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Adrian Joyce, EuroACE, on the EPBD: ”Upscaling energy efficiency will not happen by itself”
(eceee news, 9 Nov 2018) “We will lean on the European commission and hound finance ministries if we have to”, says Adrian Joyce in an interview with Arthur Neslen. Mr Joyce lays out the case for why we should care about the amended Energy Performance in Buildings Directive (EPBD).
It’s often tough to convince people to listen to the case for energy efficiency, even though it is central to any credible plan for decarbonisation. To start with the basics, why should people care about the amended Energy Performance in Buildings Directive (EPBD)?
It is one of the most important changes that has occurred in the EU buildings sector in the last 15 years. At last, EU legislators have recognised that our biggest problems are not the standards we use for our new buildings but the ones we use to renovate our existing ones. In part because of hard work by EuroACE and others, awareness has been raised around the fact that our existing buildings consume more than 40% of energy and emit more than 36% of our CO2 emissions. If politicians are serious about achieving climate goals by 2050, then the buildings sector absolutely must be addressed, and this has been our key motivation in preparing a detailed guidance note on the amended aspects of the EPBD.
How much will the Directive save in emissions terms, relative to 2005?
In 2005, total energy consumption in the EU was around 1,800 million tonnes of oil equivalent (mtoe). So, by achieving the new requirement to make the building stock highly energy efficient and decarbonised, we can reduce overall energy consumption by 360mtoe by 2050. But there are more good reasons for doing this. By properly renovating our building stock we will actualise multiple benefits for industries, businesses and society at large.
At the same time, as a large amount of energy used in buildings comes from burning fossil fuels, particularly gas for heating, we can reduce our reliance on imported gas by around 60%. Just treating the building sector will reduce energy demand in the overall economy by 32% if we achieve our goals.
How much of the emissions cut that the EU has pledged by 2030 will come from buildings?
According to Fatih Birol, the IEA’s Chief Executive, treating buildings could meet 40% of the emissions reductions needed by the whole world, cost-effectively keeping us within safe climatic limits while improving our energy security and economic growth. Our sector is the most readily accessible for achieving dramatic cuts in emissions. With the right political will coming onstream, the right level of upscaling could occur in the next decade, but it needs ongoing and persistent political drive because it is not going to happen by itself.
It’s worth pointing out that the EU has not proposed binding targets for energy efficiency…
True, and this is a weakness of the new legislative framework that we are concerned about, as indicative targets in the past have not proved to be really motivating for national governments. In our view, having ambitious binding targets is a central plank to achieving longer term goals.
The same could be said of our current 2020 climate goals which the latest Eurostat projections say we are not on track to meet. How can we ensure that doesn’t happen with the next lot of objectives?
This is the beauty of the amended EPBD. It includes an amendment requiring Member States to develop national long-term renovation strategies (LTRS) for their building stock to 2050 that will transform them into Nearly Zero Energy Buildings (NZEB). This precisely matches our ambition, now captured in legislation, and is a point of particular rejoicing for us because we feel we had a strong influence in winning that. But it makes a lot of sense, of course. Work on buildings doesn’t happen overnight. Any project requires upfront planning, design, financial resources, technical resources, the right products all coming together to create the right set of measures to produce the highly energy efficient buildings we need. An average deep renovation project will take – from the first decision-point through planning, design and construction to the keys being handed back to the owner – maybe from 9-12 months to 3-4 years.
Without a long-term perspective, we simply won’t mobilise society to achieve that transformation in time. The LTRS will be established by Member States in the coming 18-24 months and will then, be reviewed every five years, approximately. It means we can adjust as we go to take advantage of technological advances and changes in societal wishes or culture - and real climate impacts - so we can crank up our ambition over time. I’ve long held the view that the most important decade in terms of activity for energy renovation will not be 2020-2030 but 2030-2040, because it will take us the next 12 years to properly ramp up and bring all actions to the right scale.
The EPBD also requires Member States to involve and consult with stakeholders around LTRS. That means our partners working on the ground will be able to directly influence the national plans - and they’re the ones who know what’s needed and can help make that happen. So that should lift a burden off the shoulders of governments. The Directive effectively obliges action plans for monitoring and evaluation, as strategies are rolled out across Member States. That was missing in previous legislative efforts. - a mechanism to ensure that strategies have real teeth, with well phased implementation. If they don’t, we will raise our voices and make sure that the updates every five years will include those kinds of actions that can be tracked, monitored and evaluated. In this, the new Energy Union Governance Regulation should be an ally.
What will happen if strategies go ahead as they did in the run up to 2020, with an absence of good faith? That they’re often cursory, quickly put together, shoddy in execution, unthought through policies with minimal actions really the least they can get away with, often aimed at the wrong properties, and with little mention of trigger points or renovation passports. If all that happens, how can you hold governments to account?
It’s not our job to hold the Member States to account but we will lean on the European Commission to do that if we see the trend of today continuing, where indeed the building sector’s energy consumption is stable or slightly increasing, when it should already be falling. Through our national partners, we hope to have the intel to know early enough if strategies are not having the desired impact and why. We would then take action on several fronts: Raise awareness of good practices and of countries where work is advancing well; alert the European Commission, urging them to take their legal duty in hand to enforce action by the Member States; lead by example in improving the buildings that are occupied by our members and partners etc.
Given that the targets aren’t binding how could they do that?
The requirement in the EPBD for Member States to prepare strategies that lead to a transformation of the building stock to NZEB by 2050 is binding! The Commission, if it has been given the right milestones against which to measure progress, can then challenge the Member States on that strong legally binding basis - if progress is not being achieved, and the transformation we need by 2050 is being endangered.
Can you talk me through how this will all work in practice - the progress indicators, decadal milestones, and how these fit into the overall national energy and climate plans?
Indeed, there’s a great deal going on and we’ll find, as we did in past, that with 28 Member States, there will be 28 approaches to how the milestones will be set, how monitoring and evaluation takes place and how national actions precede EU actions to ensure that we are on track. We hope that our Guidance Note will help here too as we highlight key approaches that should be adopted by Member States to ensure effective LTRS are rolled out. But each and every state has its own national development strategy and really the LTRS should form an integral part of those as the buildings sector is the lifeblood of the economy. In most Member States it represents more than 50% of fixed capital assets.
We all live, work and are educated in buildings, spending usually more than 90% of our time in them so without treating the building stock as a key infrastructural element, in good condition, you can’t have a vibrant economy. For that reason, I’d expect national governments to realise that without including the buildings sector and their LTRS in overall medium- or long-term social and economic plans, they’re going to be heading for failure. With LTRS that contain clear milestones at each decade built on a full and proper understanding of the age, nature and energy consumption of the building stock at the start point, Member States can develop a chart to steer their way towards NZEB by 2050. With the monitoring and evaluation, again we’ll find that in some countries that will be at national level, in others it will be at regional or city level. But it will be up to us as stakeholders - and the general public at large - to be alert to under-achievement and then to raise the alarm. I think with the political mood in Europe at the moment of distrust in traditional parties, the engagement at more grassroots level is possibly a vector that will help in that monitoring and evaluation of progress.
In that context, what role can unglamorous but influential arenas – the national and regional levers of power – play in local stakeholder consultations? How can they be a counterweight to the deadweight of treasury thinking, which is often disengaged, disinterested - or downright sceptical - about the importance of this issue?
You mention treasuries and finance ministries which, indeed, in the past have been a major drag or millstone around the neck of ambitious politicians wishing to advance energy renovations of the building stock. But I predict they’re about to be outflanked by banks and mortgage lenders, as those institutions which are highly risk-averse see the impacts of climate change on the building stock as being very severe. If buildings are not resilient and well-prepared for climate change, if they’re not ready to accept decarbonised sources of energy then their assets - and buildings comprise the lions’ share of assets owned by banks and mortgage institutions - will be at risk. So, I think the finance ministries will be outflanked by the availability of private money. The banks have an opportunity to improve their reputation, because they can provide preferential loans that allow people to improve their homes, comfort and wellbeing through energy renovations. But coming back to ministries, rest assured that we will continue to hound those finance ministries and address, as best as we can, the lacuna in governance at national level within the EU.
There certainly seem to be many in industry and government across the EU that have reverted to a decades-old stance that climate spending is a luxury compared to the growth imperative, and we risk sacrificing our competitiveness if we move faster than the rest of the world. How hopeful are you that governments in Europe are going to really walk the walk on climate change, and not just talk the talk?
This morning, I read an article on the BBC website, where Clare Perry the UK climate change minister said that when she heard talk about ambitious climate action, her first question was ‘Who pays for this? What is the cost of climate action?’ I’d like to turn that around and ask her: What is the cost of inaction? I expect it is much higher. We can go back to the Stern report of 2015, which found that for less than 2% of GDP we could succeed in mitigating the effects of climate change but, getting on for a decade later, most governments still haven’t woken up to that call.
In the Urgenda case in the Netherlands, social pressure on government which legally proved that the government was not taking enough climate action is maybe a sign of things to come. There’s another case in the ECJ that has been fought also by some of the smallest island nations on the planet who face a direct threat from climate change. I think we are going to see governments being held more to account and if we can get some Prime Ministers or Heads of State to be much more motivated on this issue, maybe their finance ministries will follow suit and release the money needed.
On the issue of climate targets, some people say that in the context of the IPCC’s Special Report 15 – which outlined the differences between 1.5°C and 2°C in terms of climate change – our targets needs to be rethought now. Do you agree and how should they be rethought if so?
EuroACE has always supported the call for a 40% binding energy efficiency target for 2030. That wasn’t achieved in the current round where we got a 32.5% indicative target in the EED. However, there’s a crank clause in 2023 and we will be working to ensure it moves significantly upwards then. We also know - and Commissioner Canete has said himself - that the addition of the 32% renewables and energy efficiency targets effectively mean that we will reach a 45% reduction in greenhouse gases by 2030. That still falls well short of where we need to be. The best science says the EU needs to reduce its greenhouse gas emissions by 60% by 2030.
Several reports coming out now show that this is achievable but that the societal implications are very challenging because each and every one of us has to make choices and our lifestyles will change – not necessarily for the worse – but they will be different. Without that, we will fail to achieve that level of ambition and this reinforces the central role of the buildings sector, because of its high energy use and emissions at the present time.
In the UK, the Greens had an eye-catching proposal for a 4-day week which doesn’t need explanation, it cuts through immediately. Do you think that could feed into a quality of life agenda and approach to politics in which energy renovations – with all its multiple benefits in terms of air pollution, reducing energy poverty and so on – could be central?
EuroACE is not a political organisation, but we take heart from the Renovate Europe Campaign which we run, and which enjoys huge support in the European Parliament. Over 100 MEPs signed our call, across seven political groups from 23 Member States. It is a cross-party issue and that’s heartening. What should happen at Member State level is that government and opposition parties should work together with stakeholders in the preparation of long-term renovation strategies. That should ensure that over time, as the political colour of governments change, the strategy stays the same - because it was accepted as a consensus issue from the outset. That’s the political message we want to come out with and, whatever your political persuasion, our guidance note should help.
EuroACE is convinced that the amended EPBD can make a serious contribution to mitigating climate change, despite the challenges we’ve talked about and, as a result, we’re the first association to develop a comprehensive guide to the amended parts of the EPBD. It was launched at a webinar that we organised on the 8th November in partnership with the Build Up Platform and the guidance note was published on our website on that same day. The document sets out the major changes affecting the buildings sector and gives guidance - not an interpretation, which is a job for others – on how EuroACE believes that Member States should pursue and implement the changes to the directive. Reading that document will give a strong flavour of all the challenges we’re facing and some of the best ways of going about implementing them. I strongly advise anyone reading this article to download and take account of the guidance produced by EuroACE.
For further information on issues raised in this interview, contact:
EuroACE is represented on the Board of eceee. EuroACE represents European companies involved with the manufacture, distribution and installation of energy saving goods and services for buildings. EuroACE members employ around 300,000 people in these activities in Europe and have around 1,400 production facilities and office locations. The mission of EuroACE is to work together with the EU institutions to help Europe move towards a more efficient use of energy in buildings, thereby contributing to Europe’s commitments on climate change, energy security and economic growth.
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