The Energy Performance of Buildings Directive – A significant challenge for homebuilders in the EU

In order to decarbonise the EU’s housing stock by 2050, the Energy Performance of Buildings Directive (EPBD) is setting ambitious targets for the construction and renovation of buildings across the member states. The directive, aiming for a zero-emission building (ZEB) standard by 2030, mandates a substantial reduction in primary energy use in residential buildings—16% by 2030 and 20-22% by 2035.

A ZEB is characterised by its high energy performance, minimal energy requirements, and near-zero on-site carbon emissions from fossil fuels. While these standards were initially more stringer, they have been moderated following consultations with the EU institutions, also thanks to Build Europe’s lobbying activities, which were important to reflect our developers’ and homebuilders’ concerns and doubts over economic and technical feasibility. Notably, in line with our requests and suggestions, the directive now excludes electric vehicle charging from a building's primary energy demand calculations, set up more realistic deadlines for ZEB, and introduces flexibility for member states to define their own ZEB criteria. However, this progressive legislation does not come without challenges. The construction sector is worried about the potential increase in housing prices due to these new environmental regulations. France's experience in 2020 serves as a cautionary tale, where similar policies led to a 7.4% rise in construction costs, excluding the impacts of inflation and other factors, culminating in a 30% increase over three years.

So, despite the fact that Build Europe was able to achieve some flexibility in the directive's final text, the EPBD poses a significant challenge for developers and homebuilders across the EU. National federations are urged to work closely with their governments to establish realistic thresholds for emissions and energy efficiency levels for ZEBs.

For this reason, Build Europe is committed to facilitating dialogue among its members, sharing best practices, and supporting national lobbying efforts and initiatives to ensure a balanced implementation of the directive. Recently, we provided our members with a presentation that summarises the main items included in the directive, so that they understand what are the main upcoming regulatory changes. In the coming months and years, we will hold regular webinars and meetings so that our member federations and companies can exchange information and suggestions, and assess the directive’s requirements to make sure that the national implementation is not too strict and detrimental for housing affordability.

Furthermore, Build Europe has recently had a discussion with MEP Ciarán Cuffe, the EPBD rapporteur at the European Parliament, which represented an important opportunity for our sector to share concerns over the directive’s impact on the housing market and highlight the need for both financial and non-financial EU support to restore and preserve housing affordability. While the directive aligns with the broader goal of decarbonisation, the importance of housing as a social and economic cornerstone in the EU cannot be overlooked. Build Europe therefore advocates for more supportive measures to facilitate new constructions, including reducing administrative burdens, increasing financing, and reduce taxes for first-time buyers and builders.

As Europe moves forward with its green agenda, the housing and construction sectors‘ role in achieving these environmental goals is undeniable. It is important to remind policy-makers that developers and homebuilders are the ones who will make our housing stock zero emission, but this objective can’t be done at the expenses of EU citizens aspiring to access decent housing at affordable prices. Housing affordability and decarbonisation must go hand in hand and be mutually reinforcing.