Energy efficiency in buildings: “We don’t need this renovation hammer”

Energy efficiency in buildings
“We don’t need this redevelopment hammer”

By Clara Suchy

Energy efficiency classes like refrigerators and dishwashers: The EU plans to introduce these for buildings as well. In ten years, all buildings should achieve class “D”. But the proposed law is met with massive resistance – and threatens to backfire.

There they are again, the problem children of German climate policy: energy, transport and buildings. They are the sectors that are simply not meeting their mandated emissions targets. But there is no getting around it: if Germany wants to achieve its statutory climate targets, the building sector must also play its part. And that means: refurbish – massively. “Without this instrument, the climate goals in the building sector cannot be achieved,” says Christian Noll from the German Energy Efficiency Initiative in an interview with ntv.de.

That is why the EU Parliament has introduced the first regulations. As with household appliances, a scale should also be defined for the energy efficiency of buildings. The refurbishment proposal passed in Brussels would mean that by 2030 all residential buildings in the EU would achieve energy efficiency class “E” and by 2033 class “D”. A sporting undertaking, because the refurbishment from level “G” to “F” alone would affect around 30 million buildings in the European Union, as the EU Commission itself states.

How many objects there will actually be in Germany is still unclear. Much remains to be clarified in this legislative proposal. For example, how the levels should be defined at all. Only the worst category “G” is already there: According to the EU Commission, these are the 15 percent of a country’s buildings that are the most inefficient. “Historical buildings” should not be affected, but which objects will be included has not yet been determined. Also the So far, there has been a question mark over the project’s burden-sharing. The EU Commission had promised up to 150 billion euros from the EU budget. How will that be distributed, or how much will the German government contribute? Also unclear.

How much does it cost?

But even with all the question marks, the proposal is causing concern. The housing associations are sounding the alarm. “The proposals of the European Parliament are absurd,” says Axel Gedaschko, President of the Central Association of the Housing Industry GdW. The association expects annual investments of 125 billion euros – for Germany alone.

However, it is not at all easy to quantify the costs of this legislative package. Because the costs vary greatly depending on the building and its energetic condition. The costs for an energetic modernization to a solid standard are typically between 200 and 500 euros per square meter, explains Ralph Henger, economist at the Institute of German Economics (IW) in Cologne, in an interview with ntv.de. The association of the housing industry GdW, on the other hand, assumes a renovation price of 750 euros per square meter, as a press spokesman explained to ntv.de. Conversely, this would mean that a maximum of 75,000 euros would be required for the complete renovation of a 100 square meter apartment.

Not exactly a small sum for the average consumer or a pensioner – especially in times of rising construction interest and material costs. However, most apartments do not need to be completely renovated. The heating system may have already been replaced or the windows replaced. They don’t have to make it into the A class straight away. “You just have to make the jump over a grade or two,” says Noll. This varies from case to case, but can often mean simply insulating the top floor or optimizing heating efficiency.

Savings must be accounted for

Refurbishment costs are also related to savings. The poorer the energy efficiency of the building, the greater the savings potential. Owners of properties in the worst energy efficiency class “G” save a lot of money every year if they climb two levels to “E” after refurbishment. A corresponding refurbishment will therefore pay for itself quickly, according to Henger. Especially with the high energy prices and the CO₂ pricing of heating systems, which both tenants and landlords have to bear. These are exactly the buildings that, according to the EU Parliament’s draft, would have to be renovated over the next seven years.

But the EU Parliament is going one step further: by 2033, all buildings in the EU are to achieve Class “D”. That could be expensive for many property owners. Because: “The savings are lower, but the costs are still high,” says Henger. So many more homeowners would be affected by the law, but wouldn’t benefit as much from the cleanup.

In Henger’s opinion, minimum standards can help to stimulate sensible modernization of old buildings. However, the current tightening of the EU building directive could have devastating consequences. “If the plans are implemented in this way, there is a risk of enormous resistance,” says the economist. “The energy transition could fail if we work primarily with bans and burden large parts of the population excessively.” Instead of legislating renovations in poor energy efficiency classes, other instruments would lead to similar results in terms of emissions targets. For example through the steering effect of a CO₂ price. “We don’t need this renovation hammer.”

“It pays to train and increase production”

But such a “hammer” could also create incentives to invest in certain areas. The shortage of skilled workers is leaving its mark, especially in the skilled trades sector. However, the demand for heat pumps in the summer has shown that companies invest more when they know it will pay off in the long term.

The German Institute for Economic Research expects that promises and guidelines will lead to incentives in the manual sector. “Renovation and expansion rates could be increased quickly if it is a goal of society and politics,” according to a recently published study on the subject. The legislation proposed by the EU “sends signals to craftsmen and companies that it is worth training and expanding production,” explains Noll. “You know there will be demand for years to come.”

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