Summary and Implications

The European Commission (EC) has recently published proposals to revise the Energy Performance of Buildings Directive (Directive 2002/91/EC) (EPBD1) as part of its efforts to achieve the European Union's energy savings targets and tackle climate change. The proposals will mean, amongst other things, changes to the current regime of Energy Performance Certificates (EPCs) and Display Energy Certificates (DECs).

On 31 July 2009, the Department for Communities and Local Government launched a consultation on the proposals. The consultation outlines the UK's broad support for the majority of the proposals and calls for clarification on certain points. The consultation seeks feedback on the proposals from anyone who has an interest in the energy performance of buildings. The deadline for responses is 2 October 2009.

In brief

The EC claims that the revised proposals will ensure sustainable investments and job creation (often in small to medium-sized enterprises). It also predicts that total EU final energy consumption could be reduced by 11% by 2020 if the potential for energy savings in the buildings sector is realised. In order to strengthen the effectiveness and impact of EPBD1, the EC's revised directive (EPBD2) proposes to:

  • reduce the threshold area of buildings occupied by a public authority in which DECs must be displayed from 1,000m2 to 250m2;
  • require EPCs to be displayed in commercial buildings larger than 250m2 which are frequently visited by the public and where an EPC has previously been produced;
  • abolish the 1,000m2 threshold for upgrading energy performance when buildings undergo major renovation;
  • introduce minimum energy performance requirements for systems such as boilers, water heaters and air conditioning;
  • provide that the EC establishes a common framework for the definition of low and zero carbon buildings; and
  • require member states to draw up national plans for increasing the number of low or zero energy and carbon buildings.

Major renovations

The proposals call for broadening the scope of EPBD1 so that when existing buildings undergo a major renovation, they will be required to meet certain efficiency levels. Under EPBD1, only buildings above 1,000m2 are subject to this requirement. Major renovations are those which cover more than 25% of the building envelope's surface, or the cost of which is 25% or more of the building's value, excluding the land value. Interestingly, the UK Government anticipates minimal impact from this proposal, as it considers that existing Building Regulations already capture most relevant works.

EPCs and DECs

The format of EPCs will be changed so that they contain the energy saving recommendations which are currently set out in a separate report. This information must be provided each time a property transaction occurs, as well as in all advertisements for sales or rentals. The proposal that DECs should be extended to public sector buildings larger than 250m2 particularly concerns the Government, as it considers that the real energy savings are to be made in bigger buildings, and that widening the scope of the regime to smaller buildings will simply divert resources for minimal benefits.

Cost implications

The consultation contains interesting commentary on the likely cost implications of EPBD2, but (perhaps understandably) it emphasises the impact on the public sector. However, there are bound to be compliance costs across all sectors. For example, Article 6 of EPBD2 would require developers to demonstrate, before construction starts, that the feasibility of alternative energy systems has been considered. This would apply to all buildings, regardless of size, and would have to be documented. The Government appears to take the view that the feasibility analysis can be automated by modifying existing energy performance software, but such an assumption seems optimistic.

In other areas, the Government acknowledges that it is simply too early to assess the financial impact of the proposals. For example, too many uncertainties surround the definitions and targets relating to low and zero carbon buildings.

Effective implementation

The implementation of EPBD1 has presented a substantial challenge for most, if not all, of the EU's member states. Notably, the EC launched court proceedings against the UK in 2008 for its failure to implement EU requirements stating how energy performance in buildings is measured. However, in some cases, existing UK law already goes further than the m inimum standards set out in EPBD1; for example by providing for the creation of a central government register of all EPCs.

The consultation expresses concern about the EC's ambitious timetable for implementing EPBD2 (see box). To help ensure that the proposals are appropriate to the UK market, we would urge interested parties to respond to the Government consultation before the 2 October deadline.

Timetable

  • Consultation ends - 2 October 2009
  • Proposed implementation (public sector) - 31 December 2010
  • Proposed implementation (other buildings) - 31 January 2012
  • Repeal of EPBD1 - 1 February 2012

DCLG Consultation

Click here to see the consultation document.