30th Mar 2023

MEPs agree to fossil loophole in EU green building directive

  • The text now forsees a phase-out of gas boilers by 2035 (Photo: Fred Romero)
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On Thursday (9 February), the industry committee in the European Parliament agreed on a compromise on the politically fraught file for the renovation and greening of buildings, with 49 votes in favour, 18 against and six abstentions.

With buildings responsible for approximately 35 percent of greenhouse gas emissions in Europe, the so-called Energy Performance of Buildings Directive (EPBD) is an essential part of the EU Commission's decarbonisation efforts.

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The regulation aims to trigger a "renovation wave" of Europe's 130 million buildings, which includes insulation and cleaner sources of heating.

"Improving the performance of Europe's buildings will continuously reduce energy bills and energy import dependency," said lead negotiator of the file Greens MEP Ciarán Cuffe on Thursday (9 February).

Minimum energy performance standards (MEPS) are at the heart of the compromise, which will make the improvement of the worst 15 percent of residential buildings mandatory by 2030.

In addition, all new buildings should have zero emissions from 2028, which means phasing out fossil fuel heating. Cuffe initially aimed to end all gas boilers by 2026, but deep divisions along country lines forced him to water down the directive with the phase-out target now set for 2035 "unless the commission allows their use until 2040."

Italy especially resisted mandatory targets strongly, fearing massive renovation bills for its ageing building stock, with the national building association ANCE estimating EU targets may cost €400bn over the next ten years. In a last-minute upset, former Italian prime minister Silvio Berluscon's party Forza Italia broke lines with its EU political family European People's Party and withdrew its support. But this was not enough to scupper the file in parliament.

Gas boiler loophole

The compromise sets more ambitious renovation targets than the commission but leaves the door open for so-called hybrid boilers, which currently run on gas but can be switched to hydrogen and biomethane in the future.

This was an important addition for some of the more conservative members of the EPP, which resented strong EU-wide targets

"It's easy to say an electrical heat pump is the better option, but some electrical grids, for example, in Bulgaria, are fragile. That's why we pushed for some flexibility in using biogas and hydrogen," someone with knowledge of the negotiations told EUobserver.

However, experts and sector insiders slammed the addition of hybrid boilers as a loophole for the gas boiler industry to keep installing gas-fuelled boilers and "squeeze every ounce of value out of their business," one expert told EUobserver anonymously.

Independent research shows hydrogen to be more expensive and less efficient than electrified heating pumps. In addition, it has a higher risk of exploding and is damaging to respiratory health.

A Global Witness study shows hydrogen in heating would double European energy bills by 2050.

But EUobserver understands negotiators allowed for more flexibility because the file may still die when it goes up for a general vote in March.

"It is a very delicate file. There is a lot of fear that costs may get out of control," a negotiator told EUobserver anonymously, adding that some fear for 'gilet jaune'-type riots if renovation targets are set too strictly, referring to a series of weekly protests in France in 2018 following a proposed fuel tax increase.

No penalties

In an earlier text proposed by Cuffe, homeowners would be penalised if renovation targets were not met. But this was removed from the compromise text when the EPP "fought hard" against it.

"Building renovations can seem daunting to many people," said co-negotiator and EPP MEP Sean Kelly. "I believe the real enforcement mechanism will be the market itself."

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