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How to refurbish all buildings by 2050

July 26th, 2012 by Leonardo Meeus, Florence School of Regulation

Buildings account for 40% of the total energy consumption of the EU and they are one of the most significant sources of greenhouse gas emissions (36% of the EU total). In order to achieve the 2050 EU building sector target, the energy performance of existing buildings will need to be improved substantially.

The roadmaps presented by the European Commission in 2011 show that in order to achieve the EU strategic objectives, the greenhouse gas emissions in the building sector will need to be reduced by 88 – 91% by 2050 in comparison to levels in 1990. The path towards this 2050 EU building sector target includes three challenging trade-offs:

1. to accelerate the substitution of existing buildings by new ones versus the increase of investments in refurbishing buildings;

2. investing more in building refurbishment can be either to refurbish them more frequently or else to be more ambitious when refurbishing them;

3. and regarding the timing and type of investments, we can follow a linear path, or we can make greater efforts at a later stage when technology will be more advanced. Thermal insulation can be used to reduce the energy consumption of buildings and the behaviour of users can be modified. The energy consumption of buildings can be further reduced by replacing energy consuming systems and components in buildings. Alternatively, buildings can move to using electricity or can integrate renewable electricity generation as the objective is to reduce their greenhouse gas emissions.

Only a few studies have considered these trade-offs for the EU or at member state level, but three key observations can already be made:

1. most studies show the need not only to increase the current rate of refurbishment, but also to increase the greenhouse gas emission savings that are achieved by refurbishing a building;
2. the studies also emphasise that there will continue to be a ‘deepness mix’ with some buildings becoming net zero energy buildings while others will only undergo moderate, minor or even no refurbishment (e.g. a holiday house that is only used for short periods of the year should not necessarily be refurbished and there are protected historical buildings which have to adhere to strict guidelines regarding their refurbishment);
3. and the studies show that there are significant differences between different member states concerning the nature of their building stock and the usage of these buildings.

Recommendations for the European Commission:

In a recent Think report to the European Commission (DG Energy), we conclude that the EU institutions should allow member states enough freedom to tailor their building refurbishment policies to their own needs. The EU institutions nevertheless have an important role to play, particularly in ensuring that there is a commitment at national level to addressing the building refurbishment problem and to facilitate the implementation of solutions to this problem.

Prerequisites for refurbishing all buildings by 2050 are to provide correct economic signals:

- Abolish end-user regulated prices for electricity and gas. There are already on-going infringement procedures against practices that are not in line with the EU liberalisation legislation, however additional action could be taken in order to speed up their abolishment. The EU could avoid inconsistencies such as providing subsidies for energy savings’ investments to member states which are keeping energy prices artificially low.

- Internalize the cost of carbon into the building refurbishment decisions. Currently, the cost of carbon is only partly internalized so that the decisions are biased towards fossil fuels, which is inconsistent with the EU climate and energy objectives. The recent EU Energy Tax Directive proposal was a first step in this direction, but more is needed.

Primary recommendations for refurbishing all buildings by 2050 are to ensure that the EU 2050 building sector target is reached:

- Establish national building refurbishment targets or, at the least, mandate the development of national building refurbishment action plans. This is essential to ensure that there is commitment at national levels to addressing the problem. The establishment of targets has already proven to provide commitment in other energy policy areas. However, if targets are politically unfeasible, member states should at least be required to submit a plan so that the European Commission can monitor their progress. These plans will also be instrumental for the development of national building refurbishment policies.

- Create an EU energy performance certificate scheme. As mentioned previously, regulation will be needed in order to get the expected investments in building refurbishment. This will be context-specific, but it will typically include obliging actors to refurbish, and ensuring that this refurbishment also leads to improved energy performance. Energy performance certificates are key to the implementation of these regulations as they can be used to administer and enforce them. The EU’s main role, therefore, as facilitator of national solutions to the building refurbishment problem is to make sure that there are adequate energy performance certificate schemes for buildings.

The proposed Energy Efficiency Directive already introduces stricter requirements which provide the opportunity for the establishment of an EU scheme to which member states could voluntarily subscribe. In any case, member states will have to change their national energy performance certificate schemes to adhere to the new requirements.

Such certificates could also provide the information required for the development of national building refurbishment action plans, especially if they apply to more buildings than currently is the case. Increasing standardization of energy performance certificates would also make it easier to compare different national plans.

Secondary recommendations for refurbishing all buildings by 2050 are about minimizing the costs of achieving the EU 2050 building sector target:
- Facilitate the design of building refurbishment market frameworks. As member states have only just begun to experiment with organised markets for building refurbishment (e.g. the UK Green Deal), it would be difficult to agree on an EU design. However, any national market framework should include accreditation, standardised contracting and measurement and verification protocols for building refurbishment. EU institutions are already involved in these three areas, however more could be done such as the establishment of a quality label for energy service providers, the development of contract templates and a standard measurement and verification protocol.

- Continue to widen and strengthen technology standards and labelling of building refurbishment technology, products and materials. This is an on-going process that needs to be finalised to avoid decision bias. Note that the rationale to do this at least partly at EU level is that national regulations for building materials and products can create barriers for the internal market.

- Develop a building refurbishment technology roadmap. The development of a roadmap is essential to map and coordinate building refurbishment research, development and demonstration activities. It would also be used to track the progress of technology that is of strategic importance in achieving the objectives of the building sector. Several roadmaps have been developed as part of the SET-Plan, but these do not yet consider building refurbishment technology.

- Use EU funding to support the implementation of the previous recommendations. EU funding should be allocated on the basis of national building refurbishment action plans, which should therefore be a condition to receive funding. The allocation of funding should be performance-based, which would require the use of energy performance certificate schemes for buildings in member states. Public funding should also be leveraged with financial mechanisms.

Leonardo Meeus (FSR), Péter Kaderják (REKK), Isabel Azevedo (FSR), Péter Kotek (REKK), Zsuzsanna Pató (REKK), László Szabó (REKK), Jean-Michel Glachant (FSR)

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One Response to “How to refurbish all buildings by 2050”

  1. Home Insulation Says:

    Ensuring that all buildings have proper insulation is a massive step towards increasing energy efficiency. So much energy is lost through the walls and roofs of buildings due to their insulation not being up to scratch and this is something that needs to change at a base level.

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