Europe wants to double buildings’ renovation taxes in 10 years

Europe wants to double buildings’ renovation taxes in 10 years

This was confirmed by Pau García, European Commission’s policy officer, during the event Oportunidades y retos de la revisión de la Directiva de Eficiencia Energética en Edificios (Opportunities and challenges in reviewing the buildings’ energy efficiency directive) organised by Observatorio Inmobiliario. The event featured Daniel Cuervo, APCEspaña’s general secretary; Pablo Martín, director at Asefave; Natlia Bielsa, CSCAE’s technical secretary; and Amaia Uriarte, investigator at Tecnalia.

The public consultation on the Buildings’ Energy Efficiency Directive will be open until the 22nd of June. The goal is to have the proposal prepared by the end of the year. The directive proposal on energy efficiency will be presented this Summer.

Strategy Renovation Wave was presented on the 14th of October 2020, which is the basis over which a series of directives and funding lines are being reviewed. «Approximately 40% of then energy consumed in Europe is on buildings and 75% of them are inefficient. Between 85% and 95% of the buildings currently standing will continue standing in 2050», estimated García. That was why he considered essential to take into account real estate in order to decarbonise the European economy, but the buildings’ energy renovation tax is 1%.

35 million rehabilitated buildings

Doubling the energy renovation tax will translate in 2030 in 35 million buildings rehabilitated and the creation of between 12 and 16 million jobs for each million invested.

Renovation Wave identified seven areas of intervention which need to approached in an integrated fashion. The first is to improve information, legal and normative stability, so that the industry can develop business models. Mobilising public and private financing is also important. Another point is to set up technical which can mobilise this investment and design the legal, normative and administrative tools. They are also seeking for the interventions to be integrated and intelligent.

Lastly, to decarbonise the heating and cooling sector, several strategies have also been implemented. In order to follow these strategies, a series of legal, financing and technical support also need to be implemented.

There is also work being done on the different standards for the energy efficiency certificates so that they can be on the same level and on improving their quality and indicators. The directive is also working on electromobility.

In terms of financing, there is work being done on a series of integrated measures from direct financing as with the ERDF and other instruments designed by the EU to reactivate the economy

Architecture’s role

In this process, what do architects propose? «Deep renovations are those which improve in 60% a building’s energy efficiency. The CSCAE (Higher Council of Architects Associations in Spain) demanded that it be mentioned that architecture too is plays an important role in the energy process. Its passive measures (building’s orientation, lighting, materials...) are relevant. We want this to be considered», commented its technical secretary. It was made clear that there is room to improve the energy certifications’ quality. A call was also made to boost the buildings’ renovation passport as an incentive for the renovation of the entire buildings’ stock.

The housing stock is the one that includes the largest number of buildings in Europe, with more buildings in need of rehabilitation and with greater possibilities of improvement. On the other hand, a full intervention is very expensive, recognised Amaia Uriarte. «The implementation of renewed buildings in the urban surroundings might be a measure to co-finance rehabilitation, reducing that gap so that new investors can integrate those financing mechanisms». Seeking new formulas is particularly important to implement this, especially within the housing segments with worst performances. 

Historical opportunity 

There is a promise of extensive financing for the developers, which represents an «historical opportunity», as defined by Daniel Cuervo. The NextGenEu funds are a boost to accelerate the renewal of the existing stock. But it is necessary to be agile in its management so that a great number of interventions are made. Before 2019 rehabilitation interventions in Spain numbered 30.000 units per year. In order to meet the goals, we would have to multiply by ten to reach in 2030 the 1.5 million renovated dwellings meeting all the requirements which will be present in the directive. «The management of these funds will be fundamental. All should be accompanied by a battery of legal reforms»

Daniel Cuervo also highlighted that we have a «training problem, which generates a lack of qualified labour». He considered that there is a need to adjust the training offer from the administrations to what the companies need. 

The windows and light façades segment is aware of the importance of meeting the goals delineated by all the different European directives. Nevertheless, Pablo Martín assures that in terms of deep renovations, the results have not been very encouraging, with a less than 1% building renovation rate. It is not an issue of financing or lack of awareness, but that up until now, only maximum programs were launched which demand from all those involved the same level of commitment. This cannot happen as it creates losses to constructors, developers and materials», he concluded. He further recalled that in 2019 around 200.000 windows were replaced in Spain, so he wanted to highlight these small interventions.

Beyond grants, he requested tax breaks and the creation of a specific TVA.

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