Gabriel Cassar, Manager EU Policy (Sustainability) at the Malta Business Bureau.
This Opinion Piece featured on The Malta Independent on Sunday, on 16 April 2023.
Over the last 20 years, buildings in the European Union (EU) have become gradually more energy efficient and have even started to incorporate cleaner sources of on-site energy generation. This has been achieved through more efficient lighting systems, better insulation, an increased use of PV panels on roofs, solar water heating and other similar investments. Despite such advancements, data shows that the building and construction sector is still lacking behind other areas in terms of sustainability.
Quoting the European Commission, buildings in the EU account for roughly 40% of final energy consumption and 36% of all energy-related greenhouse gas emissions. These figures are presented in the context where the EU is aiming to become the first climate neutral continent by 2050 through its Green Deal strategy. It is easy to understand that any serious strategy aiming towards climate neutrality must address the impact which buildings are having on our environment and climate.
To this end, the Commission issued a proposal to revise the Energy Performance of Buildings Directive (EPBD). This has for over 20 years been the main piece of EU legislation governing the energy efficiency of buildings. The aim of the revision is to bring the Directive further in line with the ambition of the EU Green Deal and contribute towards Europe’s path towards climate neutrality.
The proposal holds measures addressing both existing and new buildings which are yet to be constructed. In terms of existing buildings, the 15% worst performing buildings in the national stock would have to be renovated and retrofitted to meet higher energy performance standards every few years. For new buildings, the proposal puts forward cut-off dates which stipulate that new buildings will need to classify as zero-emission potentially as early as 2028. The end goal of these measures is to have a zero-emission EU building stock by 2050.
These targets will be supported by several other measures included in the proposal. For instance, governments would have to issue National Building Renovation Plans every five years, starting from 2024. These plans should hold information concerning national building stocks, renovation targets, market failures, investment needs, and so on. Complementing this, the Energy Performance Certificate system would be revised to increase its usefulness and accuracy. Buildings would also be issued so-called renovation passports which spell out what investment is needed to transition the building towards zero-emissions.
It will undoubtedly take great technical and financial effort to turn such a vision into reality, with deadlines edging closer with every passing month. It does, however, provide us with an opportunity to address an industry which has significant potential to reduce energy consumption and emissions.
The Malta Business Bureau (MBB) strongly believes in the benefits that energy efficiency and renewable energy pose for businesses. Aside from the environmental interest, such investments will lead to lower energy bills and operating costs, as well as greater energy security.
Despite the obvious benefits, the revised EPBD introduces several key concerns which are worsened by the fact that Malta is a micro island state with extremely limited space. Other concerns stem from own shortcomings resulting from lax building standards and planning which does not afford room for significant retrofitting in many cases.
Over the past weeks, the MBB has worked closely with Deloitte to consider these issues more deeply in a joint assessment report published this month. The assessment is conducted from multiple different angles, including the technical merit of the targets in the local context, what could be improved to ease implementation, its consistency across other legislation and strategies and how the transition could be financed.
Crucially, the report highlights how the definition of zero-emission buildings put forward by the Commission is not implementable in the local context. The latter would require that energy demands are met through renewable generation either onsite or nearby. Malta’s densely packed urban areas with limited roof space for renewables make this definition unachievable. The report consequently calls on EU policymakers to widen the definition and account for renewable energy provided through the grid, while simultaneously increasing Malta’s ambition to implement renewable energy projects where possible.
More flexibility should also be provided in terms of renovation targets, as it may not always be economically and technically possible to renovate each building. An approach which looks at the overall building stock performance, rather than individual buildings, is considered favourable in this respect.
Effective implementation will likewise depend on a stronger emphasis placed on enforcement and building standards. This could include measures such as ensuring that energy performance is factored into the design phase of projects, with enforcement checks at key stages of construction to ensure compliance. Training and awareness raising for professionals and workers active in the sector will also be key.
The report calls on government to ensure that the data gathered on the current situation of the Maltese building stock is efficiently and accurately gathered and kept publicly available. This will help boost transparency while contributing towards evidence-based policy which addresses national particularities and opportunities.
Technical concerns aside, one must also consider the massive investment effort needed to transition buildings towards zero-emission. Without proper financing mechanisms, this will be impossible to achieve. In this respect, the report highlights the urgent need to develop innovative and more flexible funding schemes to help bridge the gap which is currently not being filled by existing support measures.
These are just a few snippets from a deeper report on the revised EPBD. The MBB intends to continue building on the discussion with stakeholders and experts to bring forward innovative ideas and opportunities.
The full MBB-Deloitte assessment report on the EPBD can be viewed here.