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More than “nice to have”: National long-term building renovation strategies can be the road to recovery and growth

On March 10th 2020, EU Member States were expected to submit their third Long-Term Renovation Strategy (LTRS), in line with requirements of the Energy Performance of Buildings Directive (EPBD). By September, BPIE found that less than half of Member State’s strategies had been submitted, and of those, few were compliant with EU legislation. Now at the beginning of 2021, twelve national strategies are still missing (over nine months late), including all strategies from Central and Eastern European Countries. [1] 

Amidst the backdrop of the pandemic and economic crisis, putting building renovation on the backburner may seem only logical; like a “wish-list” or “nice to have” item, as opposed to a non-negotiable, top priority. 2020 was certainly a difficult year to look ahead, and many plans beyond buildings were delayed or put on hold. In reality, however, now is the ideal moment for countries who have not yet submitted their strategies to prioritise finalising them, and for all countries to ensure that their respective Recovery and Resilience Plans are used to finance national renovation priorities.

Indeed, the pandemic has shown that building renovation is an important investment; one that countries cannot afford not to make. Beyond energy savings and decreased GHG emissions, healthy, low energy buildings can have a measurable impact on quality of life and economic growth. In France, for example, research from BPIE shows that medical costs of about €930 million per year are linked to poor quality housing. Including the indirect consequences of such ill-health (absenteeism, lower productivity etc.), poor quality housing could be costing the French economy as much as €20 billion per year.

The same report also indicates that for every €1 million invested in energy renovation of buildings, an average of 18 local and long-term jobs are created that will stimulate economic activity. Holistic, energy efficient renovation of office buildings increases productivity by about 12% leading to a potential benefit of about €500 billion to the economy per year, and well-designed and executed energy renovation of hospitals reduces the average patient stay by about 11%, producing potential savings of about €45 billion per year to the healthcare sector. The link between building renovation, health and well-being of citizens and economic recovery has never been more clear – the opportunity is too great to ignore.

Despite the uncertainty that 2020 brought, political priorities at EU level crystalized over the course of the year, which should now be a strong impetus for Member States to take action. The European Commission’s Covid-19 Recovery Strategy includes the Renovation Wave for the buildings sector as a key component to build Europe’s economy back better than it was before. And now at the outset of 2021, Europe has agreed a higher, more ambitious 2030 climate target of 55% emissions reductions of 1990 levels. As BPIE’s recent analysis shows, achieving this target requires immediate, ambitious, and collective action and the buildings sector will have to play a lead role; by 2030, total GHG emissions coming from buildings must have reduced by 60%.

Towards this end, unprecedented levels of funding have been put in place to support a green recovery. In addition to the EU’s multi-annual budget from 2021 to 2027, the European Commission’s Recovery and Resilience Facility will make €672.5 billion in loans and grants available to support reforms and investments undertaken by Member States. This money should be quickly and well spent, towards triggering investment in innovative technical solutions and service models into the mass renovation market. Having a well-defined renovation strategy in place will help guide this process and ensure that Member States have resources to support short-term economic recovery with a clear long-term decarbonisation objective in mind.

Those twelve Member States who have not yet done so should therefore prioritize finalizing their LTRS. While defining a national LTRS is indeed a challenge, Member States now have the benefit of two rounds of experience (previous LTRS have been submitted in 2014 and 2017), and many more tools at their disposal and examples of good practice. The Our Buildings project has provided guidance for Romania and Bulgaria to support national governments to set up their LTRS according to the EPBD, along with a complementary template enabling local authorities to develop municipal renovation strategies in line with their Sustainable Energy and Climate Action Plans (SECAP). BPIE’s 2020 Assessment of submitted LTRS also highlights a number of good practices other countries can follow, in Spain, Denmark, the Netherlands, and Flanders (Belgium). A 2020 report from the BuildUpon2 H2020 project (which included Croatia, Hungary and Poland) additionally provides guidance on how to align LTRS and SECAPs, and the Covenant of Mayors has identified a host of good practices that can inspire the development of bottom-up strategies including local actors.

2020 was an extremely difficult year, testing limits, slowing growth, and forcing leaders to constantly re-prioritize. As we kick off the new year and are busy defining resolutions, finalizing and implementing long term renovation strategies, should be at the top of all EU Member States’ priority list.  Building renovation should no longer be considered a “nice to have” item reserved for a rainy day wish-list, but as the road to economic recovery and growth, bringing immediate and long-term benefits to citizens, the economy and the climate.

[1] This remark is based on review of European Commission LTRS website as of January 5th 2021, which is kept up to date with latest submitted strategies. https://ec.europa.eu/energy/topics/energy-efficiency/energy-efficient-buildings/long-term-renovation-strategies_en


About the Author:

Caroline Milne, as Senior Communications Manager at BPIE develops and deploys BPIE’s long-term communications strategy, and manages communications campaigns across a wide range of projects.
Prior to joining BPIE, she was Director of Communications and Marketing at Joule Assets, where she led communications and stakeholder engagement for European projects targeting energy efficiency project developers and investors, including SEAF H2020 and LAUNCH H2020. In this role, she also led deployment of the commercial launch of the eQuad platform, which facilitates investment in energy efficiency projects for SMEs in Europe, and organized outreach towards municipal leaders and residents in New York State in effort to create bulk energy buying programmes (“Community Choice Aggregation”). Before entering the energy efficiency space, Caroline spent several years working as a freelance English teacher for business professionals, copywriter and academic editor.
She holds a BA in Political Science and French from the University of Victoria, Canada, and a MSc of Political Science from the Université libre de Bruxelles, where she specialized in institutional evolution in the context of EU electricity market.