COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a Directive of the European Parliament and of the Council amending Directive 2010/31/EU on the energy performance of buildings
Date: 2016-11-30
Institutions: Directorate-General for Energy, European Commission
Subjects: building, building services, energy consumption, energy efficiency, energy saving, improvement of housing, innovation, reduction of gas emissions, technological change

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   EUROPEAN COMMISSION  Brussels, 30.11.2016  SWD(2016) 415 final   COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  Accompanying the document Proposal for a Directive of the European Parliament and of the Council  amending Directive 2010/31/EU on the energy performance of buildings   {COM(2016) 765 final} {SWD(2016) 414 final}  
 
Impact assessment on a legislative proposal for the review of the Energy Performance of Buildings Directive (2010/31/EU) 

Executive summary sheet 

Why? What is the problem being addressed? 

A. Need for action 

The evaluation of the Energy Performance of Buildings Directive (EPBD) shows clear progress in improving the efficiency of 
the  buildings  sector:  reductions  in  annual  energy  consumption  per  floor  area  (kWh/(m².y))  picked  up  noticeably  after  2006 
(when  the  2002  EPBD  came  into  force)  and  were  sustained  thanks  to  the  impact  of  the  recast  EPBD  in  2013  and  2014. 
There is evidence of 48.9 Mtoe final energy savings in 2014, as compared with the 2007 baseline of the recast EPBD. This 
seems to be in line with the 2008 impact assessment and indicates that the Directive is likely to deliver the expected impacts 
by 2020. 

Nevertheless,  the  transformation  of  the  existing  building  stock  is  proceeding  at  a  relatively  slow  pace  and  there  is  still 
considerable potential for additional cost-effective energy savings by 2030. The basic problem is that a significant part of this 
potential will not be realised under ‘business as usual’, as a large number of cost-effective investments in energy efficiency in 
buildings  will  not  take  place.  The  EU  should  therefore  intervene  now  to  support  further  the  removal  of  specific  barriers  to 
energy efficiency and renewable energy in buildings which fall within the scope of the EPBD. 

The stakeholders affected by this initiative  are consumers, households, businesses and public authorities, the construction 
sector (in particular SMEs), national and regional authorities, investors and other financial actors. 

What is this initiative expected to achieve? 

The  EPBD  is  based  on  Article  194(2)  of  the  Treaty  on  the  Functioning  of  the  European  Union,  the  legal  base  for  a  Union 
policy  to  promote  energy  efficiency  and  energy  saving.  The  overall  aim  of  the  review  of  the  EPBD,  including  the  Smart 
Financing for Smart Buildings initiative, is to promote greater take-up of energy efficiency and renewable energy technologies 
in  the  building  sector  and  deliver  cost-effective  reductions  in  greenhouse  gas  (GHG)  emissions,  while  helping  to  ensure 
security of energy supply. 

The specific objectives of the review, as presented in the inception impact assessment, were to:  

(1)   address  the  shortcomings  identified  in  the  evaluation  of  the  EPBD  so  as  to  ensure  that  it  remains  fit  for  purpose 

(REFIT component); 

(2)   consider  the  need  for  additional  measures  relating  to  energy  efficiency  and  the  use  of  renewable  energy  in 

buildings, with a 2030 perspective; and 

(3)  

improve access to funding and stimulate investment (Smart Financing for Smart Buildings). 

The operational objectives of the preferred option are to: 

  maximise the role of the Directive in raising renovation rates;  

 

further enhance the removal of barriers to energy efficiency in buildings; and  

  make  the  EU  building  stock  smarter,  integrating  technological  developments  and  supporting  the  promotion  of 

electro-mobility. 

What is the added value of action at the EU level? 

The  added  value  of  addressing  building  energy  performance  at  EU  level  is  the  creation,  through  coordinated  action,  of  a 
stronger  internal  market  that  supports  the  construction  sector’s  competitiveness  and  sustainability,  exploits  synergies  with 
climate  policy,  enables  EU  citizens  to  make  more  informed  choices  when  buying/renting  and  consequently  improves  the 
quality of buildings in which we live and work. 

The impact assessment underpinning the proposal for the Effort-Sharing Decision (COM(2016) 482 final) demonstrated that, 
in a cost-effective GHG reduction scenario for the EU, all Member States need to improve energy efficiency in a similar way. 
Without  an  EU  legislative  instrument  for  buildings,  not  all  Member  States  would  act  in  this  sector  (some  can  meet  their 
effort-sharing  target  without  additional  action,  for  example).  Failure  by  one  or  more  Member  States  to  act  in  the  area  of 
buildings would lead to overall higher GHG abatement costs for the EU as a whole. 

Action at EU level drives the updating of national regulations in the building sector across the EU. Before the adoption of the 
2002 Directive, regulation in  many Member States did not impose energy efficiency requirements and until the adoption of 
the 2010 Directive, minimum performance requirements were not benchmarked by Member States against cost-optimality. 

The  construction  sector  is  vital  for  the  European  economy.  With  three  million  enterprises,  an  annual  output  of  over 
EUR 1 211 billion  and  a  contribution  of  around  10 %  to  the  EU’s  GDP,  it  employs  a  total  direct  workforce  of  14 million 
(construction  products,  construction  services,  heating,  air-conditioning  and  lighting  equipment,  on-building  renewable 
systems, smart controls, building automation systems, smart meters, etc). 

Moreover, in addition to mitigating climate change and generating growth and jobs, improving buildings’ energy performance 
has many other benefits that contribute to the achievement of environmental and social policy aims. 

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B. Solutions 

What legislative and non-legislative policy options have been considered? Is there a preferred choice or not? Why? 

In order to achieve the desired objective, the following options were considered: 

no change; 
simplification measures; 

 
 
  Option I: Enhanced implementation and further guidance; 
  Option II: Enhanced implementation with targeted amendments to strengthen current provisions; and 
  Option III: Enhanced implementation and revision beyond the current intervention logic and level of subsidiarity. 

These policy options were assessed and linked with the following measures: 

fine-tuning the implementation of minimum energy performance requirements; 

1.  accelerating the decarbonisation of buildings by significantly increasing renovation rates; 
2. 
3.  modernisation using smart technologies and simplifying outdated provisions for the benefit of citizens; and 
4.  enhancing  financial  support  and  information  for  users  through  more  integrated  and  robust  energy  performance 

certification systems. 

The preferred option is Option II, together with simplification measures. This is the option best aligned with the outcome and 
findings of the evaluation and with the existing framework. It introduces significant improvements to the EPBD and the overall 
regulatory  framework  for  improving  the  energy  performance  of  buildings,  while  allowing  a  high  degree  of  flexibility  for 
implementation at national level. 

Who supports which option? 

The  consultation  of  stakeholders  showed  broad  support  from  the  construction  industry  for  an  ambitious  policy  that  would 
stimulate the renovation of existing buildings. Some parties had reservations about ‘re-opening’ the current Directive and the 
risk  of  weakening  its  provisions.  This  supports  the  view  that  changes  should  be  targeted,  rather  than  comprehensive,  and 
that EU policy intervention is required in this sector to maintain the level of effort and ambition across the EU.  

What are the benefits of the preferred option (if any, otherwise main ones)? 

C. Impacts of the preferred option 

The preferred option promises to reduce annual final energy use by 28 Mtoe by 2030, representing a reduction of 38 Mt of 
CO2  emissions.  As  a  proportion  of  EU  GDP,  total  final  energy  used  would  decrease  by  0.3 percentage  points  by  2030. 
Between 515 000 and 3.2 million households (of a total of 23.3 million) would be taken out of energy poverty. 

The preferred option will also contribute to the competitiveness of European industry (in particular as regards insulation and 
flat glass), increasing the value of the EU market by EUR 23.8 billion by 2030 and creating a EUR 80-120 billion renovation 
market for SMEs. It will also generate about 220 000 additional jobs (as compared with the reference scenario) by 2030.  

What are the costs of the preferred option (if any, otherwise main ones)? 

It  is  estimated  that  the  preferred  option  will  lead  to  additional  energy-related  construction  activity  (roof  insulation,  window 
replacement,  building  system  upgrades,  etc.)  worth  EUR 47.6 billion  by  2030.  However,  only  EUR 1-4 billion  of  this  will  be 
directly required by the measures in question. Ultimately, this will correspond to a EUR 24-36 billion reduction in the annual 
energy expenditure of businesses and households.  

How will businesses, SMEs and micro-enterprises be affected? 

Of  the  companies  in  the  construction  sector,  99 %  are  SMEs.  The  preferred  option  creates  new  business  opportunities,  in 
particular  as  regards  building  renovation,  boosting  demand  for  energy  efficiency  and  renewable  energy  technologies  and 
systems.  To  take  full  advantage  of  the  new  opportunities  of  a  larger  renovation  market,  SMEs  would  need  to  upskill  their 
on-site  workers. However, construction product manufacturers and  distributors often provide training and  in most countries 
there is also financial support (from EU and national funds) for upskilling construction workers. 

Will there be significant impacts on national budgets and administrations? 

Calculations  of  administrative  costs  (using  the  standard  cost  model)  show  that  the  preferred  option  results  in  a  total  net 
burden  reduction  of  EUR 98.1 million  a  year  (EUR 981 million  for  the  period  2020-2030),  corresponding  to  a  reduction  of 
around EUR 108.5 million a year for the private sector and a slight increase (around EUR 10.4 million) for the public sector. 
Overall, the public budget position improves slightly thanks to the anticipated increase in economic activity. On the income 
side, there are small reductions in energy excise revenues and prices under the emissions trading scheme (ETS). There is a 
reduction in overall VAT revenues, which include VAT from energy, and deflationary impacts in the scenario result in a small 
reduction in tax revenues at current prices. However, revenues from corporation tax increase as firms’ profits are boosted by 
lower energy costs. On the expenditure side, governments spend less on energy after implementing the proposed measures 
and the money saved is used to finance investments in energy efficiency. 

Will there be other significant impacts? 

Yes.  Alleviation  of  energy  poverty,  which  is  prevalent  in  old,  unrefurbished  buildings.  According  to  Eurostat  SILC,  around 
10.8 % (i.e. 23.3 million) of households live in energy poverty.  

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When will the policy be reviewed  

D. Follow up 

The results of the implementation of the EPBD will be assessed once every decade. So the next review is foreseen for early 
2028. 

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