EU Parliament votes in favor of compulsory renovation of old buildings

The European Parliament has voted in favor of introducing strict energy efficiency rules; approximately 35 million homes across Europe will be ripe for renovation, with owners of older homes particularly targeted.

In order for the EU to meet ambitious plans to become climate-neutral by 2050, buildings with particularly poor energy efficiency are to be renovated.

Specifically, residential buildings should at least achieve energy efficiency class ‘E’ by 2030 and energy efficiency class ‘D’ by 2033. An estimated 35 million buildings across Europe will be affected by the planned new regulations. Similar to household appliances, energy efficiency is measured on a scale from A to G, similar to the one that is seen on electrical appliances.

In addition, on Tuesday, MPs voted 343 votes in favor of only building houses that emit virtually no additional greenhouse gases from 2028 onwards; whilst 216 MPs voted against, there were 78 abstentions.

The project has been the subject of controversy because of the potential high costs for homeowners. “It will overwhelm homeowners,” said Markus Pieper from the CDU.

“The aim of the upcoming negotiations is to massively reduce the energy consumption of buildings and to protect consumers’ wallets,” said German MEP Jutta Paulus from the Greens.

Potential loss of value

According to estimates by the KfW development bank, the targeted climate-neutral conversion of the building could cost EUR 254 billion in Germany alone. Tenants and owners will probably have to pay for this first and foremost. However, money from EU coffers should also be made available for the renovations. At the end of 2021, the Commission said that up to EUR 150 billion would be available from the EU budget by 2030.

After the vote, MEP Jens Geier emphasized that the path to climate neutrality must be social. “Financially weaker households should be protected from cost pressure. The draft directive expressly provides for this,” said the Social Democratic Party (SPD) politician.

Christian Democratic Union of Germany (CDU) MP Dennis Radkte perceived the situation differently: “There is obviously no longer an antenna for social realities.” He went on: “We cannot pass on the costs of fighting climate change to Grandma's house.”

Radtke’s stance was backed by President of the Haus & Grund (Central Association of German House, Apartment and Land Owners) owners' association, Kai Warnecke, who also warned of a dramatic loss in value, especially in the case of older buildings.

According to the Commission buildings are responsible for around 40 percent of energy consumption and around a third of greenhouse gas emissions in the EU. If houses are better insulated or modern heating systems are used, this can significantly reduce energy requirements.

The planned change in the law is part of the ‘Fit for 55’ climate package, which aims to reduce net greenhouse gas emissions. The plans have not yet been decided by vote in the EU Parliament. The EU states and the European Parliament still have to find a compromise before the guidelines can come into force.

These negotiations usually last at least several months. Changes are therefore still possible and are considered very likely.