The views expressed are those of the author and do not necessarily reflect the position of FORESIGHT Climate & Energy

Revision of EU directive could provide much-needed momentum to buildings renovation
Ventures into renewable energy and improving energy efficiency standards are not to blame for Europe’s forest fires during the record-breaking scorching summer of 2022 or for the skyrocketing energy bills coming through the letterboxes of homes which families cannot afford to heat. The EU’s inefficient building stock is responsible for 40% of our energy consumption and 36% of greenhouse gas emissions, which begs the question: why are we choosing to spend money on what will be eventual stranded fossil fuel assets, such as ‘Dash for Gas’ in Africa, when we should be investing in assets that we live, work and study in every day? Buildings need to be seen as a core element of our energy system. Like solar panels and electric cars, our buildings play an integral role in our energy transition away from fossil fuels. Yet, the ever-increasing fossil fuel subsidies are locking homes into using fossil-fuel-based heating installations or inefficient hydrogen boilers. This ultimately fails to address the fossil fuel crisis as it undermines our energy security, making people dependent on expensive and dangerous energy sources, and our commitment to our emission reduction goals in the 2015 Paris Agreement. DEEP RENOVATION Instead, more support is needed for the deep renovation of our buildings combined with the installation of renewable heating and cooling technologies, replacing fossil-fuel-based heating installations. In particular, this support needs to target low-income households and the most vulnerable people first as they are feeling the brunt of this crisis. The Energy Performance of Buildings Directive (EPBD) is currently being revised and discussed by EU and national policymakers. This piece of legislation will have a vital role in decarbonising the EU’s building stock and help lift millions of families out of energy poverty. It should set ambitious minimum energy performance standards that support higher renovation rates and establish a comprehensive range of incentives for the rollout of renewable heating solutions including heat pumps powered by renewable electricity and solar thermal. Outreach and advisory support measures and schemes, such as one-stop shops, are needed to support and guide renovation efforts at the local level. In addition, targeted funding is needed to subsidise renovations, especially for low-income and vulnerable households living in the worst-performing buildings. SOCIAL VALUE It is often undervalued what the benefits are that building renovations and heating decarbonisation can bring to families across the EU. It is estimated around 18,000 jobs would be created per €1 billion invested in energy efficiency. With strong social protection measures, fair working conditions, adequate wages and resources to undertake reskilling and upskilling programs to improve accessibility, these could be local, decent, long-term jobs stimulating economic activity across the EU. On top of this, we can also lower households’ energy costs while having an overall positive impact on the EU’s socioeconomic development, reducing greenhouse gas emissions, improving air quality and enhancing indoor living conditions. STRANDED ASSETS The alternative, scary and unstrategic scenario is billions being spent on fossil fuel infrastructure that will become stranded assets only to make EU homes and buildings dependent on them for their energy needs. The examples of the Nord Stream 1 and 2 fossil gas pipelines in the Baltic sea sadly demonstrate how they have now become part of Europe’s most expensive stranded assets on which millions of Europeans were dependent for their energy needs. Renovating our buildings and fulfilling our heating needs with renewables solutions, does not provide political leverage to undemocratic governments, finance wars, leak methane into the atmosphere and waste precious funding on projects that in the long run provide no real benefit to people, the environment, or the economy. JUST TRANSITION In the short run, support is needed for vulnerable households to help them pay their energy bills and heat their homes sufficiently this winter. But they also need to be embedded in a longer-term approach that will allow us to power and heat our homes and buildings in an efficient, sustainable and renewable manner by the end of the decade and put us on a path to completely phase out fossil fuels in buildings by 2035 at the very latest. Some EU member states are already working on fossil fuel phase-out policies through the introduction of fossil fuel heating restrictions in Austria, Belgium, Denmark, France, Germany and the Netherlands. A recent study highlighted the different ingredients needed for a successful fossil-fuel phase-out including subsidies to cover upfront costs for the replacement of fossil-fuel-based boilers, reducing the need for heating in homes through improving energy-saving standards and making electricity more affordable. SMART MONEY Most important of all, we need to prioritise low-income households who are living in the worst-performing buildings and may already be experiencing energy poverty. With the prospect of austerity measures banging at our doors, we can no longer afford to put our money in the deep pockets of the fossil fuel industry. A more ambitious recast of the EPBD provides an opportunity for EU policies to be felt in people’s homes through the provision of adequate financing and technical support for deep renovation projects in combination with the installation of sustainable renewable heating technologies, making our homes more energy efficient.

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