, the usual categories of buildings exempted from requirements for EPCs can be exempted from MEPS.

Residential buildings: By 29 May 2026, member states must set out a trajectory for the renovation of residential buildings – that is, a decrease in average primary energy use in line with the 2030, 2040 and 2050 targets in their national renovation plans By that date, they must also identify the number and floor area of buildings to be renovated annually and the number and floor area of the worst performing 43%.

Member states must ensure that the primary energy use of residential buildings decreases by 16% between 2020 and 2030; by 20-22% by 2035; and, from 2040 and every five years after that, by at least an amount consistent with the transition to a ZEB stock by 2050. To ensure action in respect of the worst performing buildings, whose occupiers are most likely to experience energy poverty, at least 55% of the decrease in the trajectories must come from the worst performing 43% of the stock. Where the average fossil share of energy used in residential buildings is less than 15%, member states can reduce the required reductions in average primary energy use by 2030 and 2035, within specified parameters.

Member states must achieve the trajectories by use of measures such as MEPS, technical assistance – including ‘one stop shops’ – and by financial measures. The Commission is tasked with monitoring progress and is empowered to recommend more extensive use of MEPS.

All buildings

Where buildings are renovated to comply with MEPs or where they undergo major renovations – a concept that is also defined in EPBD and describes a process that is less than deep renovation – then they must also comply with minimum energy performance requirements – a concept already in the earlier version of the EPBD, although the cost optimal methodology on which those requirements are based are due to be revised by the Commission by 30 June 2025.

Solar energy and existing buildings (Article 10)

Member states must “ensure the deployment of suitable solar installations, if technically suitable and economically and functionally feasible” – and make provision for measures to achieve this in their national renovation plans in line with certain deadlines: 

  • By 31 December 2026 on all new public and non-residential buildings with a useful floor area of over 250m2;
  • By 31 December 2027 in respect of existing public buildings with useful floor area of over 2,000m2; by 31 December 2028 for existing public buildings with useful floor area of over 750m2; and by 31 December 2030 for existing public buildings with useful floor area of over 250m2;
  • By 31 December 2027 for existing non-residential buildings with useful floor area of over 500m2, where there is a major renovation or other action which requires permits for renovation works on the roof or the installation of building services;
  • By 31 December 2029 on all new residential buildings.
  • By 31 December 2029 on all new roofed car parks adjacent to buildings.

As is the case in respect of the requirements around solar energy for new buildings, as outlined above, member states must publish the criteria for the technical assessment of the potential for solar installations and put in place a framework for administrative, technical and financial measures to support the deployment of solar installations.

Technical building systems (Articles 13 and 15)

Members states must set requirements for building systems, which in relation to energy efficiency must at least reach cost-optimal levels, and ensure where such systems are installed that their energy performance is assessed and recorded, and available for the issue of EPCs and as evidence of compliance with systems requirements set. They must also set requirements for indoor air quality standards, promote energy storage systems for renewable energy in buildings, and set requirements for building automation and control systems of various kinds by certain dates.  

Linked to the drive for “smarter” building systems, the Commission must provide an optional EU wide scheme of rating of “smart readiness of buildings”, a framework for which is provided in an annex to the EPBD. The scheme would need to enable a building’s ability to adapt to the needs of the occupant in terms of its energy use and its indoor environmental quality to be rated. By 30 June 2027, the Commission must, by delegated act, require the application of the scheme to non-residential buildings with specified levels of heating and ventilation output.

Decarbonisation of heating and cooling (Articles 13 and 17)

For new buildings, the EPBD provides for decarbonisation of heating and cooling to be achieved through the future requirements for ZEBs and, currently, for NZEBs.

For existing buildings, the EPBD requires member states to:

  • include in their national building renovation plans, their policies to phase out fossil fuel heating and cooling “with a view to a complete phasing out of fossil fuel 2040”;
  • “strive” to replace stand-alone fossil fuel boilers in existing buildings in line with national phase out plans for fossil fuels – they can provide incentives and funding for this;
  • ban, from 1 January 2025, any subsidies for stand-alone fossil fuel boilers.

Member states can also set requirements related to GHG emissions and fuel types for heat generators.

These provisions stop short of a ban on fossil fuel heating for existing buildings but the triggers above, the clear direction of travel in national strategies to decarbonise their grids, and the drivers from increased GHG emissions in corporate reporting, will all drive decarbonisation.

Infrastructure for sustainable mobility (Article 14)

Member states must set increased requirements for the installation of charging infrastructure, which in all cases should be “smart” and, where appropriate, bi-directional. The requirements vary depending on the type of building and other factors such as how recently an existing building has been renovated:

  • For new non-residential buildings, or where such buildings are undergoing major renovations which include the car park or electrical infrastructure – and in either case have over five car parking spaces in a car park within or adjacent to the building, then at least one charge point per five spaces must be installed. For new office buildings, one charge point for every two car park spaces must be installed. In addition, pre-cabling for at least 50% of the spaces, as well as ducting for all the spaces, must be provided to enable the subsequent installation of charge points for electric vehicles and e-bikes, while specified amounts of bike parking spaces must also be provided;
  • For all existing non-residential buildings with over 20 car park spaces, at least one charging point for every 10 spaces or ducting for at least 50% of the spaces must be installed by 1 January.2027. Specified amounts of bike parking spaces must also be provided by this date. The deadline, however, can be postponed by member states until 1 January 2029 for r buildings renovated to a specified standard in the two years prior to 28 May 2024, when the EPBD came into force.
  • For new residential buildings and residential buildings undergoing major renovation involving the car park or electric infrastructure, in each case where the car park is in or adjacent to the building and has more than three car parking spaces, pre-cabling must be provided for at least 50% of parking spaces and ducting installed for the remainder for electric vehicles and e-bikes. There must also be at least two bike parking spaces per residential unit. In addition, new buildings with more than three car parking spaces need to have at least one charging point.
  • Member states can choose not to apply the requirements above to specific categories of buildings where they are situated in the outermost regions of the country and implementing the requirements would risk grid stability, or for major renovations where the cost of the required works would exceed 10% of the renovation costs.
  • Member states must take steps to accelerate the installation of charging points, such as by removing regulatory barriers and providing for third party consents – like those from landlords – to be withheld only on serious grounds. They also must making technical assistance available to help building owners and operators install charging infrastructure and make bike spaces available and, in the case of residential buildings, consider implementing support schemes.

The enabling framework

Data exchange (Article 16)

One of the critical and long-term barriers to increasing energy efficiency has been the inability of those who have control of buildings to access reliable data about energy use and performance in their buildings. In France, the Decret Tertiare seeks to remove this obstacle.

Under the updated EPBD, member states are required to ensure that building owners, tenants and managers can have direct access to their buildings’ systems data – this includes all “readily available” data on energy performance of “building elements” and “building systems”, with provision made for the management and exchange of this data to be done in compliance with EU data laws. The EPBD further provides for third parties, such as financial institutions and national authorities, to gain access to such data where owners of the data have given their consent to that.

The Commission must consult on and, by 31 December 2025, adopt legislation setting out requirements for access to that data. This provision does not seem to be wide enough to ensure access to actual energy consumption data as opposed to data about the performance of building systems. This is a missed opportunity and an area where member states may want to consider gold plating their adoption of the updated EPBD. 

Energy Performance Certificates (EPCs) (Article 19)

EPCs have existed since the first iteration of the EPBD in 2002. They are required to be produced on construction, sale or renting of a property and are valid for 10 years. The May 2024 EPBD includes updated requirements for EPCs.

First, to bring some consistency across the EU, member states must each adopt a rating system of A to G with ‘A’ corresponding to ZEBs and ‘G’ covering the worst performing buildings. It is for each member state, in the light of their building stock, to set rating levels B to F. An optional A* rating can also be provided for. That rating would be reserved for buildings with energy demand thresholds at least 20% lower than ZEBs and which generate more energy than their energy demand.

The new ratings system is to apply to EPCs issued from 29 May 2026, save in cases where countries have rescaled their EPCs between 2019 and summer 2024 – in those cases, the new rating system would apply from 31 December 2029.

Second, and again bringing more consistency, EPCs are to include common numeric indicators to rate the energy performance of buildings, expressed in kWh/m2. EPCs also need to reference MEPS, NZEBs and ZEBs and, from 20 May 2026, will need to be in a common template – a copy of which is annexed to the revised EPBD. The required recommendations that must be included in EPCs have also been extended – it means they must feature recommendations for cost effective reduction of GHG emissions and the improvement of indoor air quality, as well as an assessment of the remaining lifespan of heating or cooling systems; possible adaptations to them for greater efficiency; and options for replacement of them.

The common methodology to be adopted for calculating energy performance of buildings is set out in Appendix I of the EPBD. It appears to focus on calculated or theoretical energy performance rather than actual or metered energy performance, although there is provision for the energy performance to be determined on the basis of “calculated or metered energy use” - where the latter is used, though, the method must be able to identify and disregard occupier behaviour and local climate. In addition, the template EPC may, but is not required to, include metered energy consumption. Where member states see value in including this information as a way of driving down energy use, they can take advantage of the leeway to include it in their requirements for EPCs.

The triggers for EPCs have been extended under the EPBD to include major renovations and lease renewals and to capture all buildings owned or occupied by public bodies. The exemptions from a requirement for an EPC remain the same as before the EPBD reforms, save that the historic building exemption has been removed. The validity period for EPCs remains 10 years, meaning new EPCs will only gradually become the norm – although prudent investors may want to check the new EPC rating that would apply to a building before making investment decisions.

In the interests of improving data accessibility, EPCs must be provided digitally. Member states must also ensure that all EPCs issued are uploaded to new national databases for the energy performance of buildings. Those databases must also include renovation passports, smart readiness ratings, and energy consumption, and may include embodied emissions information. The aggregated information on these databases will be available publicly on an anonymised basis and subject to compliance with data protection law. Once available, it will enable analysis of national and regional building stock and the information will also be transferred to an EU database.

Financial incentives, skills and market barriers (Article 17)

Member states must provide appropriate financing and measures to address market barriers to implementation of national renovation plans and must promote the development of financial products, such as energy efficiency loans and mortgages, energy performance contracting, ‘pay as you save’ schemes and fiscal incentives.

By 29 May 2025, the Commission must develop a portfolio framework that supports lenders to increase lending for renovations. A number of EU funds have already been set up to provide EU and national financing and member states are prohibited, from 1 January 2025, from providing financial support for standalone fossil fuel boilers. They must also incentivise deep renovations or, where these are not feasibly possible, renovations which achieve at least a 60% reduction in primary energy use. Throughout the EPBD there is consideration of the protection and support of of vulnerable households and for financial support to be available for them.

Member states must also provide measures and finance for training a sufficient workforce to support the skills needs of the building sector, especially targeting SMEs.

One-stop shops (Article 18)

Member states must establish and operate ‘one-stop shops’ that provide technical assistance and advice on available financial options to support building renovations that can improve the energy performance of buildings. 

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