Communication staff working document - Accompanying document to the proposal for a recast of the energy performance of buildings directive (2002/91/EC) - Impact assessment {COM(2008) 780 final} {SEC(2008) 2865}
Date: 2008-11-13
Institutions: European Commission
Subjects: European standard, air conditioning, building, codification of EU law, energy policy, energy saving, heating, thermal insulation

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 13-XI-2008 
SEC(2008) 2864 

COMMUNICATION STAFF WORKING DOCUMENT 

Accompanying document to the 

PROPOSAL FOR A RECAST OF THE  
ENERGY PERFORMANCE OF BUILDINGS DIRECTIVE (2002/91/EC) 

IMPACT ASSESSMENT 

{COM(2008) 780 final} 
{SEC(2008) 2865} 

Lead DG: DG TREN  
Other involved services: SG, DG ECFIN, DG ENTR, DG ENV, DG EMPL, DG RTD, DG 
JRC, DG JLS   
CLWP reference: 2008/TREN048

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COMMUNICATION FROM THE COMMISSION 

IMPACT ASSESSMENT SUMMARY 

EU buildings sector and EU policy objectives 

Energy use in residential and commercial buildings represents the lion's share, about 40%, of 
the  EU's  total  final  energy  consumption  and  CO2  emissions.  Activities  related  to  buildings 
represent  a  large  part  of  the  EU  economy,  about  9%  of  EU  GDP  and  7-8%  of  EU 
employment, and the importance of the sector in terms of social, cultural and historic value is 
enormous.  Therefore,  the  EU  buildings  sector  can  play  a  key  role  in  achieving  EU  growth, 
energy and climate policy objectives, while contributing to an improved level of comfort and 
lower energy bills for citizens.  

Energy  efficiency  of  buildings  is  an  important  part  of  broader  initiatives  on  achieving  EU 
energy and climate change objectives, as outlined in the Commission Communication Energy 
policy  for  Europe1,  and  plays  a  role  in  limiting  the  negative  impact  of  high  energy  prices2. 
The European Council in its Presidency conclusions3, and the European Parliament in two of 
its  resolutions4,  have  urged  the  Member  States  and  the  Commission  to  follow  a  proactive 
approach  towards  realizing  the  energy  savings  potential.  In  response,  the  Commission  has 
continued its work on strategic  initiatives, also on energy efficiency, with buildings being a 
basic element.  

The  potential  for  cost-effective  energy  savings  is  about  30%  of  the  whole  sector's  expected 
energy  consumption  by  2020,  which  would  lead  to  significant  economic,  social  and 
environmental  benefits.  The  savings  stimulated  by  the  main  current  EU  measures  are 
estimated  to  result  in  about  15%  total  energy  savings.  Thus,  an  additional  potential  of  a 
further 15% energy savings has been identified. This potential can be realized at very low or 
even  negative  CO2  abatement  costs,  because  of  the  relatively  low  cost  of  energy  relevant 
investments (when combined with other construction and renovation works in a building) and 
the very high value of energy savings compared to the other sectors, making energy saving a 
very attractive approach for tackling the climate change challenge.  

Buildings are often regarded as a "local" issue. Nevertheless, the buildings sector is crucial for 
meeting  the  EU  policy  objectives  and  the  EU  added  value  of  energy  savings  is  significant. 
Buildings concern every EU citizen and with the high energy prices and their volatility energy 
efficiency is now becoming an important issue. EU action on building could provide for more 
and  better  information  on  the  energy  savings  possibilities.  The  'holistic  approach'  in  this 
direction  could  also  provide  for  improvements  for  the  lowest  quality  houses  in  a  proactive 
manner,  as  support  from  the  national  budgets  for  subsidising  energy  bills  could  now  be 
targeted to long-term solutions for quality improvements in buildings.  

EU legislative action 

1 
2 
3 
4 

COM(2007) 1 
COM(2008) 384 
11018/1/08, REV 1 and 7224/1/07, REV 1 
2006/2113(INI) and (2007/2106(INI)) 

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The  existing  EU  core  instruments  in  this  context,  e.g.  Energy  Performance  of  Buildings 
Directive  (EPBD),  Eco-design  of  Energy-using  Products  Directive,  and  Energy  End-use 
Efficiency and Energy Services Directive, have proved to be a solid basis for achieving and 
supporting energy savings in the buildings sector. Amongst them, the EPBD is the main tool 
that provides for a holistic approach towards efficient energy use in the buildings sector.  

The  main  objective  of  the  EPBD  is  to  promote  cost-effective  improvement  of  the  overall 
energy  performance  of  buildings,  whilst  taking  into  account  local  conditions  and 
requirements.  The  Directive  covers  the  energy  needs  for  space  and  water  heating,  cooling, 
ventilation  and  lighting.  It  provides  for  a  holistic  view  on  the  energy  use  of  buildings  and 
combines in a legal text different regulatory (i.e. minimum energy performance requirements) 
and information based instruments (i.e. certificates and inspection requirements): 

•  Member  States  have  to  set  up  minimum  energy  performance  requirements  for  new 
buildings and for large existing ones that undergo major renovation. This means that these 
buildings  shall  meet  certain  national  and  regionally  determined  minimum  energy 
performance  levels,  with  the  aim  of  achieving  improved  energy  performance,  thermal 
comfort and lower energy bills. 

•  Member States have to introduce an energy performance certification scheme that provides 
information on the energy needs of a building and on what can be improved. It should be 
presented  to  potential  buyers/tenants  so  that  they  have  an  independent  assessment  of  the 
energy-use aspects of the buildings, enabling informed decisions to be taken. 

•  Member  States  shall  establish  a  system  for  inspection  of  medium-  and  large-size  heating 
and  air-conditioning  systems  at  regular  intervals  so  that  their  energy  performance  can  be 
monitored and optimized. These systems are specially targeted as they dispose of very high 
energy savings potential. Promotion campaigns can be undertaken by Member States as an 
alternative to inspections, provided it can be demonstrated that this approach would be of 
equal impact.  

These three main instruments take effect at different times of a building's lifetime. Minimum 
energy  performance  requirements  are  to  be  met  at  the  time  of  construction  or  major 
renovation  (i.e.  every  25-40  years  approx.).  An  energy  performance  certificate  is  required 
only when buildings are newly constructed, sold or rented out and is valid for a maximum of 
10  years.  The  inspections  of  heating  and  air-conditioning  systems  are  carried  out  more 
frequently, this being a function of the system size and fuel source. For instance, in the case of 
medium-sized  boilers  and  air  conditioning  systems  Member  States  are  entitled  to  decide  on 
the frequency of inspections regardless of whether or not the building is for sale or rent (as is 
the case for the energy performance certificate), whereas for large boilers it should be every 
two years, etc..  

Member States also have to develop their own methodology, or use European standards5, for 
calculating the energy characteristics and performance of buildings, whilst also ensuring that 
there are enough qualified experts to carry out the certifications and inspections. 

The  EPBD  does  not  fix  concrete  EU-wide  energy  performance  requirements,  but  obliges 
Member  States  to  lay  down  holistic  methodologies,  requirements,  and  inspection  and 

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European standards are adopted by a European standardisation body (CEN) and made available to the 
public.  A  package  of  31  EPBD  has  been  prepared  by  CEN  acting  on  a  mandate  by  the  European 
Commission to support Member States for the national implementation of the EPBD. 

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certification regimes to rate the energy performance of buildings at a national/regional level. 
Thus,  its  approach  takes  national/regional  boundary  conditions,  like  outdoor  climate  and 
individual  building  traditions,  fully  into  consideration  and  respects  the  subsidiarity  and 
proportionality  principles.  Member  States  can  go  beyond  the  minimum  prescriptions  laid 
down in the Directive and be more ambitious. 

Before  the  adoption  of  the  EPBD  in  2002,  many  Member  States  did  not  have  energy 
efficiency  requirements  or  promotional  instruments  in  their  regulations  and  building  codes. 
Therefore,  in  a  number  of  countries  the  EPBD  implementation  has  been  a  significant 
challenge but also, in parallel, an opportunity to improve the quality of their building stock. 
These challenges led to delay in transposition and a number of infringement cases (21 cases at 
their  maximum)  and  support  actions  were  initiated  by  the  Commission.  There  has  been 
positive reaction by the Member States and now 22 of them declare full transposition (which 
is  still  under  evaluation  by  the  Commission).  Nevertheless,  the  implementation  is  a 
continuous process and there are still a number of challenges to be resolved, such as low level 
of ambition, ambiguous interpretations, and poor enforcement by some Member States. 

The  main  contribution  of  the  EPBD,  so  far,  has  been  in  bringing  the  subject  of  the  energy 
efficiency  of  buildings  onto  political  agendas,  into  building  codes  and  to  the  attention  of 
citizens.  In  terms  of  implementation  costs,  several  Member  States  reported  moderate  costs, 
but  with  significant  improvements  in  terms  of  energy  savings  in  the  buildings  sector 
stimulated by the Directive.  

Need for further activities? 

Despite the actions already undertaken within the buildings sector, the main problem is that 
there is still a large cost-efficient energy saving potential that remains unutilized. Whilst the 
available  data  does  not  allow  for  a  full  assessment  of  the  impacts  of  the  current  directive, 
rough calculations show that, if fully and properly implemented, the energy savings from the 
EPBD can be as much as 96 Mtoe final energy in 2020, this being 6.5% of EU final energy 
demand.  However,  its  wording  and  the  'openness'  of  its  provisions  allow  for  various 
interpretations in its implementation. This would probably mean that its full impact may not 
be realized. 

Many of the potential social, economic and environmental benefits at national and EU level 
are being neither fully explored nor fully exploited. This is due not only to the complexity of 
the  sector  and  the  existence  of  market  failures,  but  also  to  limitations  of  the  current  EPBD. 
The  possible  alternative  ways  of  tackling  the  challenges  are:  (i)  repealing  the  EPBD  and 
replacing it by ‘soft’ instruments, (ii) business as usual through use of the existing instruments 
without  adaptation,  and  (iii)  EU  action  by  complemented  and  improved  instruments  of  the 
current EPBD. 

The first alternative, which is to repeal the EPBD and rely on 'soft law' instruments, such as 
information,  voluntary  activities,  financing  measures,  etc.,  would  entail  pro-active  and 
ambitious actions from Member States wherein the Commission would monitor and support 
the  progress.  However,  the  specifics  of  the  sector,  insufficient  measures  in  many  Member 
States,  the  high  cost  of  “soft”  instruments,  and  the  fact  that  there  is  already  a  functioning 
Directive  at  EU  level,  all  lead  to  the  conclusion  that  this  alternative  would  not  solve  the 
problems  at  acceptable  cost.  In  addition,  repealing  the  EPBD  would  send  a  very  negative 
signal regarding the EU ambitions to pursue its policy objectives on energy efficiency. 

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The second alternative is to continue with the 'business as usual' or ‘do nothing more’ than the 
existing measures, besides continued and improved implementation. If such an approach were 
adopted a large potential, currently outside of the EPBD, would remain untapped. Also, due to 
the limitations in the wording of the current EPBD, the full expected potential would not be 
realized. On the contrary, because of the vagueness of some provisions there may even be a 
negative  connotation.  For  instance,  because  of  the  lack  of  provisions  on  monitoring  and 
compliance, the certificates might be of very poor quality in some countries and considered as 
a useless bureaucratic burden imposed from Brussels.  

The  third  alternative  is  to  revise  the  EPBD.  The  main  provisions  of  the  current  Directive 
would  be  kept,  as  they  are  already  delivering,  but  their  efficiency  would  be  significantly 
improved  and  their  scope  extended.  By  building  on  its  current  structure  and  provisions,  as 
well as the implementing measures already undertaken in Member States, the transposition - 
and indeed the comprehension of these measures by all stakeholders- would be eased, whilst 
at  the  same  time  provision  could  be  made  for  tapping  a  larger  share  of  the  energy  saving 
potential  and  other  related  benefits.  The  setting  up  of  the  concrete  levels,  requirements  and 
mechanisms would, as under the current EPBD, be left to the national/regional authorities in 
respect of the principles of subsidiarity and proportionality. 

The  conclusion  drawn  from  the  three  policy  alternatives  was  that  the  largest  contribution 
towards meeting the EU policy goals can be achieved through revision of the EPBD. This can 
be done with modifications of the current provisions that would keep the principles and their 
essence,  but  would  significantly  improve  their  efficiency.  In  this  case,  the  current  Directive 
will  be  the  starting  point  for  the  revised  instrument  and  will  constitute  its  'backbone'. 
Therefore, the continued implementation of the EPBD is of crucial importance.  

However, it should be emphasized that the solution is an integrated mix of policy instruments 
and thus other non-regulatory measures, although not sufficient on their own, are necessary to 
complement  the  implementation  of  the  Directive.  Therefore,  the  efforts  in  providing  more 
financial  and  fiscal  incentives,  information,  training  of  experts,  and  agreeing  on  voluntary 
actions  should  be  strengthened.  The  'soft  law'  instruments  already  contained  in  the  current 
EPBD should be further developed. 

EU's right for undertaking these activities  

Climate  change,  security  of  energy  supply  and  environmental  protection  are  challenges  that 
cannot be sufficiently addressed at national level only. Energy efficiency provides part of the 
solution  of  these  problems  and  the  instruments  on  energy  efficiency  that  have  already  been 
adopted  at  EU  level,  based  on  Art.  6  of  the  Treaty  (environmental  protection),  reflect  this 
need for Community action. 

The  buildings  sector  is  responsible for  about  36  %  of  the  EU's  total  CO2  emissions  and  for 
about half  of the CO2 emissions which are not covered  by the  Emission  Trading System. It 
disposes of a considerable cost-effective energy savings potential which can hardly be found 
in  any  other  area  and  which  is  attainable  at  comparatively  low  costs.  Therefore,  it  becomes 
evident that every country needs to urgently save energy in buildings but not all dispose of the 
knowledge needed.  

The  buildings  sector  is  also  highly  disaggregated  and  is  experiencing  a  number  of  market 
failures  (e.g.:  partial  internalization  of  externalities  in  energy  prices;  principal-agent 
problems; split incentives; lack of appropriate information, education and training; low uptake 

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of  new  and  innovative  technologies;  etc.)  which  have  limited  the  rate  of  energy  efficiency 
gains  in  the  sector.  Indicators  show  that  while  for  example  the  energy  consumption  of 
industry  is  decreasing,  that  of  households  is  constantly  on  the  rise.  Construction  products, 
appliances and services related to buildings are an important part of the EU internal market. In 
addition,  with  the  increasing  mobility  of  people  and  number  of  businesses  with  operations 
across the EU, a similar way to measure, for example, the energy performance  of  buildings 
would decrease the administrative burden for them.  

As  energy  efficiency  objectives  could  not  thus  far  be  achieved  by  Member  States  to  a 
sufficient extent, then action at Community level is appropriate to facilitate  and  support  the 
uptake of activities at national level. 

The main elements of the current EPBD have already been discussed from the point of view 
of the principles of subsidiarity and proportionality when the Directive was tabled in 2001 and 
adopted  in  2002.  Furthermore,  they  have  also  been  tested  in  practice,  demonstrating  the 
appropriateness  of  the  approach.  Since  then  the  need  for  common  action  to  tackle  the 
challenges  of  climate  change  and  energy  dependency  have  become  even  more  apparent.  In 
this  Impact  Assessment,  subsidiarity  and  proportionality  were  guiding  principles  when 
developing the initial screening of options. Nevertheless, some options, which could possibly 
not be in line with these two principles, were discussed in the text as they have high potential 
for energy and CO2 reductions. In this case appropriate indication has been given in the text.  

What options for a better EPBD? 

The  Impact  Assessment  concluded  that  several  aspects  of  the  current  EPBD  could  be 
improved. These in general refer, firstly, to the improvement of some ambiguous wording (in 
particular  of  definitions)  and,  secondly,  to  each  of  the  main  pillars  of  the  current  Directive. 
Within each pillar several options were chosen, based on a broad discussion with stakeholders 
and observations from the implementation of the current EPBD.  

The options were analysed in view of their economic, social and environmental impacts. For 
the  analysis,  the  BEAM  model  (see  Annex  IV)  and  data/assumptions  available  in  a  large 
number  of  studies  were  used,  as  well  as  the  knowledge  and  observations  accumulated  by 
following  the  implementation  of  the  EPBD  and  discussion/inputs  from  Member  States  and 
stakeholders.  The  calculation  of  the  impacts  is  bottom-up  (i.e.  based  on  following  the 
construction,  demolition  and  renovation  rates,  and  energy-efficiency  measures  in  building 
retrofits).  The  baseline  is  the  latest  update  (September  2007)  of  the  PRIMES  model  of  DG 
TREN which includes policies and measures implemented in the Member-States until the end 
of 2006. The latest policy developments for the ETS and non-ETS sectors are not included in 
the  baseline.  For  some  options,  only  qualification  of  the  impacts  was  possible,  due  to 
limitations in the available quantitative data.  

The options discussed include a mix of policy instruments, including regulatory and also non-
regulatory alternatives, like information and other soft measures.  

The  main  areas  where  action  is  required  and  within  which  various  options  needed  to  be 
discussed were: 

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General: Clarification and simplification 

This is essential for proper implementation of the EPBD. The need for action in this direction 
surfaced  during  discussions  with  representatives  from  Member  States  and  via  inputs  from 
stakeholders.  Two  actions  are  key  in  this  direction:  (i)  to  clarify  and  simplify  the  text  itself 
(i.e.  certain  definitions  and  provisions),  and  (ii)  to  choose  the  proper  legal  format  of  the 
proposed revised text (recast vs. amendment).  

A: 1000 m2 threshold for existing buildings when they undergo major renovation 

The current EPBD provision that only existing buildings above 1000m2 should meet certain 
energy  performance  requirements  when  undergoing  major  renovation  (for  which  either  the 
investment is above 25% of the whole building value, excluding the land, or the renovation 
concerns  more  than  25%  of  the  building  shell),  means  that  only  about  29%  of  the  EU 
buildings sector falls within the scope of this provision. The best moment for the introduction 
of energy efficiency measures is when a building anyhow undergoes major renovation, which 
is approximately every 25 years. At that stage, the additional investment needed is not high 
and -as the investment also leads to energy savings- it is usually repaid during its lifetime.  

This provision therefore limits the impact of the Directive. 

Three possible options on the extension of the EPBD were analysed:  

Option A1: Lowering the threshold to 500 m², (all medium sized buildings).  

Option  A2:  Lowering  the  threshold  to  200  m²,  (all  buildings  apart  from  small  ones  (mainly 
single family houses)).  

Option A3: Abolishing the 1000 m² threshold (all buildings).  

For  all  options  the  current  exceptions  listed  in  Art.4  (3)  for  certain  buildings  (for  example, 
buildings officially protected because of their architectural or historical merit, the stand-alone 
buildings smaller than 50 m², etc), are considered to remain. Also, the possibility for Member 
States to go beyond the requirements, i.e. below 500 or 200 m² would remain.  

It  should  be  highlighted  that  within  the  discussed  options,  Member  States  would  still  be 
responsible  to  set  up  the  individual  requirements  of  energy  performance  and  thus  the 
subsidiarity  principle  will  be  respected.  Also,  the  definition  of  major  renovation  would  be 
retained as in the current EPBD, which means that, for example, renovation of an apartment 
in a large multifamily building would, in most cases, not be covered by the requirements. The 
effect  on  individual  households  would  be  limited  further  by  the  fact  that  renovations  are 
usually made 'step by step'. The current EPBD also entails that for existing buildings, when 
they undergo major renovation of a certain part, the energy performance requirements are to 
be met only for this part and not for the whole building. For example, if the building shell is 
renovated this would not mean that the heating system should mandatorily be changed. 

A summary of the calculated impacts of the three options is provided in the table below.  

Option A1 

Option A2 

Option A3 

Final energy savings in 
2020 (Mtoe/a) 

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5 

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Option A1 

Option A2 

Option A3 

CO2 emission reductions 
in 2020 (Mt/a)  
Capital costs in 2020 
(billion €/a)  

Job creation in 2020 

Administrative costs 

8 

1 (but 3 saved  
energy costs) 

10,000 

Low  

14 

2 (but 7 saved 
 energy costs) 

21,000 

Low 

51 

8 (but 25 saved  
energy costs) 

75,000 

Medium  

The analysis indicates that option A3 could most significantly contribute to the realization of 
the EU policy objectives in question. 

B: Energy performance certificates 

The  certificates,  which  are  already  mandatory  under  the  current  EPBD  when  buildings  are 
constructed, sold or rented out, can be a powerful tool to create a demand-driven market for 
energy  efficient  buildings,  as  they  allow  economic  agents  to  estimate  costs  in  relation  to 
energy consumption and efficiency. However, observations show that some certificates issued 
in  some  Member  States  are  not  of  satisfactory  quality,  or  they  are  not  systematically  made 
available  during  property  transactions,  thus  significantly  restricting  their  real  impact  at  the 
present time. Higher uptake of the recommendations, as shown on the certificates, for energy 
improvements  of  the  buildings  can  stimulate  further  energy  savings.  Therefore,  several 
options have been analysed:  

Option  B1:  Quality  and  compliance  requirements  for  certificates.  It  is  proposed  that  a 
requirement for random sampling checks of the quality of energy performance certificates and 
compliance with the building energy codes is carried out by public authorities or accredited 
institutions. This regulatory instrument would ensure that the information on the certificates is 
of good quality and reliable. It is also expected that it would trigger an increase in the rate of 
renovations, and thus high energy savings as, due to the improved quality, people would be 
more  aware  of  the  possibilities  for  improvements  and  of  their  cost-effectiveness.  Proposing 
such requirements can be justified from a proportionality point of view as, from the current 
practice, it has been evident that the low quality of certificates is one of the key factors for the 
credibility and market uptake of the certificates in a number of Member States. 

Option  B2:  Requiring  that  the  recommended  cost-effective  measures  of  the  certificate  are 
realized  within  a  certain  time  period.  The  proposal  is  to  require  that  the  cost-effective 
recommendations  on  the  certificate  are  implemented  within  a  certain  period  of  time.  The 
setting  up  of  a  definition  for  'cost-effective'  and  the  period  of  time  are  to  be  decided  at 
national or regional level. This regulatory instrument can be introduced either for all buildings 
or  only  for  those  of  the  public  administration.  Due  to  data  availability  limitations,  the 
introduction of such a requirement was only analyzed for tertiary sector buildings. This would 
be  a  significant  financial  burden  for  EU  citizens  and  businesses,  and  therefore  such  action 
would not be justified at EU level if no sufficient financial mechanisms are ensured.  

Option B3: Making certificates a mandatory part of property advertisement and/or property 
transaction  documents.  This  would  entail  that  information  on  the  energy  performance  of  a 
building  is  included  in  advertisements  and  publicity  for  property  transactions  and  that  with 
each  transaction  the  certificate  has  to  be  presented.  The  former  is  an  information  tool  that 
would increase the awareness about the certificates and energy efficiency. Such a requirement 

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at EU level has already been made for the display of CO2 emissions of cars and, taking into 
account  the  important  contribution  such  action  may  have,  its  introduction  would  be  in  line 
with  both  the  subsidiarity  and  proportionality  principles.  The  latter  is  a  regulatory  measure 
that would limit the interpretations of the current text of the EPBD which already states that a 
certificate  should  be  'made  available',  but  for  which,  nevertheless,  there  are  some 
interpretations which mean that the certificates are not de facto presented. 

Option  B4:  Requiring  the  linking  of  the  certificates  with  other  support  or  discouragement 
mechanisms. It is suggested that the energy efficiency improvements of a building, which are 
achieved as a result of a financial incentive, are demonstrated or justified using the certificate. 
For example, if a certificate is made before and after the investment, the financial support may 
be given only if there are improvements to the ranking of the building. This will help property 
owners/tenants to make informed decisions about the cost-effectiveness of their investments 
and  there  will  be  a  proof  that  the  funding  provided  would  really  lead  to  energy  savings. 
However, such a requirement would not be in line with the subsidiarity principle, as it would 
touch  upon  issues  of  national  budget  spending.  Furthermore,  introducing  such  a  text  into  a 
Directive  based  on  Art.  175  (environmental  protection)  of  the  Treaty  may  not  be  possible 
from a legal point of view.  

A summary of the calculated impacts of the three options is provided in the following table.  

Option B1 

Option B2* 

Option B3 

Option B4 

Final energy savings in 
2020 (Mtoe/a) 
CO2 emission reductions 
in 2020 (Mt/a)  
Capital costs in 2020 
(billion €/a)  

21 

57 

12 

33 

8 (but 26 saved 
energy costs) 

5 (but 9 saved 
energy costs) 

++ 
(lower than B2) 
++ 
(lower than B2) 

Very low 

++ 
(lower than B2) 
++ 
(lower than B2) 
Strongly depends on 
type of measures 

Job creation in 2020 

60,000 

100,000 

++ 

++ 

Administrative costs 

Low - medium 

High 

Very low 

Medium 

Comments 

CO2 abatement 
costs of about  
-315 €/ton. 

High one-off 
investments; 
legal constraints 

Measures outside 
EPBD, legal 
constraints 

* Impact quantified for the tertiary buildings sector only, so figures do not contain the potential of the residential 
sector. 

The analysis indicates that options B1 and B3 could significantly contribute to the realization 
of the EU policy objectives in question. Option B4 could also be further developed outside the 
scope of the EPBD. 

C: Inspection of heating and air-conditioning systems  

These systems have a very high energy saving potential, up to 40-60% of their total energy 
use. At present, the current EPBD requires that a regular inspection be performed on systems 
above certain thresholds, although it is very unclear what the outcomes of these inspections 
are and furthermore their quality is not always satisfactory. As a result, it is estimated that the 
EPBD  as  it  is  today  can  bring  only  10%  energy  savings  in  this  field  by  2020.  There  is 
significant room for further savings, for which two options have been discussed:  

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Option  C1:  Requiring  an  'inspection  report'  for  heating  and  air-conditioning  systems.  It  is 
proposed that an 'inspection report', to be drawn up by an independent expert, is given to the 
building  owner.  It  would  include  an  energy  efficiency  rating  of  the  heating/cooling  system 
and  recommendations  for  cost-effective  measures.  This  information  tool  aims  at  providing 
practical  and  useful  results  to  building  owners  when  deciding  on  retrofitting  and  would 
therefore increase the impact of the current EPBD provisions. In this context, existing CEN 
standards for inspections could be further developed to allow for an efficiency rating of the 
installation systems. The recast EPBD could therefore refer to European standards and make 
the  efficiency  rating  part  of  the  inspection  report.  Minimum  energy  efficiency  installation 
requirements could then be set by Member States. This would link the EPBD with the Eco-
design  Directive.  The  inspection  report  would  be  an  important  upgrading  to  the  existing 
requirements  for  inspection  and  would  help  consumers  in  identifying  important  possibilities 
for  cost-effective  energy  savings  and,  hence,  is  justified  from  the  point  of  view  of 
proportionality.  

Option C2: Introducing compliance requirements. It is proposed that random sampling checks 
of inspection reports (presented in option C1) of different levels of detail and frequency could 
be introduced. This regulatory tool could ensure that the inspections are carried out regularly 
and are of satisfactory quality (which is  not  always the case at present). Similarly to option 
B1,  proposing  such  requirements  can  be  justified  from  a  proportionality  point  of  view  as, 
given the evidence from the current practice, it has been witnessed that without compliance 
checks the usefulness and credibility of inspections is drawn into question. 

A summary of the calculated impacts of the two options is provided in the table below.  

Final energy savings in 
2020 (Mtoe/a) 
CO2 emission reductions in 
2020 (Mt/a) 

Capital costs in 2020 
(billion €/a) 

Job creation in 2020 

Administrative costs 

Comment 

Option C1 

5 

15 – 20 

Option C2 

++ - +++ 
(higher than C1) 
++ - +++ 
(higher than C1) 

Net benefits (investments minus 
energy savings) estimated to €2 billion 
per year. 
46,000 

Low 
CO2 abatement costs estimated to be 
around -133€/ton.  

In the same magnitude as C1 

23,000 

Medium 

CO2 abatement costs estimated to be 
in the same magnitude as option C1. 

The  analysis  indicates  that  taken  together  both  options  C1  and  C2  could  significantly 
contribute  to  the  realization  of  the  EU  policy  objectives  in  question,  without  leading  to 
negative social or administrative implications. 

D: Energy performance requirements 

At  present,  Member  States  determine  individual  energy  performance  requirements  and  their 
levels of ambition. These vary widely across the EU, even within similar climatic zones. In 
many  Member  States  cost-optimal  levels  are  not  yet  achieved,  which  means  that  the  cost-
efficient  energy  savings  and  CO2  emission  reduction  possibilities  are  not  fully  utilized. 
Furthermore, cross-border comparisons of how Member States have advanced in this respect 
are  difficult  due  to  diverse  national/regional  approaches  of  calculation  and  setting  up  of  the 

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underlying  parameters.  Therefore,  further  stimulation  at  Community  level,  while  respecting 
the subsidiarity and proportionality principles, could realize additional energy savings.  

Four options have been identified:  

Option D1: Specifying EU–wide energy performance requirements. The proposal would entail 
that specific energy performance requirement levels are proposed as an Annex to the revised 
EPBD,  based  on  robust  calculations  that  have  to  take  into consideration  various  factors,  for 
example,  different  climate  zones  and  building  types  for  residential  and  non-residential 
buildings.  This  regulatory  instrument  would  allow  for  a  large  part  of  the  energy  savings 
potential to be reaped, as in some countries the requirements are below cost-optimal level, but 
would  require  a  high  level  of  regulation  at  EU-level.  It  would  ease  cross-border  operating 
businesses and support the internal market of energy efficiency related construction materials 
and  appliances.  However,  determining  these  levels  would  be  a  very  demanding  and  highly 
disputed task. Such concrete regulation at EU level would not be in line with the principles of 
subsidiarity and proportionality.  

Option D2: Introducing a benchmarking mechanism. The proposal is to include in the EPBD 
(i.e.  as  an  Annex)  principal  parameters  to  calculate  the  cost-optimal  level  of  energy 
performance  requirements  for  buildings  which  can  be  used  to  compare  the  Member  States' 
level  of  ambition  in  the  implementation.  The  current  provisions  of  the  EPBD  would  not  be 
changed regarding the minimum energy performance requirements, i.e. Member States would 
still  have  to  set  up  the  individual  levels  based  on  their  national  circumstances.  In  addition 
there would be a calculation methodology proposed, for example, by the Commission, which 
would  allow  for  a  cross-check  of  how  close  national/local  requirements  are  to  the  optimal 
levels. In order for this comparison to be carried out, Member States would have to provide 
input data or to calculate the levels for themselves but report the results. This would clearly 
indicate whether Member States are below the optimal levels, which would mean that money 
from  energy  savings  is  lost  every  time  national  or  local  regulations  are  applied,  or  whether 
Member  States  are  too  ambitious  in  their  requirements  and  place  an  unjustified  burden  on 
their citizens.  

This is a "soft law" instrument and would not impose any requirement for the Member States 
to  correct  their  levels  and  thus  would  be  in  line  with  the  proportionality  and  subsidiarity 
principles. However, it is believed that it would create significant peer-pressure from the front 
runner countries, as well as from the construction industry and other stakeholders, and would 
ultimately  move  all  Member  States  towards  optimal  energy  efficiency  requirements.  The 
impact  that  is  measured  is  the  maximum  possible,  i.e.  meaning  that  Member  States  would 
gradually correct their national levels, with half of them would adjusting their national levels 
to cost-optimal ones by 2020 and the remainder, possibly, by 2030.  

Option D3: Requiring an evolving improvement scheme for the buildings stock focussing on 
the worst performing buildings (a kind of top-runner approach). It is proposed that Member 
States  monitor  their  building  stock  and  lay  down  Action  Plans  on  how  to  increase  the 
refurbishment rate and the energy performance of the worst performing buildings. This mix of 
instruments  could  tackle  the  most  cost-effective  potential.  However,  it  would  require  that  a 
significant  quantity  of  presently  unavailable  good  quality  statistical  information  on  the 
building stock is collected, thus implying high administrative costs. Such an approach would 
also be a considerable burden for the owners (some of them with low incomes) of the poorly 
performing  buildings  and  this  would  also  entail  that  Member  States  would  have  to  provide 

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financial  support  mechanisms.  This  approach  would  not  be  in  line  with  the  subsidiarity 
principle as it would touch upon issues of national budget spending. 

Option  D4:  Setting  up  EU–wide  low  or  zero  energy/carbon  buildings/passive  house 
requirements.  It  is  proposed  that  a  requirement  is  introduced  that  all  newly  constructed 
buildings  must  meet  the  low  energy  building  requirements  from  a  certain  date  onwards. 
Alternatively, Member States can be encouraged to set a definition and strategy for achieving 
the  low  energy  building  standard  where  the  final  and  intermediary  target  years  are  clearly 
mentioned.  These  actions  would  lead  to  very  well  performing  new  buildings  and  foster 
innovation.  

However, such a requirement would pose a significant challenge to the construction industry 
to  build  such  houses  and  would  increase  houses  prices  by  7%  to  15%.  It  would  also  not 
respect the subsidiarity and proportionality principle, as it would require investments that are 
not in all cases cost-efficient and would create burden for the national budgets as they would 
have to support households that could not afford to build such low energy homes. Therefore, a 
softer  approach  can  be  taken  which  is  to  include  an  obligation  for  the  development  of 
'roadmaps',  wherein  Member  States  would  show  their  commitment  toward  achieving  low 
energy/emission houses in the future and the concrete measures they plan to undertake. 

A summary of the calculated impacts of the four options is provided in the table below.  

Option D1 

Option D2 

Option D3 

Option D4 

Final energy savings in 
2020 (Mtoe/a) 

CO2 emission reductions 
in 2020 (Mt/a)  

10 

24  

5  
(up to 10 in 2030)

13 

(up to 24 in 2030)

Capital costs in 2020 
(billion €/a)  

6 (but 12 saved 
energy costs) 

3 (but 6 saved 
energy costs) 

Job creation in 2020 

82,000 

up to 82,000 

+ 

+ 

++ 

+ 

Administrative costs 

Very high 

Very low 

High 

Comment 

CO2 abatement 
costs of about -
250 €/ton. 
subsidiarity 
concerns 

CO2 abatement 
costs of about -
250 €/ton.  

15 (if required for 
all new-build) 

+ (if gradually with 
roadmaps) 

41 (if required for 
all new-build) 

+ (if gradually with 
roadmaps) 

50 – 120 (if required 
for all new-build) 

+++ 

Low 

Very high one- off 
investments if 
required for all new-
build  

The  analysis  indicates  that  option  D2  could  significantly  and  quickly  contribute  to  the 
realization  of  the  EU  policy  objectives  in  question.  Option  D3  could  be  taken  on  board  by 
Member States when starting national activities, in particular related to the National Energy 
Efficiency  Action  Plans.  Option  D4  could,  due  to  economic  and  legal  constraints  be 
considered in a less prescribed form, i.e. by national visions/roadmaps. 

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Furthermore, the role of the public sector to act as a leading example in energy efficiency is 
dealt with in the Impact Assessment by proposing stricter deadlines for the public sector than 
for other sectors to comply with EPBD obligations and by proposing an obligatory realization 
of energy efficiency measures which are recommended in the energy performance certificate 
of a building. 

Conclusions 

The results for the most cost-effective and beneficial options (indicated in bold in the tables 
above),  with  all  available  quantifications,  show  significant  positive  impacts  which  are 
possible if the Directive is revised, that would make use of a large part of the remaining 
potential in the buildings sector and would also contribute to the realization of the full 
potential of the current EPBD. Furthermore, such a revision would create a simplified and 
improved framework for energy savings. The minimum total impact of the options identified 
as being most beneficial and for which quantification was possible, is: 

–  60 – 80 Mtoe/year energy savings in 2020, i.e. reduction of 5-6% of the EU final energy 

consumption in 2020; 

–  160 to 210 Mt/year CO2 savings in 2020, i.e. 4-5% from EU total CO2 emissions in 2020; 

The  impact  on  the  labour  market  would  also  be  important.  It  is  expected  that  280,000  (to 
450,000) potential new jobs will be created by 2020 by the revised EPBD. This would mainly 
be in the construction sector itself as well as for the services of energy certifiers, auditors and 
inspectors of heating and air-conditioning systems.  

The investment requirements and the administrative costs of the measures were analysed and 
are relatively low compared to the benefits and the returns. For example, abolishing the 1000 
m2 threshold on an EU scale would lead to €8 b illion/year additional capital investments but 
would  trigger  €25  billion/year  energy  cost  sa vings  in  2020,  which  also  means  considerably 
negative CO2 abatement costs These calculations have been made on the basis of conservative 
estimations about oil prices (e.g. 55$ per barrel oil in 2005, 100$ in 2020 and 119 $ in 2030 in 
year 2005 prices). With higher oil prices it can be expected that returns on investment would 
be in even shorter periods and the potential would be even higher. 

The  investment  needs  differ  substantially  across  Europe  depending  on  the  social  and 
economic  conditions,  on  the  initial  state  of  property  and  on  the  type  of  renovations  people 
undertake. They are not equally distributed amongst EU citizens, i.e. there will be additional 
costs  for  those  who  make  major  renovations  of  their  buildings  or  are  engaged  in  property 
transactions.  However,  with  the  high  oil  prices  these  initial  investments  will  have  attractive 
returns. The overall benefits for society in terms of reduction of energy consumption and thus 
reduced  CO2  emissions  and  energy  import  dependency,  job  creation,  especially  at  local  and 
regional  level,  positive  health  and  labour  productivity  far  exceed  the  costs  of  the  measures 
analysed. 

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1. 

1.1. 

1.2. 

2. 

2.1. 

2.2. 

2.3. 

3. 

3.1. 

3.2. 

3.3. 

3.4. 

3.5. 

4. 

4.1. 

4.2. 

4.3. 

5. 

5.1. 

5.2. 

5.3. 

5.4. 

5.5. 

5.6. 

6. 

7. 

Procedural issues and consultation............................................................................. 15 

Organisation and timing............................................................................................. 15 

Consultation and expertise ......................................................................................... 15 

Problem definition...................................................................................................... 17 

Overarching problem definition................................................................................. 17 

Actions in the EU ....................................................................................................... 18 

Remaining problems .................................................................................................. 26 

Objectives................................................................................................................... 28 

EU policy objectives .................................................................................................. 28 

Specific policy objectives .......................................................................................... 29 

EU's right to act.......................................................................................................... 30 

EU value added .......................................................................................................... 30 

Subsidiarity and proportionality................................................................................. 32 

Policy options............................................................................................................. 33 

Repealing the EPBD and replacing it by ‘soft’ instruments ...................................... 33 

Business as usual........................................................................................................ 34 

EU action by complemented and improved instruments ........................................... 35 

Analysis of impacts .................................................................................................... 37 

Main analytical approach ........................................................................................... 37 

Clarification and simplification.................................................................................. 38 

1000 m2 threshold for existing buildings when they undergo major renovation ...... 40 

Energy performance certificates ................................................................................ 44 

Inspection of heating and air-conditioning systems................................................... 53 

Minimum energy performance requirements............................................................. 58 

Comparing the options ............................................................................................... 68 

Monitoring and evaluation ......................................................................................... 74 

ANNEXES 

I 

II 

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Summary of public consultation 

Summary of the survey to the Member Sates 

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III 

Summary report of the consultation meeting 

IV  Main methods and assumptions 

V 

EU buildings sector 

1. 

PROCEDURAL ISSUES AND CONSULTATION  

1.1. 

Organisation and timing 

The Energy Efficiency Action Plan of 20066, endorsed at the Spring 2007 European Council7 
and further supported by the June 2008 European Council, details a plan for achieving 20% 
energy saving by 2020 and highlights the importance of the buildings sector to this end. One 
possible measure with significant potential that is discussed and evaluated in the Action Plan 
and its Impact Assessment8 is the strengthening of existing policies, and in particular, of the 
Energy Performance of Buildings Directive (hereinafter EPBD) 2002/91/EC. Possible action 
in this direction features on the Commission Legislative Work Programme of 2008 as one of 
the  four  strategic  priorities  on  energy9  and  on  the  Commission  Simplification  Rolling 
Programme for 2008-200910 aimed at better regulation and lawmaking.  

Energy  efficiency  of  buildings  is  an  important  part  of  broader  initiatives  on  achieving  EU 
energy and climate change objectives as outlined in the Commission Communication Energy 
policy for Europe11 and on limiting the negative impact of high energy prices12. The European 
Council  in  its  Presidency  conclusions13,  and  the  European  Parliament  in  two  of  its 
resolutions14,  has  urged  the  Member  States  and  the  Commission  for  a  proactive  approach 
towards  realizing  the  energy  savings  potential.  In  response  the  Commission  is  preparing  an 
encompassing  Strategic  energy  review  2  package  to  be  adopted  by  the  Commission  in 
November 2008. Action on buildings, as discussed in this Impact Assessment, would be part 
of this package. 

The  Impact  Assessment  has  been  prepared  in  the  first  half  of  2008  to  evaluate  options  that 
could be explored in this area. It does not prejudge the final form of any decision to be taken 
by the Commission.  

1.2. 

Consultation and expertise 

The impact assessment is based on a wide range of information sources such as material from 
the  Member  States,  experts,  stakeholders,  as  well  as  from  conferences,  public  consultations 
and studies. The process was supported inside the Commission by an Inter Service Steering 
Group, lead by DG Energy and Transport (DG TREN). 

6 
7 
8 
9 
10 
11 
12 
13 
14 

COM(2006)545 
7224/1/07, REV 1 
SEC(2006)1174 
COM(2007) 640 final 
COM(2008) 33 final 
COM(2007) 1 
COM(2008) 384 
11018/1/08, REV 1 and 7224/1/07, REV 1 
2006/2113(INI) and (2007/2106(INI)) 

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1.2.1.  Member States and Stakeholder consultations  

DG  TREN  has  a  very  good  understanding  of  the  challenges  encountered  by  the  Member 
States  with  the  implementation  of  the  EPBD  at  national/regional  level,  as  there  has  been  a 
continuous  exchange  of  information  based  on  regular  contacts  since  the  existing  Directive 
was  adopted  in  2002.  While  DG  TREN  closely  follows  the  transposition  of  the  EPBD  into 
national  legislation,  it  also  extensively  discusses  the  implementation  with  national 
representatives in regular meetings. The Energy Demand Management Committee is one such 
discussion  platform  to  follow  the  status  of  implementation  and  challenges  of  the  Directive 
between Member States and the Commission which usually meets twice a year (a summary of 
Member States’ input on the impacts of the EPBD and need/possibilities for its modification 
is included in Annex II).  

Further intensive discussions were held in the context of two dedicated initiatives, so-called 
Concerted  Actions  (01/2005-06/2007  and  12/2007-11/2010),  which  were  initiated  under  the 
Intelligent Energy Europe Programme of the EU (implemented by the Executive Agency for 
Competitiveness  and  Innovation  (EACI))  to  provide  support  to  the  Member  States  for 
transposing and implementing the EPBD. The Concerted Actions consist of regular 2 - 3 day 
meetings  (about  twice  a  year)  of  all  Member  States'  representatives  -  involving  around  100 
participants of national authorities and institutions directly in charge of implementation of the 
Directive  in  each  Member  State.  Best  practices  and  detailed  questions  on  transposition  are 
discussed  in  the  plenary  sessions  and  parallel  workshops  held  therein.  The  exchange  of 
information  continues  in  between  the  meetings  via  working  groups,  internet  meetings, 
newsletters and a supporting web based service platform.  

DG  TREN  has  many  bilateral  contacts  with  stakeholders,  such  as  property  and  industry 
associations,  banks  and  energy  services  companies  to  assess  how  the  EPBD  impacted  their 
businesses.  Some  major  stakeholders  contributed  with position papers  presenting their ideas 
on how to increase energy efficiency of buildings in the framework of the EPBD. 

At  the  beginning  of  2008,  DG  TREN  organized,  with  the  support  of  the  EPBD  Buildings 
Platform, the "Energy Performance of Buildings Directive: Next steps" Conference as part of 
the  EU  Sustainable  Energy  Week.  The  objectives  were  to  present  DG  TREN's  preliminary 
ideas  for  gaining  more  energy  saving  from  buildings  and  to  initiate  a  consultation  on  the 
elements  of  the  Directive  which  could  be  revised  (see  Annex  III  for  its  summary).  The 
conference was attended by more than 150 participants and the ideas for the challenges and 
possibilities for further steps were discussed and in general very well accepted. 

To further widen the scope of ideas on how to upgrade the energy performance of buildings, 
DG  TREN  also  launched  an  online  consultation  for  a  period  of  eight  weeks,  starting  from 
April 2515. There were in total 246 responses, of which 82% organizations and 18% citizens, 
originating  from  22  Member  States  and  several  countries  outside  the  EU  (for  summary  see 
Annex I). There has been a strong support of the revision of the EPBD (more than 75%). The 
answers  indicate  a  clear  wish  for  clarification  or  simplification  to  extend  the  scope  of  the 
existing  Directive  concerning  e.g.  specific  definitions  or  lowering/abolishing  of  existing 
thresholds,  and  strengthening  the  role  of  its  instruments,  e.g.  the  Energy  Performance 
Certificate.  Furthermore,  suggestions  were  made  for  a  better  European  harmonization  that 

15 

It  was  in  the  form  of  questionnaire  and  was  published  on  the  Commission's  webpage  'Your  voice  in 
Europe' and on the webpage of DG TREN 

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would  ease  cross-country  comparisons  and  improve  business  environment.  Also  a  stronger 
role of the public sector to act as a leading example was clearly proposed. 

1.2.2.  Studies  

Broad  knowledge  exists  on  the  different  economic,  social  and  environmental  dimensions 
associated  with  the  energy  performance  of  buildings,  and  is  well  documented  in  various 
studies, including those supported by the EU within its Intelligent Energy Europe Programme 
and  the  Framework  Programmes  for  Research  and  Development.  However,  these  studies, 
many of which arise from grass-roots initiatives supported at European or national level, are 
fragmented  with  regards  to  the  issues  discussed  and  countries  covered.  Hence,  this  impact 
assessment considers the results of a large number of studies having very different scopes.  

The  National  Energy  Efficiency  Action  Plans  of  the  Member  States,  submitted  within  the 
reporting  obligations  of  the  Energy  end-use  efficiency  and  energy  services  Directive 
(2006/32/EC), were also consulted for information on the energy efficiency measures taken in 
the buildings sector of Member States. 

In addition to the literature already available, the assessments made in this document are also 
based on the analyses and data provided by an external consultant, who was contracted by DG 
TREN  to  provide  support  with  the  quantification  of  the  various  impacts  resulting  from  the 
options discussed in this impact assessment. The task of the consultant was to screen available 
studies  for  best  practice  examples  and  foremost  to  provide  estimates  for  costs  and  benefits 
based on official statistical data and modelling tools.  

1.2.3.  Opinion of the Impact Assessment Board 

This Impact Assessment has been on the agenda of the Impact Assessment Board hearing on 
16 July 2008 and a written procedure in September 2008. 

All  items  of  the  Impact  Assessment  Board  opinion  of  22  July  2008  were  comprehensively 
addressed in a revised version of the Impact Assessment resubmitted on 4 September 2008. In 
its second opinion the Impact Assessment Board asked for new modifications of the document 
mainly on: (i) further in-depth analysis of subsidiarity aspects; (ii) another clarification on the 
analysis  of  costs  and  benefits  of  the  options  analysed;  (iii)  assessing  administrative  costs  of 
the  options  analysed  using  the  EU  Standard  Cost  Model;  (iv)  further  clarification  of  the 
problem  definition;  and  (v)  possibility  for  a  discussion  of  the  other  foreseen  EU  measures 
which possibly target on energy efficiency of buildings. 

Points (i), (ii) and (iv) have been addressed in this Impact Assessment by adding and further 
explaining the text. The administrative costs have been analysed based on available studies, 
referred in the text. As the request in point (iii) to use the EU Standard Cost Model came at a 
very late stage it was not met. The same applies for point (v). 

2. 

PROBLEM DEFINITION 

2.1. 

Overarching problem definition 

The  EU  buildings  sector  can  play  a  key  role  in  achieving  EU  growth,  energy  and  climate 
policy objectives, while contributing to an improved level of comfort and lower energy bills 
for citizens. To meet the common policy targets on energy and climate change Member States 

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need to act in all fields, ETS and non-ETS. The policy frame for non-ETS is also given in the 
EEAP of which buildings constitute an important element.  

However,  the  problem  is  that  a  large  part  of  the  cost-effective27  energy  efficiency 
potential is not realised in practice. The potential of the buildings sector is estimated at the 
possibility  for  28%  cost-efficient  energy  savings  by  2020  for  the  sector  (or  143Mtoe  final 
energy) which could be translated in 11% reduction of the total EU final energy consumption 
and 11% reduction of EU total CO2 emissions. This potential is for both existing and newly 
constructed buildings. This will result in a number of other benefits (see Annex V).  

Narrowing of the gap between the realisable potential and its real uptake is the Commission's 
main motivation for initiating a discussion and analyzing the possible options.  

Before  proceeding  to  identifying  the  concrete  problems  and  suggestions  for  actions  it  is 
important that a good understanding of the buildings sector is developed and of the existing 
policy  that  was  developed  to  partially  tackle  the  problem.  This  presentation  is  provided  in 
Annex V and the following Section 2.2. Taking these actions into account a discussion of the 
remaining problems is included in Section 0. 

2.2. 

Actions in the EU 

After  the  oil  crises  of  the  1970s,  many  governments  around  the  world  realized  the  impacts 
energy supply disturbances can have on their economies and the benefits of decreasing their 
energy needs. As a consequence, significant energy efficiency gains were realized which, for 
example, resulted in about 30% reduction of  the energy  intensity of households  and service 
sector by 1990 compared to 1973 in the biggest eleven OECD countries16. 

Figure  1.  The  impact  of  energy  efficiency  improvements  on  energy  use  in  several  OECD 
countries. Source: Geller et. al 2006 

The  instruments  varied  from  country  to  country  but  included  building  codes,  financial  and 
fiscal  initiatives,  research  and  development  programmes,  and  information  and  education 
campaigns.  From  the  frontrunners,  Sweden  and  Denmark  were  the  first  to  introduce  energy 

16 

Geller  et.  al.  Polices  for  increasing  energy efficiency:  Thirty  years of  experience  in OECD  countries. 
Energy  Policy  34,  556–573.  Data  refer  to  11  OECD  countries  OECD  countries  Australia,  Denmark, 
Finland,  France,  Germany,  Italy,  Japan,  Norway,  Sweden,  United  Kingdom,  and  the  United  States, 
2006.  

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efficiency  requirements  in  their  buildings  codes  in  1947  and  1961,  respectively,  and 
requirement  for  provision  of  information  on  the  energy  consumption  of  buildings  as  a 
certificate in 199717. The introduction of thermal insulation requirements reduced the heating 
energy  consumption  per  unit  of  floor  area  in  Germany  by  30%  over  1978-1993  period. 
However,  at  that  time,  fewer  activities  were  carried  out  in  other  Central  and  in  Eastern 
European  countries,  which  is  also  true  for  many  EU-15  countries.  In  the  1990s,  energy 
efficiency gains slowed worldwide and only recently there was a new upsurge of attention and 
dedicated policy. 

At EU level, several energy policy measures have been introduced since 1970's, but the major 
policy  initiative  was  the  adoption  of  the  Energy  Performance  of  Buildings  Directive 
2002/91/EC (EPBD) in 2002. 

2.2.1.  Energy Performance of Buildings Directive (EPBD) (2002/91/EC) 

The  main  objective  of  the  EPBD  is  to  promote  cost-effective  improvement  of  the  overall 
energy performance of buildings, while taking into account local conditions and requirements. 
The Directive covers the energy needs for space and hot water heating, cooling and lighting 
and  has  three  main  pillars:  energy  performance  requirements  for  new  buildings  and  for 
existing that undergo major renovation, energy performance certificates, and the inspection of 
boilers and air-conditioning systems. The Directive sets the basic principles and recruitments 
and  leaves  significant  room  for  Member  States  to  establish  the  concrete  mechanisms  and 
numeric requirements and ways to implement them. To this end Member States shall: 

•  Set  up  minimum  energy  performance  requirements  following  their  national/local 
situation. This means that whenever a new building is constructed or a large existing one 
(above  1000m2)  undergoes  major  renovation18  certain  nationally  or  regionally 
determined minimum levels of energy efficiency should be met. This level for new build 
may  be,  for  example,  one  value  that  represents  the  maximum  permissible  energy 
consumption or CO2 emissions of a building. For existing buildings it may refer to a value 
for certain components. For instance, if the windows are replaced then only the efficiency 
of this component should meet the national or regional minimum requirements and not the 
other  components  (such  as  roof,  façade,  floor,  heating/cooling  system)  or  the  whole 
building. The holistic approach for new-build gives maximum flexibility for the choice of 
system  or  design  to  reach  the  value  and  thus  stimulates  innovation.  In  parallel,  the 
component approach for existing buildings provides that owners/tenants are not burdened 
with  huge  expenses  when  they  want  to  carry  out  partial  renovation.  To  promote  further 
innovation  for  all  new  buildings  above  1000  m2  the  feasibility  of  alternative  systems 
(i.e. renewables, co-generation, district heating and cooling, and heat pumps, under certain 
conditions) is to be considered and taken into account. 

•  Establish  a  national  scheme  for  energy  labelling  of  the  buildings  (see  examples  from 
Germany  and  England  &  Wales  below;  similar  for  example  to  the  energy  efficiency 
labelling  of  household  appliances).  This  Energy  Performance  Certificate  shall  include 

17 

18 

Laustsen.  Energy  efficiency  requirements  in  building  codes,  energy  efficiency  policies  for  new 
buildings. IEA Energy Efficiency Working Party note by the Secretariat, 2007  
Major renovations are cases such as those where the total cost of the renovation related to the building 
shell  and/or  energy  installations  such  as  heating,  hot  water  supply,  air-conditioning,  ventilation  and 
lighting is higher than 25 % of the value of the building, excluding the value of the land upon which the 
building is situated, or those where more than 25 % of the building shell undergoes renovation. 

EN 

19 

   EN 

 
                                                 
information  on  the  energy  consumption  needs  of  a  building,  its  rating  compared  to  other 
buildings, and recommendations for cost-effective improvements. The Certificate shall be 
provided to the (potential) buyer/tenant when buildings are constructed, sold or rented out 
by their owner. The aim is to provide information so that informed choices  can be  made 
and  also  to  provide  with  guidance  on  the  cost-efficiency  and  savings  possibilities  for 
possible  improvements  of  the  property.  All  public  buildings  or  buildings  frequently 
visited by the public above 1000 m2 should have certificates that are to be displayed in a 
place that is visible to the general public.  

Figure 2. Examples of Member States Energy Performance Certificates 

•  Introduce inspection requirements so that heating and air-conditioning systems above 
certain  thresholds  should  be  regularly  checked  for  their  efficiency19.  Boilers  and  air-
conditioning systems are addressed because they play a significant role for the building's 
energy  consumption  and  their  efficiency  can  be  improved  considerably.  Instead  of 
inspection requirements, boilers may have a promotion scheme that should have the same 
savings effect as the inspection schemes.  

These three main instruments take effect at different times of a building's lifetime. Minimum 
energy  performance  requirements  are  to  be  met  when  buildings  are  built  or  they  undergo 
major renovation (i.e. every 25-40 years). The energy performance certificate is required only 
when  building  are  newly  constructed,  sold  or  rented  out  and  is  valid  for  a  maximum  of  10 
years. The inspections of heating and air-conditioning systems are more often. The regularity 
is a function  of  the size and fuel source (e.g.  for  medium  sized  boilers  and  air  conditioning 
systems  Member  States  should  decide  on  the  regularity,  for  large  boilers  it  should  be  every 
two years, etc.) and the inspections are independent of the sale or rent of a building. 

In  this  way  the  Directive  calls  for  setting  up  a  regulatory  policy  instruments  measures  (i.e. 
minimum  requirements)  along  with  informative  ones  (i.e.  the  certificates  and  inspections). 
The use of mix of policy instruments provides for means of addressing various challenges of 
the sector and developing a coherent approach towards problem solution. 

19 

For boilers fired by non-renewable liquid or solid fuel with rated output of 20 kW to 100 kW – regular 
inspection,  for  boilers  above  100  kW  –  inspection  every  two  years  (with  possibility  for  expansion  to 
four years for gas boilers). For all heating installation with boilers of effective rated output of more than 
20  kW  older  than  15  years  –  a  one-off  inspection  is  required.  For  air-conditioning  systems  with 
effective rated output of more than 12 kW – regular inspection required. 

EN 

20 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
To achieve the above-mentioned requirements the Member States should: 

•  Establish  (or  use  the  relevant  CEN  standards)  a  methodology  for  calculation  of  energy 
performance  of  buildings.  Such  is  needed  for  the  calculation  of  energy  performance 
requirements  and  carrying  out  of  the  certifications.  This  includes  calculations  on  the 
quality  of  insulation  of  the  building,  the  efficiency  of  heating,  cooling  and  lighting 
installations,  ventilation  needs,  position  and  orientation  of  the  building,  heat  recovery, 
active  and  passive  solar  gains  and  other  renewable  energy  sources,  and  also  takes  into 
account local conditions, such as climate and economic aspects (e.g. labour costs).  

•  Ensure  that  certification  and  inspections  requirements  implemented  in  practice  are 

carried out in an independent manner by qualified and accredited experts. 

Summary of the main provisions of the EPBD are included in the following figure. 

  EPBD: Holistic approach 
towards lower energy needs in buildings 

New build 
(all) 

New build 
> 1000m2: 

e
p
o
c
S

  - Minimum 
t
n
e
requirements
m
e
- Certificate 
r
i
u
q
e
R

- Minimum 
requirements 
- Consid. of 
alternative 
systems 
- Certificate 

Existing 
buildings 
(all)  
when sold or 
rented out: 

-Certificate

Existing 
buildings 
> 1000m2 
undergoing 
major 
renovation: 

- Minimum 
requirements

- Certificate 

Public 
buildings 
> 1000m2 

  Heating and 

air-
conditioning 
systems 

- Certificate 
displayed at 
a prominent 
place 

- Regular 
inspection 
depending 
on size 

Basic  requirements:  holistic  calculation  methodology  in  place,  sufficient  number  of 
independent experts 

The deadline for the implementation of the provisions on energy performance requirements 
was January 4, 2006, whilst for certification and inspection - due to the challenges that MS 
have  with  training  and  accrediting  experts  to  carry  out  the  certifications  and  inspections  -  a 
justified derogation of up to three years (until January 4, 2009) was allowed of which most of 
the Member States took advantage of20. 

Before  the  adoption  of  the  EPBD  the  majority  of  Member  States  did  not  have  energy 
efficiency  requirements  in  their  regulations  and  building  codes,  nor  did  they  have  long 
running,  sustained  instruments  for  their  promotion.  Therefore,  the  implementation  in  a 
number of Member States has been a huge challenge, but also in parallel an opportunity for 
improving the quality of their buildings stock. The complex nature of the Directive requires 
framework legislations as well as in many cases individual pieces of legislation for each of its 
main provisions. Also, the development of standards and software has been required for the 
proper implementation of several provisions. Furthermore, in some countries the EPBD is to 
be  implemented  at  regional  level.  For  example,  this  means  that  in  Austria  there  should  be 
transposition of all Articles in all nine Länder, in Italy in all twenty regions, whilst in the UK 

20 

In total, 23 Member States have opted for the additional three-year extension to apply Art. 7, 8 and 9 of 
the EPBD, as provided for by Art. 15 ibid. 

EN 

21 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
apart from in England and Wales, Scotland, and Northern Ireland, enforcing legislation is also 
needed for Gibraltar. 

These  challenges  led  to  delay  in  transposition  and  a  number  of  infringement  cases  (at  their 
maximum 21) and support actions were initiated by the Commission to speed up the process. 
Since 2006, the transposition has improved tremendously and now all Member States have at 
least  framework  legislation  on  the  issue.  By  August  2008  twenty  two  Member  States  have 
reported that their EPBD transposition is complete. The Commission is now in the process of 
review  of  the  notified  legislation  and  considering  closing  some  of  the  seventeen  ongoing 
infringements. Nevertheless, if it identifies that there is no full conformity on all Articles or 
lack of full implementation in all regions, the cases will be kept open and will advance in their 
stages. Apart from legal conformity, the real and ambitious implementation of certain articles 
is  questionable  in  some  Member  States  which  is  due  to,  as  described  in  Section  2.3.2,  the 
ambiguous EPBD wording and large room for various interpretations, poor enforcement, and 
the lack of possibility for comparisons between the national/regional implementing measures 
(i.e. setting up of requirements that are far from the optimal levels). 

Building on the EPBD, some countries have even gone beyond its requirements. For example, 
about  one  third  of  the  EU  Member  States  have  extended  the  requirements  to  all  existing 
buildings  that  undergo  major  renovations,  whilst  several  Member  States  have  set  targets  to 
reach  low  energy/passive  house  standards  for  new  build.  In  some  countries  or  regions,  the 
installation  of 
the  cost-effective 
the 
recommendations on the certificates with specified pay-back time, are made mandatory for all 
or certain types of buildings. More good practices are included as examples in the discussions 
of Section 5. 

renewable  systems,  or 

implementation  of 

The  main  contribution,  so  far,  of  the  EPBD  is  in  bringing  the  subject  of  the  energy 
efficiency of building onto political agendas, into buildings codes and to the attention of 
citizens. Nevertheless, it is early and very difficult to quantify the real impact of the Directive 
for  the  whole  Community  because  of  highly  disaggregated  nature  of  the  sector,  the 
complementarity of energy improvements to other policy objectives, slow transposition, and 
lack  of  proper  monitoring.  Still,  calculations21  of  EPBD  expected  impact  show  that,  if  fully 
and properly implemented, the energy savings from the EPBD can be as much as 130 Mtoe22 
or  7%  reduction  of  the  total  EU  primary  energy  supply  in  2020  (or  96  Mtoe  final  energy), 
evidently a very high figure. Therefore the current EPBD is already contributing considerably 
to the EU energy policy objectives. However, there are a number of limitations arising from 
the low level of ambition to its implementation and also from its wording. These remaining 
challenges are discussed in Section 0. 

2.2.2.  Other regulatory instruments  

In addition to the Energy Performance of Buildings Directive, there is a comprehensive set of 
legislation  in  place  on  both  the  European  and  the  national  level,  the  requirements  of  which 
impact on the energy performance of buildings. The following table presents the main pieces 
of legislation interacting with the EPBD and offering complementary requirements to enhance 
energy  efficiency  in  buildings.  These  activities  in  an  energy  consuming  and  GHG  emitting 

21 
22 

EN 

SEC(2006)1174 

In  the  EEAP  IA  the  figure:  125  Mtoe  for  EU-25  is  provided.  130  Mtoe  is  an  extrapolation  to  EU-27.  The 
conversion factor used is 1.35 as included in Annex IV. 

22 

   EN 

 
                                                 
sector (buildings), which is not covered by the EU Emission Trading System (ETS), are also 
an important part of the response to the climate change challenge: due to the enormous cost-
effective  energy  and  CO2  emission  savings  potential  of  the  buildings  sector,  it  is  evident  to 
take  action  in  this  field  in  order  to  achieve  the  EU's  overall  CO2  abatement  targets  in  the 
macro  economically  optimum  and  therefore  cheapest  way,  which  would  not  occur  if  CO2 
abatement measures were limited to the ETS sectors. 

EN 

23 

   EN 

 
Table 1: Main legislation influencing the energy performance of buildings 

Directive 

Purpose 

Energy end-use 
efficiency and 
energy services 
Directive (ESD) 
(2006/32/EC) 

Enhance cost-effective 
improvement of energy 
end-use efficiency in the 
Member States (in non 
ETS-sector)  

Requirements influencing the energy performance of 
buildings 
To achieve the indicative fixed energy savings target in 2016, 
the Member States can opt for energy efficiency measures in 
the  residential  and  tertiary  sector  such  as  improving  heating 
and  cooling  systems,  insulation  and  ventilation,  hot  water 
installations  and  lighting.  The  use  of  standards  and  norms 
improving the energy efficiency of buildings are also eligible 
measures (Article 4 and Annex 3). 
The funds foreseen by the ESD can be used to finance energy 
audits and to provide financing (loans, grants, etc.) for energy 
efficiency  improvement  measures.  The  funds  are  open  to  all 
providers  of  energy  efficiency 
improvements  measures 
(Article 11). 
ESD requires the MS to ensure the availability of high-quality 
energy audits (Article 12). 
According to Article 5 of the EPBD, the feasibility for the use 
of cogeneration of heat and power in new buildings (>1000 m²) 
has to be considered and taken into account before construction 
starts.  

A  set  of  implementing  measures  establishing  eco-design 
requirements  are  in  preparation  for  a  range  of  energy  using 
products,  which  have  a  decisive  impact  on  the  energy 
performance  of  buildings,  such  as  boilers,  water  heaters, 
office  lighting,  residential  room  conditioning  appliances, 
electric  motors 
in  commercial  buildings  and  domestic 
lighting.  
Developing specific standards for buildings products and 
components such as insulation and windows concerning the 
declaration of conformity. 

With respect to their building regulations and codes, Member 
States  shall  promote  the  use  of  renewable  energy  in  heating 
and cooling systems and equipment that achieve a significant 
reduction  of  fossil  energy  consumption  and  they  shall  use 
energy  or  eco-labels  or  other  appropriate  certificates  or 
standards  developed  at  national  or  European  level,  where 
these  exist,  as  the  basis  for  encouraging  such  systems  and 
equipment. 
The proposals to extend the Eco-Design Directive as well as 
the  Energy  Efficiency  Labelling  Directive  to  cover  more 
products  and  to  promote  Green  Public  Procurement  will 
impact on buildings products. 

Creates a framework for 
promotion and 
development of high 
efficiency cogeneration 
of heat and power.  

Establishes a framework 
for setting Eco-design 
requirements for all 
energy using products in 
the residential, tertiary 
and industrial sectors. 

Ensure that declaration 
of performance 
accompanying the 
product is accurate and 
reliable. 
Establishes a common 
framework for the 
promotion of energy 
from renewable sources. 

New dynamic framework 
to improve the energy 
and environmental 
performances of 
products.  

Directive on the 
promotion of 
cogeneration 
(2004/8/EC) 

Eco-design of 
energy-using 
products Directive 
(2005/32/EC) 

Construction 
products Directive 
(89/106/EEC) 

Promotion of the use 
of energy from 
renewable sources 
(Proposal 
COM(2008) 30 final) 

Sustainable 
Production and 
Consumption and 
Sustainable 
Industrial Policy 
Action Plan 
(Proposal)  
Community 
guidelines on state 
aid for environment. 
protection (2008/C 
82/01) 

Apply to State aid for 
environmental 
protection. 

Investment and/or operating aid enabling undertakings to 
achieve energy savings will be considered compatible with 
the common market within the meaning of Article 87(3)(c) of 
the EC Treaty, if certain conditions are fulfilled. 

EN 

24 

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2.2.3. 

 Provision of information and expertise  

The European Commission has started many activities to promote and support energy saving 
in  buildings.  These  also  give  a  good  understanding  of  the  challenges  and  opportunities  that 
Member States, industries, and citizens are faced with.  

Activities on exchange of information and experience include the Concerted Action I and II 
that provide fora for discussion of specific challenges and exchange of best practices among 
representatives of Member States. Furthermore the EPBD Buildings Platform is established - 
a  dynamic  web  portal  that  aims  at  disseminating  information  on  the  energy  efficiency  of 
buildings and related activities and at providing support on the EPBD implementation via a 
helpdesk  and  more  detailed  and  targeted  information  to  all  interested  stakeholders  and 
citizens.  Many  events  have  also  been  organized  to  discuss  the  opportunities  and  challenges 
with a large number of experts and stakeholders.  

Research on the possibility for improved energy efficiency of buildings and the development 
of  sustainable  communities  has  been  carried  out  within  the  EU  Research  and  Development 
Framework  Programmes  and  the  barriers  and  possibilities  for  energy  saving  policy  and 
solutions have been revealed within the Intelligent Energy Europe Programme which in the 
recent  years  has  supported  about  70  projects  related  to  energy  aspects  of  buildings.  In 
addition, the Commission mandated the European standardization body – CEN to develop a 
set of 31 EPBD CEN standards which cover different elements of the calculation procedures 
for evaluating energy performance of a building and of its various systems and components, 
heating  and  air-conditioning  systems  inspection  procedures  and  other  relevant  procedures. 
The work on all standards is completed now and only few are not officially published yet. 

Furthermore,  the  EU's  dissemination  activities  like  ManagEnergy  and  Sustainable  Energy 
Europe initiate many actions to promote energy efficiency in buildings. 

2.2.4.  Financial and fiscal instruments   

The  largest  energy  saving  potential  in  the  buildings  sector  lies  with  the  existing  buildings 
when they undergo major renovations. The lack of information and lack of financing appears 
to be one major limitation for reaping this energy savings potential but also for carrying out 
renovations. Due to the importance of energy consumption in buildings, but also because of 
the  sector's  social  and  employment  impacts,  many  countries  have  established  financial  and 
fiscal schemes to stimulate energy saving investments.  

At  the  European  level,  the  financial  schemes  include  such  as  the  Cohesion  Fund.  For  the 
2007-2013  period,  EUR  4.2  billion  of  the  Cohesion  policy  funding  have  been  allocated  to 
energy  efficiency  for  the  housing  sector  projects  in  Bulgaria,  Cyprus,  the  Czech  Republic, 
Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia and 
Slovenia. A change in the minimum energy performance requirements  for  existing and new 
buildings will increase the investment needs for the buildings' owners but reduce energy costs. 

Member  States  are  also  allowed  to  apply  a  reduced  VAT  rate  until  31/12/2010  (VAT 
Directive  2006/112//CE)  to  a  specific  list  of  labour  intensive  services,  including  the 
renovation  and  repairing  of  private  dwellings.  On  7  July  2008  the  Commission  adopted  a 
proposal on reduced VAT rates. This Proposal provides for the option for Member States to 
apply  reduced  VAT  rates  to  the  whole  housing  sector  and  certain  services  relating  to  some 
non commercial buildings (including the supply and construction of housing, the renovation, 
repair,  alteration,  maintenance  and  cleaning  of  housing  and  of  places  of  worship  and  of 

EN 

25 

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cultural heritage and historical monuments recognised by the Member States concerned). This 
Proposal is currently under discussion in the Council. 

Consequently,  the  supply  of  services  including  the  combined  supply  and  installation  of 
equipment  which  aims  at  increasing  energy  efficiency  and  saving  or  using  sustainably 
generated energy relating to the buildings mentioned, would be eligible for reduced rates, if 
the Proposal is adopted by the Council. 

Additionally, the Commission is currently analysing the possibility of applying reduced VAT 
rates  to  environmentally  friendly  goods  and  services  not  mentioned  above,  as  well  as  the 
abolition of the possibility to apply reduced rates to environmentally harmful products. In the 
near  future  the  results  of  the  Commission's  analyses  will  be  presented,  as  a  part  of  a  more 
global  communication  on  the  role  of  taxation  in  energy  and  environmental  policy, 
accompanied by relevant proposals and recommendations.  

Under  the  revised  Community  Guidelines  on  State  Aid  for  Environmental  Protection  which 
were announced as part of the Climate Action package of January 23, 2008, energy savings 
are eligible for state aid. It is up to the Member States to develop schemes for the support of 
energy savings activities. 

2.3. 

Remaining problems 

Major  energy  savings  potential  in  the  buildings  sector  is  still  available.  Various  factors 
limit  the  utilisation  of  the  potential.  Some  come  from  the  complexity  of  the  sector  and  the 
existence of market failures, while others stem from limitations of the regulatory framework. 

2.3.1.  General challenges of the sector and market failures 

The  EU's  buildings  sector  is  a  true  example  of  the  EU's  diverse  nature.  Different  climates, 
building  traditions  and  cultural,  historic  and  economic  factors  have  resulted  in  significant 
variations between the EU Member States and even between their regions. Therefore, detailed 
regulation  and  complete  harmonization  at  EU  level  is  not  possible  and  is  not  sought. 
However,  a  certain  level  of  harmonization  of  the  approaches  and  certain  instruments  are 
needed  in  order  to  ensure  that  energy  aspects  are  considered  seriously,  that  there  can  be  a 
possibility  for  comparison  of  the  achievements  and  transfer  of  experience,  but  also  to 
facilitate the companies that operate at  EU  level.  This diversity and disaggregation of  the 
buildings  sector  also  poses  significant  difficulties  in  obtaining  quantitative  data  about  the 
sector.  

The  other  significant  barrier  is  the  existence  of  imperfect  market  conditions  or  market 
failures.  A  typical  example  for  such  failure  is  the  lack  of  complete  internalization  of  all 
externalities  in  energy  prices.  In  many  countries,  this  has  led  to  a  low  priority  for  energy 
efficiency  in  buildings  as  energy  demand  is  distorted.  Although  most  of  the  investments  in 
energy  efficiency  improvements  have  low  pay-back  times,  especially  if  done  within  the 
renovation cycle, they still require substantial upfront costs  for many European citizens and 
companies.  Therefore  both  the  lack  of  sufficient  initial  investments  and  the  low  priority  of 
energy considerations are some of the main challenges. The EU and a number of individual 
Member  States  have  realised,  or  are  starting  to  comprehend,  that  there  are  societal  benefits 
that  may  have  a  high  private  cost.  To  partially  compensate  for  these  market  failures,  some 

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26 

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financial  and  fiscal  support  mechanisms  are  already  established  (as  described  in  Section 
2.2.4), but new and additional financing tools are needed.  

Another market failure that is very relevant for the sector is imperfect information, i.e. the 
general  lack  of  good  quality  and  understandable  information  on  energy  performance  of 
buildings  and  on  potential  energy  savings.  The  problem  is  further  exacerbated  by  the 
'principal-agent problem' or the fact that it is of seller’s or leaser’s advantage not to provide 
information on energy consumption if the property they offer is of poor energy performance 
quality.  

Furthermore, as the tenant normally pays the energy bill, then the incentive for the owner to 
invest in energy efficiency is weak. This also relates to another market failure, the so-called 
split incentives. For instance, in the Netherlands, this problem is relevant to 40% of the total 
energy  use  in  the  commercial  sectors  and  41%  of  energy  use  for  heating  in  the  residential 
sector23. There only about 40% of private and 59% of social rental residential buildings have 
proper roof insulation, while for the privately owned sector, this figure is up to 70%. 

Therefore,  provision  of  clear  and  reliable  information  at  affordable  cost,  at  the  correct  time 
and  at  low  transaction  costs  to  prospective  tenants  and  buyers  is  crucial  for  making  energy 
efficiency  investments  more  attractive.  Some  requirements  for  information  provision  are 
already  included  in  the  EPBD  (i.e.  Energy  Performance  Certificates).  However,  there  are 
certain problems in interpretation and ambition that limit their full impact. 

The low uptake of new and innovative technologies is one of the main consequences of the 
two problems mentioned above. The lack of sufficient information limits the uptake of these 
technologies and the cost of some is prohibitive for their higher market uptake.  

Other  commonly  recognized  problems  are  related  to  the  low  number  of  trained 
professionals  (such  as  architects,  energy  auditors,  builders,  installers)  that  can  successfully 
integrate,  evaluate,  construct  and  maintain  a  low  energy  consuming  building.  Also,  the 
behavior of the inhabitants is of significant importance as even a zero energy house can turn 
into  an  energy  waster.  The  rebound  effect  of  having  bigger  houses  occupied  by  less  people 
but also subject to excessive heating or cooling are other general problems that, although very 
important, are also very difficult to tackle.  

2.3.2.  Regulatory limitations 

regulatory 

the  existing 

Limitations  of 
the 
national/regional  measures  that  implement  it,  are  also  preventing  the  higher  reductions  of 
energy  consumption.  These  originate,  firstly,  from  lack  of  clarity  and  the  complexity  of 
certain  provisions  of  the  EPBD  and,  secondly,  from  the  low  level  of  ambition  in  its 
implantation.  

in  particular  EPBD  and 

framework, 

Representatives of Member States and stakeholders claim that there are some definitions and 
wording  of  the  Directive  that  are  not  clear  enough,  and  create  confusion  and  difficulties  in 
implementation,  resulting  in  differences  between  Member  States  and  even  between  their 
regions. For example, the term 'public building' is explained in the preamble and Article 7 of 
the  Directive  in  two  different  ways.  Also,  the  requirements  for  provision  of  the 

23 

IEA. Mind the gap: Quantifying Principal-Agent Problems in Energy Efficiency. IEA: Paris, 2007 

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recommendations  from  the  Energy  Performance  Certification  are  not  very  clear  to 
stakeholders  and  national  or  local  policy-makers.  This  leads  to  a  situation  that  the 
recommendations  on  how  energy  efficiency  can  be  improved,  are  not  shown  to  the 
tenants/buyers. 

Another limitation comes from the thresholds that are set in the Directive. As mentioned in 
Section  2.2.1,  EPBD  provisions  call  on  Member  States  to  require  that  certain  minimum 
energy performance levels are met when existing buildings above 1000 m2 undergo a major 
renovation. Because of this 1000 m2 threshold for existing buildings, the EPBD covers only 
about  28%  of  the  EU-15  buildings  stock24.  In  introducing  energy  efficiency  measures  when 
retrofitting,  the  costs  are  on  average  between  two  and  three  times  less  than  when  done 
separately.  This  in  general  means  that,  with  renovations  below  1000  m2,  an  opportunity  for 
cost-effective energy savings for the owner might be lost. However, in a number of Member 
States, this 1000 m2 threshold has been lowered or abolished so that all buildings that undergo 
major renovation have to fulfil certain energy performance requirements. 

There are a number of limitations that stem from the low ambition in the implementation. 
For instance, the experience with the Certificate shows that in some cases they are of very 
poor  quality  and  do  not  provide  sufficient  and  correct  information.  This  raises  questions 
regarding the usefulness of the certificates. Furthermore, the currently required inspections of 
boilers  and  air-conditioning  systems  have  limited  impact  on  their  energy  performance 
improvement,  as  their  objective  is  not  included  in  the  Directive  and  due  to  missing 
specifications  and  requirements.  This  is  the  experience  of  Member  States  that  have  already 
implemented an inspection scheme. The energy performance requirements set by Member 
States  do  neither  fully  meet  expectation  with  regard  to  their  level  of  ambition.  If  they 
were  set  in  a  cost-optimal  way  (i.e.  taking  into  account  a  number  of  parameters,  such  as 
climate,  oil  prices,  labour  and  products  costs)  this  would  mean  that  once  a  building  is 
constructed, or an existing large one is undergoing major renovation, the result is the optimal 
of  what  is  available  at  market  and  a  reasonable  pay-back  times.  At  present  there  are  many 
Member States that do not have cost-optimal requirements.  This  means  that  the  occupier  of 
the building pays more for their energy bill than is economically reasonable. 

More detailed explanations of these shortcomings and limitations are provided as background 
information when the policy options are discussed. 

3. 

OBJECTIVES 

3.1. 

EU policy objectives 

The EU has set ambitious targets in Energy Policy for Europe25 of 20/20/20% for reduction of 
energy  consumption  and  greenhouse  gas  emissions,  and  increased  share  of  renewables  by 
2020.  Urgent  actions  are  needed  in  the  light  of  the  mounting  scientific  evidence  of  climate 
change26 and high oil prices and the ever growing energy dependency. The buildings sector 

24 

25 
26 

Ecofys for Eurima. Mitigation of CO2 Emissions from the Building Stock - Beyond the EU Directive 
on the Energy Performance of Buildings, 2004 
as outlined in the Commission Communication An Energy Policy for Europe COM (2007) 1 
as outlined in the latest report of the Intergovernmental Panel on Climate Change of 2007 the preceding 
report of Sir Nicholas Stern on the economic costs for non-action (reference)  

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has significant untapped potential for cost-effective27 energy savings. Thus it can contribute to 
all the energy policy targets.  

The  objective  here  is  to  harness  the  unrealized,  cost-effective  energy  saving  potential.  The 
important  role  of  the  buildings  sector  was  recognized  with  the  adoption  of  the  SAVE 
Directive28  in  1993  and  later  through  a  holistic  approach  as  laid  down  in  the  Energy 
Performance  of  Buildings  Directive of  2002. Consultation on possible further actions for its 
realization was initiated in the Commission's Green Paper on Energy Efficiency: Doing More 
with Less29 of 2005. The outcomes resulted in the adoption by the Commission of the Energy 
Efficiency Action Plan30 in November 2006. In the action plan, making buildings more energy 
efficient was identified as one of the five priority actions, with the strengthening of the EPBD 
identified as playing a key role with highest positive impact. The Action Plan was endorsed at 
the spring 2007 European Council. 

From the Renewed EU Sustainable Development Strategy31, the buildings sector can support 
the fulfilment of its objectives on climate change and clean energy, sustainable consumption 
and production, but also on social inclusion, demography and migration. A possible revision 
of  the  EPBD  will  be  complementary  to  the  actions  included  in  the  recently  adopted 
Sustainable Consumption and Production package. 

In  the  light  of  the  growing  energy  prices  and  related  social  consequences,  the  energy  use 
reduction of the buildings sector is key area to be tackled as it would ease the difficulties for 
many EU citizens to pay their bills by providing a long-term solution and not only short-term 
fixes through, for example, energy subsidies. Therefore, actions in this area, esp. the revision 
of the EPBD to further help Member States in developing policies on the issue, are included 
in  the  Commission’s  Communication  Facing  the  challenge  of  higher  oil  prices  of  April 
200832. 

3.2. 

Specific policy objectives 

The following specific objectives can be identified based on the problems of energy efficiency 
in the buildings sector and while taking into account existing measures: 

•  Provide a simple and unambiguous legal framework that will provide clear guidance and 

ease the transposition and implementation 

•  Ensure that the policy instruments used stimulate further energy savings 

27 

28 

29 
30 
31 
32 

Cost-effective  can  be  interpreted  in  different  ways.  In  a  study  (Boonekamp  2006)  for  the  Energy 
Efficiency  Action  Plan  it  is  mentioned  that  the  World  Energy  Assessment  2000  (Jochem,  2000)  has 
been  used  and  it  refers  to  the  term  ‘life  cycle  costs’.  This  suggests  that  the  pay-back  time  of  the 
investment can be equal to the technical lifetime of the saving measure. However, this is an extended 
definition of cost effectiveness compared to other sources, e.g. the 3, 5 or 8 year pay-back time that is 
currently used in the Netherlands (Menkveld et al, 2005). 
Council Directive 93/76/EEC of 13 September 1993 to limit carbon dioxide emissions by improving 
energy efficiency (SAVE). Repealed by Directive 2006/32/EC.  
COM(2005) 265  
COM(2006)545 
10917/06,  
COM(2008) 384 

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•  Ensure  that  the  measures  have  a  wider  coverage  of  the  EU  buildings  stock  and  relevant 

energy consumption but are at low additional cost 

•  Ensure that buyers/tenants/owners receive good quality information at a reasonable cost on 
the  energy  performance  of  buildings  and  about  the  performance  of  their  heating  and  air-
conditioning systems 

•  Establish  a  base  for  cost-effective  energy  performance  requirements  for  buildings  or  for 

their comparison 

•  Stimulate the public sector to show good example in buildings' energy efficiency. 

3.3. 

EU's right to act 

The EU's actions regarding energy performance of buildings are primarily based on article 6 
of  the  Treaty,33  which  states  that  environmental  protection  requirements  must  be  integrated 
into the definition and implementation of the Community policies and activities, in particular 
with  a  view  to  promoting  sustainable  development.  This  requirement  has  to  be  seen  in  the 
light  of  article  174(1)  of  the  Treaty,  which  specifies  that  the  Community  policy  on  the 
environment  shall  contribute  to  preserving,  protecting  and  improving  the  quality  of  the 
environment and the prudent and rational utilisation of natural resources.  

The  importance  of  coordinated  action  in  energy  efficiency  has  been  stressed  in  previous 
legislative  documents,  such  as  the  Council  Decision  of  29  October  1991  concerning  the 
promotion  of  energy  efficiency  in  the  Community  (SAVE  programme)34  and  Council 
Directive 93/76/EEC of 13 September 1993 to limit carbon dioxide emissions by improving 
energy  efficiency  (SAVE).35  These  considerations  led  to  the  EPBD  Directive  which  was 
adopted  on  the  legal  basis  of  article  175(1)  of  the  Treaty.  In  the  framework  of  a  possible 
revision of the current EPBD Directive, these legal bases for EU action remain unchanged. 

3.4. 

EU value added 

Climate  change,  security  of  energy  supply  and  environmental  protection  are  challenges  that 
cannot be sufficiently addressed at national level only. Energy efficiency provides part of the 
solution  of  these  problems  and  the  instruments  on  energy  efficiency  that  have  already  been 
adopted at EU level reflect this need for Community action. 

The  buildings  sector  is  responsible for  about  36  %  of  the  EU's  total  CO2  emissions  and  for 
about half of the CO2 emissions which are not covered by the Emission Trading Scheme. It 
disposes of a considerable cost-effective energy savings potential which can hardly be found 
in  any  other  area  and  which  is  attainable  at  comparatively  low  costs.  Therefore,  it  becomes 
evident that every country needs to urgently save energy in buildings but not all dispose of the 
knowledge needed.  

The  buildings  sector  is  also  highly  disaggregated  and  is  experiencing  a  number  of  market 
failures  (e.g.:  partial  internalization  of  externalities  in  energy  prices;  principal-agent 
problems; split incentives; lack of appropriate information, education and training; low uptake 

33 
34 
35 

Recital 1 of the EPBD. 
Decision 91/565/EEC. 
Repealed by Directive 2006/32/EC. 

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of  new  and  innovative  technologies;  etc.)  which  have  limited  the  rate  of  energy  efficiency 
gains  in  the  sector.  Indicators  show  that  while  for  example  the  energy  consumption  of 
industry  is  decreasing,  that  of  households  is  constantly  on  the  rise.  Construction  products, 
appliances and services related to buildings are an important part of the EU internal market. In 
addition,  with  the  increasing  mobility  of  people  and  number  of  businesses  with  operations 
across the EU, a similar way to measure, for example, the energy performance  of  buildings 
would  decrease  the  administrative  burden  for  them.  Member  States  also  stimulated  the 
Commission  to  take  action  in  order  to  ease  tackling  the  potential  at  national  level  in  this 
complex and highly fragmented area by common EU efforts (see Annex III). 

Due  to  the  identified  market  failures  the  proposed  revised  directive  justifies  the  action  on 
energy  performance  of  buildings  also  in  the  framework  of  the  Climate  and  Energy  package 
proposals  (not  approved  yet).  Moreover,  the  revision  of  the  EPBD  will  lead  also  to 
clarification  and  simplification  of  an  existing  directive.  In  tackling  a  sector  with  high 
reduction potential at relatively low cost, the revised EPBD will reinforce the effects  of the 
Climate and Energy package.  

Buildings are often regarded as a "local" matter. Local people/legal entities own buildings and 
these  are  controlled  by  national/regional  legislation.  The  buildings  sector  is  nevertheless 
crucial for meeting the EU policy objectives stated above and the EU added value of energy 
savings is significant which justifies action at EU level, since: 

•  Although buildings are stationary, the construction products and services and the heating, 
air-conditioning  and  lighting  devices  and  systems  sectors  are  important  part  of  the  EU 
internal  market.  Furthermore,  nowadays  the  everyday  activities  of  many  people  and 
businesses are not limited to a single country. Increasing the rate of renovation rates and 
the quality of building (resulting thus in increased sales of insulation materials, windows, 
heating and air-conditioning systems, etc.), would have a positive effect across the related 
business sector. In addition, with the increasing number of Europeans that live in a country 
other  than  their  native  one  and  companies  that  have  their  businesses  activities  across  the 
EU,  similar  ways  to  measure,  for  example  the  energy  performance  of  the  buildings  they 
rent  or  buy,  would  mean  significant  decrease  of  administrative  burden.  Not  surprisingly 
requests  for  EU  unification  of  methods  and  even  complete  harmonization  of  individual 
requirements come from owners of service-providing chains (such as supermarkets, hotels, 
etc.) and from construction materials and products manufacturing industries. 

•  It would contribute to national and EU security of supply policy objectives. Energy savings 
lead to decreased energy demand and reduced need for generation capacity, or the so called 
Nega  Watts  (or  negative  Watts,  coming  from  the  analogy  with  Mega  Watts  (MW),  of 
installed capacity and meaning that with the decrease of energy demand less power plants 
will be needed). These Nega Watts would lead to the decreased energy dependency of the 
Union. Furthermore, it is rational to have an EU-wide approach on efficiency given the EU 
energy policy priorities for creating an internal energy market and the common approach 
on energy security.  

•  It might direct Member States to a sector that has significant potential for cheap CO2 and 
thus  will  contribute  significantly  towards  climate  change  mitigation  and  adaptation. 
Traditionally  there  is  a  focus  on  CO2  reductions  on  the  supply  side  and  from  large 
consuming  units.  The  buildings  sector  with  its  disaggregated  nature  and  underestimated 
positive  impacts  is  often  overlooked.  However,  if  the  greenhouse  gas  reduction  and 
renewables increase objectives are to be met, action in the sector is a must.  

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•  It  could  stimulate  sustained  activities  on  national  energy  efficiency  improvements  in  the 
buildings sector that need to be taken in all EU Member States. This has been proven by 
the  impact  of  the  current  EPBD.  As  mentioned,  before  2002  only  a  limited  number  of 
Member  States  had  embarked  on  adopting  policy  measures  to  improve  the  efficiency  of 
their building stock (see Section 2.2.1).  

•  EU experience could serve as a leading international example and establish the Union as a 
forerunner in the area, this also being beneficial for EU businesses. In a time of emerging 
pressure  for  action  on  reduced  energy  consumption  the  activities  at  EU  level  are  closely 
followed  worldwide.  Developed  and  developing  countries  are  starting  to  adopt  similar 
approaches to the EPBD, which will contribute to lower global CO2 emissions. Therefore, 
the EU can show leadership on sustainable building policy and be a recognized player on 
the  international  scene  (as  shown  by  the  findings  of  the  2008  Impact  Assessment  on  the 
recast  of  Directive  92/75/EEC  on  the  indication  by  labelling  and  standard  product 
information  of  the  consumption  of  energy  and  other  resources  by  household  appliances, 
Annex 7). 

•  It  might  create  peer-pressure  for  improvements  of  the  building  stock  within  all  Member 
States and also internationally which could possibly lead to faster adoption of policies, but 
also  stimulate  innovation  and  cost-reductions.  This  would  be  facilitated  by  an  EU-wide 
system for the comparison of the different national requirements. 

3.5. 

Subsidiarity and proportionality 

Given  the  national  importance  of  this  sector,  EU  policies  have  added  value  beyond  the 
confines of subsidiarity and proportionality.  

The main elements of the current EPBD have already been discussed from the point of view 
of the principles of subsidiarity and proportionality when the Directive was tabled in 2001 and 
adopted  in  2002.  Furthermore,  they  have  also  been  tested  in  practice,  demonstrating  the 
appropriateness  of  the  approach.  Since  then  the  need  for  common  action  to  tackle  the 
challenges of climate change and energy dependency have become even more apparent.   

National differences cannot be ignored. EU action has to take into account the specificity of 
each  Member  State  and  the  diverse  nature  of  its  building  stock,  climatic  and  economic 
circumstances  and,  thus,  the  fact  that  it  is  not  possible  nor  necessary  to  set  up  the  exact 
requirements  at  a  EU-level.  Emphasis  should  therefore  focus  on  the  establishment  of  a 
harmonized  approach  which  creates  the  basis  for  coherent  and  mutually  reinforcing 
mechanisms  for  energy  efficiency  improvements  in  the  sector,  while  at  the  same  time 
Member  States  retain  control  over  setting,  in  a  transparent  and  comparable  way,  the 
individual levels.  

These have already been the main guiding principles of the current EPBD and should be kept 
in  any  action  that  is  to  be  undertaken.  Its  preamble  refers  to  the  subsidiarity  principle  and 
clearly delineates the borderline between national/regional action and Community one:  

“In accordance with the principles of subsidiarity and proportionality as set out in Article 5 
of the Treaty, general principles providing for a system of energy performance requirements 
and its objectives should be established at Community level, but the detailed implementation 
should be left to Member States, thus allowing each Member State to choose the regime which 
corresponds  best  to  its  particular  situation.  This  Directive  confines  itself  to  the  minimum 

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required in order to achieve those objectives and does not go beyond what is necessary for 
that purpose.” 

4. 

POLICY OPTIONS 

A  number  of  activities  have  been  initiated  to  reap  the  potential  benefits  of  the  buildings 
sector.  Legislation  promoting  energy  efficiency  of  buildings  exists  at  EU  level.  However, 
there  is  still  large  room  for  improvements  (as  discussed  in  Section  0).  The  fundamental 
question concerns the best approach to address the remaining challenges and barriers and to 
achieve  the  relevant  EU  objectives.  In  this  respect  three  alternative  approaches  can  be 
considered:  (i)  repealing  the  EPBD  and  replacing  it  with  ‘soft’  instruments,  (ii)  business  as 
usual  through  use  of  the  existing  instruments  without  adaptation,  and  (iii)  EU  action  by 
complemented and improved instruments. 

4.1. 

Repealing the EPBD and replacing it by ‘soft’ instruments 

Soft instruments, such as the open method of coordination, voluntary agreements, provision of 
information,  financial  incentives,  etc.  are  an  alternative  approach  to  the  use  of  legal 
requirements.  This  would  entail  proactive  and  ambitious  actions  from  Member  States  while 
the  Commission  would  monitor  and  support  the  progress.  If  the  actions  undertaken  are 
sufficient to achieve the EU policy objectives at low social and economic cost and to provide 
EU  citizens  and  businesses  with  lower  energy  bills  at  the  same  or  better  levels  of  comfort, 
then the existing legislation, especially the EPBD, can be repealed. 

The  method  of  open  coordination  refers  to  the  use  of  “soft  law  mechanisms”,  such  as 
guidelines and indicators, benchmarking and sharing of best practice. Its success is very much 
dependant on the willingness of each individual Member State to adopt appropriate measures 
as  there  are  no  sanctions,  but  only  possible  peer  pressure  and  naming  and  shaming.  As 
mentioned  in  Section  3.3  activities  on  energy  performance  improvements  of  the  buildings 
sector  are  justified  on  environmental,  but  also  on  internal  market  grounds.  The  energy 
savings,  environmental  and  security  of  supply  benefits  were  often  overlooked  in  many  EU 
Member States, one of the reasons being that actions dealing with ‘my home – my castle’ may 
not be appealing to the voters even if they are beneficial and cost-effective but, nevertheless, 
require some additional up-front investments and time. Also the energy prices have not been a 
major  challenge  to  the  citizens  for  many  years,  although  fuel  poverty  exists  in  all  Member 
States. Now with the high oil prices and climate change manifestation, the governments are 
starting to realize the importance of the sector. 

Voluntary agreements can be another efficient tool for achieving policy objectives without the 
need  for  governmental  intervention  but  on  the  grounds  of  good  dialogue  and  understanding 
from all parties. For example, these could be agreements between governments and buildings 
industry or property owners so that all new buildings or all major renovations of the existing 
building  stock  meet  certain  energy  performance  requirements,  or  that  good  quality 
information on energy performance of buildings is always provided when transactions occur. 
Today, such agreements are used in some limited cases when authorities want to go beyond 
the existing, already ambitious, legally binding minimum requirements set within the EPBD 
and in countries where there is a tradition of such type of instrument, e.g. in the Netherlands 
where they are used to reach the standards of energy 'neutral buildings' by 2020.  

The observed very limited use of voluntary agreements on improving energy performance of 
buildings  is  due  to  the  specificities  of  the  sector  (such  as  the  high  share  of  individual 

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ownership  and  the  large  number  of  SMEs  in  the  construction  sector)  that  would  entail 
significant transaction costs for a negotiation of and compliance checks. Also it is not in the 
interest  of  the  building  owner  to  provide  adequate  information  on  the  energy  efficiency  of 
their property that is to be rented out or sold, especially, if it is not satisfactory.  

Providing good quality and understandable information that reach citizens and stakeholders at 
the  right  moment  is  an  important  factor  behind  the  success  of  energy  savings  policy 
objectives and a number of initiatives in this direction have been initiated (some of those at 
Community  level  were  described  in  Section  2.3.3).  However,  for  such  measures  to  have  a 
high  impact,  several  conditions  should  be  met,  i.e.:  (i)  the  information  should  reach  a  very 
large number of people around the EU; (ii) as property transactions are happening all the time, 
any  campaign  should  be  maintained  over  long  periods  of  time;  (iii)  information  provided 
should  be  regularly  updated  as  the  cost-effectiveness  of  measures  can  change  within  short 
periods of time. Meeting these three conditions will mean very high costs and an additional 
burden to the national budgets. 

Increased  provision  of  financial  support  could  be  another  'soft  law'  approach.  In  this  case, 
Member States should provide financial means to property owners or tenants to increase the 
energy efficiency of their buildings or fiscal incentives, such as for instance, the German KfW 
programmes.  This  would  trigger  energy  savings,  but  to  achieve  significant  impact  it  would 
require  substantial  financial  resources  to  be  provided  that  may  be  a  serious  burden  to  the 
national/regional  budgets.  At  present,  there  are  some  subsidy  programmes  that  provide 
financial assistance to fuel poor households to pay their energy bills. However, this approach 
is  not  sustainable  in  long-term  as  it  does  not  reduce  energy  bills  and  can  have  only  limited 
impact. 

Some countries, such as the UK and its Energy Efficiency Commitment, have introduced an 
obligation  on  the  suppliers  (but  can  also  be  on  producers  or  distributors)  to  achieve  certain 
savings at their consumers (usually including a  proportion  of  fuel  poor  households).  This  is 
done through investing, in most of the cases, in the lowest cost measures. The costs are born 
by all consumers and if they are not high this instrument (also called white certificates) can be 
very  efficient.  However,  it  cannot  be  used  to  achieve  the  significant  potential  as  it  would 
dramatically increase the energy prices. 

The  specifics  of  the  sector,  slow  uptake  of  national  measures,  if  not  supported  at  EU  level, 
and  the  high  cost  of  “soft”  instruments,  together  with  the  fact  that  there  is  already  a 
functioning Directive at EU level leads to the conclusion that it is not appropriate to repeal the 
EPBD  and  depend  only  on  “soft  law”  to  solve  the  problems  and  objectives  as  outlined  in 
Sections  2  and  3.  In  addition,  repealing  the  EPBD  would  send  a  very  negative  signal 
regarding  the  EU's  ambitions  to  pursue  its  policy  objectives,  both  within  its  Member  States 
and also internationally. The EPBD has certain limitations but it has already laid the basis for 
action  and  this  has  been  recognized  as  an  EU  achievement.  Its  transposition  has  been  a 
challenge but is progressing well and Member States are starting to see its importance. In the 
times when energy efficiency action is requested by all, repealing of a well-established legal 
document cannot be justified. 

4.2. 

Business as usual 

The  'business  as  usual'  or  ‘do  nothing  more’  alternative  implies  that  there  is  no  need  for 
additional  measures  beyond  the  existing  ones,  including  continued  implementation  of  the 
current EPBD and all related regulatory and non-regulatory instruments (described in Section 

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2.2), which, combined with the normal market operation, are to deliver the cost-effective level 
of energy performance. This approach can be supported with measures that can maximize the 
impact of the EBPD by encouraging its full transposition. The Commission has already relied 
heavily on infringements to strongly move forward EPBD implementation, has already won 
one  case  against  a  Member  State  and  has  several  others  brought  before  the  Court  or  at  the 
final stage of the infringement process. As mentioned in Section 2.2.1 this had a very positive 
impact on accelerating the adoption of needed legislation and now most of the Member States 
declare  complete  transposition.  The  Commission  has  also  already  undertaken  a  number  of 
additional activities, i.e. by funding projects on information exchange and research of the best 
practices, and the development of standards, to support the implementation. 

The full impact of the existing EPBD in 2020 is estimated to be a reduction of about 96 Mtoe 
of  final  energy  consumption36,  while  the  remaining  cost-effective  potential  in  the  buildings 
sector,  not  covered  by  the  existing  Directive,  is  an  additional  saving  amount  of  143  Mtoe 
(final energy) as mentioned (see Section 2.1).  

This would mean that even if the EPBD is fully implemented a large potential would still 
remain unutilized (which equals about 11% of EU total final energy consumption and CO2 
emissions, see Annex V). 

In addition, if this approach is adopted, the limitations of the current legislation will remain 
and  may  even  have  a  negative  influence  on  the  possibilities  for  achieving  EU  energy  and 
climate  change  policy  objectives.  For  example,  if  no  measures  are  adopted  to  tackle  the 
problem  with  the  very  poor  quality  energy  performance  certificates  that  are  issued  in  some 
Member  States  only  to  fulfill  the  legal  requirements,  they  may  become  a  “useless 
administrative burden” set by Brussels and have even a negative impact on the perception for 
energy savings and for any future measures.  

4.3. 

EU action by complemented and improved instruments 

A  third  alternative  is  to  improve  the  existing  regulatory  instruments.  An  encompassing 
regulatory  framework  has  already  been  developed  at  EU  level,  and  although  it  has  some 
limitations, it can serve a good base upon which one can built and thus the efforts should be 
focused  on  its  improvement.  From  the  number  of  adopted  legal  documents  (some  listed  in 
Section 2.2), the EPBD is the one that deals in a holistic way with energy use of buildings37. 
They have emphasized the need and benefits of strengthening the EPBD. This option scored 
first amongst all options discussed in terms of potential energy savings and high in terms of 
cumulative effect. 

While  building  on  the  current  EPBD,  the  measures  already  undertaken  by  national  and 
regional  authorities  for  its  implementation  would  be  the  base  which  will  be  upgraded.  This 
would ease the transposition and understanding of the measures by all stakeholders while at 
the  same  time  tapping  a  larger  share  of  potential  and  related  benefits.  For  this  reasons  the 
original EPBD requirements and basic structure should be kept and improved or extended for 

36 

37 

SEC(2006)1174 the data there provided for primary energy or 125 Mtoe for EU-25 is extrapolated to EU-
27 and converted into final energy. Due to lack of ambition of implementation of the EPBD or lack of 
clarity of some provisions this potential may not be fully realized. However, it is not possible at present 
to calculate what would be the impact of this. 
i.e.  RES  directive,  EuP  implementing  measures,  Construction  Products  Directive  that  are  under 
discussion now. 

EN 

35 

   EN 

 
                                                 
the  cases  when  this  is  proven  necessary  and  beneficial.  This  is  the  underlying  principle  for 
each of the options that are analyzed in the text to follow. 

This approach allows for the use of a combination of policy instruments, such as regulatory, 
provision of information, comparisons between Member Sates instruments. Still, the concrete 
levels,  requirements  and  mechanisms  are  determined  at  national/local  level  so  that  the 
subsidiary and proportionality are respected. 

Based on the knowledge gathered, analysis and broad consultation, a conclusion was reached 
that  several  aspects  of  the  EPBD  need  to  be  tackled  in  order  to  reach  the  specific  policy 
objectives.  These  in  general  refer,  firstly,  to  the  issues  of  improvement  of  the  wording  and, 
secondly,  to  each  of  the  four  main  pillars  of  the  current  Directive,  namely:  (i)  1000  m2 
threshold for existing buildings when they undergo major renovation; (ii) energy performance 
certificates;  (iii)  inspection  of  boilers  and  air-conditioning  systems;  and  (iv)  energy 
performance requirements. Within each pillar several options are discussed. The selection of 
the options is a result of pre-screening of a larger number of options that were raised in the 
last several years by Member States' representatives and stakeholders based on observations 
of EPBD implementation and various analyses of possible actions (see Section 1.2).  

Under  all  main  pillars  of EPBD the improvement options comprise all type of measures (in 
line, like combining approaches in 4.1, 4.2 and 4.3). The options are: 

•  General: Clarification and simplification 

•  1000 m2 threshold for existing buildings when they undergo major renovation 

–  Option  A1:  Lowering  the  threshold  to  500  m²,  to  include  all  medium  sized 

buildings. 

–  Option A2: Lowering the threshold to 200 m², to include all buildings apart from 

small ones (mainly single family houses). 

–  Option A3: Abolishing the 1000 m² threshold to include all buildings. 

•  Energy performance certificates 

–  Option B1: Quality and compliance requirements. 

–  Option B2: Requiring the recommended cost-effective measures of the certificate 

are realized within a certain time period. 

–  Option B3: Making certificates a mandatory part of property advertisement and/or 

property transaction documents.  

–  Option  B4:  Requiring  the  linking  of  the  certificates  with  other  support  or 

discouragement mechanisms.  

•  Inspection of boilers and air-conditioning systems  

–  Option  C1:  Requiring  an  'inspection  report'  for  heating  and  air-conditioning 

systems. 

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36 

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–  Option C1: Introducing compliance requirements. 

•  Energy performance requirements 

–  Option D1: Specifying EU – wide energy performance requirements. 

–  Option D2: Introducing a benchmarking mechanism. 

–  Option  D3:  Requiring  an  evolving  improvement  scheme  for  the  buildings  stock 

focussing on the worst performing buildings (a kind of top-runner approach). 

–  Option  D4:  Setting  up  EU–wide  low  or  zero  energy/carbon  buildings/passive 

house requirements.  

As a conclusion from the three discussed policy alternatives the revision of the EPBD is 
the appropriate action to meet the EU policy objectives given the problems and the ways 
they are tackled at present. In this case the current Directive will be the starting point and the 
'backbone'  of  the  revision.  Therefore,  the  continued  implementation  of  the  EPBD  is  of 
crucial importance.  

However,  it  should  be  emphasized  that  the  solution  is  in  an  integrated  mix  of  policy 
instruments and thus other non-regulatory measures, which otherwise would not be sufficient 
on their own, are necessary to complement the implementation of the Directive. Therefore the 
efforts in providing more financial and fiscal incentives, and information, training of experts, 
and agreeing on voluntary actions should be continued and further developed. 

5. 

ANALYSIS OF IMPACTS 

For  each  of  the  options  presented  in  the  previous  section,  a  general  description  is  provided 
followed by explanation of what is proposed, and evaluation of the benefits and limitations in 
terms of their economic, social and environmental impacts. 

5.1.  Main analytical approach 

For the baseline the latest available update (September 2007) of  the  PRIMES  model  of  DG 
TREN was used. It includes policies and measures implemented in the Member States up to 
the end of 2006 and was used in order to ensure consistency with other impact assessments 
and publications of the European Commission on energy. The Ecofys BEAM model was used 
by the consultant to this Impact Assessment for the calculations of the economic, social and 
environmental impacts. Building up on PRIMES, the EU building stock was replicated by the 
model  to  calculate  the  impact  of  the  individual  options.  The  calculation  of  the  impacts  is 
bottom-up  (i.e.  based  on  following  the  construction,  demolition  and  renovation  rates,  and 
energy-efficiency  measures  in  retrofits).  BEAM  is  a  holistic  model  that  reproduces  the 
building  stock  by  using  reference  buildings.  With  regard  to  all  factors  quantified,  the 
calculations  of 
individual 
measures/options  analysed  into  consideration  and  eliminates  overlaps  in  the  results.  The 
individual  options  analysed  were  not  calculated  independently  by  the  model  but  within 
connected loop model runs. Additionally, where modelling of the impacts was not possible by 
the BEAM model, the results of the studies available were used and extrapolated to EU-27. 

interactions  between 

the  BEAM  model 

take 

the 

the 

EN 

37 

   EN 

 
Out  of  the  BEAM  model  and  study  results,  the  CO2  abatement  costs  are  calculated  (annual 
capital  costs  of  a  measure  in  2020  minus  annual  energy  cost  savings  of  a  measure  in  2020 
divided by annual CO2 emission savings of a measure in 2020) and are consistent through the 
whole text. The year 2009 was assumed to be the starting year of measures analysed. This e.g. 
means, assuming the annual renovation rate of 2.5% in the buildings sector, by 2020 27.5% of 
all existing buildings would be renovated (11 * 2.5%), therefore be subject to annual capital 
costs  for  the  renovation  presented  under  this  option  and  achieve  the  energy  cost  and  CO2 
emission savings presented. 

For some of the options only qualification of the impacts was possible due to limitation of the 
available quantitative data and the complexity of the issues. If data are not reliable or missing, 
but  there  is  enough  evidence  from  experience  and  practice,  only  qualitative  conclusions  are 
made. In addition, as there are few studies that include the whole EU, extrapolation is often 
needed.  

The  calculations  were  made  for  year  2020  as  the  20%  target  for  energy  consumption 
reduction is for the year 2020. However, the benefits would continue to increase in the future. 
To demonstrate this, projections for the year 2030 were also occasionally presented. 

For further details and assumptions see Annex IV and footnotes in the text. 

5.2. 

General: Clarification and simplification 

The simplification and clarification is essential for proper implementation of the EPBD. The 
need for action in this direction surfaced in discussions with the Member States at the Energy 
Demand Management Committee (see also the summary of a questionnaire in Annex II) and 
Concerted  Action  meetings,  and  inputs  from  stakeholders.  Such  actions  have  also  been 
requested by a majority of the respondents to the public consultation. 

Two actions are essential in this direction. The first action is the choice of proper legal format 
of the proposed revised text. The  second is to clarify and  simplify the text  itself i.e. certain 
definitions  and  provisions.  These  shall  be  an  inseparable  part  of  the  EPBD  revision  and  be 
carried out to support its smooth and complete transposition and implementation. 

5.2.1.  Simplification through the use of appropriate legal form (recasting vs amendment) 

Energy  efficiency  in  buildings  is  part  of  the  Commission's  Better  Regulation  Strategy,  in 
particular  of  the  Action  plan  "Simplifying  and  improving  the  regulatory  environment"38. 
Although the policy options will remain  the  same,  the  measures  would  be  strengthened  and 
clarified.  

The choice of a legal form for the final text of the Directive to be proposed is important from 
the  point  of  view  of  simplification,  as  it  can  provide  for  improved  understanding  and 
simplified implementation. In this respect the two possible instruments of revision at disposal 
are: amendment or recasting. The main difference between them is that in the recasting, the 
new text of the Directive will be a consolidation, in other words it will be a single new legal 
document,  and  not  a  second  one  that  includes  only  the  revised  parts,  as  in  the  case  of 

38 

COM/2002/0278 final 

EN 

38 

   EN 

 
                                                 
amendment.  This  will  improve  readability  and  will  facilitate  comprehension  for  both 
implementing authorities and affected stakeholders alike.  

As  the  principles  of  the  existing  EPBD  should  be  kept,  the  recasting  is  an  opportunity  to 
develop  further  EU  and  national  policies  and  measures  related  to  energy  efficiency  in  the 
buildings sector, based on what has been learnt from the implementation of the current EPBD, 
and  on  the  ambitions  implied  by  the  EU  and  national  targets.  It  is  crucial  that  the  current 
EPBD  be  properly  implemented  and  on  time.  The  forthcoming  recasting  should  not  be  an 
excuse for delay in implementation of the current Directive. 

5.2.2.  Clarifying and simplifying certain provisions 

One of the factors that limit the full realisation of the energy saving potential intended by the 
EPBD is the wording of some of its provisions and definitions. The Directive could achieve a 
higher degree of consolidation, legal certainty and simplification of legislation by being more 
unambiguously  worded  on  certain  aspects.  This  has  been  detected  by  responsible  national 
authorities in the EPBD Concerted Action, based on their experience with implementing the 
existing  Directive.  National  implementing  bodies  should  therefore  be  provided  with  a  clear 
legal  framework  which  ensures  better  overall  coherence  of  their  legislations  and  thereby 
simplifies  its  implementation  and  application  for  involved  parties,  such  as  the  construction 
sector, designers, energy services companies, installers and building owners. 

There  is  room  for  improvement  of  several  EPBD  definitions,  such  as  'public  buildings',  for 
which  special  EPBD  provisions  apply,  inter  alia  the  display  of  the  energy  performance 
certificate at a prominent  place: The  definition of public  buildings  in  EPBD  recital 16  shall 
also  be  used  in  Article  7(3),  instead  of  having  two  different  wordings.  'Major  renovation', 
'alternative  systems'  and  'air-conditioning  systems'  are  further  terms,  whereof  the  existing 
Directive contains vague or ambiguous descriptions. "Passive heating" and "passive cooling" 
are  elements  which,  although  implicitly  brought  up  in  the  existing  Directive  (recitals  8,  10, 
and 18, article 3 and its reference to Annex part 1), could be highlighted and stressed more in 
the text of the Directive. This would also reflect the relevant proposal for stimulating "passive 
heating  and  cooling"  of  the  Commission's  Energy  Efficiency  Action  Plan  (Annex,  part  1)6. 
Furthermore,  clarification  of  certain  provisions  could  be  made,  where  it  has  not  been  made 
clear in the existing EPBD what exactly is required to be done, at what time, and by whom: 
i.e. with regard to the required recommendations within the energy performance certificate of 
a building and how/when exactly it is to be made available to an interested buyer or tenant of 
a building or building unit (Article 7 of the existing EPBD). Wherever available (e.g. as for 
air-conditioning  systems),  these  definitions  in  the  EPBD  should  now  be  taken  from  the 
relevant,  recently  developed  31  CEN  standards, 
the 
implementation of the EPBD provisions. 

to  further  simplify 

in  order 

In order to address the public sector as a leading example more strongly than in the existing 
EPBD, this sector could be required to comply with obligations of the revised EPBD earlier 
and  in  a  stricter  way  than  the  private  sector  has  to.  This  would  be  in  line  with  the  relevant 
activity  announced  in  the  Commission's  Energy  Efficiency  Action  Plan  2006  and  with  the 
Commission's  Green  Public  Procurement  initiative  of  2008.  Furthermore,  the  public  sector 
could  be  required  to  realize  cost-effective  measures  which  are  recommended  in  the  energy 
performance certificate of a building (see option B2 in chapter 5.4) within a certain period. 

EN 

39 

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5.3. 

1000 m2 threshold for existing buildings when they undergo major renovation 

Current situation: The EPBD requires that owners of buildings larger than 1000 m² upgrade 
the energy performance of their buildings to meet the nationally set requirements, when these 
undergo  major  renovations39.  In  relation  to  the  total  EU-27  building  stock,  this  means  that 
only  29%  of  the  total  conditioned  floor  area  and  27%  of  CO2  emissions  caused  from  total 
space  heating  are  covered  by  the  above  mentioned  legal  provision.  If  the  figures  for  the 
residential  and  commercial  buildings  are  considered  separately,  it  shows  that  mostly 
residential  house  owners  do  not  have  to  meet  any  minimum  energy  requirements  when 
renovating, as 86% of the residential floor area is left out of the scope of the Directive (see 
Figure  2).  On  the  other  hand,  since  commercial  buildings  are  usually  larger  than  residential 
ones, almost two third of the commercial floor area is already covered by the legal provision 
for major renovations. This means that large part of the existing buildings do not fall within 
the scope of the EPBD and therefore the possibilities for the realization of energy savings and 
CO2 emission reductions potentials that lie with them are not exploited. 

Figure 2. Floor area distribution and CO2 emissions by threshold categories in 2005 (Source: 
BEAM) 

However,  at  least  9  Member  States40  transposed  the  EPBD  without  a  1000  m²  threshold, 
hence requiring energy performance upgrades for all existing buildings41 undergoing (major) 
renovations.  The  national  reasons  for  not  introducing  a  1000  m²  limit  were  diverse.  For 
instance,  Denmark  and  Germany  had  already  in  place  strong  regulation  and  introducing  a 
threshold would have weakened existing building legislation. Finland e.g., stated that 40% of 
the heating energy consumption of the building stock would have been excluded with such a 

39 
40 

41 

See endnote 18 
K.  Engelund  Thomson  et  al  and  Member  States  answers  to  the  questionnaire  circulated  at  the 
Committee meeting in March 2008 (see Annex X): Thresholds related to renovation of buildings (not 
published yet): The following countries do not have a minimum 1000 m² threshold: Flemish Region of 
Belgium, Czech Republic, Denmark, Finland, Germany, Latvia, Portugal, Slovak Republic and Sweden.  
Most  countries  do have  a  minimum  m²  threshold, usually  equivalent  to the  smallest  type  of building, 
such as 10, 40 or 50 m². 

EN 

40 

   EN 

 
 
                                                 
threshold. Portugal on the other hand argued that energy savings measures are cost-effective 
for every building and therefore no exception should be made for smaller ones. On the other 
hand,  Cyprus  opted  for  a  1000  m²  threshold,  because  it  had  no  experience  with  similar 
buildings  regulations  in  the  past  and  therefore  wanted  to  set  a  threshold  in  accordance  to 
common  practice  in  the  construction  industry.  However,  even  the  less  experienced  Member 
States now dispose of a couple of years of experience on this topic since the EPBD has been 
adopted in 2002. 

Proposal: Keeping in mind that buildings with less than 1000 m² are responsible for 73% of 
total  CO2  emissions  caused  by  the  building  stock,  it  seems  appropriate  to  discuss  whether 
abolishing this threshold, or at least lowering it to cover more buildings, are feasible options 
to increase the amount of energy saved in the buildings sector in a cost-effective way.  

The following three options are looked into for more details: 

•  Option A1: Lowering the threshold to 500 m² to include all medium sized buildings.  

A  500  m²  threshold  would  cover  81%  more  residential  (i.e.  25%  of  total)  and  26%  more 
commercial  (i.e.  83%  of  total)  floor  area  as  with  the  current  threshold  in  the  Directive. 
Buildings  between  500  m²  and  up  to  1000  m²  are  medium  sized  multifamily  houses  and 
medium sized office buildings. 

•  Option  A2:  Lowering  the  threshold  to  200  m²  to  include  all  buildings  apart  from  small 

ones.  

With  this  option,  mainly  just  the  owners  of  single  family  houses  will  not  have  to  consider 
minimum  energy  performance  requirements  while  refurbishing  their  homes.  This  threshold 
would then cover almost 100% of the commercial and 35% of the residential floor area. 

•  Option A3: Abolishing the 1000 m² threshold to include all buildings. 

The minimum conditioned area of a stand-alone building is usually about 50 m². Abolishing 
the 1000 m² would mean that all buildings with an area of more than 50 m² are subject to legal 
requirements when undergoing major renovations. 

It  should  be  highlighted  that  within  the  discussed  options,  Member  States  would  still  be 
responsible  to  set  up  the  individual  requirements  of  energy  performance  and  thus  the 
subsidiarity  principle  will  be  respected.  Also,  the  definition  of  major  renovation  would  be 
retained as in the current EPBD, which means that, for example, renovation of an apartment 
in a large multifamily building would, in most cases, not be covered by the requirements. The 
effect  on  individual  households  would  be  limited  further  by  the  fact  that  renovations  are 
usually made 'step by step'. The current EPBD also entails that for existing buildings, when 
they undergo major renovation of a certain part, the energy performance requirements are to 
be met only for this part and not for the whole building. For example, if the building shell is 
renovated this would not mean that the heating system should mandatorily be changed. 

Eliminating or lowering the 1000 m² threshold for buildings undergoing major renovation will 
not  change  the  overall  framework  of  the  EPBD,  nor  the  possible  exceptions  foreseen  for 
certain categories of buildings, such as stand-alone buildings smaller than 50 m². In order to 
assess the three options presented above, it is necessary to weight the gains made in terms of 
energy  savings,  reduction  of  CO2  emissions  and  job  creation  against  the  energy  related 
investment  costs  for  the  owners  of  the  smaller  buildings  and  for  the  administration  to 
implement and control this new legal requirement. 

EN 

41 

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Impact:  The  most  meaningful  indicator  is  the  total  costs  savings,  as  it  shows  the  difference 
between the energy costs saved in a specific year and the costs of capital raised (interest rate 
and amortization) for carrying out an energy performance upgrade in the context of a major 
renovation.  In  the  very  short  term,  i.e.  in  2010,  introducing  lower  or  no  thresholds  will  not 
have any decisive additional impact on the total costs savings, since only a small proportion 
of  the  buildings  stock  will  by  then  have  undergone  major  renovation.  However,  the 
accumulation of energy savings from energy related renovations of an increasing number of 
buildings  will  by  2020  have  a  decisive  impact:  19.8  Mtoe  or  4  %  of  the  final  energy 
consumed by the residential and service sectors (510 Mtoe in 2020 according to PRIMES) in 
the EU-27 can be saved additionally if the threshold is abolished (option  A3). Furthermore, 
the  total  costs  savings  from  this  option  will  amount  to  an  additional  €17  billion  per  year 
compared to those reached through the current EPBD. 

The  economic  benefits  for  the  buildings  industry  can  be  derived  from  a  higher  demand  for 
energy  saving  appliances  such  as  insulation  material,  multi-glazed  windows  or  more  energy 
efficient  boilers,  heating  and  cooling  systems.  The  impact  on  the  labour  market  in  terms  of 
additional  employments  created  was  assessed  based  on  turnover  values  in  the  buildings 
industry.42  According  to  these  calculations,  approximately  75.000  additional  jobs  in  EU-27 
could be created and maintained in 2020 when eliminating the 1000 m² threshold (see Table 
1). See Annex IV for the assumptions.  

Table  1.  Impact  on  job  creation  in  terms  of  additional  jobs  created  in  2020,  by  threshold 
option, compared to the 'business as usual' scenario (BAU), Source: Ecofys 

Scenario 
BAU (existing EPBD (> 1000 m²)) 
Option A1 (EPBD > 500 m²) 
Option A2 (EPBD > 200 m²) 
Option A3 (EPBD > 50 m²) 

Jobs in 2020
149 000
159 000
170 000
224 000

Change compared to BAU 

--
+ 10 000
 + 21 000
+ 75 000

The economic and environmental impacts have been quantified based on the Ecofys Building 
Area  Model  (BEAM),  which  provides  estimates  for  final  energy  savings,  energy  related 
investment costs, annual capital costs, saved annual energy costs and total costs savings for 
the three threshold options and for the years 2010, 2020 and 203043. The results are presented 
in terms of additional costs and benefits compared to the business as usual scenario (BAU), 
which is the current Directive.  

Table  2.  Estimated  impacts  of  different  thresholds  for  minimum  energy  performance 
requirements for major renovations, Source: BEAM model (see Annex IV) 

Impacts for EU-27  
Final energy savings, Mtoe/a 
BAU (EPBD > 1000 m²) 
compared to 2009 

2010

4.4

2020

47.1

2030

75.8

42 

43 

The  estimates  area  based  on  a  simplified  method  neglecting  smaller  effects  but  offering  a  good 
indication of possible employment related impacts of energy efficiency measures. For this purpose, the 
assumed  additional  turnover  from  energy  efficiency  projects  is  divided  by  the  average  turnover  per 
employee  in  the  construction  sector  and  multiplied  by  a  specific  factor  1.  This  factor  depends  on  the 
labour  intensity  of  the  measures  carried  out.  For  this  impact  assessment,  it  was  assumed  that  the 
additional turnover is caused by the usual mix of material and labour costs as presently observed in the 
building industry of the EU-27.  
See  Annex  IV  for  more  information  on  the  BEAM  and  the  assumptions  made  for  compiling  the 
estimates. 

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12

1
1
5

0.3
0.5
2.0

Additional impact compared to BAU: 
Option A1 (EPBD >500 m2) 
Option A2 (EPBD >200 m2) 
Option A3 (EPBD >50 m2) 
CO2 emissions, Mt/a 
BAU (EPBD > 1000 m²) 
compared to 2009 
Additional impact compared to BAU: 
Option A1 (EPBD >500 m2) 
Option A2 (EPBD >200 m2) 
Option A3 (EPBD >50 m2) 
Energy related investment costs, billion €/a 
Additional impact compared to BAU: 
Option A1 (EPBD >500 m2) 
Option A2 (EPBD >200 m2) 
Option A3 (EPBD >50 m2) 
Annual capital costs for energy related investments, billion €/a 
Additional impact compared to BAU: 
Option A1 (EPBD >500 m2) 
Option A2 (EPBD >200 m2) 
Option A3 (EPBD >50 m2) 
Saved energy costs, billion €/a 
Additional impact compared to BAU: 
Option A1 (EPBD >500 m2) 
Option A2 (EPBD >200 m2) 
Option A3 (EPBD >50 m2) 
Total cost-savings, billion €/a (Saved energy costs - capital costs) 
Additional impact compared to BAU: 
Option A1 (EPBD >500 m2) 
Option A2 (EPBD >200 m2) 
Option A3 (EPBD >50 m2) 

2
4
12

0
0
1

0
0
2

0
0
1

2.8
5.4
19.8

129

8
14
51

1
3
11

1
2
8

3
7
25

2
5
17

3.2
5.7
21.2

204

9
15
55

1
2
7

2
4
13

4
8
31

2
4
18

The  CO2  abatement  costs  (total  cost  savings  per  year  divided  by  annual  CO2  savings  of  an 
option) and annual capital costs per saved ton CO2 can be calculated out of the table above, 
which results e.g. for option A3 ("EPBD >50") in the following values: 

Option A3 (EPBD >50) 

Abatement costs in € per 
saved ton CO2 
Annual capital costs in € 
per saved ton CO2 

2010 

-200 

200 

2020 

-333 

157 

2030 

-327 

236 

It should be noted that the annual capital costs per saved ton CO2 presented in the table above 
cannot  simply  be  compared  to  e.g.  those  of  investments  in  renewable  energy  techniques,  as 
this  would  neglect  the  benefits  (energy  cost  savings)  which  are  linked  to  energy  efficiency 
measures.  So  the  presented  CO2  abatement  costs  are  the  appropriate  indicator  for  cross-
comparisons  of  the  economy  of  measures,  although  negative  abatement  costs  have  to  be 
interpreted with care in general. 

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Regarding the additional administrative burden which a change in the threshold would cause, 
a  survey  undertaken44  in  the  framework  of  the  Buildings  Platform  has  revealed  that  most 
Member  States  assessed  the  current  administrative  burden  as  moderate  or  small.  Extending 
the  legal  requirements  for  major  renovations  to  the  entire  building  stock  should  not 
considerably impact on the administrative burden. 

At the level of citizens, the impacts materialize at the moment of a major renovation as they 
need  to  meet  the  national  building  code  requirements.  This  could  mean  for  instance  the 
moment  when  a  building/refurbishment  permit  is  needed.  Realizing  energy  efficiency 
measures  when  retrofitting  costs,  on  average,  between  two  and  three  times  less  than  when 
done separately. This in general means that by every renovation below 1000m2 which is not 
combined with efficiency measures, a unique opportunity for cost-efficient energy savings is 
lost for the owner. The level of requirements and the related additional costs vary from one 
country to another but normally remain moderate when planned properly. 

The  investment  needs  differ  substantially  across  Europe  depending  on  the  social  and 
economic conditions, on the initial state of the property and on the type of renovations people 
undertake. For example purchasing a high efficient boiler would require about €800 additional 
to the price of an average boiler sold today on the market. However, in 4-5 years these would 
be reaped from the savings on the energy bill and afterwards the household would save €250-
300 annually until the end of the lifetime of the boiler (15 years). An example from the UK 
shows  that  if  there  is  no  loft  insulation  in  a  building  and  in  a  renovation  the  recommended 
270mm  are  installed,  then  the  investment  costs  for  the  household  would  be  about  €600. 
Annually €150 would be saved on the energy bill  so the payback time will be only about 4 
years.  If  there  is  already  50  mm  insulation,  the  investments  would  be  the  same  but  energy 
savings only €40 and thus the payback time about 16 years. 

Well  insulated  and  acclimatized  buildings  have  a  probable  positive  effect  on  the  persons 
working, learning or living in them. Increasing the amount of buildings subject to minimum 
energy  performance  requirements  when  undergoing  major  renovations,  will  reinforce  this 
effect.  Although  this  impact  cannot  easily  be  quantified  as  it  is  often  perceived  as  very 
subjective, some studies have shown e.g. that a better insulated building can have a positive 
impact on the learning environment of students in terms of better results.  

Based  on  the  available  estimates  and  the  positive  experiences  made  in  countries  without  a 
1000  m²  threshold  for  existing  building  undergoing  a  major  renovation,  the  removal  of 
minimum  area  thresholds  to  cover  all  buildings  is  the  most  appropriate  option  in  terms  of 
cost-effectiveness and impact on final energy demand. 

5.4. 

Energy performance certificates 

The  certificates,  which  are  already  mandatory  under  the  current  EPBD  when  buildings  are 
constructed, sold or rented out, can be a powerful tool to create a demand-driven market for 
energy  efficient  buildings,  as  they  allow  economic  agents  to  estimate  costs  in  relation  to 
energy consumption and efficiency. The aim of the Certificate is to make the complex issue of 
the  energy  performance  of  a  building  transparent  to  non-energy  experts  (such  as  average 
building owners and tenants) and therefore tackles the lack of information market failure. The 
possible impact of the certificates in some countries is estimated at annual 2 % energy savings 

44 

Thomson et al.: Thresholds related to renovation of buildings (not published yet) 

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in  the  buildings  sector  when  a  proper  certification  scheme  is  implemented45.  Although  the 
first Member State introduced energy performance certificates as early as of 1997 and made 
positive experience, only few other Member States started similar requirements, that is why 
the Commission initiated action at Community level and made certificates part of the existing 
EPBD requirements.  

At present, Member States have already implemented, or transposed, or are currently setting 
up  regimes  and  administrative  preconditions  for  the  energy  performance  certificate  for 
buildings,  when  a  building  is  constructed,  newly  rented  out  or  sold,  at  national  level  as 
requested  by  the  EPBD.  The  certificates  shall  be  issued  by  accredited  experts.  The 
qualification needs of these experts are fixed at national level, not in the EPBD. The majority 
of Member States start in practice not before summer 2008.  

The  observations  from  some  of  the  Member  States  which  have  already  introduced  the 
certificate show that some are not of satisfactory quality, or that there is insufficient bottom-
up uptake to ensure that they are systematically made available during property transactions. 
In addition, higher realization of recommendations for energy improvements of the buildings 
can  stimulate  further  energy  savings.  These  prompted  the  need  for  improvements  of  the 
provision on the Certificates in the EPBD so that the market failures of lack, or low quality, of 
information and to tackle the remaining energy savings potential. 

In  order  to  respect  the  principle  of  subsidiarity,  the  objective  of  the  energy  performance 
certificates  will  still  remain  limited  to  the  provision  of  information  and  any  effects  of  these 
certificates  in  terms  of  legal  proceedings  or  otherwise  shall  be  decided  in  accordance  with 
national rules, as is stated in the EPBD, for all the following options B1 to B4. 

5.4.1.  Option B1: Quality and compliance requirements for certificates 

Current situation: There are no provisions in the EPBD requiring that Member States set up a 
quality check of the certificate. The lack of such a system in some countries has resulted in 
bad  quality  certificates  being  issued.  Also,  compliance  with  the  requirements  for  issuing  of 
the  certificates  and  for  meeting  of  the  minimum  energy  performance  requirements  is  not 
satisfactory. Although the implementation is still in its early stage numerous complaints were 
already  sent  to  the  Commission  in  2007  and  2008  about  unsatisfactory  quality  of  energy 
performance certificates.  

The  procedure  of  issuing  of  certificates,  as  developed  in  some  Member  States,  often  starts 
with  an  on  site  check  of  the  building  by  an  expert  to  gather  information  on  its  technical 
properties,  based  on  which  a  calculation  of  the  energy  rating  of  the  building  is  performed. 
This  proceeding  usually  leads  to  high  quality  certificates,  assuming  that  the  training  of  the 
experts  is  sufficient.  Alternatively,  in  some  Member  States  the  building  owner  is  providing 
technical information on the building's properties to an expert, who prepares a certificate only 
based on this information and using many simplified and standardised assumptions depending 
on the building type without visiting the site. This does not always reflect the actual situation 
and  therefore  can  lead  to  incorrect  rating  results  and  inappropriate  recommendations  in  the 
certificate,  but  leads  to  low  costs  for  certification.  Furthermore,  it  allows  for  incorrect  and 
false input to 'sugar-coat' the rating result, which is not always easy to detect afterwards by 

45 

Minna  Sunikka,  Discussion  on  the  potential  impact  of  the  energy  certificate  on  existing  housing:  the 
UK as a case study, 2005 

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e.g. a future prospective buyer or tenant of a building. Moreover, the independence, required 
by  the  existing  EPBD,  and  quality  of  these  experts  varies  widely  within  the  EU. 
Consequently, the quality of currently issued certificates varies widely as well. 

The  certification  of  a  building  could  also  be  linked  to  compliance  criteria  on  building 
regulations  to  improve  the  compliance  rate  and  realize  higher  energy  savings.  Several 
stakeholders46,  experts  and  energy agencies47 have asked for effective control regimes to be 
put  in  place  in  order  to  increase  compliance  with  building  regulations.  Ideally,  sufficient 
quality  of  energy  performance  certificates  could  also  contribute  to  better  compliance  on 
buildings  regulations.  The  check  of  EPBD  building  certificates  by  a  compliance  control 
scheme  could  be  such  an  efficient  instrument.  A  similar  control  regime  is  i.e.  currently 
developed  in  the  Flemish  Region  of  Belgium.  Denmark  already  introduced  a  regime  for 
systematic quality control of certificates in 2006. Such a control scheme should be as effective 
and as less administrative as possible. 

Proposal: Introduction of a requirement that random sampling checks of the quality of energy 
performance certificates and the compliance with the building energy codes is carried out by 
public authorities or accredited institutions. 

A random control of the real outcomes, validity and quality of certificates, could be required 
for  certificates  in  the  EPBD  recasting48.  Checks  at  different  levels  of  detail  and  frequency 
could therefore be introduced as a new requirement by the EPBD recasting. These levels of 
random  sampling  regime  could  range  from  validity  checks  of  input  and/or  result  data  for 
certificates to on-site checks of buildings certified.  

46 

47 

48 

In  position  papers  and  studies,  such  as  European  Construction  Industry  Federation  FIEC:  FIEC 
Memorandum  -  The  impact  of buildings on  climate  change, 2007 (amended version 2008);  European 
Energy  Network  EnR:  Implementation  of  the  EU  Energy  Performance  of  Buildings  Directive  -  a 
snapshot report, 2008 
As e.g. presented at the 2nd Sustainable Energy Week event 'Energy Performance of Buildings Directive 
- Next Steps' in January 2008. 
For similar objectives, Denmark already revised its certification procedure in 2006, firstly introduced in 
1997, to 'quality level' 5 and 6 respectively in its 2nd generation certification scheme: 
In a range from 1 to 6, 1 being lowest quality which only consists of "Meter reading reported by the 
building  owner  and  the  utility  companies",  whilst  5  and  6  mean  "Computation  by  energy  consultants 
based on building envelope inspection" and " Computation by energy consultants combined with meter 
reading". 
The revision of the Danish provisions was based on several years of experience since 1997, which also 
underlined the importance of quality control within the certification scheme (subsequently also named 
as 'label'/'labelling scheme'). The analysis of Jensen et al conclude that "Confidence in the energy label 
is the most important factor in achieving the  main aim of the labelling scheme - energy savings. The 
user must at all times have confidence in the registrations made, the calculations, the label itself, and 
especially that the suggested energy saving measures are viable and will result in improved economy. 
Thus, it is essential to maintain a high level of quality in the energy labelling scheme. If quality is poor, 
the users will lose confidence in the labels. […] Credibility may be lost very fast as a few poor labels 
can  do  a  lot  of  damage.  The  quality  control  of  the  Danish  energy  labelling  scheme  takes  place  at  all 
levels  of  the  scheme.",  taken  out  of:  Ole  Michael  Jensen,  Morten  Tony  Hansen,  Kirsten  Engelund 
Thomsen,  Kim  Wittchen:  Development  of  a  2nd  generation  energy  certificate  scheme  –  Danish 
experience, 2007 

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Random sampling checks could take place for e.g. 0.5% of certificates annually issued49 with 
3 levels of detail: A certain share of these checks could be requested to be done by a validity 
check  of  input  data  and  rating  outcome  of  energy  performance  certificates  only.  Another 
(lower)  share  could  requested  be  checked  (stricter)  for  input  data  and  be  recalculated  by  a 
controller.  And  another  (very  low)  share  of  random  sampling  checks  could  consist  of  the 
aforementioned  proposal  plus  control  of  the  building  on  site  for  compliance  with  building 
regulations and correspondence with the certificate.  

Impact:  Detailed  analyses  of  the  various  impacts  of  the  certificates  (stimulation  of  more 
renovations and improvement of compliance with building codes) were made with the BEAM 
model calculations (for details on the model: see Annex IV). According to that it results in 21 
Mtoe/year energy savings and 57 Mt CO2 emission savings in 2020 for EU-27. This is linked 
to  annual  capital  costs  of  €8  billion,  but  cause s  annual  energy  cost  savings  of  €26  billion. 
Consequently,  properly  carried  out  energy  performance  certificates  may  bring  along  up  to 
20,000  new  jobs50  for  certifiers  and  up  to  40,000  new  jobs  in  the  construction  and 
refurbishment sector by 2020 (see Annex IV for the assumptions). This is confirmed by data 
known for the UK51 (and some limited data for Germany which is in the range of that for the 
UK52). For the UK it is estimated that 8 to 12% of cost effective energy efficiency measures 
are realized53. The UK figures simply extrapolated to EU-27 level would mean an increase of 
10 to 29 Mtoe/year realized energy savings and of 24 to 84 Mt/year CO2 emission savings in 
202054. 

The  costs  for  a  thorough  quality  control  system  appear  manageable.  For  example,  the  total 
yearly  costs  of  the  Danish  administration  of  the  scheme  paid  by  the  consumers  amount  to 
about  €0.8  million  for  the  development  of  the  system 55  and  about  €0.3  million  annual 

49 

50 

51 

52 

53 

54 

55 

Underlying  that  an  accredited  expert,  specialised  on  issuing  energy  performance  certificates  for 
buildings,  compiles  one  certificate  per  working  day,  so  about  200  certificates  a  year.  A  random 
sampling  check  of  0.5  %  of  certificates  would  therefore  mean  that  accredited  experts  face  with  one 
control per year on average. 
In full time equivalents. Actual jobs may fluctuate because of anticipated certification in rental sector 
and EPC saturation. Based on 4.8 to 9.3 hours per EPC, calculated from several country reports of the 
IMPACT project. 
Calculated  from  data  originating  from  Department  for  Communities  and  Local  Government,  2007. 
“Regulatory  Impact  Assessment  Energy  Performance  of  Buildings  Directive  Articles  7-10”.  Carbon 
saved claimed for EPCs in first year of implementation, electricity use excluded in PRIMES reference 
emissions. 
For example, for the UK the savings equal 0.9% of the existing residential building stock’s emissions. 
For  comparison:  in  Germany,  the  certificates  are  projected  to  help  avoid  0.35%  of  the  existing 
residential  building  stock’s  emission  (calculated  from:  Forschungszentrum  Jülich,  2005.  “Evaluierung 
der  CO2-Minderungsmaßnahmen  im  Gebäudebereich”,  p.  20.  Carbon  saved  claimed  for  EPCs  after 
three years of implementation, electricity use excluded in PRIMES reference emissions). 
Calculated  from  data  originating  from  Department  for  Communities  and  Local  Government,  2007. 
“Regulatory  Impact  Assessment  Energy  Performance  of  Buildings  Directive  Articles  7-10”.  Savings 
claimed  exclusively  for  EPCs,  i.e.  additional  to  EEC  savings.  Applies  for  first  year  of  full 
implementation  (2009)  to  2020,  only  when  EPC  is  available.  This  range  may  differ  from  figures 
mentioned below because of non-additionality and different time frames. No information is available on 
the effect of certification on the renovation rate of buildings 
Of  course,  conditions  in  other  Member  States  differ  from  the  UK  in  terms  of  savings  potential  (size, 
profitability) and complementary policies. 
Jens Laustsen (Danish Energy Authority) & Kirstine Lorenzen (COWI), 2003. “Danish Experience in 
Energy  Labelling  in  Buildings”,  p.  20.  For  comparison,  for  the  UK  one-off  administration  costs  are 

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maintenance  cost.  These  amounts  include  the  quality  assessment  control,  the  registration  of 
data  and  the  development  of  facilities  to  help  improve  and  minimise  the  work  for  the 
consultants as well as some training activities for the consultants. Based on extrapolations of 
the  Danish  approach  the  overall  administrative  cost  of  random  sample  checks  in  the  EU-27 
are of the magnitude of 5 to 16 M€ per year 56. In general, costs of a more elaborate quality 
control scheme could add up to 10 to 32 M€ administrative costs per year 57. 

Moreover, this control regime could also guarantee a sufficient quality of experts issuing the 
certificates as an indirect consequence.  

Proposing such requirements can be justified from a proportionality point of view as, from the 
current practice, it has been evident that the low quality of certificates is one of the key factors 
for the questionable credibility and market uptake of the certificates in a number of Member 
States. 

5.4.2.  Option  B2:  Requiring  the  recommended  cost-effective  measures  of  the  certificate 

are realized within a certain time period 

Current  situation:  According  to  the  EPBD  the  energy  performance  certificate  shall  be 
accompanied  by  a  list  of  recommendations  for  cost-effective  improvement  of  the  energy 
performance.  There  are  no  requirements  in  the  EPBD  that  some  of  these  recommendations, 
such as those with short pay-back time, are to be realized. However, if there is no uptake of 
these  recommendations  a  significant  possibility  for  energy  reductions  is  not  achieved.  This 
possibility prompted criticism by some stakeholders who argue that in this way the potential 
may not be tackled and asking that the cost- effective recommendations are implemented. For 
example, the European Energy Network in its report58 suggests that recommendations with 7 
years pay-back time are to be mandatorily implemented. 

It is difficult to evaluate from practice what is the rate of uptake of these recommendations in 
the certificates as there is no sufficient experience in most of the Member States. The lack of 
such information has been highlighted in a study carried out within the Buildings Platform for 
which  only  one  respondent  to  a  questionnaire  sent  to  experts  from  all  EU  Member  States 
provided estimation that an uptake of up to 20% of low and non-cost measures for the service 
sector59.  

Some  Member  States  have  also  already  included  such  provisions  in  their  legislation.  For 
example, in Portugal for the non-residential buildings the cost- effective opportunities with a 
payback smaller than 8 years must be implemented within 3 years. There are severe financial 
penalties if these are not realized. In Denmark all buildings owned by public administration 

estimated at app. 2 M€, and yearly enforcement co sts at 14 M€ (all sectors, excluding communication). 
Calculated from data originating from Department for Communities and Local Government, 2007. 
Extrapolation of the Danish approach: one out of 500 EPCs is fully re-issued. In addition, one out of 
100 data forms is reviewed. Costs of random checks are thus approximately 0.25% (1/400) of the total 
costs of issuing the EPCs.  
Quality checks costs equal to 0.5% of EPC issuing costs (information given orally by the IA consultant 
on, 23 June 2008).  
EnR. Implementation of the EU Energy Performance of Buildings Directive - a snapshot report, 2008 
BRE.  Impact  of  the  Energy  Certificates  on  the  energy  savings  in  the  existing  buildings  in  the  MS 
(EPBD article 7). Draft June 2008 

56 

57 

58 
59 

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(government, 
recommendations with a pay-back time of 5 years or less shall be implemented. 

regions,  municipalities)  shall  be  certified  and 

the  cost-  effective 

Proposal:  A  requirement  can  be  introduced  that  the  cost-effective  recommendations  of  the 
certificate are to be implemented within a certain period of time. Such requirement can be for 
the  owners  of  all  buildings  or  for  some  parts  of  them  based  on  the  division:  residential, 
commercial and public buildings. In case of purchase the investment requirement may be on 
the new owner. The setting up of a definition for 'cost-effective' and the period of time are to 
be decided at national or regional level. 

Impact:  Unfortunately,  the  evaluation  of  the  impact  of  requiring  that  the  cost-efficient 
recommendations of the Certificate are realized within a certain time cannot be based on the 
countries that have adopted certain requirements in this aspect, i.e. Denmark and Portugal, as 
there are no impact assessments available. Still, it has been evaluated that if requirements are 
included solely for the buildings of the tertiary sector, this may already lead to final energy 
demand saving of approximately 12 Mtoe, i.e. 3% reduction in 2020 in the EU-27 buildings 
sector; to a CO2 emission reduction of about 33 Mt, i.e. 1% reduction in 2020 in overall EU-
27 CO2 emissions.  

However,  although  from  the  data  available  it  is  not  possible  to  make  estimations  on  the 
investment requirements for the whole buildings sector (tertiary only), it can be expected that 
meeting  the  costs  can  be  a  significant  challenge  for  some  property-owners,  especially  those 
with  restricted  budgets,  or  housing  associations  that  own  a  large  number  of  properties.  To 
ease the burden on this segment, targeted financial support mechanisms could be established 
by Member States (see option B4). 

For the purpose of requesting the realization of the recommendations of the certificates, their 
quality would have to be sufficiently good such that no economically wrong investments are 
required. Currently, the experience of some countries shows that as there is a drive towards 
very low cost of certificates, they do not provide reliable and sufficient information for these 
principle investment decisions. 

In  addition,  the  results  of  the  STABLE60  project  do  not  show  a  clear  need  for  adopting  a 
mandatory approach. In its activities the perceptions of professional parties61 of whether they 
will  act  upon  the  recommendations  if  they  are  mandatory  or  voluntary  was  evaluated.  The 
results  show  that  58%  of  respondents  said  they  would  increase  their  investment  in  energy 
efficiency  measures  if  the  recommendations  on  the  certificate  were  voluntary,  whilst  64% 
believe they would do so if the recommendations were made mandatory.  

From  a  subsidiarity  point  of  view,  introducing  such  a  requirement  would  be  a  significant 
financial  burden  for  EU  citizens  and  businesses  and  therefore  such  action  would  not  be 
justified  at  EU  level.  To  varying  degrees  Member  States  also  use  market-based  instruments 
such  as  taxes  on  energy  products  used  for  heating  to  incentivize  efficiency  measures  in  the 
housing sector. For subsidiarity reasons Member States should continue to be able to choose a 

60 

61 

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Motiva  Oy  et  al.  2007,  Securing  The  Take-off  of  Building  Energy  Certification:  Improving  Market 
Attractiveness 
at 
through  Building  Owner 
report, 
http://stable.motiva.fi/about/  STABLE,  stands  for  Securing 
take-off  of  Building  Energy 
Certification. The project has been co-funded under the Intelligent Energy Europe Programme 
Professional  parties  include  large  owners,  suppliers  to  owners,  associations  of  users,  the  sample 
includes 466 respondents from Austria, Belgium, Bulgaria, Finland, Greece, Sweden, and Netherlands 

Involvement,  STABLE 

cited 

final 

the 

49 

   EN 

 
                                                 
combination of market-based and command and control measures, which would no longer be 
the case if every price increase would automatically trigger higher minimum standards.  

Nevertheless,  the  public  authorities  should  lead  the  way  in  demonstrating  best  practices  in 
energy efficiency improvements. Therefore, setting up of a requirement that for the buildings 
occupied by the public sector the cost-efficient recommendations should be implemented can 
be a good step for showing such an exemplary role. This has also been proposed by several 
organizations that have responded to the public consultation. 

5.4.3.  Option B3: Making certificates a mandatory part of property advertisement and/or 

property transaction documents 

Current situation: The EPBD only specifies that the certificate "has to be made available" to 
the potential owner (for newly built constructions), the prospective buyer or tenant. When and 
how  this  information  has  to  be  communicated,  is  not  specified.  In  certain  situations  this 
information is only disclosed as one of the many annexes to a contract ready to be signed. At 
such a moment the information on energy performance can no longer influence the decision 
of the prospective buyer or tenant and it consequently loses its added value. 

In order to use the full potential of the energy performance certificate, the information related 
to the energy performance of a building has to be disclosed as early as possible. In this way 
information  on  the  energy  performance  can  determine  the  choice  for  a  particular  building. 
Such  information  is  already  provided  by  some  real  estate  agencies,  for  example  in  the  UK, 
which include the 'rainbow' rating from the Certificate in the ads that are at displayed in their 
offices and in the websites. 

Proposal: To require that the energy performance certificate is displayed in the publicity for 
property transactions when a property is on sale or for rent and to require that it is included as 
part of the property transaction documentation. 

The information on energy performance of a building should be integrated in all publicity for 
property  transactions.  A  similar  requirement  at  EU  level  has  already  been  made  for  the 
disclosure  of  fuel  economy  and  CO2  emissions  for  the  marketing  of  new  passenger  cars.  In 
order to have an effect, this information should be explicitly mentioned on any contract for a 
property  transaction.  In  this  it  can  be  considered  as  any  objective  information  regarding  a 
building such as the surface or the material description.  

Impact: Making energy performance part of the marketing process can, over time, add market 
value  to  good  performing  buildings,  which  will  have  a  competitive  advantage  over  similar 
buildings with the same price but performing less efficiently. Integrating energy performance 
information  in  publicity  and  marketing  tools  could  also  raise  the  awareness  of  the  general 
public.  Not  only  will  potential  buyers  or  tenants  be  able  to  compare  the  efficiency  of  their 
possible  choices,  the  general  public  will  familiarise  itself  with  the  concept  of  energy 
efficiency  of  buildings.  Home  owners  could  perceive  this  as  an  incentive  to  establish  the 
energy performance of their own property and act accordingly.  

As  the  preparation  and  presentation  of  the  certificates  are  already  required  in  the  current 
EPBD the costs for the consumers will be mainly for displaying the information (printing and 
including  it  in  websites)  while  the  costs  for  Member  States  will  be  for  monitoring  the 
compliance.  However,  the  added  value  of  the  information  for  the  real  estate  market  could 
compensate possible additional cost. No quantification on the impacts on energy savings and 

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CO2  emission  reductions  are  available  but  they  can  be  considered  relatively  high  and 
increasing in time as the role of the certificate will be considerably strengthened. 

Taking into account the important contribution of a requirement that would make certificates 
a mandatory part of property advertisement and the fact that similar approach at EU level has 
already been adopted in other sectors (i.e. CO2 emissions for the marketing of new passenger 
cars), the proposal would be inline with both the subsidiarity and proportionality principles. 
Making the certificate a mandatory part of property advertisement and/or property transaction 
documents  would  limit  the  interpretations  of  the  current  text  of  the  EPBD  which  already 
states  that  a  certificate  should  be  'made  available'  but  nevertheless  there  are  some 
interpretations that it does not mean that the certificates are de facto presented or handed over. 

5.4.4.  Option  B4.  Requiring  the  linking  of  the  certificates  with  other  support  or 

discouragement mechanisms 

Current  situation:  There  are  no  requirements  in  the  EPBD  that  stipulates  that  support 
mechanism should be linked with the certificate. Some of the possibilities that are available at 
EU level for general support schemes which could be linked to the certificate were listed in 
Section 2.2.4 and there are a number of examples from around the Europe of well functioning 
support schemes, although at present these do not necessarily include all of those which are 
needed. 

In  the  residential  and  commercial  buildings  chapter  of  the  fourth  Assessment  Report  of  the 
Intergovernmental  Panel  on  Climate  Change62,  it  is  stated  that  there  is  no  single  policy 
instrument  that  can  capture  the  entire  potential  for  GHG  mitigation.  Due  to  the  especially 
strong and diverse barriers in the residential and commercial sectors, overcoming these is only 
possible through a diverse portfolio of policy instruments for effective and far-reaching GHG 
abatement  and  for  taking  advantage  of  synergistic  effects.  Since  climate  change  literacy, 
awareness of technological, cultural and behavioural choices and their impacts on emissions 
are  important  preconditions  to  fully  operating  policies,  these  policy  approaches  need  to  go 
hand in hand with programmes that increase consumer access to information, awareness and 
knowledge (high agreement, medium evidence). This is confirmed by the summary report of 
the "Active Implementation of the European Directive on Energy Efficiency" (AID-EE). 

Nevertheless,  such  approach  has  already  been  adopted  in  several  EU  Member  States.  For 
example,  in  the  Netherlands  there  is  a  green  mortgage  which  house  owners  can  use  to 
implement energy saving measures during renovation. The size of the loan is coupled to the 
improvement of the energy performance label. This means that in cases where more energy 
saving  measures  are  implemented  the  energy  performance  of  the  house  is  further  approved 
and more money can be borrowed against favourable conditions (see Table 3). In general the 
interest is 1% lower than the market interest. The scheme is in force since May 2008, so there 
is no assessment available yet of its possible impacts63. 

62 

63 

IPCC,  Levine,  M.,  D.  Ürge-Vorsatz,  K.  Blok,  L.  Geng,  D.  Harvey,  S.  Lang,  G.  Levermore,  A. 
Mongameli  Mehlwana,  S.  Mirasgedis,  A.  Novikova,  J.  Rilling,  H.  Yoshino,  2007:  Residential  and 
commercial buildings. In Climate Change 2007: Mitigation. Contribution of Working Group III to the 
Fourth  Assessment  Report  of  the  Intergovernmental  Panel  on  Climate  Change  [B.  Metz,  O.R. 
Davidson,  P.R.  Bosch,  R.  Dave,  L.A.  Meyer  (eds)],  Cambridge  University  Press,  Cambridge,  United 
Kingdom and New York, NY, USA. 
VROM. Adjustment  regulation  Green  investments,  Ministry  of  Finance  and  Ministry  of  Housing, 
Spatial Planning and Environment, 22 April 2008 

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Table  3.  Improvements  to  the  energy  performance  (in  terms  of  energy  rating)  and  amount 
provided for green mortgage in the Netherlands 

From label 

To label 

Number of steps  Maximal green mortgage (EUR)

F 
F 
F 

D 
B 
A 

2 
4 
5 

25 000 
50 000 
100 000 

In  Portugal  energy  conservation  measures  will  be  financially  supported  by  tax  benefits,  this 
scheme will in the near future be coupled to energy performance certificates64.  

Interesting  examples  of  linking  energy  certificates  to  complementary  financial  or  fiscal 
mechanisms  are  to  be  found  outside  the  built  environment.  For  example,  in  2006,  a  bonus-
malus (or ‘feebate’) mechanism was introduced for new automobiles in the Netherlands. The 
objective  of  the  scheme  is  to  shift  market  shares  from  inefficient  vehicles  towards  more 
efficient  ones.  The  scheme  entails  a  fiscal  bonus  (re-ward)  or  malus  (penalty)  for  buyers  of 
vehicles. The size of the bonuses or penalties is proportionate to the energy label of the car, 
which is considered an indicator of its CO2-emissions.  

An  evaluation  of  the  scheme  showed  that  a  considerable  shift  in  market  shares  had  in  fact 
taken place. Meanwhile, the costs of execution of the scheme are characterized as ‘relatively 
modest’. After all, an existing tax scheme for motorized vehicles was used as a platform for 
additional  incentives  for  efficiency.  Early  2008,  the  bonuses  and  maluses  were  increased  to 
higher amounts, in order to shift market shares further against virtually no additional cost65. 

The case of energy labelling of appliances in the Netherlands constitutes another interesting 
example.  It  can  be  questioned  whether  labelling  as  a  single  instrument  would  have  had  a 
substantial  impact  in  the  Netherlands.  High  efficient  appliances  are  more  expensive  and  are 
probably  not  attractive  for  consumers  without  additional  policies  (subsidies  and/or  eco-tax). 
What happened after the introduction of the energy label -and a subsidy scheme linked to it- 
was  that  the  market  share  of  energy  efficient  appliances  increased  rapidly  and  inefficient 
appliances were removed from the market. This happened at higher pace in the Netherlands 
than elsewhere in Europe. In this case the policy package counts up to success. In Sweden no 
subsidy scheme was linked to the labelling. Current penetration of high efficient appliances is 
comparable with penetration in the Netherlands. Market transformation, however, came at a 
later stage and might have benefited from policies introduced in other countries66. 

Proposal:  It  can  be  required  (or  recommended)  that  a  link  with  the  energy  performance 
improvements  is  made  when  financial  or  fiscal  support  by  Member  States  is  provided  to 
property owners (or tenants). 

64 

65 

66 

Information provided by Eduardo Maldonado, Universtiy of Porto, Portugal, email and telephone call 
13 and 17 June 2008 
VROM. Cijfers over wonen 2006 (Statistics on housing 2006), a report issued by the Dutch Ministry of 
Housing, Spatial Planning and Environment. The Hague, April 2007 
Kahn et al. 
From Theory Based Policy Evaluation to SMART Policy Design. Summary report of 
the  Active Implementation  of  the  European  Directive on Energy  Efficiency”(AID-EE)  project,  within 
the  framework  of  the  EU  Intelligent  Energy  by  Jamil  Khan  (Lund  University),  Mirjam  Harmelink, 
Robert Harmsen (both Ecofys Netherlands), Wolfgang Irrek (Wuppertal Institute) and Nicola Labanca 
(Politecnico), April 2007 

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There are various tools Member States can use to provide economic incentives for promoting 
energy efficiency measures in buildings and to respect subsidiarity the exact support should 
be  decided  on  national  or  regional  level.  One  option  could  be  to  link  financial  instruments 
such as subsidies, preferential loans or fiscal deductions with the use of energy performance 
certificates.  For  this  option,  energy  auditors  would  determine  the  energy  performance  of  a 
building  and  identify  cost-effective  energy  savings  measures  accordingly.  If  the  owner 
decides  to  carry  out  the  suggested  energy  efficiency  measures,  he/she  could  get  financial 
support when decisively upgrading the energy performance of his building from e.g. a D to a 
B  grade.  A  new  certificate  would  then  be  issued  to  document  the  savings  reached  after  the 
implementation of the savings measures. 

Impact:  The  impacts  of  linking  of  the  certificates  with  other  support  or  discouragement 
mechanisms are difficult to quantify as they are very dependant on the specifics of the support 
system  that  is  to  be  devised  by  individual  Member  States.  However,  it  would  require 
significant state funds (some also coming from the Structural and Cohesion funds). 

Provision  of  financial  stimuli  will  inevitably  lead  to  energy  efficiency  improvements.  For 
example,  the  above-mentioned  STABLE  project  concluded,  among  others,  that  the  most 
important  factor  which  would  influence  the  uptake  of  energy  saving  measures  was  the 
availability of investment grants and subsidies. Nearly all respondents (93%) consider that if 
implementation were to be supported by financial mechanisms, this would stimulate them to 
realize the cost-effective recommendations of the energy performance certificate. 

However, such a requirement would not be in line with the subsidiarity principle as it would 
touch issues of national budget spending. Furthermore, the introduction  of such a text into a 
Directive based on Art. 6 (environmental protection) of the Treaty may not be possible from a 
legal point of view. 

5.5. 

Inspection of heating and air-conditioning systems 

The  EPBD  requires  organising  regular  inspections  of  heating  and  air-conditioning  systems. 
These systems have a very high energy saving potential, up to 40-60% of their total energy 
use. In this context, the current EPBD's inspection requirement is estimated to result in just 
10% energy savings67. So there is significant room for further savings. The need for further 
action is even more important because of the significant increase of air-conditioning systems 
throughout Europe. As the components of heating and air-conditioning systems are tradable 
goods, an initiative which is as much harmonized as possible within the EU is desirable (i.a. 
to  ease  internal  market  activity),  that  is  why  action  at  Community  level  is  deemed  to  be 
appropriate. 

5.5.1.  Option  C1:  Requiring  an  'inspection  report'  for  heating  and  air-conditioning 

systems 

Current  situation:  The  existing  EPBD  inspection  requirements  generally  aim  at  energy  and 
CO2  savings,  but  they  do  not  specify  the  inspections'  content  and  deliverables.  Therefore, 
some  of  the  Member  States'  inspection  schemes  are  imprecise  and  give  limited  energy 

67 

Estimations  made  corresponding  to  current  Danish  action  plans,  for  new  buildings.  According  to 
Scholten  et  al.  about  10%  of  energy  savings  are  expected  as  result  of  an  average  increase  of  heating 
system  efficiency  from  76%  to  86%.  Source:  Toothless  tiger?  Is  the  EU  action  plan  on  energy 
efficiency sufficient to reach its target?, A. Scholten, S. Lechtenböhmer, D. Mitze and S. Thomas, 2007 

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savings. In many Member States inspections are not sufficiently prescribed or are only based 
on  safety  checks  (i.e.  in  France,  The  Netherlands),  so  they  do  not  directly  lead  to  energy 
savings. Besides, few Member States have organised systematic information, promotion, and 
advice campaigns to date, as requested by article 8(b) of the EPBD.  

Consumers  and  building  owners  need  more  information.  Better  operation  and  control  of 
systems  and  retrofit  of  old  systems  and  components  by  more  efficient  ones,  brings  big 
savings.  Proper  and  regular  inspection  and  maintenance  of  the  heating  and  air-conditioning 
systems accompanied by adequate information/advice to building owners for retrofitting can 
significantly stimulate and accelerate these savings68. 

Proposal: An inspection report should be given to building owner after the inspection. This 
should  include  an  energy  efficiency  rating  of  the  heating/cooling  systems,  e.g.  compared  to 
up-to-date  and/or  best  technology  available,  and  recommendations  for  cost-effective 
improvement measures.  

Furthermore,  it  could  be  requested  that  these  recommendations  contain  an  estimate  of  the 
costs  for  replacing  the  existing  boiler,  water  heater,  or  cooling  system  with  a  new  one  that 
complies with the Eco-design69 minimum requirements, or 'A' class under Energy Labelling70. 

An inspection report including recommendations for system improvement would not need to 
be made with the same frequency as the inspection of the systems themselves, as its rating and 
recommendation results remain valid for a longer period of time. 

The relevant CEN standards for inspections could be further developed. These would allow an 
efficiency  rating  of  the  installations.  They  could  represent  an  overarching  guideline  which 
supports Member States' implementation of an inspection report71. The EPBD recasting could 
therefore  directly  refer  to  these  CEN  standards  and  minimum  energy  efficiency  installation 
requirements could be set by Member States based on these standards. 

As  a  further  step,  the  recommended  saving  measures  in  the  inspection  report  could  be 
requested  to  be  realized.  Measures  with  short  payback  periods  could  be  required  to  be 
implemented  faster  than  the  ones  with  a  longer  payback  period.  Therefore,  the  inspection 
report should have clear information on economic information to building owners. 

68 

69 

70 

71 

Due  to  boiler  replacement  combustion  efficiency  increased  on  average  by  7  %  in  Italy  (mainly  gas 
boilers) and 5 % in Finland (mainly oil boilers); Fuel saving due to a more frequent regular maintenance 
(yearly instead of customary average) was calculated between 1.3 % and 2.5 % (Ireland); Statements by 
Marcello Antonucci, Krzysztof Klobut in presentation 'How to evaluate the impact of inspections and 
advice programmes for boilers' at 9th World Congress Clima2007, Helsinki, June 2007 
(http://www.rehva.com/projects/clima2007/WSs/WS7/WS7_pSUMMARY.pdf) 
Directive  2006/32/EC  of  the  European  Parliament  and  of  the  Council  of  6 July  2005  establishing  a 
framework for the setting of ecodesign requirements for energy-using products and amending Council 
Directive 92/42/EEC and Directives 96/57/EC and 2000/55/EC of the European Parliament and of the 
Council, OJ L 191, 22/07/2005 p. 29 -58 
Council Directive 92/75/EEC of 22 September 1992 on the indication by labelling and standard product 
information  of  the  consumption  of  energy  and  other  resources  by  household  appliances,  OJ  L  297, 
13/10/1992, p. 16–19 
The  outcomes  of  relevant  projects  under  the  EU  IEE  programme,  such  as  AUDITAC  and 
HARMONAC, can be of further support. 

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Impact: In average, the inspection report could bring about 30% of building owners inspected 
to follow the advice, e.g. in France, the impact of individual energy advice has been estimated 
at  30%,  and  in  Sweden  incentives  on  individual  oil  boilers  substitution  resulted  in  30% 
renovation72. Assuming an average inspection frequency of 3.3 years, the requirement for an 
inspection report would therefore lead to an annual renovation rate of 9.1% per year (30% / 
3.3). The current renovation rate is about 6.7% per year (assuming an average boiler lifetime 
of  about  15  years).  Thus  the  inspection  report  could  lead  to  about  2.4  %  additional 
replacements/retrofits  of  the  stock  of  boilers  and  combi-water  heaters  per  year.  As  a 
consequence, not only 80% of the stock of boilers and combi-water heaters would be replaced 
by  2020  (as  is  the  case  with  current  replacement  rate),  but  100  %  of  the  stock  would  be 
replaced by more efficient products. Realistically, this figure might be lower at 95 % due to 
market  imperfections,  to  calculate  conservatively.  The  additional  annual  savings  in  2020 
caused by the inspection report requirement would therefore be around 5 Mtoe final energy, 
15 to 20 Mt CO2, or €2 billion (net of extra cost of replacement) 73. 

Inspections  of  heating  and  cooling  systems  can  furthermore  -  apart  from  energy  savings  - 
achieve co-benefits, such as decrease of discomfort hours caused by non-properly  operating 
heating/cooling systems, as examined by Bory et al74. 

In addition, the new system could help manufacturers to produce heating and air-conditioning 
systems for the entire EU market which are easier to inspect, which could therefore improve 
the  companies'  competitiveness.  Furthermore,  inspection  of  heating  systems  is  linked  to 
creation of jobs, which can be estimated at 195,000 jobs (inspectors and energy consultants) 
in EU-2775 in 2020 if made properly and if including the inspection report requirement. This 
means  about  25%  or  40,000  more  inspectors  than  currently  needed  for  the  existing  EPBD 
heating  system  inspection  requirement.  For  air-conditioning  systems,  it  can  be  estimated  at 
around  30,000  (inspectors  and  energy  consultants)  in  EU-2776  in  2020,  which  means  about 
6,000  more  inspectors  than  currently  needed  for  the  existing  EPBD  air-conditioning  system 
inspection requirements (see Annex IV for the assumptions).  

Additional cost to the Member States and their consumers of the inspection report should be 
low,  as  the  information  on  the  existing  boiler,  and  system  etc.  should  already  be  available 
from the building certificate and boiler/cooling inspection. The extra cost will be selecting the 
right size and technical specification of a replacement and cost of installation system. Given a 
well  designed  system,  the  add-on  cost  to  the  inspector  should  be  low  (less  than  10%  of 
inspection cost e.g. every 4 to 6 years).  

Finally,  as  is  the  case  for  recommendations  from  the  buildings  certificate,  national  subsidy 
schemes could and should support the investments that originate from the inspection report. 

72 

73 

74 

75 

76 

'Summary of WS : How to evaluate the impact of inspections and advice programmes for boilers' at 9th 
World  Congress  Clima07,  Helsinki, 
2007,  www.rehva.com/projects/clima2007/WSs/WS7/ 
WS7_pSUMMARY.pdf 
VHK  EcoDesign  of  boilers  and  combi-boilers  study,  2007  and  DG  TREN  model  based  calculations 
built on the VHK study. 
Daniela  Bory,  Jerome  Adnot,  Carmelo  Greco,  Dominique  Marchio:  Auditing  the  European  room  air-
conditioning systems and potential energy savings, 2007 
VHK EcoDesign of boilers and combi-boilers study, 2007, task 2 and extrapolated from EU-25 to EU-
27 by BIO Intelligence Service S.A.S. (using calculation methodology according to Jerome Adnot) 
In  2017,  based  on  extrapolation  out  of  Roger  Hitchin,  Jerome  Adnot,  Maxime  Dupont:  'Issues  of  the 
implementation of the EPBD article 9', 2005 

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The  inspection  report  would  be  an  important  upgrading  to  the  existing  requirements  for 
inspection and would help consumers in identifying important possibilities for cost-effective 
energy savings and therefore it is justified from proportionality point of view. 

5.5.2.  Option  C2:  Introducing  quality  check  and  compliance  requirements  for 

inspections 

Current situation: Member States have introduced very different requirements with regard to 
educational  preconditions  and  training  of  the  independent  experts  which  are  allowed  to 
execute inspections. The actual independence, required by the existing EPBD, and quality of 
inspectors therefore varies widely within the EU. 

Where  there  is  currently  little  or  no  compliance  control  of  inspections  and  inspection 
outcomes  of  heating  and  air-conditioning  systems,  the  implemented  national  inspection 
schemes  are  unlikely  to  contribute  a  lot  to  the  realization  of  the  energy  saving  potential  of 
installations: The technical saving potential for heating systems is estimated to be very high, 
at 30%77, which correspond to around 66 Mtoe final energy savings, reduction of €55 billion 
of  costs  and  252  Mt  CO2  emission  savings  per  year  in  2020.  Similarly  regarding  the  air-
conditioning  systems,  technical  energy  savings  potential  can  reach  a  maximum  of  50%  of 
their final energy use74. 

inspection  schemes  are  unlikely 

Without  control  of  the  inspection  outcomes  of  heating  and  air-conditioning  systems,  the 
national 
to  achieve  sufficient  energy  efficiency 
improvements.  Analysis  of  stakeholders  and  experienced  Member  States78  (e.g.  Sweden, 
Germany, France, Italy) recommend ensuring that effective enforcement systems are in place 
for  compliance  and  to  regularly  and  independently  assess  whether  the  control  regimes  are 
effective.  The  importance  of  compliance  controls  is  also  underlined  by  numerous 
contributions  to  the  public  consultation  on  the  EPBD  recasting:  About  one  third  of  all 
contributors asked explicitly for compliance control requirements for inspection in an EPBD 
revision, whereof about 90 % of them are representing big European associations.  

For example, for air-conditioning systems the energy savings of the compliance requirements 
can  be  estimated  at  up  to  20%  of  their  total  energy  saving  potential,  which  correspond  to 
around 0.5 Mtoe final (electricity) energy savings79, reduction of €1.1 billion of costs and 5.7 
Mt CO2e emissions savings per year in 2020. 

Member  States  have  introduced  very  different  requirements  with  regard  to  educational 
preconditions and training of the independent experts who are allowed to execute inspections. 
Their actual independence, required by the existing EPBD, and quality therefore varies widely 
within the EU. 

77 

78 

79 

VHK EcoDesign of boilers and combi-boilers study, 2007, task 6, p. 36 (data correspond to scenario for 
design option 3 for XL boilers). 
As  e.g.  presented  at  the  2nd  Sustainable  Energy  Week  event  'Energy  Performance  of  Buildings 
Directive  -  Next  Steps'  in  January  2008  and  as  demonstrated  in  a  Swedish  case  study  of  2007  (see 
European Energy Network EnR: Implementation of the Energy Performance of Buildings Directive - a 
snapshot  report,  2008),  In  Sweden,  energy  monitoring  must  be  undertaken  for  a  period  of  two  years 
after  the  building  has  been  completed,  to  demonstrate  compliance  on  the  ground.  The  policy  was 
introduced  in  mid-2006  and  results  will  begin  to  emerge  soon.  Large  property  developers  have 
expressed their support for the initiative 
Based on extrapolation out of data originating from ‘Energy Efficiency and Certification of Central Air 
Conditioners’ (EECCAC), 2003. 

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The  importance  of  compliance  controls  is  also  underlined  by  numerous  contributions  to  the 
public  consultation  on  the  EPBD  recasting:  About  one  third  of  all  contributors  asked 
explicitly  for  compliance  control  requirements for  inspection  in  an  EPBD  revision,  whereof 
about 90 % of them are representing big European associations. 

Any  compliance  control  scheme  for  inspections  should  be  well  balanced  with  regard  to 
control costs and achievable benefits in terms of energy and emission savings and their gross 
economic costs. Such a control scheme has to be as effective as possible at low administrative 
efforts.  In  doing  so,  a  positive  balance  between  benefits  and  control  costs  (in  terms  of 
improved quality and saved energy and emissions) can be achieved 

Proposal:  Similar  to  what  has  been  presented  under  option  B1  on  energy  performance 
certificates for buildings, random sampling checks of inspection reports (presented in option 
C1)  of  different  levels  of  detail  and  frequency  could  therefore  be  introduced  as  a  new 
requirement. The levels of the random sampling regime could range from validity checks of 
input and/or result data for inspection reports to on-site checks of heating and air-conditioning 
systems inspected. 

The  compliance  control  regime  could  also  guarantee  a  sufficient  quality  of  experts  carrying 
out the inspections80, leaving it to the Member States to lay down training requirements and 
educational preconditions for inspectors. However, as an indirect consequence, by a control of 
the inspection report a sufficient quality of inspectors would be checked automatically at the 
same time.  

Member  States  could  be  requested  to  establish  random  sampling  checks,  for  e.g.  0.1  %  of 
annually carried out inspections81, at 3 levels of detail: A certain share of these checks could 
requested  to  be  done  by  a  validity  check  of  input  data  and  given  recommendations  of 
inspection reports only. Another (lower) share could be requested to be checked (stricter) for 
input data and the recommendations could be recalculated by a controller. And another (very 
low)  share  of  random  sampling  checks  could  consist  of  the  aforementioned  proposal  plus 
control of the heating/air-conditioning system on site for correspondence with the certificate.  

Impact:  Similar  to  what  has  been  described  under  option  B1  on  certificates,  a  random 
sampling  control  of  inspection  results/reports  is  an  option  to  improve  the  quality  of 
inspections;  guarantee  a  sufficient  quality  of  information  on  energy  efficiency  improvement 
measures provided to the owner of a building by the inspection report and therefore increase 
the retrofitting rate of heating and air-conditioning systems; and ensure a sufficient quality of 
inspectors at the same time for reasonably low administrative efforts and costs. 

A  random  sampling  check  of  the  inspection  outcomes  for  heating  and  air-conditioning 
systems  does  have  positive  effect  on  creation  of  jobs:  i.e.  in  Portugal,  the  quality  of  the 
certificates is checked every five years on 10% of the total. For inspections, random sampling 

80 
81 

ibid 48 
Underlying  that  an  accredited  expert,  specialised  on  issuing  energy  performance  certificates  for 
buildings,  compiles  one  certificate  per  working  day,  so  about  200  certificates  a  year.  A  random 
sampling  check  of  0.5  %  of  certificates  would  therefore  mean  that  accredited  experts  face  with  one 
control per year on average. 

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rate  can  be  assumed  as  similar,  which  could  result  in  23,000  jobs82  (inspectors  and  energy 
consultants) for EU-27 by the year 2020. 

Similar to option B1 proposing such requirements can be justified from a proportionality point 
of view as, from the current practice, it has been evident that without compliance checks the 
usefulness and credibility of inspections is in question. 

5.6.  Minimum energy performance requirements 

The  present  energy  performance  requirements83  and  their  levels  of  ambition  vary  widely 
across  the  Member  States,  even  within  similar  climatic  zones.  Cross-border  comparisons  of 
fixed requirements are difficult due to very different basic approaches regarding how energy 
performance requirements are calculated and expressed. In addition, a multitude of different 
parameters are used for calculation purposes. Furthermore, with regard these parameters, very 
different definitions exist in Member States84. Moreover, some Member States focus on fixing 
the  transmission  losses  of  a  building  by  setting  minimum  requirements  for  individual 
components,  such  as  windows,  others  have  established  holistic  energy  performance  rating 
methodologies,  fixing  e.g.  the  maximum  allowed  primary  energy  demand  and/or  CO2 
emission for a building, fully or partly based on relevant CEN standards. These incorporate, 
inter alia, energy consumption for lighting, ventilation and domestic hot water. 

This fragmented situation is the result of many years of development of building regulations 
in the Member States, each having different starting points, dates (some started decades ago, 
some  recently)  and  executive  bodies.  The  existing  performance  requirements  and 
methodologies  also  regularly  undergo  revision.  Furthermore,  the  performance  requirements 
have to be in line with other, non-energy national building regulations, which are outside the 
scope  of  the  EPBD.  An  all-embracing  project85  was  launched  in  autumn  2007  in  order  to 
assess  these  differences  and  to  analyse  how  cross-border  comparisons  can  be  made  in 
principle.  The  project  consists  of  16  international  partners  from  across  the  EU  and  is 
scheduled to run for 2.5 years. 

The  overarching  aim  of  an  EU  legal  activity  on  energy  performance  requirements  in  the 
buildings  sector  is  to  achieve  optimum  performance  requirements,  which  are  feasible,  cost-
effective  and  in  balance  with  provoked  energy  savings,  technical  and  environmental 
feasibility  and  subsidiarity86.  Cost-optimal  levels  are  not  yet  achieved  European-wide  by 

82 

83 

84 

85 

86 

Based on Roger Hitchin, Jerome Adnot, Maxime Dupont: 'Issues of the implementation of the EPBD 
article 9', 2005; see Annex IV for further information. 
Energy performance requirements: meaning regulations which limit the energy use of buildings under 
standardised  conditions,  expressed  as  a  fixed  limit  of  e.g.  the  annual  final  or  primary  energy  use  in 
kilowatt hours per square meter useful floor area of a building [kWh/m2.a] 
Such  as  e.g.  "useful  floor  area",  a  common  value  on  which  the  energy  performance  of  a  building  is 
based  on:  Energy  consumption  in  kWh  per  m2  useful  floor  area,  varying  up  to  +/-10  -  15  %  across 
Member  States,  see  e.g.  information  paper  P65  "Comparing  Energy  Performance  Requirements  over 
Europe" at the Commission's Buildings Platform (www.buildingsplatform.eu). 
ASIEPI  project  -  Assessment  and  Improvement  of  the  EPBD  Impact,  project  under  the  Intelligent 
Energy Europe Programme, 10/2007 to 3/2010 
Ambitious  energy  performance  requirements  for  buildings  (insulation  and  reduction  of  uncontrolled 
ventilation  by  improved  air-tightness)  sometimes  have  been  blamed  for  a  degradation  of  the  indoor 
environment and increase in problems in connection with moisture and dampness in buildings. Several 
studies,  such  as  the  comprehensive  Swedish  survey  about  health,  well  being  and  energy  efficient 
buildings  (Energy  efficient  and  healthy  buildings,  M.  Gullberg,  ÅF  Process  Sweden,  E.  Öfverholm, 

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nationally  fixed  energy  performance  requirements,  which  is  why  further  stimulation  at 
Community level could realize additional energy savings. It is also important for regulation 
to encourage and not hamper innovation in the buildings sector. The existing EPBD respects 
this  by  requesting  the  Member  States  to  set  a  holistic  methodology  (instead  of  fixing  very 
specific details of each component of a building) and any change in legislation must recognise 
the importance of this approach87. 

The options for energy performance requirements below reflect these fundamentals. 

5.6.1.  Option D1: Establish EU energy performance requirements 

Current  situation:  Member  States  individually  fix  energy  performance  requirements  for 
buildings at different levels, based on different methodologies and covering different scale of 
influencing  factors88,  as  stated  above  in  the  introduction  to  options  D.  European  CEN 
standards for energy aspects in the buildings sector, initiated by the Commission in 2004 to 
support  Member  States  implementing  the  existing  EPBD,  only  reduced  this  variety  to  a 
certain  extent.  Furthermore,  not  all  Member  States  make  broad  use  of  them.  One  option  to 
achieve ambitious requirements EU wide and to harmonize them could therefore be to fully 
lay down binding methodologies and levels of requirements at EU level. 

The  principle  structure  of  Member  States'  legislation  on  buildings  differs  widely.  Energy 
performance requirements are often embedded in complex national building regulations and 
rarely  laid  down  separately  without  interconnections  to  other  legislation.  These  building 
regulations  often  also  go  beyond  energy  aspects,  such  as  health  requirements  on  indoor  air 
quality,  static  requirements,  structural  fire  protection  or  noise  control  etc.  Member  States' 
notifications on the implementation of the existing EPBD confirm these common legal cross 
correlations. Furthermore, Member States insist on the subsidiarity principle when it comes to 
specifying individual building requirements. 

To set minimum energy performance requirements for buildings at EU level would therefore 
require (i) either to unbundle national building regulations in order to separate and fix energy 
aspects  with  one  harmonized  approach  (ii)  or  to  develop  an  approach  at  EU  level  which  is 

87 

88 

Swedish  Energy  Agency,  M.  Bengtsson  and  N.  Tolstoy,  National  Board  of  Housing,  Building  and 
Planning,  2005)  disproved  this  claim.  Health  aspects  in  buildings  are  rather  a  question  of  proper 
construction work and pattern of use, independent of the level of energy performance requirements on 
the construction, notably that adding envelope insulation and improving air-tightness need to be made 
together with correct natural or adjusted mechanical ventilation. 
In this regard, e.g. an overall limitation of the building's primary energy demand calculated according to 
the  aforementioned  holistic  methodology  by  a  building  regulation  leaves  full  room  for  best  technical 
solutions how to comply with these requirements, so which combination of e.g. insulation levels, boiler 
efficiency level and use of renewable energy sources ensures to keep the overall primary energy limit of 
a building. A counter-example would be to define exactly in the building regulation what type/level of 
insulation has to be used for the building envelope or which type of boiler is allowed to be installed etc 
in order to limit the energy consumption of the building. 
See  several  comparison  studies,  such  as:  Scottish  Building  Standards  Agency,  "International 
comparison  of  energy  standards  in  building  regulations:  Denmark,  Finland,  Norway,  Scotland,  and 
Sweden", Scotland, 2007; Belgium Building Research Institute, "Energy performance regulations: small 
scale comparison between Flanders, the Netherlands, Germany and France", Belgium, announced to be 
published  in  summer  2008;  Department  of  the  Environment,  Heritage  and  Local  Government, 
‘Consultancy study of energy efficiency regulations for new dwellings and options for improvement’, 
Ireland, 2007; ASIEPI project - Assessment and Improvement of the EPBD Impact, project under the 
Intelligent Energy Europe Programme, 10/2007 to 3/2010. 

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able  to  take  implicitly  into  consideration  all  existing  national  interconnections  to  other 
building legislations for consistency reasons.  

Proposal:  Specifying EU-wide energy performance requirements for buildings in the EPBD, 
taking  into  consideration  various  factors,  for  example,  different  climate  zones  and  building 
types (residential and non-residential buildings) 

Setting harmonised energy performance requirements at EU level, e.g. expressed as maximum 
annual  primary  energy  use  per  useful  floor  area  of  a  building  [kWh/m2.a]  in  dependence  of 
the  outdoor  climate,  could  ensure  more  ambitious,  cost-optimal  energy  efficiency  levels 
throughout  the  EU.  As  the  design  and  use  of  buildings  is  widely  varying  and  does  have 
significant  influence  on  the  energy  needs,  a  differentiation  of  building  types  would  also  be 
necessary when fixing these requirements, as is practice today in almost all Member States. 

Impact: The energy savings potential of this option D1 in 2020 can be estimated at 9.5 Mtoe 
per year for EU-27 (see Annex IV for assumptions made for the potential calculations). This 
means a potential of 24 Mt CO2 emission savings per year. It incurs annual capital costs of €6 
billion  per  year  for  investments  and  results  in  annual  energy  cost  savings  of  €12  billion  in 
2020.  The  number  of  newly  created  jobs  within  the  buildings  sector  can  be  estimated  at 
82,000.  These  figures  are  based  on  currently  laid  down  levels  of  energy  performance 
requirements in the Member States compared to newly fixed cost-optimal requirements at EU 
level, which would be more ambitious on average. 

Furthermore, it would ease cross border comparisons and the achievement of equal levels of 
ambition  in  all  Member  States.  It  could  help  construction  companies,  construction  products 
manufacturers  and  energy  services  companies  to  understand  and  to  comply  with  building 
regulations all over the EU and therefore stimulate the internal market for this sector. 

Setting harmonized minimum energy performance requirements at EU level could be difficult 
with  regard  to  concerns  of  Member  States,  which  claimed  that  it  is  in  Member  States 
competence  to  specify  detailed  building  regulations.  Furthermore,  it  could  hamper  Member 
States from laying down even stricter energy performance requirements which were already 
announced to come. Moreover, an EU-wide regulation would become very complex in order 
to  reflect  all  national  particularities  in  a  fair  way  and  therefore  could  become  indefinite  in 
practice and take a very long time to be fixed. 

5.6.2.  Option D2: Introducing methodology for benchmarking 

Current  situation:  As  analysed  in  the  previous  option,  a  uniform  EU  wide  energy 
performance  setting  is  very  challenging,  that  is  why  other  possibilities  also  need  to  be 
verified.  Benchmarking  is  one  common  instrument  whenever  complex  issues  need  to  be 
tackled or assessed without specifying all the underlying (technical) details and requirements. 
It is a results-oriented methodology in order to rate the achieved or aspired level of a matter. 
Benchmarking  of  energy  performance  requirements  can  e.g.  be  the  comparison  of  existing 
national  requirements  with  a  set  of  similar  regulations  laid  down  in  other  countries  or  with 
e.g.  cost-optimal  energy  performance  requirements.  Hence,  it  can  steer  Member  States 
towards  best  practice  or  cost-optimal  solutions  and  create  competition  amongst  Member 
States  towards  the  best  or  most  ambitious  energy  performance  requirements.  Real  estate 
companies,  chain  store  companies  and  institutions/authorities  often  use  benchmarking 
methods  when  managing  a  large  number  of  buildings.  So  an  objective  benchmarking 
mechanism  could  guide  and  support  Member  States  towards  setting  cost-optimal  holistic 

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energy  performance  requirements.  Currently,  only  a  few  Member  States  fix  their  levels  of 
requirements  based  on  national  economic  impact  assessments,  as  stated  in  answers  to  the 
questionnaire which has been sent to Member States in spring 2008 (see Annex II). 

Proposal: Include in the EPBD (i.e. as an annex) a methodology showing how to calculate the 
cost-optimal level of energy performance requirements for buildings of which Member States 
shall make use of as a benchmarking instrument and present the calculation and results of the 
benchmarking to the Commission by reports and/or in the EPBD Comitology Committee. 

National  energy  performance  requirements  for  buildings  could  be  geared  to  cost-optimal 
requirements  by  providing  Member  States  with  a  methodology  for  benchmarking.  The 
cost-optimal  requirements  (=  best  economic  balance  of  investment  costs  versus  energy 
savings)  could  therefore  be  specified  by  an  objective  methodology  allowing  implicit 
consideration of all boundary conditions by parameters. This methodology should be based on 
EPBD CEN standards, which already fulfil these requirements. The parameters used inter alia 
consist of outdoor climate, energy prices, labour costs, material (e.g insulation), product (e.g. 
windows, heating systems) and service costs, as these vary within the EU and influence the 
cost-optimal level of energy performance requirements for buildings. 

Such  a  benchmarking  mechanism,  consisting  of  a  CEN  based  calculation  methodology  for 
cost-optimal  energy  performance  requirements,  could  be  introduced  to  the  EPBD.  It  would 
contain all relevant parameters (e.g. underlying construction product costs, energy costs, taxes 
etc.). The specific parameters would have to be fixed at national level (only for benchmarking 
purposes),  not  in  the  EPBD  and  therefore  with  respect  to  the  subsidiarity  principle.  In 
practice,  Member  States  could  then  be  requested  by  the  EPBD  to  recalculate  (i)  their 
nationally  fixed  energy  performance  requirements  and  (ii)  the  cost-optimal  level  of 
requirements  with  the  aforementioned  new  EPBD  methodology  in  order  to  benchmark.  The 
calculation results and the specific parameters used could then be required by the Commission 
to be published in reports and/or EPBD Comitology committee meetings. 

In  doing  so,  Member  States  would  not  be  asked  to  change  their  (complex  and  widely 
varying) national methodologies to set their requirements, but would be asked to carry out a 
comparison calculation with the aforementioned new EPBD benchmarking methodology, in 
order  to  check  whether  their  level  of  fixed  requirements  is  at  the  cost-optimal  level  or  not. 
Therefore, the ambition of energy performance requirements that Member States actually set 
would be made transparent, which is very difficult to rate at present. Furthermore, this could 
also  help  to  make  cross-country  comparisons  for  levels  of  ambition  of  fixed  energy 
performance requirements, as the calculation methodology and all parameters used would be 
made  public.  So  the  benchmarking  instrument  is  just  a  "translator"  of  complex,  widely 
varying  energy  performance  requirements  fixed  at  national  levels  to  an  EU-wide  identical 
methodology  for  comparison  purposes,  not  for  regulating  the  levels  of  requirements  at  EU-
level. This would clearly indicate whether Member States are below the optimal levels which 
would  mean  that  money  from  potential  energy  savings  are  lost  every  time  regulations  are 
applied  or  whether  Member  States  are  too  ambitious  in  their  requirements  and  pose  an 
unjustified burden on their citizens.  

Impact: Based on current energy performance requirements in the Member States, the long-
term impact of the described new benchmarking system in terms of energy savings (current 
level versus theoretically cost-optimum level) can be identical to option D1, being estimated 
at 5 Mtoe for EU-27 in 2020 and 9.5 Mtoe in 2030 on a yearly basis in residential and non 
residential buildings. This also means a potential ranging from 13 Mt CO2 emission savings 

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on  a  yearly  basis  in  2020  to  24  Mt  CO2  emission  savings  per  year  in  203089.  The  figures 
represent  the  maximum  possible  impact,  i.e.  meaning  that  Member  States  would  gradually 
correct their national levels and half of them would adjust their national levels to cost-optimal 
ones by 2020 and all Member States would do so by 2030. 

Furthermore,  the  potential  number  of  new  jobs  (all  tackled  sectors  together,  so  construction 
and installation sector, manufacturers and energy services) can be estimated at 82,00090 in the 
long run if minimum energy performance requirements for new and refurbishment of existing 
buildings  were  individually  lifted  to  cost-optimal  levels  in  all  Member  States.  The 
administrative  costs  of  this  benchmarking  mechanism  would  be  very  low,  as  only  a 
recalculation  of nationally  fixed requirements would  be  requested  (plus  publication  of  fixed 
parameters used). 

Furthermore,  administrative  costs  within  the  EU  could  be  kept  to  a  minimum  by  providing 
Member  States  with  a  uniform,  objective  benchmarking  methodology  within  the  EPBD.  At 
present,  Member  States  develop  national  approaches  on  how  to  fix  the  requirements. 
Frequently  new  economic  analysis  is  undertaken  for  each  revision  of  energy  performance 
requirements. 

Introducing  a  benchmarking  methodology  for  fixing  energy  performance  requirements  for 
buildings in the EPBD could simultaneously: 

•  support Member States in laying down cost-optimal levels of holistic energy performance 

requirements in an objective manner, 

•  lead  to  more  transparency  for  all  parties  involved  whenever  energy  performance 
requirements  are  fixed  by  Member  States,  as  a  fully  transparent  and  public  methodology 
would  be  introduced  which  allows  for  validating  the  fixed  levels  of  energy  performance 
requirements, 

•  provide Member States with a method which does not have to be revised as frequently as 
the requirements themselves and therefore offers planning certainty to Member States and 
all parties involved, and 

•  keep the integral administrative costs for the EU and for Member States to a minimum for 

this complex issue. 

The disadvantage of this option is its soft, rather voluntary nature, as Member States would 
not be forced to fix their energy performance requirements at the cost-optimal level, but just 
to  benchmark  them.  So  the  success  of  this  option  cannot  be  guaranteed.  However,  it  is 
believed that it would create significant peer-pressure from the front runner countries, as well 
as  from  the  construction  industry  and  other  stakeholders,  and  would  ultimately  move  all 
Member States towards cost-optimal energy efficiency requirements. 

This is a "soft law" instrument and would not impose any requirement for the Member States 
to  correct  their  levels  and  this  will  be  in  line  with  the  proportionality  and  subsidiarity 
principles. 

89 
90 

Provided by consultant, based on PRIMES model calculation. 
Provided by consultant, based on EURIMA estimates, corrected for current variables. 

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5.6.3.  Option  D3:  Develop  an  evolving  improvement  scheme  for  the  buildings  stock 
focussing on the worst performing buildings (a kind of top-runner approach) 

Current  situation:  Buildings'  life  cycle  ranges  from  several  years  to  several  centuries.  The 
energy performance standard significantly varies by the age of the building. This is caused by 
the evolution of construction methods and the coming into force of building regulations: 

Strengthening of requirements: New buildings
Strengthening of requirements: New buildings

Heat Demand [kWh/(m²·a)]

350

300

250

200

150

100

50

0
1970

Thermal Insulation Ord. 1977

Thermal Insulation Ord. 1984

Thermal Insulation Ord. 1984

Energy Saving Ord. 
2002 / 2004 / 2007

2009

2012

Passive House

1975

1980

1985

1990

1995

2000

2005

2010

2015

© 2006 Dipl.-Ing. Horst-P. Schettler-Köhler

Figure  3.  Development  of  strengthened  building  codes,  German  (left)  and  Danish  (right) 
example 

Furthermore,  the  energy  performance  differs  by  building  type  and  the  location,  due  to 
traditionally different methods of construction in individual Member States. 

Proposal:  Requirement  for  Member  States  to  monitor  the  buildings  stock  and  lay  down 
Action Plans how to increase the refurbishment rate and the energy performance of the worst 
performing buildings 

A  countrywise  monitoring  of  the  building  stock  looking  at  the  distribution  of  energy 
performance levels is proposed to help identify the worst performing buildings. Initiatives and 
measures to improve the energy efficiency could then be focussed on specific buildings, i.e. 
those with a performance below a specified threshold (see Figure 4). 

Energy Performance Frequency within the Buildings Stock

Energy Performance Frequency within the Buildings Stock

1.20E+00

1.00E+00

8.00E-01
y
c
n
e
6.00E-01
u
q
e
r
F
4.00E-01

2.00E-01

0.00E+00

Increase 
renovation rate of 
this category 
from e.g. current 
2 % p.a. to 6 % 

Increase renovation 
rate of this category 
from e.g. current
3 % p.a. to 8 % p.a.

1.20E+00

1.00E+00

8.00E-01
y
c
n
e
6.00E-01
u
q
e
r
F
4.00E-01

2.00E-01

0.00E+00

Worst 30 %

Worst 20 %

Worst 10 %

0

100

300
200
400
Energy Need [in kWh(m2.a)]

500

600

0

100

200
300
400
Energy Need [in kWh(m2.a)]

500

600

Figure 4. Illustration of the revolving stock concept 

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Sufficient statistical data on the national building stocks is a precondition for this approach, 
which aims at shifting poorly performing buildings towards better performance. According to 
analysis of the European ODYSSEE project91, the level of available statistics on the building 
stock  today  varies  widely  within  the  EU.  The  distribution  frequency  of  energy  performance 
levels for building types is not known in numerous Member States92. This situation hampers a 
systematic regulatory action to focus on worst performing buildings. Member States could be 
asked to improve the situation by developing detailed statistics on their buildings stock. Based 
on experience with most advanced countries, this is likely to take several years. On the other 
hand, Member States are asked to create detailed sectorial energy statistics for other purposes 
anyway, such as for the National Energy Efficiency Action Plans, which are required by the 
Energy End Use and Services Directive (2006/32/EC). This could help Member State to focus 
their financial support initiatives especially on the worst performing buildings where the ratio 
of  saved  energy  or  saved  ton  CO2  per  €  spent  is  best  and  th erefore  could  create  highest 
economic, social and environmental benefits. 

Impact: This 'evolving buildings stock' approach is a qualitative one which focuses on worst 
performing  buildings.  Measures  tend  to  be  of  high  cost-effectiveness  in  particular  for  these 
buildings. Nonetheless, a quantification of such an approach in terms of energy and emission 
savings,  job  creation  and  social  and  administrative  impacts  is  very  difficult  as  its  detailed 
implementation  and  scope  still  need  to  be  further  specified  and  no  EU-wide  harmonized 
statistical  data  is  available.  Tentative  estimations  could  be  given  only.  Administrative  costs 
can  be  estimated  to  be  high  as  the  statistical  monitoring  of  the  complex  and  fragmented 
buildings stock would have to be done in many Member States first. 

Such a requirement would have substantial budgetary implication for Member States if they 
have to provide funding for the poor performing buildings (which would especially be needed 
if they are occupied by low income people). Therefore, such an intervention would not fully 
respect the subsidiarity principle. 

5.6.4.  Option D4: Setting up EU–wide low or zero energy/carbon buildings/passive house 

requirements.  

Current situation: The buildings that are designed in a way that significantly decreases their 
energy needs, but providing adequate level of comfort are known under different names; low 
energy house, zero energy house, high-performance house, passive house93, etc.  

91 

92 

93 

ODYSSEE  -  Energy  Efficiency  Indicators  in  Europe:  Project  under  the  Intelligent  Energy  Europe 
Programme of the Commission, started in 1993, still ongoing (http://www.odyssee-indicators.org/) 
11 Member States of EU-25 do not dispose of sufficient energy efficiency indicators and data for the 
household and services sectors according to a presentation of Didier Bosseboeuf, ADEME (ODYSSEE 
project partner) at workshop 'New energy indicators for buildings and appliances: the way forward' of 
the International Energy Agency, Paris, 25-26 October 2007. 
The passive house concept was developed in Germany and refers to buildings that assure a comfortable 
indoor climate in winter without the need for a conventional heating system (with annual demand for 
space heating of 15 kWh/(m²a)) which means that they roughly use 85% less energy to heat that a house 
built  to  existing  German  building  regulations.  The  extra  costs  of  construction  are  repaid  over  a 
reasonable time period through the reduced heating bills in a typical Northern European climate. The 
application  of  this  definition  has  some  limitations  for  Southern  climates  where  the  air-conditioning 
demand 
(http://www.passive-on.org/en/details.php) 
For convenience in the document hereinafter the term low energy buildings is used. 

applied. 

cannot 

high 

and 

be 

is 

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The definitions and calculations methodologies differ a lot between EU Member States (i.e. 
seven  Member  States  have  official  definitions  and  further  seven  are  currently  developing 
them).  

Figure 5. illustrates well the different approaches used in Denmark (DK low energy class 1), 
Switzerland (Minergie), France (effinergie) and Germany (passive house)94.  

Several  Member  States95  have  made  ambitious  policy  statements  and  have  set  up  long-term 
targets  for  achieving  the  low  energy  standards  for  new  houses.  For  example,  in  the 
Netherlands  there  is  a  voluntary  agreement  with  industry  to  reduce  energy  consumption 
compared to the present building codes by 25% in 2011 and 50% in 2015 (which is close to 
passive  house)  and  to  have  energy  neutral  buildings  in  2020.  In  the  UK  the  ambition  is  to 
have zero carbon homes by 2016. In France by 2012 all new buildings should comply with 
"low-consumption" standard, and by 2020 be energy positive, i.e. produce energy. However, 
the concrete details for the realization of some of these plans are still under development. 

The  European  Parliament96,  stakeholder  organizations  and  some  respondents  to  the  public 
consultation have called for the introduction of very low energy requirements (passive house 
standard) for new buildings in the revised EPBD.  

However, so far the uptake of these houses has been limited, i.e. in the whole EU there are 
only 12-13,000 passive houses of which approximately 9-10,000 are located in Germany and 
2,000 in Austria97. 

Proposal:  A  requirement  can  be  introduced  in  the  revised  EPBD  that  all  newly  constructed 
buildings must meet the low energy building requirements from a certain date. 

94 

95 

96 
97 

Effinergie  presentation,  March  2007.  Adapted  from  EUROACE  SBI  Survey,  March  2008:  European 
national strategies to move towards very low energy buildings 
Engelund  Thomsen,  SBi  and  Wittchen,  SBi,  for  EuroACE  European  national  strategies  to  move 
towards very low energy buildings, 2008 
P6_TA(2008)0033 
Mission report VB EACI 

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Alternatively, Member States can be encouraged to set a definition and strategy for achieving 
the  low  energy  building  standard  where  the  final  and  intermediary  target  years  are  clearly 
mentioned.  

Impact: The benefits to the decrease of energy consumption, CO2 emission reductions can be 
considerably high, roughly estimated at 15 Mtoe energy savings and 41 Mt CO2 savings per 
year by 2020 (if a full uptake is considered to start in 2012 for all new buildings). However, 
the investment needs for such change are also substantial. In general, studies suggest that the 
price increase of houses would be in the range of 7 to 15%98. 

In addition, to achieve a full market transformation, so that each year about 210 million m2 of 
new residential and commercial buildings in the EU-27 meet this standard would be a huge 
challenge  and  would  require  a  substantial  change  in  the  construction  and  buildings  market. 
The full accumulation of necessary knowledge, training of relevant experts, such as architects, 
constructors,  auditors,  and  availability  of  construction  products  and  technologies  will  take 
about 10 to 15 years. 

Investment  costs  for  passive  housing  are  also  substantial.  To  construct  all  new  build  up  to 
passive  house  requirements  every  year  in  the  EU  would  cost  between  €50  billion  to  €120 
billion a year99 on top of regular construction costs for new buildings. This would lead to very 
high employment creation with the potential of creating from 240,000 to 580,000 jobs for the 
passive housing construction sector (i.e. architects, consultants, specialized construction firms 
and workers). It is important to note that these numbers are purely indicative as the realization 
of 210 million m2 of passive housing a year is currently not feasible. Thus job creation must 
be understood to be proportional to the extent to which passive housing expansion occurs.  

Therefore,  although  the  environmental  and  security  of  supply  benefits  of  having  all  new 
buildings consuming minimal quantities of energy are self evident, it may not be practical to 
introduce low energy buildings requirements in a short-term in all member States. This is due 
to  the  low  penetration  rates  in  Europe,  higher  costs,  lack  of  trained  professionals  and  low 
readiness of the construction industry to deliver large quantities of low energy buildings in all 
EU  Member  States.  Furthermore,  such  requirements  would  also  not  respect  the  subsidiarity 
and proportionality principle as they would require investments that are not in all cases cost-
efficient and would create a burden for the national budgets since they would have to support 
households that would not be able to afford to build such low energy homes, which are more 
expensive than cost-optimal ones. 

If  Member  States  are  encouraged  to  set  a  vision  for  achieving  the  low  energy  building 
standard,  this  will  send  a  strong  signal  to  the  construction  industry  that  a  market 
transformation is sought. In response they shall plan and act accordingly but would also allow 
for the national differences to be taken into account by each Member State. In addition, the 
public sector can play exemplary role in promoting low energy buildings concepts. This can 
possibly be achieved by including more rigorous provisions for the sector in these strategies, 

98 

99 

For  example,  http://www.communities.gov.uk/documents/planningandbuilding/pdf/153125.pdfAudenart  (energy  policy), 
http://www.passive-on.org/en/details.php  
Calculation assumptions: 100 kWh/m² lower total final energy need of these type of buildings than the 
ones required in a business as usual. Average prices of newly constructed square meter taken are based 
on  ADEME  figures  (http://www2.ademe.fr/servlet/KBaseShow?sort=-1&cid=96&m=3&catid=15019), 
and calculated extra costs (7% -15%) associated with passive housing and the benchmarking goals of 
210 million m2 per year. 

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i.e.  by  introducing  earlier  dates  at  which  new  public  buildings  will  meet  the  low  energy 
requirements. This suggestion is in line with the thinking of some of the major stakeholders 
and responses from the public consultation. 

EN 

67 

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6. 

COMPARING THE OPTIONS 

Energy efficiency in the buildings sector is an effective means to fight climate change and to 
achieve  EU  energy  policy  objectives.  Even  though  many  measures  have  been  taken,  a  very 
important  savings  potential  still  remains  to  be  harnessed.  In  looking  for  ways  to  achieve 
additional savings, three alternative policy approaches have been studied. The first one was to 
repeal the existing legal framework, in particular the EPBD, and use only 'soft' instruments. 
The second approach was to 'do nothing more' than the existing measures, but to strengthen 
their  uptake.  Thirdly,  the  possibility  of  adding  EU  action  by  complemented  and  improved 
instruments of the current EPBD was discussed (Section 4).  

The impact analyses showed that completion of the regulatory framework including, notably 
the  Energy  Performance  of  Buildings  Directive  EPBD,  the  main  EU  legal  tool,  is  the 
appropriate action to address the existing problems. In order to improve the effectiveness of 
the  Directive,  the  first  step  taken  was  to  obtain  certain  clarifications  and  analyse  possible 
simplifications.  In  addition,  a  set  of  possibilities  for  the  improvement  of  each  of  the  main 
pillars of the EPBD were discussed in Section 5.  

For each option an evaluation of its economic, social and environment implications was made, 
based on the availability of data and the inputs provided by Member States and a number of 
stakeholders. As energy efficiency is a key driver, the impacts on energy savings have been 
quantified  for  most  of  the  options.  However,  this  has  not  always  been  the  case  of  the 
investment  needs  or  administrative  costs  and  job  creation.  Wherever  possible,  quantitative 
data  has  been  provided.  However,  due  to  limitations  of  data  availability  in  some  cases 
qualitative indications of the impact have been made.  

The impacts of each option are presented in the tables in relation to the baseline (i.e. based on 
following the construction, demolition and renovation rates, and energy-efficiency measures 
in  retrofits).  However,  if  there  was  no  possibility  for  quantification  their  relative  impact 
compared to the other options was included. The summing up of the individual impacts has 
been  done  on  the  basis  of  the  BEAM  model  and  studies.  The  BEAM  model  is  a  holistic, 
closed calculation instrument that reproduces the building stock by reference buildings. In this 
context and with regard to quantified energy and CO2 saving impacts, overlapping effects of 
the individual options analysed were taken into consideration and overlaps in the results were 
eliminated. The individual options analysed were not calculated independently by the model 
but within connected loop model runs. Additionally, where modelling of the impacts was not 
possible by the BEAM model, the results of the studies available were used and extrapolated 
to EU-27. 

For some of the following tables, not all options were fully quantifiable and therefore contain 
symbols which mean: 

+++:  very  high  energy/CO2  saving  potential,  very  low  capital  costs  or  very  high  job

potential, comparable to the highest figures which were quantified for other options. 

++: 

+: 

high energy/CO2 saving potential, low capital costs or high job potential, at about 25 –
50% lower than the highest figures which were quantified for other options. 

energy/CO2 saving potential, moderate capital costs or job potential, about 75% lower
than the highest figures which were quantified for other options. 

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A: 1000 m2 threshold for existing buildings when they undergo major renovation 

(regarding minimum energy performance requirements) 

Three options were studied under this pillar: 

Option A1: Lowering the threshold to 500 m², to include all medium sized buildings. 

Option A2: Lowering the threshold to 200 m², to include all buildings apart from small ones 
(mainly single family houses). 

Option A3: Abolishing the 1000 m² threshold to include all buildings. 

The table below includes a summary of their EU-27 impacts compared to the business as 
usual scenario (full implementation of existing EPBD). 

Option A1 

Option A2 

Option A3 

Final energy 
savings in 2020 
(Mtoe/a) 
CO2 emission 
reductions in 2020 
(Mt/a)  

Capital costs in 
2020 (billion €/a)  

Job creation in 
2020 

Comment 

3 

8 

1 / 3 

10,000 

CO2 abatement costs of 
about -250 €/ton.
 Low 
administrative costs as the 
threshold (regardless 
whether A1, A2 or A3) can 
easily be embedded in 
existing national 
legislation. Executive 
bodies have to deal with a 
slightly higher number of 
cases (e.g. refurbishment 
permits). 

5 

14 

2 / 7 

21,000 

20 

51 

8 / 25 

75,000 

 See 

CO2 abatement costs of 
about -357 €/ton.
remark on A1. Executive 
bodies have to deal with a 
higher number of cases 
(e.g. refurbishment 
permits). 

CO2 abatement costs of 
about -333 €/ton. See 
remark on A1. Executive 
bodies have to deal with a 
considerably higher 
number of cases (e.g. 
refurbishment permits). 

The analysis indicates that option A3 could most significantly contribute to the realization of 
the EU policy objectives in question, followed by A2. 

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69 

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B: Energy performance certificates 

Four options were studied under this pillar: 

Option B1: Quality and compliance requirements for certificates 

Option B2: Requiring the recommended cost-effective measures of the certificate are realized 
within a certain time period 

Option B3: Making certificates a mandatory part of property advertisement and/or property 
transaction documents  

Option B4: Requiring a linking of certificates with other support/discouragement mechanisms  

The table below includes a summary of their EU-27 impacts compared to the business as 
usual scenario (full implementation of existing EPBD). 

Option B1 

Option B2100 

Option B3 

Option B4 

Final energy savings 
in 2020 (Mtoe/a) 
CO2 emission 
reductions in 2020 
(Mt/a)  

21 

57 

Capital costs in 2020 
(billion €/a)  

8 (but about 26 
saved energy costs) 

Job creation in 2020 

60,000 
(by 2020) 

Comment 

CO2 abatement 
costs of about -315 
€/ton. Highly 
beneficial 
proportion of 
administrative costs 
(10 – 32M€) and 
saved energy costs. 
High and reliable 
quality is a key 
element for the 
functioning of the 
certification 
instrument. 

12 

33 

+++101 

+++101 

++102 

++102 

About 5.3 (but about 
9.3 saved energy 
costs)103 
About 100,000 (by 
2020; see footnote on 
capital costs) 
Compliance control 
could lead to 
considerable 
administrative costs. 
This requirement 
could lead to 
challenges for those 
who cannot afford 
the one-off 
investment, although 
the economic 
benefits would 
outbalance in the 
long run. 

Very low104 

Depends very much 
on type and scope of 
measures105 

+++106 

++102 

Similar low 
administrative costs 
and similar positive 
effect to end 
consumers as the 
broadly known 
requirement to 
display the fuel 
consumption and 
CO2 emissions in 
advertisements and 
transaction articles 
for cars. 

Low administrative 
costs (Member States 
only need to link the 
EPBD to support 
measures). 
Impact depends on 
applied support 
measures, e.g. the 
scope of financing 
instruments. 
Specification of 
measures is outside 
the scope of this 
Directive. 

100 

101 

102 
103 

104 

105 

106 

Impact quantified for the tertiary buildings sector only, so figures do not contain potential of residential 
sector. 
Expected  to  be  very  high  due  to  creating  more  awareness  and  a  demand  driven  market  for  energy 
efficient buildings throughout the society by giving transparent information on the energy performance 
of a building. 
Expected to be high, based on experience of Member States which use already similar instruments. 
Proposed option stimulates refurbishments. Capital costs and job creation (not specified in Section 5) 
can  therefore  approximately  be  quantified  by  same  factor  of  costs  and  jobs  per  energy  savings  as  in 
option A1 to A3 and are extrapolated in this way. 
For  citizens  and  administration,  as  information  needed  for  this  action  can  be  taken  out  of  existing 
certificates. 
Experienced  Member  States  such  as  Germany  e.g.  show  that  the  amount  of  given  subsidies  is 
outbalanced by stimulated investments and additional tax incomes related. 
Expected to be very high due to indirect stimulation of constructions/refurbishments of higher quality in 
order to improve the energy rating of a building in the certificate. 

EN 

70 

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The analysis indicates that options B1 and B3 could significantly contribute to the realization 
of the EU policy objectives in question. Option B4 could also be further developed outside the 
scope of the EPBD. 

C: Inspection of boilers and air-conditioning systems  

Two options were studied under this pillar: 

Option C1: Requiring an 'inspection report' for heating and air-conditioning systems 

Option C2: Quality and compliance requirements for inspections 

The table below includes a summary of their EU-27 impacts compared to the business as 
usual scenario (full implementation of existing EPBD). 

Final energy 
savings in 2020 
(Mtoe/a) 

CO2 emission 
reductions in 
2020 (Mt/a)  

Capital costs in 
2020 (billion €/a)  

Job creation in 
2020 

Comment 

Option C1 

5 

15 - 20 

Net  benefits  (investment  minus  energy 
savings)  estimated  at  €2  billion  per  year. 
Admin.  costs  expected  to  be 
low,  as 
information  needed  should  mainly  be 
available 
existing 
from 
obligations 
(certificates and inspections). 

Option C2 

++ - +++107 

(estimated to be even higher than option 
C1) 

++ - +++107 

(estimated to be even higher than option 
C1) 

Expected  to  be  of  the  same  magnitude  as 
the similar option B1 on certificates. 

46,000 

23,000 

CO2 abatement costs of about -133 €/ton. 
Administrative costs can be kept low when 
Member States embed the inspection 
report regime into the existing regime for 
energy performance certificates for 
buildings. 

CO2 abatement costs estimated to be of the 
same magnitude as option C1. Highly 
beneficial proportion of administrative 
costs and savings. 

High and reliable quality is a key element 
for the functioning of the inspection 
instrument. 

The analysis indicates that options C1 and C2 together (option C2 requires option C1) could 
significantly  contribute  to  the  realization  of  the  EU  policy  objectives  in  question  without 
leading to negative social or administrative implications. 

107 

Contributes to realize the high total technical savings potential for heating and air-conditioning systems 
of about 70 Mtoe energy and more than 250 Mt CO2 per year. 

EN 

71 

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D: Energy performance requirements 

Option D1: Specifying EU – wide energy performance requirements 

Option D2: Introducing a benchmarking mechanism 

Option D3: Requiring an evolving improvement scheme for the buildings stock focussing on 
the worst performing buildings (a kind of top-runner approach) 

Option D4: Setting up EU–wide low or zero energy/carbon buildings/passive house 
requirements.  

The table below includes a summary of their EU-27 impacts compared to the business as 
usual scenario (full implementation of existing EPBD).  

Final energy 
savings in 2020 
(Mtoe/a) 

CO2 emission 
reductions in 
2020 (Mt/a)  

Capital costs in 
2020 (billion 
€/a)  
Job creation in 
2020 

Comment 

Option D1 

Option D2 

Option D3 

9.5 

24 

5 
(up to 9.5 in 2030)

+108 

13 
(up to 24 in 2030) 

+108 

Option D4 
Up to 15 

(cutting the energy 
needs of newly 
constructed buildings 
to 0 – 20 % of today's
average energy 
requirements) 

Up to 41 
(cutting the CO2 
emissions of newly 
constructed buildings 
to 0 – 20 % of today's
requirements) 

6 / 12 

3 / 6 
(up to 6 / 12 in 2030)

Highly beneficial 
LLCC capital costs 
to savings ratio 

82,000 

up to 82,000 

+109 

50 - 120 

+++ 

Low administrative 
costs expected (can 
be embedded in 
existing national 
building regulations). 

CO2 abatement 
costs of about -250 
€/ton. Very high 
administrative costs 
expected due to 
dramatic changes to 
complex national 
building 
regulations. 
Complex, long-
lasting task; strong 
concerns of 
Member States 
expected with 
regard to 
subsidiarity. 

CO2 abatement 
costs of about -250 
€/ton. Very low 
administrative costs 
as the instrument is 
a guide/ support 
tool for public 
authorities. 
Presupposed that 
the 'guiding' bench-
marking actually 
leads Member 
States to strengthen 
their requirements 
to cost-optimal 
(LLCC) levels. 

High administrative 
costs. Soft 
instrument, leaving 
lot of freedom to 
Member States. 
Should be embedded 
in activities on 
National Energy 
Efficiency Action 
Plans, requested by 
Directive 
2006/32/EC. 

The  analysis  indicates  that  option  D2  could  significantly  and  quickly  contribute  to  the 
realization  of  the  EU  policy  objectives  in  question.  Option  D3  could  be  taken  on  board  by 
Member States when starting national activities, in particular related to the National Energy 

108 

109 

Contributes to realize the high cost-effective savings potential of the sector of about 143 Mtoe/a (final) 
or 382 Mt/a CO2. 
Can contribute to the potential number of 82,000 new jobs presented under D1 and D2. 

EN 

72 

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Efficiency  Action  Plans.  Option  D4  could  be  considered,  due  to  economic  and  legal 
constraints, in a less prescribed form, i.e. by national visions/roadmaps. 

The  Impact  Assessment  identified  the  recast  of  the  Energy  Performance  of  Buildings 
Directive  as  the  most  appropriate  way  to  enhance  energy  efficiency  in  buildings  in  a  cost-
effective way and to achieve the EU energy and climate change policy objectives, as outlined 
in sections 4.3 and 5. The recast could introduce clarifications and simplifications to facilitate 
the  implementation  of  the  Directive  and  furthermore  (i)  abolish  the  1000  m2  threshold  for 
existing  buildings  when  they  undergo  major  renovation  (option  A3)  (ii)  require  quality  and 
compliance  control  schemes  for  energy  performance  certificates  (option  B1)  and  make 
certificates a mandatory part of property advertisement and/or property transaction documents 
(option  B3);  (iii)  for  the  inspections  of  heating  and  air-conditioning  systems,  to  require  an 
inspection report being handed over to building owners (option C1) and requiring quality and 
compliance  control  schemes  (option  C2);  and  (iv)  to  introduce  a  benchmarking  mechanism 
for  energy  performance  requirements  (option  D2).  In  line  with  the  holistic  approach  of  the 
Directive,  these  proposed  completions  should  be  accompanied  by  other  policy  tools  on 
financing (e.g. as presented under option B4), by public buildings acting as a leading example 
(see  Section  5.2.2)  and  roadmaps  on  low/zero  energy/carbon  buildings  (presented  under 
option D4).  

The results for the most cost-effective and beneficial options (indicated in bold in the tables 
above) with quantifications available show significant positive impacts which are possible 
if the Directive is revised, that would make use of a large part of the remaining potential 
in the buildings sector and would also contribute to the realization of the full potential of 
the  current  EPBD.  Furthermore,  such  a  revision  would  create  a  simplified  and  improved 
framework for energy savings. The minimum total impact of the options identified as being 
most beneficial and for which quantification was possible, is: 

–  60 – 80 Mtoe/year energy savings in 2020, i.e. reduction of 5-6% of the EU final energy in 

2020; 

–  160 to 210 Mt/year CO2 savings in 2020, i.e. 4-5% from EU total CO2 emissions in 2020; 

The  impact  on  the  labour  market  would  also  be  important.  It  is  expected  that  280,000  (to 
450,000) potential new jobs will be created by 2020 by the revised EPBD. This would mainly 
be  in  the  construction  sector  and  for  the  services  of  energy  certifiers  and  auditors  and 
inspectors of heating and air-conditioning systems.  

The investment requirements and the administrative costs of the measures were analysed and 
are relatively low compared to the benefits and the returns. For example, abolishing the 1000 
m2  threshold  would  lead  to  €8  billion/year  a dditional  capital  investments  but  would  trigger 
€25  billion/year  energy  cost  savings  by  2020,  wh ich  in  return  means  considerably  negative 
CO2  abatement  costs.  These  calculations  have  been  made  on  the  basis  of  conservative 
estimates about the oil price (e.g. 55$ per barrel oil in 2005, 100$ in 2020 and 119 $ in 2030 
in year 2005 prices).  

The  investment  needs  differ  substantially  across  Europe  depending  on  the  social  and 
economic conditions, on the initial state of the property and on the type of renovations people 
undertake. They are not equally distributed to EU citizens, i.e. there will be additional costs 
for  those  who  make  major  renovation  of  their  buildings  or  are  engaged  in  property 
transaction. However, with increasing oil prices these initial investments will have attractive 
returns. 

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The overall benefits for society in terms of reduced energy consumption and hence reduced 
CO2 emissions and energy import dependency, job creation, especially at local and regional 
level, positive health and labour productivity exceed the costs of the measures proposed. 

Finally, it needs to be underlined that the implementation of the current legislation remains a 
priority.  Any  legal  framework  also  needs  the  support  from  other  non-regulatory  policy 
measures. Financing, fiscal, information and communication tools are indispensable. 

7. 

MONITORING AND EVALUATION 

The  Directorate-General  for  Energy  and  Transport  will  continue  its  assessment  on  the  legal 
transposition of the EPBD. However, there is a general lack of comprehensive data on the EU 
buildings and their energy use, which is a serious limitation when it comes to monitoring the 
implementation  of  the  EPBD  and  evaluating  the  progress  made  in  terms  of  energy  savings. 
Such  data  should  be  provided  in  the  framework  of  the  existing  Community  structures,  i.e. 
Eurostat.  These,  for  example,  can  include  data  on  energy  savings  and  CO2  emissions,  the 
number of certificates, energy related renovation, number of trained experts. 

A link with the reporting requirements of the Energy Services Directive (ESD) shall be better 
established. For this purpose, it will be necessary to further explore how and what information 
on  energy  efficiency  in  the  buildings  sector  could  be  provided  in  the  next  National  Energy 
Efficiency  Action  Plans.  Some  specific  data,  for  example  on  uptake  of  cost-efficient 
recommendations  of  certificate  and  inspection  reports  and  of  low  energy  houses,  can  be 
carried out within projects supported within the EU Intelligent Energy Europe programme. 

EN 

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