Last year, the fourth revision of the Energy Performance of Buildings Directive (EPBD-IV) entered into force. This latest revision marks a sharp difference in the EU's policy to regulate the energy performance of buildings. Under the new directive, EU Member States are required to take measures to boost the energy efficiency of buildings, as buildings account for 40% of energy consumption in the EU and 36% of the EU's carbon emissions from fossil fuels.
Affecting the existing building stock as well as new buildings, the proposed measures will have a massive impact, not only on project developers and construction companies but also on property owners, investors and local and national authorities. This blog will address the key changes.
NZEB out, ZEB in
The 2018 revision of the initial EPBD (EU/2010/31), resulting in EPBD-III, introduced the Nearly Zero-Energy Building (NZEB) requirements. It meant that from 2021 all new buildings in the EU were required to have very low energy needs, covered largely by renewable energy sources. Taking things up a notch, last year's revision of the EPBD provides that in addition to being highly energy efficient, buildings are to be decarbonised, meaning zero carbon emissions.
The revised EPBD thus introduces a new standard: the Zero-Emission Building (ZEB). Effectively, this means that from 1 January 2030 all new buildings must be zero-emission and that ZEB will be the new standard for the building sector. New public buildings must comply even earlier, from 1 January 2028. The aim is for the entire building stock to be zero-emission by 2050.
What does ZEB actually mean?
A zero-emission building has a very low energy demand, which - where technically feasible - is fully covered by renewable energy sources such as solar photovoltaics, heat pumps and/or efficient district heating and cooling. Although Member States have some leeway in defining 'low energy demand', they must abide by the principle that the use of fossil fuels is to be phased out entirely. In practical terms, this means that natural gas-fired boilers must be phased out, nor can they be used to absorb peak loads. Member States will shift their focus to the electrification of buildings and the generation of power from renewable sources.
Energy performance certificate
In addition to enhanced standards for energy performance of buildings, the Directive also introduces a uniform rating scale for Energy Performance Certificates (EPCs). This new EU-wide energy performance rating scale has been set up to facilitate sustainability initiatives and provide both property owners and tenants with more accurate information about the energy performance of buildings. Although the current rating scale - from A down to G - can remain as it is in the Netherlands, the individual ratings will have different narratives assigned to them. Energy rating A corresponds to the minimum ZEB standard, with rating G representing the 15% of buildings with the poorest energy performance. Lastly, EPC ratings have a validity of ten (10) years, listed and historic buildings will also need EPCs, and owners of the worst performing buildings must be sent invitations for renovation advice by municipal energy offices.
Mandatory installation of solar energy equipment on buildings
EPBD-IV entered into force on 28 May 2024 and must be transposed into national legislation by the Member States by 29 May 2026. Implementation is phased, with the strictest requirements and standards applying to new buildings and public buildings. The existing building stock is subject to a longer transition period.
Existing buildings
EPBD-IV introduces 'Minimum Energy Performance Standards' (MEPSs), which are rules that require existing buildings to meet an energy performance requirement, the objective being to trigger the phased renovation of the worst performing buildings. The public authorities are tasked with the supervision of compliance with MEPSs and, where necessary, with enforcement.
New buildings
From 1 January 2028, all new public buildings must be zero-emission. This requirement will extend to all new buildings - both residential and non-residential - with effect from 1 January 2030. Construction companies and project developers will have to adjust their plans in time to meet requirements.
Mandatory solar energy installation
Under the revised Directive, all new and existing buildings must be deployed with suitable solar energy installations. By 31 December 2026, solar panels must be installed on all new public and non-residential buildings with a useful floor area larger than 250 m2.
A phased implementation applies to existing public buildings:
- with a useful floor area larger than 2,000 m2, by 31 December 2027
- with a useful floor area larger than 750 m2, by 31 December 2028
- with a useful floor area larger than 250 m2, by 31 December 2030
From 1 January 2028, this requirement extends to existing non-residential buildings with useful floor area larger than 500 m2, where the building undergoes a major renovation or an action that requires works on the roof and/or the installation of a new technical building system.
From 1 January 2030, the requirement to install solar energy equipment will apply to all new residential buildings, and to all new roofed car parks physically adjacent to buildings (irrespective of their function).
Sustainable mobility infrastructure
By 1 January 2027, all non-residential and public buildings with more than 20 parking spaces must have installed at least one recharging point for every 10 parking spaces.
The directive also sets requirements for the installation of bicycle parking spaces with new buildings and buildings undergoing major renovation.
In conclusion
EPBD-IV marks a watershed moment for the European real estate sector. The transition from NZEB to ZEB requires buildings not only to be energy efficient but to be decarbonised as well. In time, the minimum requirements will also apply to the existing building stock. On top of that, installation of solar energy equipment will be mandatory, which requirement is triggered when owners plan maintenance or renovation works for their properties. Property owners and finance providers would do well to take stock of the new requirements and compile timely overviews of the sustainability improvement measures applying to their situation. The requirements introduced by EPBD-IV must be transposed into Dutch law by 29 May 2026, whereupon they will be phased in from 1 January 2027 onwards.
Last year, the fourth revision of the Energy Performance of Buildings Directive (EPBD-IV) entered into force. This latest revision marks a sharp difference in the EU's policy to regulate the energy performance of buildings. Under the new directive, EU Member States are required to take measures to boost the energy efficiency of buildings, as buildings account for 40% of energy consumption in the EU and 36% of the EU's carbon emissions from fossil fuels.
Affecting the existing building stock as well as new buildings, the proposed measures will have a massive impact, not only on project developers and construction companies but also on property owners, investors and local and national authorities. This blog will address the key changes.
NZEB out, ZEB in
The 2018 revision of the initial EPBD (EU/2010/31), resulting in EPBD-III, introduced the Nearly Zero-Energy Building (NZEB) requirements. It meant that from 2021 all new buildings in the EU were required to have very low energy needs, covered largely by renewable energy sources. Taking things up a notch, last year's revision of the EPBD provides that in addition to being highly energy efficient, buildings are to be decarbonised, meaning zero carbon emissions.
The revised EPBD thus introduces a new standard: the Zero-Emission Building (ZEB). Effectively, this means that from 1 January 2030 all new buildings must be zero-emission and that ZEB will be the new standard for the building sector. New public buildings must comply even earlier, from 1 January 2028. The aim is for the entire building stock to be zero-emission by 2050.
What does ZEB actually mean?
A zero-emission building has a very low energy demand, which - where technically feasible - is fully covered by renewable energy sources such as solar photovoltaics, heat pumps and/or efficient district heating and cooling. Although Member States have some leeway in defining 'low energy demand', they must abide by the principle that the use of fossil fuels is to be phased out entirely. In practical terms, this means that natural gas-fired boilers must be phased out, nor can they be used to absorb peak loads. Member States will shift their focus to the electrification of buildings and the generation of power from renewable sources.
Energy performance certificate
In addition to enhanced standards for energy performance of buildings, the Directive also introduces a uniform rating scale for Energy Performance Certificates (EPCs). This new EU-wide energy performance rating scale has been set up to facilitate sustainability initiatives and provide both property owners and tenants with more accurate information about the energy performance of buildings. Although the current rating scale - from A down to G - can remain as it is in the Netherlands, the individual ratings will have different narratives assigned to them. Energy rating A corresponds to the minimum ZEB standard, with rating G representing the 15% of buildings with the poorest energy performance. Lastly, EPC ratings have a validity of ten (10) years, listed and historic buildings will also need EPCs, and owners of the worst performing buildings must be sent invitations for renovation advice by municipal energy offices.
Mandatory installation of solar energy equipment on buildings
EPBD-IV entered into force on 28 May 2024 and must be transposed into national legislation by the Member States by 29 May 2026. Implementation is phased, with the strictest requirements and standards applying to new buildings and public buildings. The existing building stock is subject to a longer transition period.
Existing buildings
EPBD-IV introduces 'Minimum Energy Performance Standards' (MEPSs), which are rules that require existing buildings to meet an energy performance requirement, the objective being to trigger the phased renovation of the worst performing buildings. The public authorities are tasked with the supervision of compliance with MEPSs and, where necessary, with enforcement.
New buildings
From 1 January 2028, all new public buildings must be zero-emission. This requirement will extend to all new buildings - both residential and non-residential - with effect from 1 January 2030. Construction companies and project developers will have to adjust their plans in time to meet requirements.
Mandatory solar energy installation
Under the revised Directive, all new and existing buildings must be deployed with suitable solar energy installations. By 31 December 2026, solar panels must be installed on all new public and non-residential buildings with a useful floor area larger than 250 m2.
A phased implementation applies to existing public buildings:
- with a useful floor area larger than 2,000 m2, by 31 December 2027
- with a useful floor area larger than 750 m2, by 31 December 2028
- with a useful floor area larger than 250 m2, by 31 December 2030
From 1 January 2028, this requirement extends to existing non-residential buildings with useful floor area larger than 500 m2, where the building undergoes a major renovation or an action that requires works on the roof and/or the installation of a new technical building system.
From 1 January 2030, the requirement to install solar energy equipment will apply to all new residential buildings, and to all new roofed car parks physically adjacent to buildings (irrespective of their function).
Sustainable mobility infrastructure
By 1 January 2027, all non-residential and public buildings with more than 20 parking spaces must have installed at least one recharging point for every 10 parking spaces.
The directive also sets requirements for the installation of bicycle parking spaces with new buildings and buildings undergoing major renovation.
In conclusion
EPBD-IV marks a watershed moment for the European real estate sector. The transition from NZEB to ZEB requires buildings not only to be energy efficient but to be decarbonised as well. In time, the minimum requirements will also apply to the existing building stock. On top of that, installation of solar energy equipment will be mandatory, which requirement is triggered when owners plan maintenance or renovation works for their properties. Property owners and finance providers would do well to take stock of the new requirements and compile timely overviews of the sustainability improvement measures applying to their situation. The requirements introduced by EPBD-IV must be transposed into Dutch law by 29 May 2026, whereupon they will be phased in from 1 January 2027 onwards.