Introduction to the Recast EPBD

The recast EPBD is a European Union Directive that aims to reduce greenhouse gas (GHG) emissions from buildings, which represent a significant portion of the EU’s energy consumption and emissions. The Directive aligns with the EU's Climate Law, which mandates a 55% reduction in GHG emissions by 2030 and achieving climate neutrality by 2050. To meet these targets, the EPBD updates existing regulations, raising the requirements for building energy efficiency, decarbonisation, and renewable energy use, with each Member State required to integrate these requirements into their national laws.

The Directive sets out stringent requirements focusing on areas like minimum energy performance standards (MEPS) and Energy Performance Certificates (EPCs). Only EPC ratings from A to G will be valid starting in May 2026, and new, comparable performance metrics across Member States will make it easier for financial institutions to support energy-efficient renovations. MEPS will be gradually introduced to improve the energy performance of the 16% worst-performing buildings by 2030 and the 26% worst-performing buildings by 2033. The EPBD also mandates reducing the average energy performance of the national residential building stock by 16% by 2030, compared to 2020, and between 20-22% by 2035.

The EPBD’s enabling framework seeks to mobilise sustainable finance by encouraging financial institutions and Member States to support building energy renovations. It promotes energy-efficient mortgages, public-private partnerships, and targeted financial products, such as loans and subsidies, especially for vulnerable households and poorly performing buildings. Member States are to provide information on available funding and encourage the development of innovative financial products. The Directive also calls for the Commission to develop a framework by 29 May 2025 to help financial institutions increase lending volumes aligned with the EU’s decarbonisation goals.

The recast EPBD aims to standardise EPCs across the EU to make them more comparable and valuable for financial institutions and building owners. Member States will adopt a unified EPC scale from A to G by May 2026 and must ensure EPC information is accessible to building owners, tenants, and managers, and, with owner permission, to experts and financial institutions. Regular reviews, at least every five years, will assess energy performance standards, with adjustments if requirements are more than 15% below cost-optimal levels.

The EPBD encourages Member States to increase renovation rates, focusing on deep renovations that align with energy efficiency goals. By 29 May 2026, Member States must introduce a scheme for renovation passports, providing building owners with a roadmap for staged energy upgrades that meet zero-emission standards by 2050. Renovation passports will be stored in or accessible through national energy performance databases, supporting long-term building transformations across the EU. Renovation will be mandatory for specific building types, including those underperforming or going through sale or lease changes.

The Directive mandates the creation of national databases for energy performance, with data shared with the EU Building Stock Observatory. These databases will ensure building owners, tenants, managers, and authorised financial institutions have free access to full EPC information, particularly for buildings available for rent or sale. The EPBD also introduces the concept of digital building logbooks to store renovation passports, further enhancing transparency and monitoring in the EU's building sector.