Decarbonisation of the EPBD
Olivia Jamison
Emissions are the issue. Join Olivia Jamison as she explores how to decarbonise buildings as set out by the EPBD and the implications for owners, occupiers, investors and lenders.
Emissions are the issue. Join Olivia Jamison as she explores how to decarbonise buildings as set out by the EPBD and the implications for owners, occupiers, investors and lenders.
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Decarbonisation of the EPBD
18 mins 7 secs
Key learning objectives:
Outline how to decarbonise buildings as set out by the EPBD
Understand how the fossil fuel phase out will be critical
Identify the implications of the EPBD
Overview:
The EPBD sets a framework for decarbonising buildings by requiring new public and private buildings to be zero-emission buildings (ZEBs). This involves prohibiting on-site emissions from fossil fuels, reducing energy needs to a minimal level, and sourcing energy from renewables or energy-efficient district systems. The EPBD mandates increased solar energy use, requiring all new buildings and certain existing non-residential buildings to be “solar-ready.” The EPBD plans to phase out fossil fuel heating and cooling systems by 2040, starting with ending subsidies for standalone fossil fuel boilers from 2025.
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Summary
How does the EPBD aim to decarbonise buildings?
The EPBD sets a framework for decarbonising buildings by requiring new public and private buildings to be zero-emission buildings (ZEBs). This involves prohibiting on-site emissions from fossil fuels, reducing energy needs to a minimal level, and sourcing energy from renewables or energy-efficient district systems. The directive encourages on-site renewables, nearby renewable energy communities, and carbon-free energy sources, pushing for a comprehensive shift from nearly zero-emission buildings (NZEBs) to ZEBs by specified future dates.
What are the requirements for solar deployment in buildings?
The EPBD mandates increased solar energy use, requiring all new buildings and certain existing non-residential buildings to be “solar-ready.” By various dates from 2026 to 2030, Member States must ensure that solar installations are deployed where feasible on:
- New and existing public and non-residential buildings over specific floor area thresholds
- Existing buildings undergoing major renovations
- New residential buildings and roofed carparks located next to buildings
These measures aim to increase reliance on solar power, supporting the EU’s goal of building decarbonisation.
How does the EPBD approach the whole life cycle carbon assessment?
The EPBD requires disclosure of a building's whole life cycle carbon (WLCC), capturing greenhouse gas emissions across the building’s lifecycle. By 2028 for large new buildings and by 2030 for all new buildings, the EPBD mandates reporting the building’s carbon footprint over four stages: production, usage, end-of-life, and additional benefits or loads. Results will be measured in CO₂ equivalent per square metre over a 50-year period. Member States must also develop national targets for life-cycle GWP by 2027, considering climate neutrality goals for 2030 and beyond.
Why is the phase out of fossil fuels crucial to EPBD objectives?
The EPBD plans to phase out fossil fuel heating and cooling systems by 2040, starting with ending subsidies for standalone fossil fuel boilers from 2025. Energy storage for renewable energy is encouraged, with incentives available to transition heating and cooling systems to non-fossil sources. Member States must also create national renovation plans targeting ZEB transformation for existing buildings by 2050, supporting gradual, financially assisted renovations to reduce fossil fuel reliance across the EU.
What systems and technologies are required for improved building performance?
New buildings must include smart regulation devices for room-by-room temperature control, where feasible. Automation and control systems (BACS) for non-residential buildings are required by 2024, and automatic lighting control must be in place by 2027. For new residential buildings, continuous electronic monitoring of energy systems is required from 2026. These advanced controls ensure efficient energy use, supporting optimal building operation and potentially enabling interaction with energy grids for broader efficiency.
What implications does the EPBD hold for building owners and occupiers?
Building owners must align with EPBD regulations to ensure buildings meet ZEB and performance standards. This could impact financing, operational costs, and asset attractiveness due to compliance requirements like solar readiness and EV infrastructure. Occupiers stand to benefit from more efficient, automated, and sustainable buildings, though they may experience increased service charges as costs are shared. Lease agreements over transitional periods may also need to reflect cost-sharing for compliance with new standards.
What opportunities and considerations does the EPBD create for investors and lenders?
For investors, the EPBD introduces a more predictable regulatory pathway and opens opportunities aligned with sustainable finance and EU Taxonomy goals. Lenders may find new products to support emissions reduction targets and consider risks tied to older buildings’ compliance. Both sectors may benefit from retrofitting projects and access to sustainable finance, while also assessing investments for compatibility with national EPBD-compliant renovation plans.
How does the EPBD impact the construction sector?
The construction sector faces both new responsibilities and opportunities under the EPBD. Requirements for material selection, solar deployment, and mobility infrastructure will shape building design. Projects targeting high-performance standards and low-carbon construction techniques are likely to gain appeal. Retrofitting incentives for building owners and developers also create potential markets for the sector, as companies look to comply with lifecycle assessments and sustainable construction practices.
How does the EPBD connect with other EU sustainability directives?
The EPBD is part of a broader suite of EU sustainability directives, including the Energy Efficiency Directive, the Renewable Energy Directive, and the Corporate Sustainability Reporting Directive. These regulations intersect in areas like emissions reporting, sustainable finance, and lifecycle assessments, ensuring building renovations align with EU Taxonomy criteria for sustainable activities. Compliance with these laws will impact all stakeholders, influencing financing, reporting obligations, and operational standards across the building lifecycle.
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