Energy Efficiency
Climate Change

The key to the renovation challenge is a well-known policy tool

John Churchill
John Churchill
October 13, 2020

Renovation of buildings is a must for society to meet climate targets, but current efforts aren’t fast or deep enough to hit the mark. Performance standards can change this.

Park Zariadye in Moscow, Russia

As boring as they sound, performance standards have been improving our daily lives for decades. When they work, people, business and society benefit.

So as the European Union looks for ways to increase the rate and depth of renovation of its existing building stock, minimum energy performance standards (MEPS) could be the difference maker – securing the path to long-term climate goals while also stimulating the green economic recovery we need now.

The current state of renovation: too slow, too shallow

Despite the region’s best efforts, renovation rates have not yet taken off the way policymakers have hoped.  For the EU region to meet its new 55 percent emissions reduction targets by 2030, current building renovation rates in Europe must at least double by 2030– from about one percent to two percent of buildings per year.

And yet, even that probably won’t be enough, says a new report from the Regulatory Assistance Project (RAP), “Filling the policy gap: Minimum energy performance standards for European buildings". The authors, Louise Sunderland and Marion Santini, found that many of the renovations contributing to the current one percent rate simply don’t go deep enough, accomplishing little in the way of energy savings – increasing the likelihood these buildings soon will need to be renovated again.

“The average energy savings achieved by renovations were only nine percent in domestic [residential] and 17 percent in non-domestic [non-residential] buildings from 2012 to 2016. Deep renovations that save more than 60 percent of primary energy, and take buildings closer to decarbonisation, are only carried out in 0.2 percent to 0.3 percent of the stock a year”, says the report.

Further, the authors write that the inability of Member States to boost the rate or depth of renovation – despite generous programmes of assistance in many cases – suggests “the existing policy framework has proved to be inadequate and must be reinforced” with “additional policy tools and stronger approaches to swiftly accelerate deep renovations”.

Their recommendation – introduce Minimum Energy Performance Standards (MEPS) for existing buildings.

MEPS – policies that drive continuous improvement

Performance standards are widely used in other areas as policy tools to ensure products become better for people and society (over predefined time intervals) while also stimulating innovation in markets.

Whitegoods (i.e. large electrical appliances) are a good example of how MEPS can be a win-win for society and markets. It is thanks to performance standards and performance labelling for white goods like washing machines and refrigerators that manufacturers – through R&D and innovation needed to meet the requirements – make better performing products that consume less energy and cost less to buy and operate over time. Clean drinking water, food that doesn’t poison us and medicine that is tamper proof are other examples of performance standards at work.

Used in buildings, MEPS are not new either. And while they vary in their design depending on local priorities, they always require buildings to improve their energy performance to meet a specified standard at a chosen trigger point or date and can include standards that tighten over time. This ensures a desired rate of and depth of renovation. See below illustration from the RAP report.

20201009 GMC INFO 223

Source: Regulatory Assistance Project, report

The case of California – economic growth, better buildings, lower emissions

In the United States, California is a shining example of the long-term value of MEPS. A recent report from the National Resource Defense Council (NRDC) found that California’s economic growth – without a corresponding increase in emissions – is attributable in large part to policies enacted in the 1970s, notably Title 24, which established MEPS for buildings and has led to an 80 percent reduction in energy use in buildings since.

“It is difficult to overstate the impact and value of these standards”, the NRDC writes. “Because of them — both the initial iterations and periodic upgrades — households got a break on their electric bills, the California landscape avoided dozens of new generating stations, and thousands of tons of harmful particulate emissions and smog were prevented”.

Further, the report says “what enabled California to cut its fossil fuel use relative to economic activity faster than the rest of the country was a sustained, bipartisan commitment to efficiency and clean energy standards and incentives”. 

MEPS can boost renovation – but only as part of a larger framework

Minimum performance standards didn’t accomplish all these things alone of course.

Whether it’s California or the examples in the Netherlands, France or other countries mentioned in the RAP report, all of them illustrate MEPS as a key part of a strategy that includes many other elements like investments in R&D, incentive programmes and carefully designed economic policies.

If they are used as part of a “comprehensive decarbonisation strategy”, Sunderland and Santini say MEPS can overcome the barriers to renovation by doing the following:

  • Signalling the finish line. Showing the incremental path to long-term decarbonisation for buildings.
  • Ensuring the worst performing segments of the building stock improve.
  • Removing obstacles (i.e. financial, consumer, communication, supply chain, legislative and regulatory, building complexity).
  • Enabling timely action, signalling to building owners and occupiers to adopt energy saving measures at the right time.
  • Giving the supply chain a heads-up so tech manufacturers, installers, banks and trades have the confidence to invest, innovate and upskill with certainty, ensuring a sustained renovation market and good quality jobs.

Indeed, together with the massive funding the EU is making available for climate-related economic recovery measures and enhanced technical support to local authorities and national government, minimum energy performance standards can be a powerful driver in creating truly sustainable buildings while simultaneously contributing to economic growth, occupant wellbeing, and positive climate impact.

Want to learn more?