Energy-saving directive welcomed

Mandatory energy-saving measures - which will include the renovation of public buildings, energy-saving schemes for utilities, and energy audits for all large firms - will be required by an EU energy efficiency directive which was approved last week.

Cutting energy consumption by 20% could save the EU €50 billion per year, it claimed.

The European Parliament's adoption of the Energy Efficiency Directive has been welcomed by FIEC (the European Construction Industry Federation) and it said it especially applauded the directive's provision for long-term national roadmaps for the renovation of Europe's building stock.

The directive will require member states to renovate 3% of the total floor area of "heated and/or cooled buildings owned and occupied by their central government."

This will apply to buildings with a "total useful floor area" of more than 500m² - and as from July 2015, of more than 250m². However, member states will also be able to use alternative means to achieve equivalent energy savings.

Energy companies covered by the directive will have to achieve a "cumulative end-use energy savings target" by 2020. This target will have to be at least equivalent to achieving new savings, each year from 2014 to 2020, of 1.5% of annual energy sales to final customers, by volume, and averaged over the most recent three-year period before the directive takes effect.

The European Parliament said that sales of energy used in transport could be excluded and alternative ways to achieve equivalent energy savings would be permitted, provided that equivalence was maintained.

All large enterprises will be required to undergo an energy audit. These audits will need to start within three years of the directive's coming into force and should be carried out every four years by qualified and accredited experts. SMEs (small and medium-sized enterprises) will be excluded from this obligation.

Special provisions for establishing financing facilities for energy efficiency measures will be included in the directive. Member states will have to facilitate the establishment of these facilities or the use of existing ones.

Member states will have 18 months to transpose it into their national laws.

FIEC president Thomas Schleicher said, "Given the low replenishment rate of the building stock, the key to reducing Europe's demand for energy while maintaining skilled employment lies in Europe's existing buildings, which account for 40% of final energy demand and over a third of greenhouse gas emissions."

He added, "The directive provides a much needed impetus to national governments in driving up renovation rates, but none of this can be achieved without the necessary investment and financing mechanisms."

Mr Schleicher said that while the example being given with public buildings and central government procurement in the directive was welcome, such measures could not distract from the main objective, which had to be to transform the market to one that prioritised energy savings.

He said this was both to meet the EU's targets for reduced greenhouse gas emissions, and also to reduce the EU's reliance on imported fossil energy, and therefore keeping more money in Europe's economy.

"Furthermore," he said, "the economies of scale associated with the development of a real market around energy savings in buildings will fuel the capacities and skills in the construction sector."

He said that overcoming the "huge financial barrier to investment" was essential to seizing the potential of renovating Europe's ageing building stock.

"This can come through large scale financing such as revolving funds or pay-as-you-save schemes that reimburse the cost of the works through savings in energy bills." He said that fiscal incentives such as reduced VAT for services linked to renovation that leads to demonstrable energy savings have also proved to stimulate the market.

"FIEC therefore calls on those countries that use reduced rates of VAT for renovation works to continue to do so," said Mr Schleicher.

Energy Perfomance Certificates

FIEC also called for the EPC or Energy Performance Certificate to be transformed into "a real and reliable gauge of a building's energy consumption", saying it must be more than just a box ticking exercise which it said was so often the case today. It said fiscal incentives should be linked to certified improvements in the building's performance in order to create confidence and foster quality in the market.

FIEC said it underscored the benefit of renovation works to the economy as a whole, as underlined by a recent impact study on energy efficiency investments in Germany carried out on behalf of the German Development Bank (KfW).

It said this study found that for every €1 invested in energy efficient renovation an extra €5 net accrued to the German exchequer through increased tax receipts and lower unemployment benefit payments.

Mr Schleicher said, "Such figures show that whether economically or environmentally, taking up the challenge of renovating Europe's building stock makes sense. Now that the directive is in place Member States must act to turn good intentions into reality."