The EU Parliament wants to tighten the building energy law. After the discussions about the German heating law, homeowners are now facing additional costs. At the weekend, Federal Construction Minister Klara Geywitz (SPD) took a position on this: She considers the proposed renovation obligation to be wrong. Other German government politicians are also critical of the EU’s ideas. The EU Commission, Parliament and the Council of Heads of State and Government are still negotiating the directive. But what exactly is being discussed here and what impact would that have on German owners?

The EU wants to revise its directive on the energy efficiency of buildings. This is necessary because Europe wants to be climate neutral by 2050. By then, all buildings must also be completely decarbonized. On the one hand, buildings are the EU’s largest CO2 emitter: from construction to demolition, they are responsible for more than a third of greenhouse gas emissions. On the other hand, buildings are the largest energy consumers at 40 percent, also because around three quarters (in the EU) are not energy efficient. According to a 2020 EU Commission report, renovation of existing buildings could reduce the EU’s total energy consumption by up to six percent and CO2 emissions by around five percent.

The EU’s biggest lever is to focus on the buildings whose values ​​are the worst. The EU Parliament’s proposal is therefore that all residential buildings in the lowest energy efficiency class G must reach class E by 2030 and class D by 2033. But that doesn’t mean anything: there are currently no uniform EU energy classes, so it is not clear whether which buildings would fall into class G. In Germany, for example, the efficiency classes range from A to H.

The house owners association

How high the costs will be for individual homeowners therefore depends on the renovation status of the houses. The state development bank KfW expects total costs for Germany to be around 254 billion euros. Possible measures include, for example, new windows, heating or insulation. Federal Construction Minister Geywitz has now questioned the usefulness of insulation. Not every house would increase in value as a result, she said in an interview with the “Neue Osnabrücker Zeitung”.

However, a low energy efficiency class could actually have a negative impact on the value or on sales and rentals, as inventory that has been poorly renovated in terms of energy efficiency is already less attractive. If the directive is adopted and becomes national law, owners could face additional sanctions if they do not comply with the requirements. However, responsibility for this lies with the individual member states, which are likely to act rather loosely here. According to the current status of the law, exceptions are also made, including for listed or small buildings up to 50 square meters.

Both the EU and the federal government want to promote energy-saving renovations. At the end of 2021, the Commission promised that up to 150 billion euros would be available from the EU budget by 2030. Parliament has also spoken out in favor of easier access to financing.

In Germany there is the so-called Federal Funding for Efficient Buildings (BEG), which promotes measures for more energy efficiency and the replacement of fossil heating systems. The maximum funding limit for individual measures in existing buildings is 60,000 euros per residential unit. But the homeowners will have to bear the majority of the costs themselves. Landlords can transfer part of the renovation costs to the tenants through a levy.

The EU Commission supports the strict requirements that Parliament wants to set. In the long term, the investments in renovations would pay off. However, negotiations with the Council of Heads of State and Government are ongoing and could weaken the law. Many SPD MPs supported the law for a long time. Construction Minister Geywitz, herself in the SPD, has now said that she is critical of the tightening of the directive. “In fact, there would then be an obligation to renovate all buildings that do not meet certain energy standards. I reject that,” the SPD politician made clear . A “giant act” such as a renovation should not be enforced by law and certainly not stipulated across the board. “I say no to minimum standard requirements for every house without looking at who lives in it, who owns it and how long it could be used,” said Geywitz.

Finance Minister Christian Lindner (FDP) said he considered the directive “extremely dangerous.” The CDU MEP Dennis Radtke had already warned that the costs of fighting climate change could be passed on “to grandma’s house”. The Greens in the EU Parliament, on the other hand, argue that consumers would, on the contrary, benefit from lower energy costs if they use energy more efficiently.

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