This is an informative article for our EUMEPS members, highlighting the recent publication by the Buildings Performance Institute Europe (BPIE) on achieving growth and social value through resilient, healthy, and affordable zero-emission buildings. The article discusses ten policy priorities critical to transforming Europe's built environment, aligning with EUMEPS' mission to advocate for sustainable construction practices and materials.
Boosting Industrial Competitiveness and Innovation
The construction sector plays a pivotal role in Europe's economy, and its competitiveness and capacity for innovation are crucial for delivering affordable, future-proof buildings. Achieving climate neutrality by 2050 necessitates a comprehensive understanding of the environmental impact of procurement, design, construction, and disposal decisions.
BPIE emphasises that innovation in construction processes, planning, design, and renovation is essential to increase investments in future-proofing the building stock. Reducing the climate footprint of buildings not only enhances industrial competitiveness but also creates local job opportunities. The European Commission's initiatives, such as the New European Bauhaus and the High-Level Forum on Construction, are steps towards supporting this transformation.
However, given the sector's dominance by SMEs, it is vital to establish mechanisms that facilitate cooperation with industry and foster innovation. Proposals include creating a “Clean Transition Dialogue for the Built Environment” to encourage investment and collaboration. A coordinated approach across different DGs (Directorates-General) within the European Commission is necessary to maximise the sector's potential and address the fragmented nature of the construction industry.
Furthermore, the construction sector is characterised by a complex and long value chain with varying degrees of competition and fragmented responsibilities. This fragmentation can lead to inefficiencies and conflicting priorities. Therefore, establishing a Directorate General for the Built Environment & Construction (DG BUILD) or a robust inter-service mechanism can enhance collaboration across relevant DGs. This would help develop strategies and policies that are mutually supportive and effectively monitor the progress of initiatives like the Renovation Wave.
Enhancing Energy Security and Resilience
Energy efficiency and the integration of renewable energy sources are fundamental to enhancing Europe's energy security and resilience. Buildings account for a significant portion of the EU's final energy consumption, making energy-efficient buildings crucial for reducing dependency on fossil fuels and increasing energy security.
The principle of "Energy Efficiency First" should be central to any energy security strategy. This principle prioritises energy-saving measures over other energy-related investments, supporting better infrastructure planning and investment. The Heating & Cooling Strategy update should reflect this principle, ensuring a comprehensive approach to decarbonising the operational use of buildings.
Massively deploying renewable energy technologies, such as solar PV/thermal, heat pumps, geothermal energy, or renewables-based district heating, will not be possible without minimising energy needs from the built environment. Therefore, fully decarbonising buildings requires a combination of energy efficiency improvements and the adoption of renewable energy sources.
Additionally, the built environment can provide flexibility to the energy system by reducing overall energy needs and incorporating demand-side flexibility and smart energy management services. These measures can help balance energy supply and demand, enhance the stability of the energy grid, and support the integration of variable renewable energy sources.
Accelerating Financial Flows Towards Future-Proof Buildings
Future-proofing our buildings will require financial flows on a similar scale as other major infrastructure investment. According to the Renovation Wave Communication, €275 billion will be needed annually to reach the 2030 climate target. Available public money must be used wisely to trigger private investments.
Well-designed financial instruments can deliver a strong leverage factor. BPIE estimates that the total amount of public money needed to trigger significant scaling up of the renovation rate and depth amounts to €90 billion per year; this amount can help achieve the needed annual investment in renovations of €275 billion. This money should be allocated to support mostly deep renovation, advisory services for owners/investors, and technical assistance in the Member States, as well as innovation in serial renovation solutions.
Currently committed public money amounts to approximately €75 billion throughout 2021 to 2027 under the Multiannual Financial Framework, including co-financing from Member States and the Recovery and Resiliency Facility. This amount falls significantly short of the required investment. Moreover, the allocated funds vary in their effectiveness regarding building performance, with some directed toward projects that fail to achieve the necessary renovation depth. This underlines the urgent need for more strategic and substantial financial commitments to ensure meaningful progress toward climate goals.
The Commission should allocate a larger amount of public funding for building renovation in the next Multiannual Financial Framework (post-2027). Additionally, adjustments to the current MFF 2021-27 can be made during its mid-term review to increase support for renovation projects.
The Social Climate Fund could further support renovation for vulnerable and energy-poor households. However, the currently committed €86.7 billion over the 2026-2032 period divided between numerous sectors dilutes attention to buildings and is insufficient. As poorly performing buildings are one of the root causes of energy poverty, more attention to building renovation within the Social Climate Fund will help to ensure a fair and equitable transition. To raise additional funds for building improvement, the Commission could earmark revenues from Emission Trading System 2 for renovation beyond what is dedicated to the Social Climate Fund. Other approaches could be continued; following the experience of the Recovery and Resilience Facility, the common debt can be used to support funding for buildings.
As an implementation tool, the EU’s Sustainable Finance Taxonomy enables investors and companies to identify and assess industry areas and sectors aligned with Paris Agreement goals. This taxonomy will significantly influence business models and investment decisions in the construction and real estate sectors in the coming decades.
Conclusion: Advancing Sustainable Building Practices
In conclusion, the BPIE's policy priorities highlight the need for a strategic approach to transforming Europe's built environment. By boosting industrial competitiveness and innovation, and enhancing energy security and resilience, the EU can achieve resilient, healthy, and affordable zero-emission buildings. EUMEPS members are encouraged to align with these priorities, embracing sustainable practices and innovations that contribute to a climate-neutral and resource-efficient Europe.
For more information on how EUMEPS is supporting its members in this journey, visit our website and join our initiatives aimed at fostering sustainable construction practices. Together, we can ensure that EPS plays a crucial role in building a resilient and sustainable future for Europe.
For further details on the BPIE’s policy priorities, please visit the official publication here.