The unprecedented push for renovation across Europe needs to be in line with its climate ambition and work in synergy with the rest of the EU’s climate legislation in order to fulfil its potential, writes Adeline Rochet and Pedro Guertler.
Adeline Rochet is a senior policy advisor for the think tank E3G, in the Place-Based Transitions team. Pedro Guertler is a programme leader at E3G.
Last month, European energy ministers swiftly agreed conclusions emphasising the potential of a ‘Renovation Wave’ to repair the economy and contribute to Europe’s green transition. This month, the Commission publishes its package of proposals for achieving a 55% reduction in the EU’s greenhouse gas emissions by 2030. The renovation of Europe’s buildings can be the engine for achieving climate neutrality in every sector, in a way that works for people. To make this happen, negotiations on the package will need a relentless focus on how legislation translates into practical delivery.
The Commission, even before COVID-19 brutally swept the world, had identified massive renovation plans for buildings as central to delivering the European Green Deal and had announced the ‘Renovation Wave’ as a flagship initiative for its mandate to succeed on core European priorities: not only climate-neutrality, but green and local jobs creation, and healthier, affordable to run homes and workplaces in every part of Europe. Renovation is where the need for ever deeper decarbonisation connects directly with recovery and the everyday of people’s lives and livelihoods.
But it goes broader. The Commission’s Renovation Wave envisages the overhaul of 220 million buildings standing today by 2050. 150,000 buildings a week. That will touch a majority of the 440 million living in the EU, involve vast material demands and constant, intense activity. Renovation at this scale – whether delivered for individual homes, neighbourhoods, cities or regions – presents a unique opportunity to drive many mutually supportive facets of deep decarbonisation. These include decentralised renewables, smart power grids and demand, electric mobility infrastructure, resilience to climate risk, greener and cooler urban environments, finance into small infrastructures, sustainable, circular construction materials and industrial transformation, and trade in clean products and services. This is, in essence, an unprecedented opportunity to include people in shaping the transition itself.
Seizing this opportunity will be challenging but necessary. First the Renovation Wave needs legs to stand on: to treble the annual energy renovation rate to 3% by 2030, and ensure those renovations are ‘deep’ (i.e. achieving over 60% of energy savings, currently a rate of just 0.2% per year). Policy makers need to prioritise the 50 million people living in energy poverty in Europe – over 10% of the EU’s population. With ‘stay-at-home’ orders in many places over the past 18 months, their predicament is likely to have worsened.
But it is highly uncertain whether the current framework will secure the basics, as it remains very narrowly approached in silos. All elements of the Renovation Wave and the ‘Fit for 55%’ legislative package – for meeting the EU’s 2030 climate target – need to come through strongly: the Energy Performance of Buildings, Energy Efficiency and Renewable Energy directives, to name a few. At the same time, substantial headline ambitions for renovation are emerging from the near-final Recovery and Resilience Plans, which is promising. For these to succeed, the Commission and its partners, particularly the European Investment Bank, can and must do more to align and bolster the various tools at their disposal to help Member States build up financeable and deliverable renovation project pipelines.
Tapping the transformative potential of the Renovation Wave to drive multiple facets of delivering climate-neutrality, while bringing societal substance to the European Green Deal, needs a broader vision. This requires a pivot from the politics of ambition – targets, cash announcements, legislative breakthroughs – towards a sustained politics of delivery. The ball is now in the Commission’s court to push forward consistent and wide-ranging proposals, by solving five structural issues.
First, the Renovation Wave legislative package’s internal coherence needs to be resolved. For example by ensuring that targets for renewable energy in buildings are consistent with a new deep renovation standard as well as the introduction of minimum energy performance standards for all buildings.
Second, the wider Fit for 55 package needs strong cross-sectoral coherence. E.g. by ensuring that its legislative pieces on gas, alternative fuels, buildings, efficiency and energy taxes together support the drive to electrify an increasing share of the EU’s heat supply, governed by the ‘Energy Efficiency First’ principle – the long-standing top priority for any energy policy framework.
Third, Fit for 55 needs to cast its eye firmly on the horizon, to ensure synergies – such as those between the potential demand for sustainable construction materials and the revised Industrial Strategy and later Circular Economy Action Plan – can be exploited and support the path towards competitive clean trade advantage and enhanced diplomatic clout. Energy pieces that are outside of Fit for 55’s scope, such as the ‘TEN-E’ regulation impacting energy infrastructure choices, have to be consistent too to avoid infrastructural dead-ends.
Fourth, consolidating innovation can allow strategic learning and drive new commercial, financial, social, cultural outcomes. Delivery failures, and valuable lessons from them, will be inevitable – but there isn’t time for major resets. Institutions at all levels need to be agile and develop the capabilities to continually course correct while scaling up the quality, pace and integration of delivery. The Commission should progress with urgency the innovation mission for 100 climate neutral cities by 2030, place renovation at its heart and connect it with the new Bauhaus and 100 lighthouse renovation district initiatives.
Finally, the European Green Deal’s social pillar needs to move to the centre. Successful delivery rests on the consent and active participation of people. Fit for 55 needs to accelerate a necessary shift from a mindset of compensation or redress from the impacts of the transition, towards one that has people as its starting point.
The Renovation Wave may feel like a moon-shot at times. Precisely for that reason it can connect all of these issues – which is why it may prove far more important than we think.