TABLE OF CONTENTS

1.

Introduction

1

2.

Minimum energy performance standards for non-residential buildings

5

2.1.

Scope of the requirements

5

2.2.

Relevant definitions

5

2.2.1.

Definition of non-residential buildings within the scope of Article 9

5

2.2.2.

Definition of worst-performing non-residential buildings

6

2.3.

Stepwise approach to designing minimum energy performance standards for non-residential buildings

6

2.3.1.

STEP 1: Identify data sources and characterise the non-residential building stock

7

2.3.1.1.

Use of existing building stock data and complementary data sources

7

2.3.1.2.

Statistical sampling and ad hoc data collection

10

2.3.2.

STEP 2: Define indicator(s), energy performance baseline, and set energy performance thresholds.

11

2.3.2.1.

Indicator for the implementation of MEPS

11

2.3.2.2.

Baseline for the MEPS scheme

13

2.3.2.3.

Energy performance thresholds for MEPS

17

2.3.2.4.

Energy performance thresholds beyond 2033

19

2.3.2.5.

Temporary adjustment of the threshold in case of serious damage due to natural disaster

20

2.3.3.

STEP 3: Design MEPS governance and rules of compliance

20

2.3.3.1.

Governance and responsibilities

20

2.3.3.2.

Compliance: identifying buildings/owners to comply with MEPS

22

2.3.3.3.

Compliance: Establishing a compliance mechanism

23

2.3.3.4.

Optional: allowing for exemptions of individual buildings

26

2.3.4.

STEP 4: Set up an enabling framework

32

2.3.4.1.

Purpose of the enabling framework and key considerations

32

2.3.4.2.

Mechanisms of support

33

2.3.5.

STEP 5: Set up monitoring mechanism and penalty scheme

33

2.3.5.1.

Monitoring

34

2.3.5.2.

Penalty scheme

34

3.

Trajectory for the progressive renovation of the residential building stock

35

3.1.

Scope of the requirements

35

3.2.

Definitions

35

3.2.1.

Definition of residential buildings within the scope of Article 9

35

3.3.

Designing a trajectory for renovating the residential building stock

36

3.3.1.

STEP 1: Identify data sources and classify the residential building stock

37

3.3.1.1.

Data sources and preliminary classification and building categories

37

3.3.1.2.

Estimating the energy performance of residential buildings based on EPCs and data on the physical characteristics of the buildings

38

3.3.1.3.

Statistical sampling and ad hoc data collection

38

3.3.2.

STEP 2: Set the trajectory and milestones to achieve a progressive decrease in the average primary energy use

39

3.3.2.1.

Average primary energy use in 2020

40

3.3.2.2.

Milestones and sub-targets

41

3.3.2.3.

Eligible measures for reducing the average primary energy use of the residential building stock

42

3.3.2.4.

Reporting requirements on the trajectory

43

3.3.2.5.

Estimating the number or floor area of buildings to be renovated to achieve the decrease in the average primary energy use

44

3.3.3.

STEP 3: Setting the sub-target to achieve at least 55% of the decrease in the average primary energy use by renovating the 43% worst-performing buildings

44

3.3.3.1.

Setting the threshold for the 43% worst-performing buildings

44

3.3.3.2.

Estimating the number or floor area of buildings to achieve each sub-target

45

3.3.4.

STEP 4: Adopt policy measures to reduce the average primary energy use

46

3.3.4.1.

MEPS for residential buildings

46

3.3.4.2.

Financial support

47

3.3.4.3.

Financial support for renovating worst-performing buildings

47

3.3.4.4.

Financial support for vulnerable groups to renovate buildings

47

3.3.4.5.

Performance-based support schemes

48

3.3.4.6.

Technical assistance

48

3.3.4.7.

Monitoring impact

49

1.   INTRODUCTION

Article 9 of the recast Energy Performance of Buildings Directive (‘the recast EPBD’) (1) introduces new requirements for Member States to improve the energy performance of their existing building stock. This text provides guidance to Member States on how to incorporate the requirements to establish minimum energy performance standards for non-residential buildings and to set-up a trajectory for the progressive renovation of the residential building stock into national law (Article 9).

This Annex does not alter the legal effects of the EPBD and has no bearing on the binding interpretation of the EPBD as provided by the Court of Justice.

2.   MINIMUM ENERGY PERFORMANCE STANDARDS FOR NON-RESIDENTIAL BUILDINGS

2.1.   Scope of the requirements

Minimum energy performance standards (MEPS) are a regulatory tool to stimulate the renovation of existing buildings on a large scale. They remove the main barriers to renovation such as split incentives and co-ownership structures, which cannot be overcome by economic incentives, as also indicated in Recital 25. The recital further states that the general purpose of MEPS is to gradually phase out the worst-performing buildings and thereby improve the energy performance of the building stock.

For non-residential buildings, Article 9(1) requires Member States to set up a national MEPS scheme based on the establishment of minimum energy performance standards for non-residential buildings. These ensure that the buildings do not exceed the specified maximum energy performance threshold. The scheme is designed to improve the energy performance of the worst-performing non-residential buildings by certain enforcement dates.

2.2.   Relevant definitions

2.2.1.   Definition of non-residential buildings within the scope of Article 9

There is no explicit definition of a non-residential building. A non-residential building is a building that is used for a purpose other than residential, e.g. office buildings, healthcare buildings, wholesale and retail trade buildings, educational buildings, sports facilities, hotels and restaurants. This is a non-exhaustive list of non-residential buildings according to their use, in accordance with Annex I, paragraph 6.

With regard to mixed-use buildings, i.e. buildings that include both residential and non-residential units (e.g. a residential building with shops on the ground floor), Member States may identify the most appropriate approach and, according to Recital 34, may continue to choose whether to treat them as residential or non-residential buildings, or a mix of the two.

If a mixed-use building is being renovated, double-counting of energy performance improvements must be avoided. The improvements must therefore be clearly attributed to the residential or non-residential part of the stock.

All non-residential buildings fall within the scope of Article 9(1) irrespective of whether or not the owner or user is a public or private body. Energy renovations of public buildings with a non-residential use could therefore contribute to both the achievement of the MEPS thresholds and to the annual renovation target established under Article 6 of the Energy Efficiency Directive (Directive (EU) 2023/1791) (2), provided that such renovations meet the requirements set in both pieces of legislation.

2.2.2.   Definition of worst-performing non-residential buildings

Article 9(1) states that worst-performing non-residential buildings are defined based on the national thresholds corresponding to the energy performance level of the worst 16% and worst 26% of the non-residential building stock in 2020 in terms of floor area or number of buildings. Member States shall establish additional thresholds for 2040 and 2050 with lower maximum energy performance thresholds to ensure the gradual phasing out of worst-performing buildings over time. Thresholds can be established for the entire non-residential building stock or by building type or category, based for instance on the building categories listed in Annex I. Categories of buildings could also be established according to their more specific use but also their size, typology, climate zone and a combination of these or other features.

2.3.   Stepwise approach to designing minimum energy performance standards for non-residential buildings

The design of a MEPS scheme, including the selection of an indicator, the definition of thresholds and means of compliance, needs to be conducted in several steps. To make sure all design elements are considered and a proper enabling framework is set up, the following five steps are proposed to design and implement national MEPS schemes for non-residential buildings:

—	identify data sources and characterise the non-residential building stock;

—	define indicator(s), an energy performance baseline and set energy performance thresholds;

—	design governance and rules of compliance;

—	set up an enabling framework;

—	set up a monitoring mechanism and penalty scheme.

Figure 1. Recommended steps for the design of a MEPS scheme for non-residential buildings

In the sections below, examples and possible options for the different MEPS design features in accordance with Article 9 are presented based on the five steps in Figure 1. The elements for each of the steps can be recombined to match individual Member States’ circumstances such as specificities of the existing building stock, prevalence of certain barriers and capacities to address them.

2.3.1.   STEP 1: Identify data sources and characterise the non-residential building stock

To establish a baseline for non-residential buildings, Member States need to have a clear understanding of the energy performance of their non-residential building stock on 1 January 2020. Member States therefore have to characterise their building stock, i.e. collect and process the relevant information to describe the building stock according to its main characteristics in order to derive its energy performance. This characterisation of non-residential building stock should allow Member States to rank all non-residential buildings by energy use in order to then determine the maximum energy performance thresholds, including 16 % of the non-residential building stock for 2030, 26 % for 2033, and the subsequent thresholds for 2040 and 2050. The worst-performing buildings with an energy use above the maximum thresholds identified for each year will then be obliged to comply with MEPS.

There are at least two general approaches to the characterisation of non-residential stock that can be implemented individually or in combination using a) existing building stock data and complementary data sources; and/or b) statistical sampling and ad hoc data collections. These are described in the following sub-sections.

For any approach selected by Member States, it is recommended to establish a clear plan in terms of time and resources.

The characterisation of non-residential building stock also relates to the development of the database described in Article 22. In the case of public buildings, Member States may take advantage of the data collected for the purpose of the public buildings inventory required by Article 6(5) of the Energy Efficiency Directive, which could be used for the characterisation of the stock of non-residential public buildings. During the initial characterisation of non-residential building stock, different existing databases will have to be identified and used. Some of these databases, such as energy performance certificate (EPC) databases, 3D urban models and cadastre or land registers, could potentially turn into permanent data sources to populate the national database for the energy performance of buildings as defined in Article 22.

Before characterising the non-residential building stock, it is recommended to select the indicator for the implementation of the MEPS scheme. Article 9(1) states that Member States can choose to establish the national thresholds in either final energy use or primary energy use. The choice of the preferred indicator has implications for the type and range of measures that can be implemented to improve the energy performance and therefore to comply with the MEPS obligation (see section 2.3.2.1). It is therefore recommended to characterise the non-residential building stock using the indicator that will be used for the MEPS scheme.

When already in place, the update and improvement of existing databases such as EPC repositories or cadastre registers may enable a faster and more cost-effective characterisation of the non-residential building stock in comparison to implementing an approach involving data collection from scratch. When selecting data sources for the characterisation of the non-residential building stock, Member States shall consider key data aspects such as ownership, rights of accessibility, privacy and security to ensure that the rights of building owners, tenants and any other relevant stakeholders are protected. These aspects are also relevant for other steps of the design of the MEPS scheme as discussed in other sections.

2.3.1.1.   Use of existing building stock data and complementary data sources

2.3.1.1.1.   Data sources

Member States may use a wide range of existing data sources to characterise non-residential building stock. Where available, information related to the energy performance of a subset or segments of the non-residential building stock can be obtained from sources such as EPCs, results from research, censuses, energy audits or aggregated measured energy data. It is possible to estimate the energy performance of a building by comparing it to buildings with similar characteristics – such as use, date of construction, typology and location – for which energy performance data is available.

Data on the physical characteristics and other features of the non-residential building stock such as use, date of construction, typology, location, geometric characteristics or data on technical building systems can be collected from sources such as 3D urban models, satellite images, digital building logbooks, cadastre data, construction and planning permission registers, interviews with architects or developers, and others.

It is recommended that Member States assess the quality, completeness and representativeness of the different datasets. It is also recommended to further pursue the automatic updating of these datasets and the interoperability between the databases.

2.3.1.1.2.   Preliminary characterisation and building categories

For the characterisation of non-residential building stock, it is recommended to start with a preliminary estimate of the overall size of the building stock and the share of buildings in each use category, such as offices, healthcare, wholesale and retail trade, educational buildings, sports facilities, hotels and restaurants, as mentioned in Annex I of the EPBD. Member States are encouraged to use established use categories from existing policies, which may be more detailed. This will enable the identification of those segments where data collection may require higher efforts.

The non-residential building stock varies not only in terms of use but also in term of size, typology, facade materials and technical building systems. To obtain a better characterisation of the stock, it is therefore recommended to split it into more manageable portions based not only on their use, but also on some of these additional features. Results from research such as EPISCOPE (3) and TABULA or existing national categorisations can support this process. Also, patterns of common local or regional construction practices can be used as a criterion to define categories. Examples of other criteria include date of construction, climate zone, and heating system technology. This enables a breakdown of non-residential stock into segments of buildings with more similar characteristics (e.g. large hospitals (with floor area > x m2), located in a certain climate zone). It can make it easier to develop assumptions for each segment when required and improve the results when estimating the energy performance of the buildings for which data is not available. Also, such categories may be used to develop different thresholds per building category that Member States may define.

The classification of buildings according to the construction period, location or climate zone can be linked to common construction practices. For instance, the implementation of previous building codes or energy performance standards, including requirements on the thermal characteristics of materials, can enable assumptions about the materials, thermal characteristics and systems of non-residential buildings. A building energy code implemented in the 1980s, including minimum requirements for the U-value of windows or a minimum level of insulation, can then be used to assume certain values for the material and other characteristics of buildings constructed during that period for which individual information is not available. Member States can also build on the classifications used for other purposes, for instance on the buildings’ typologies used for the purpose of the cost-optimal calculation.

Interviews with architects, constructors and developers can help refine the assumptions about construction practices over the years. They may also help identify building typologies, their physical characteristics and distribution over time (e.g. typical school construction between 1960 and 1970).

In the case of different climate zones, the local climate conditions may impose certain requirements on construction practices, e.g. a higher level of insulation is expected in regions with cold climates compared to warmer regions. These kinds of analysis can also strengthen the assumptions for buildings without individual data.

2.3.1.1.3.   Using EPC data

It is important to ensure that the available EPCs are sufficiently representative of non-residential building stock. A representative dataset reflects the characteristics of the whole non-residential building stock, mirroring for instance the relative share of different building categories according to age, size, climate region etc. The coverage of EPCs of e.g. public buildings could be overrepresented due to the existing obligation to include the EPC information of public buildings in existing energy performance databases according to Article 10(6a) of Directive 2010/31/EU. Regions with a high density of non-residential buildings (e.g. capital cities or cities with large service sectors) may be overrepresented as well. It is important to assess whether these cases are in specific climate regions that do not represent the circumstances of the rest of the non-residential building stock. Similarly, other characteristics such as size and typologies should be assessed. The gaps identified in the EPC data available can be addressed by collecting additional information from the categories of buildings, regions or climatic zones that are underrepresented.

Besides coverage per use, size, typology, climate zone and other characteristics, the time of issuing is also relevant when using EPC data. EPCs are valid for 10 years and an EPC may not have been reissued after the building underwent renovation. Furthermore, the requirements to issue EPCs also introduce a bias in the database. EPCs are generally issued for new buildings or for buildings that are in the sales or rental market. These buildings may have a different performance compared to buildings that have been out of the market for a long time. Last but not least, many subsidy schemes require an EPC to demonstrate the improvement of the buildings’ performance. This may include EPCs for both before and after, just before or just after.

To refine the data on the current status of the building, EPC data can be combined with additional information from construction and planning permission registers and digital building logbooks (when available). These can provide information on the date and scope of previous renovation activities carried out on the buildings.

2.3.1.1.4.   Estimating the energy performance of non-residential buildings

Once there is assurance that EPC data or other data on the energy performance for a subset of buildings is representative of the whole (or parts) of the non-residential building stock and available, Member States may choose to combine this information with information on the physical characteristics and other features of the same buildings to create a reference set. A combination of data such as use, date of construction, location and size of the buildings for which the energy performance information is not available can be fed into statistical models such as multinomial logistic regression (based on the buildings in the reference set) to estimate their energy performance. This allows an energy performance value to be assigned to each building for which this data is not available and therefore complete the characterisation of the non-residential building stock.

When the energy performance information from subsets or segments of the non-residential sector is not representative or is not available, information for each individual building on its use, date of construction, typology, location, geometric characteristics or technical building systems can be fed into energy models to simulate the operation of the buildings and estimate their energy performance. Similar to the case described above, this allows an energy performance value to be assigned to the buildings for which this data is not available and therefore completes the characterisation of the non-residential building stock.

Coupling bottom-up data (buildings’ physical characteristics, location, energy performance etc.) with top-down data (aggregated data for different energy carriers’ consumption, final energy consumption, national statistics on building construction practices etc.) can strengthen the characterisation of non-residential building stock. The estimations based on bottom-up data can be cross-checked with the available top-down data to calibrate the assumptions and estimations made.

It is recommended that Member States describe the data sources and approach they use for the characterisation of non-residential building stock in their national building renovation plans (NBRPs).

2.3.1.2.   Statistical sampling and ad hoc data collection

For the cases where there is no representative data on the energy performance of non-residential building stock or no data at all, statistical sampling and ad hoc data collection can support the characterisation of the building segments. The collection of data can be used to complement existing data and cover specific gaps, e.g. related to building types, geographical areas or climatic zones. This approach can be used on its own or alongside existing data to verify the findings and assess their plausibility.

When using statistical sampling, it is recommended to have a preliminary overview of non-residential building stock, breaking it down into different categories of buildings with similar characteristics in terms of use, typology, location, date of construction and/or others. The different categories of buildings should be represented in the final statistical sample.

A clear sampling procedure is required, e.g. by conducting a multi-stage survey that combines methods such as a screening for general information available from the sample buildings, followed by interviews with building owners and then on-site inspections (4). The information to be collected includes details on the operation of the building, energy demand, energy suppliers, construction materials, details on previous renovations and any other relevant data.

The information collected can be put into a simulation model to estimate the energy performance of the sample buildings. The results can be extended to the rest of the building stock, taking the initial categorisation into consideration. The results can then be cross-checked with available aggregated data on the energy performance of the building stock as in the previous approach.

Table 1

Characterisation approaches to non-residential building stock

Approach	Key requirements and steps	Advantages/challenges
Building stock data and complementary data sources	— Sufficiently representative data across dimensions such as use categories, geographical and climatic coverage, years of construction, size, typologies, others. — Assess the quality of datasets and identify gaps. — Integrate the different datasets/sources available and fill the gaps. — Characterise the buildings for which the energy performance data is available in terms of use, typology, etc. Characterise in the same way the buildings without energy performance data. — Define the model to estimate the energy performance of buildings for which this data is not available based on their characteristics and the reference set of buildings.	Advantages Leverage existing data resources. If based on EPCs, it makes it easier to use EPCs as a compliance mechanism. Useful to identify gaps to be covered by dedicated data collection. Challenges Data across different databases is usually not consistent. If data triangulation is not possible, a simplified estimation of energy performance can lead to miscalculations. Ownership and accessibility to the data from different sources may be a barrier.
Statistical sampling and ad hoc data collection	— Establish the characteristics of a sample of buildings representative of national non-residential building stock. — Conduct a survey to collect data from a representative sample of non-residential building stock. — Use a building model to estimate the energy performance of non-residential building stock.	Advantages Up to date and specific to the policy requirements for setting up and monitoring a MEPS scheme. The data could be used for other policy purposes. Challenges Sampling period can be long. Costs and responsiveness rate.   Reliability of the building model.

2.3.2.   STEP 2: Define indicator(s), energy performance baseline, and set energy performance thresholds.

The provisions in Article 9 allow Member States to make different decisions on certain features of the MEPS scheme for non-residential buildings, such as the choice of the indicator to deploy the MEPS scheme (final or primary energy use), whether to exclude certain building categories from the baseline, and whether to define a threshold for the entire non-residential building stock or by category (see Figure 2). This section presents different considerations that Member States should take into account while defining these features for their MEPS scheme.

Figure 2. Definition of key features of the MEPS scheme for non-residential buildings

2.3.2.1.   Indicator for the implementation of MEPS

Article 9(1) states that Member States can choose the indicator for the maximum energy performance thresholds to be either final energy use or primary energy use. The choice of the preferred indicator has implications for the type and range of measures to comply with the MEPS obligation (see Table 2).

Final energy use is the amount of energy that must be delivered to the building for space heating, space cooling, domestic hot water, ventilation, built-in lighting and other technical building systems to ensure the standardised operation of the building throughout the year. It describes the theoretical energy demand based on the physical properties of the building envelope and the systems technology. Primary energy use is energy from renewable and non-renewable sources that has not undergone any conversion or transformation process (see Article 2(9)). The use of final energy use as the main indicator encourages measures aimed at improving the efficient use of energy in buildings, such as the renovation of building envelopes and installation of more efficient heating systems, thereby tackling decarbonisation by reducing energy demand. However, it has limitations when it comes to comparing energy sources, introducing renewable energy sources in buildings or accounting for the improvements in the energy grid. The use of primary energy use would cover both energy efficiency measures described above and the use of renewable energy sources in buildings, thereby promoting also the decarbonisation of the building energy supply. It also makes it easier to compare multiple energy carriers.

If adjustments to primary energy factors or weighing factors per energy carrier lead to a better outcome of calculated energy performance, Member States need to justify the adjustments to the Commission and show that they reflect a real change in the mix of energy sources. The choices made and data sources shall be reported in accordance with EN 17423 or any superseding document (see Annex I.2).

The Commission recommends the use of primary energy given its use as the main indicator in the methodology for calculating energy performance (Annex I) and EPCs.

In accordance with Article 9(3), Member States can use complementary indicators of non-renewable and renewable primary energy use, and of operational greenhouse gas emissions expressed in kgCO2eq/(m2.y). These indicators should be treated as additional ones, i.e. they can be used to establish a second requirement for non-residential buildings that are above the thresholds identified through the main indicator (final or primary energy use). This second requirement could help achieve higher levels of renewable energy use in buildings or further reductions in greenhouse gas emissions. The additional indicators cannot therefore substitute final or primary energy use as the main indicator for the setting of the energy performance threshold of the MEPS scheme.

A reference-building approach resulting in a ratio and displayed as a threshold expressed in final or primary energy use in kWh/(m2y) will also be eligible to establish the baseline and thresholds in accordance with Article 9(1).

Tabelle 2

Threshold indicator options

	Advantages	Disadvantages
Final energy use	Encourages measures to reduce the energy needs, including renovation of the building envelope, efficient heating systems, low-cost measures to reduce heat losses in heat distribution systems within the building. It may be easier to communicate as it relates directly to energy bills and is therefore directly related to consumers’ decision-making.	The measures related to the decarbonisation of the building energy supply and the use of renewables on-site are not reflected by the indicator. Comparison between energy carriers is more complex.
Primary energy use	Encourages a larger set of measures, including both those that reduce energy needs and those related to the decarbonisation of the building energy supply and the use of renewables on-site. It allows for a direct comparison between different energy carriers. It is based on the same indicator used to identify energy classes in the EPCs. This could facilitate monitoring and compliance checks. Well-established indicator in the EPBD to express the energy performance of buildings across several provisions (e.g. Zero Emission Buildings, minimum energy performance requirements).	Primary energy use can change due to changes in the energy mix and primary factors, making monitoring difficult. Reduction of primary energy through measures in the supply side needs to be accounted for. More complex to communicate for non-specialists.

2.3.2.2.   Baseline for the MEPS scheme

Article 9(1) states that the energy performance of non-residential buildings must be improved to ensure that their energy use is below the maximum energy performance thresholds, including 16% of non-residential building stock for 2030, 26 % for 2033, and the subsequent thresholds for 2040 and 2050. To determine these thresholds, Member States must set up a baseline reflecting their non-residential building stock on 1 January 2020. Member States may use data of a more recent year than 2020 along with the relevant assumptions (such as new construction rates and records of renovations or demolitions) to interpolate and achieve a realistic characterisation of the building stock in 2020. Member States should report data from 2020 in their NBRP as well as more recent data (2023 data for the submission of the first plan in 2025). This is reflected in the NBRP template.

The characterisation of non-residential building stock as described in STEP 1 is the main input to establish the baseline and define the energy performance thresholds.

The Directive allows Member States to exempt certain categories of buildings from MEPS according to Article 9(6) and exempt individual buildings according to Article 9(1). Both provisions are optional and have different effects on the application of MEPS.

The exemptions based on certain building categories as described in Article 9(6) lead to the exclusion of the selected buildings from the baseline. The considerations for them are explained in the following subsection.

Conversely, the individual buildings that may be exempted according to Article 9(1) cannot be removed from the baseline. They are discussed in Section 2.3.3.4.

2.3.2.2.1.   Exemptions according to Article 9(6)

Member States may decide to exempt certain categories of buildings listed in Article 9(6) from the requirements under Article 9(1) as listed below:

(a)

Officially protected buildings, e.g. due to their special architectural or historical merit, or other heritage buildings. This applies only if compliance with the standard would lead to an unacceptable alteration to the character or appearance of the building, or if the renovation is not feasible from a technical or economic point of view. — There is technical feasibility when the technical characteristics of the technical building systems and the building (or building unit) make it possible to apply renovation measures to comply with the MEPS requirement. There is no technical feasibility when it is impossible to apply renovation measures to improve the energy performance of the building below the MEPS threshold due to technical limitations such as structural elements of the building, materials, aesthetics, space constraints, and others. — Economic feasibility relates to the costs of applying the MEPS requirements and whether: (i) these costs are proportionate to the overall goal of the planned intervention (e.g. technical building system upgrade); (ii) the expected benefits outweigh the costs, taking into account the expected lifetime of the system or of the building, where appropriate.

(b)	Buildings used as places of worship and for religious activities.

(c)	Temporary use (two years or less), industrial sites, workshops and non-residential agricultural buildings with low energy demand and non-residential agricultural buildings that are used by a sector covered by a national sectoral agreement on energy performance.

(d)	Residential buildings that are used or intended to be used for either less than four months of the year or, alternatively, for a limited annual time of use and with an expected energy consumption of less than 25 % of what would be the result of all-year use.

(e)	Stand-alone buildings with a total useful floor area of less than 50 m2.

(f)	Buildings owned by the armed forces or central government and serving national defence purposes, apart from single living quarters or office buildings for the armed forces and other staff employed by national defence authorities.

If Member States decide not to include the buildings associated with some or several of these categories in their national MEPS scheme, these buildings must be removed from the baseline, i.e. they will not be counted as part of the non-residential building stock when defining the thresholds. The exclusion is therefore not automatic, the relevant national authorities must decide whether to apply exemptions and report such decisions in their national NBRPs. Member States shall also provide an estimation of the share of buildings excluded from the baseline in their NBRPs (see Annex II to the recast EPBD). The exclusion (for instance of historical buildings with non-residential use) has the disadvantage that it prevents such buildings and their owners from benefiting from access to tailored financial aid and specialised guidance that shall be provided on the basis of the recast EPBD Article 9(4), paragraphs a, b, d.

If Member States decide to exempt one or more of the categories indicated above, they must develop clear and public/transparent criteria to determine which buildings will be exempted. This is important when communicating the scheme to building owners. For example, if a Member State decides to exempt historical or heritage buildings, the MEPS scheme must include a clear definition of what is considered a historical building and what types of historical buildings are exempted (e.g. by making reference to a historical building catalogue).

2.3.2.2.2.   Differentiation by building category

The baseline and the thresholds for the MEPS scheme can be established for the entire non-residential building stock or by building type or category. Categories of buildings can be defined according to their use (examples in Annex I to the recast EPBD: offices, educational buildings, hospitals, hotels and restaurants, sport facilities, wholesale and retail trade services buildings, or others (5)), but also their size, typology, climate zone and a combination of these or other features.

Predefined categories in existing data sources such as cadastre registers or censuses can support the categorisation process. If defined by category, the thresholds should be defined separately for each category.

The implementation of a single threshold for the entire non-residential building stock may simplify the characterisation and monitoring process. However, the classification of buildings by category is recommended to avoid treating certain building segments unfairly.

For instance, if the baseline is defined in terms of the entire non-residential building stock, the same threshold will apply to hospitals, office buildings and hotels. These types of buildings in practice have different energy use patterns and potential for energy use reduction. If a single threshold is defined for the entire non-residential stock, this would disadvantage buildings with inherently higher energy use per square metre due to their specific functions. For instance, hospitals use more energy due to increased ventilation requirements. This will put them in an unfavourable position to comply with the same threshold compared to office buildings, which typically consume less energy under similar conditions and will therefore meet the same threshold much more easily.

Another example can be related to buildings in different climate zones. There can be significant differences in the energy performance of buildings from the same use category (e.g. hotels) and with similar dimensions due to the climate zone where they are located. The characteristics of different climate zones (temperature, humidity, solar radiation etc.) may call for different construction practices in terms of materials, technical building systems etc. For instance, a hotel in a warm coastal climate may require sun shading systems and extensive cooling. In contrast, a similarly sized hotel in a cold, non-coastal city may not need shading systems but have high heating requirements.

It is therefore recommended to establish different categories to capture the particularities of different building segments according to the context of each Member State, considering different use, size, typology, climate zones etc. The classification will depend on aspects such as current categorisations that may exist in building databases such as cadastre registers, if there are pre-established climate regions identified within the country, whether there are clear time periods linked to previous building energy codes with specific requirements for materials and building systems, etc.

Applying the same threshold to all non-residential buildings without considering their specificities could result in suboptimal renovations that are not cost-efficient. Defining baselines by category also makes it easier to design better targeted renovation support and strategies to implement MEPS, taking into account differences in ownerships/renting practices, estimated renovation times, common features and typologies, etc. This can also trigger innovation developments for instance in devices and building systems specialised for each category (e.g. hospital and building offices).

2.3.2.2.3.   Final baseline

Based on the characterisation of the non-residential building stock conducted in STEP 1, the data collected and estimated for the energy performance of non-residential buildings is used to rank the buildings according to the indicator selected, final energy use or primary energy use.

If Member States opt to exempt certain building categories indicated in Article 9(6), their data shall be removed from the characterisation and therefore be excluded from the baseline so they do not appear anymore in the ranking.

Based on the data collected and estimated during the characterisation of the building stock, the buildings can be ranked by creating a frequency distribution of the buildings or by using the data for each individual building. To create a frequency distribution, the data range (the difference between the minimum and maximum value of the energy use, e.g. 0-500 kWh/(m2y)) is divided into the number of desired classes. The range for each class is defined accordingly, e.g. class 1 corresponds to 0-19 kWh/m2/year, class 2 corresponds to 20-39 kWh/m2/year, class 3 corresponds to 40-59 kWh/m2/year and so on. The data points in each class are counted to define the frequency. This can be done by the number of buildings or by floor area. Figure 3 shows an example of frequency distribution. Each bar represents the number of buildings or the floor area of the buildings in each class. The buildings that belong to the classes at the top of the graph perform worse than the buildings in the classes at the bottom.

Figure 3. Non-residential building stock organised according to the energy use in a frequency distribution

To create the baseline using data for each individual building, the buildings are organised according to their energy use as illustrated in Figure 4. Each bar represents one building. Figure 4 is intended to be a representation of an entirely fictional non-residential building stock. The building stock is assumed to be composed of 25 buildings, therefore only 25 bars are presented to facilitate visualisation. The same approach to create a frequency distribution can be reproduced for a building stock of thousands of buildings. This approach and similar figures are used to illustrate other concepts and provisions in the following sections.

Figure 4. Illustration of the baseline for non-residential building stock

The baseline should include as a minimum the number of buildings (or floor area), type of buildings (i.e. office, healthcare, wholesale and retail trade, educational buildings, sports facilities, hotels and restaurants etc.), other building categories (if defined by the Member State) and their energy performance. The baseline should allow the subsets of worst-performing buildings to be identified (e.g. 16 %, 26 %) so that the maximum energy performance thresholds can be defined, as explained in the following subsection. Regardless of the number of categories or subcategories, the total portion of building stock that must undergo renovation remains the same (in number of buildings or area).

Figure 5. Illustration of baselines for different categories of non-residential building stock

If thresholds for several building categories are implemented, a specific baseline shall be established for each of the categories. The buildings in each category are organised according to their energy use. Figure 5 illustrates the case for two categories, each bar represents one building (6). Note that each category may have different number of buildings with a different range of energy performance.

2.3.2.3.   Energy performance thresholds for MEPS

Under Article 9, non-residential buildings must comply with specific energy performance thresholds that shall not be exceeded by the specified deadlines. The energy performance thresholds must be set in a way that at least 16 % and 26 % of the national non-residential building stock exceed these thresholds. These thresholds are expressed in kWh/(m2y) and should represent either their final or primary energy use. Subsequent thresholds need to be established for 2040 and 2050, in line with the pathway for transforming the national building stock into a zero-emission building stock.

Member States shall ensure that all non-residential buildings are below the 16 % threshold by 2030 and below the 26 % threshold by 2033 unless they are exempted from the provision in accordance with Article 9(1) or Article 9(6).

To establish the thresholds, the number of buildings or the floor area can be used as explained below.

2.3.2.3.1.   Defining the thresholds according to the number of buildings

Figure 6. Establishing the 16 % threshold: (a) identifying the 16 % of buildings, (b) defining the threshold

If the thresholds are established based on the number of buildings, the number of buildings in the baseline are counted starting from the building with the worst energy performance until the percentage of buildings indicated for each milestone is reached. For instance, in 2030, the threshold shall be established by covering 16 % of the total number of buildings as illustrated in Figure 6(a). The energy use (in terms of final or primary energy use) of the next building after reaching 16 % of the buildings shall correspond to the maximum energy performance threshold for 2030 as shown in Figure 6(b). In the example, by 2030 all buildings belonging to the 16 % group must be renovated to improve their energy performance below the threshold in kWh/(m2y) represented by the horizontal orange line.

The 26 % threshold for 2033 can be defined following the same approach, as shown in Figure 7. The subsequent thresholds for 2040 and 2050 can be defined following the same approach, see also Figure 9.

Figure 7. Illustration of 2030 and 2033 energy performance thresholds for MEPS

Figure 8. Illustration of 2030 and 2033 energy performance thresholds for MEPS when using multiple categories

If thresholds are defined for different building categories, the procedure previously described is applied to each of the baselines of the categories as illustrated in Figure 8. The 16 % and 26 % thresholds will represent a different number of buildings in each category, and the thresholds will be different values in kWh/(m2y) according to the energy use of the buildings in the category.

2.3.2.3.2.   Defining the threshold according to the floor area

If the threshold is established in terms of the building floor area, the approach is similar to the method based on the number of buildings. The floor area of the buildings in the baseline is counted starting from the worst performing building until the percentage of floor area indicated for each milestone is reached. In 2030, this value shall correspond to 16 % of the total floor area of the buildings included in the baseline. The energy use of the next building after reaching 16 % of the floor area shall correspond to the maximum energy performance threshold for 2030.

In this case, it is important to note that even though the threshold is established based on the floor area, the number of buildings above the threshold shall also be established.

The 26 % threshold for 2033, and the subsequent thresholds for 2040 and 2050, can be defined following the same approach.

If thresholds are defined for different building categories, the procedure previously described is applied to each of the baselines of the categories.

2.3.2.3.3.   Defining the threshold according to the energy performance class

Setting energy performance thresholds corresponding to the energy performance class is optional for Member States. It has the advantage that it improves the visibility of the MEPS scheme and makes communication and monitoring easier.

If the threshold is defined to correspond to a specific energy performance class in accordance with Article 19(2), the definition should still comply with Article 9(1), third subparagraph. The buildings above the threshold shall therefore at least cover the indicated portion of the worst-performing buildings, i.e. 16 % for 2030, 26 % for 2033, etc.

This can be done by defining the energy performance classes G and F of EPCs using the coverage indicated in Article 9(1), third subparagraph, i.e. 16 % threshold for G and 26 % threshold for F respectively. Alternatively, Member States could also define class G as the 26 % threshold for the building stock. While this would give more space to upper classes, it would make the differentiation between the 16 % and 26 % thresholds less visible. The buildings should be renovated to improve their energy performance and achieve a better energy performance class than the one defined in the threshold. Similarly, additional classes (e.g. D and E) could be used to represent the thresholds for 2040 and 2050.

2.3.2.4.   Energy performance thresholds beyond 2033

In addition to the first two thresholds, Member States shall establish additional thresholds for 2040 and 2050 with values representing progressively lower energy consumption levels. These thresholds shall be reported in their national renovation plans as referred to in Article 3(1), point (b).

The maximum energy performance thresholds for 2040 and 2050 shall be in line with the pathway for transforming the national building stock into a zero-emission building stock. The threshold for 2040 can be defined as a midpoint threshold between the 26 % for 2033 and the threshold for 2050 (see Figure 10). The allocation of the threshold for 2040 closer to 26 % (threshold for 2033) or closer to the final threshold for 2050 will define the number of buildings or floor area to be renovated in 2033-2040 and in 2040-2050. A threshold for 2040 closer to the final threshold for 2050 will require most of the renovation efforts to occur in 2033-2040. However, a threshold for 2040 closer to 26 % can encourage non-residential buildings covered by the MEPS obligation for the 2033 threshold to implement adequate renovation measures to already meet the upcoming 2040 threshold. This will avoid a double intervention in the building to comply with the 2033 threshold and then with the 2040 threshold. It is recommended to consider these economies of scale when defining the 2040 and 2050 thresholds.

Figure 9. Illustration of 2040 and 2050 thresholds for minimum energy performance standards for non-residential building stock

It is recommended to make publicly available all the thresholds and timeline for all the relevant actors as soon as possible and in a clear way.

2.3.2.5.   Temporary adjustment of the threshold in case of serious damage due to natural disaster

Article 9(1) last subparagraph states that in the case of serious damage to a portion of non-residential building stock by a natural disaster, a Member State may temporarily adjust the maximum energy performance threshold. This way, renovation activities can focus on the renovation of damaged buildings. The adjustment of the threshold should correspond to a proportionate share of worst-performing buildings, equivalent to the damaged buildings. By adjusting the threshold, those worst-performing buildings are temporarily not required to comply with the threshold. If this provision is used, Member States will have to report on the adjustments and estimated duration in their NBRP (Article 3).

Example: If shortly before the first threshold in 2030 (corresponding to 16 % of the worst-performing buildings) 1 % of the non-residential building stock is seriously damaged by a natural disaster and the Member State intends to prioritise the energy renovation of the damaged buildings, the maximum threshold can be adjusted to the effect that 15 % (16 %-1 %) of the non-residential building stock is above the new threshold. Member States should ensure that a similar number of buildings undergo energy renovation. In this example, the 1 % of the building stock that was damaged should be renovated. The threshold should be adjusted once prioritisation of the renovation of the damaged buildings ends. The use of this option should be accompanied by a relevant disaster declaration.

2.3.3.   STEP 3: Design MEPS governance and rules of compliance

Once the calculations have been completed and the values for the thresholds have been determined, the legal framework and rules of compliance have to be laid down. This includes appointing the relevant authorities, defining the means to show compliance, the compliance procedure, criteria for exemptions, process to apply for exemptions, etc. Figure 10 presents the recommended general steps to design the legal architecture of the MEPS scheme. These steps are not exhaustive and additional elements may be needed according to the particularities and specificities of each Member State. Even though the steps are presented in a linear flow, the process will include iterations, feedback and adjustments across the different elements defined in each step. The following sections present recommendations for each of the steps presented, except for the last step on monitoring and penalties. For details on that step, see STEP 5: Set up monitoring mechanism and penalty scheme.

Figure 10. Steps to design the legal architecture of the MEPS scheme

All these choices need to be integrated into a clear plan and timeline for compliance during the different stages (i.e. before 2030, between 2030-2033, 2033-2040 and 2040-2050). This will allow building owners and tenants to better prepare and react on time to the MEPS requirements. It is recommended to design the legal architecture for the MEPS scheme and the compliance mechanism at an early stage and communicate them clearly to the building owners, authorities, construction associations and any other key actors to reduce uncertainties, disinformation and incomplete assumptions from the different groups of key stakeholders.

2.3.3.1.   Governance and responsibilities

Member States must incorporate Article 9(1) and the resulting thresholds into national law and put in place a MEPS scheme that can be enforced at the level of the building owner. Assigning relevant authorities, defining their responsibilities and setting up a compliance scheme are crucial parts of the architecture of a MEPS scheme. The MEPS architecture has to ensure that owners of non-residential buildings above the threshold are adequately informed well in advance about key aspects of the scheme, including available technical and financial support (as required under Article 9(4)) and information on how to show compliance.

2.3.3.1.1.   Appointing the relevant authorities

Member States may design a centrally organised MEPS scheme e.g. by creating a central register for all non-residential building owners administered by a central public authority that would also be responsible for compliance checks.

Alternatively, they could decide to organise a decentralised MEPS scheme, assigning responsibilities e.g. to local authorities or municipalities or public one-stop shops, or commission the implementation to energy agencies to enact the scheme on a regional or local scale. In both cases, Member States must clearly set out the mandate to the respective implementing authority and provide sufficient resources to ensure smooth implementation. Revenues could be used from the penalty scheme to (partly) finance the administrative costs of the MEPS scheme (see STEP 5: Set up monitoring mechanism and penalty scheme).

Roles and responsibilities need to be defined for activities such as notifying and contacting building owners who must comply with the MEPS obligation, managing and checking the quality of the compliance evidence, managing the monitoring and penalty scheme, designing the technical and financial support tools etc. Actors that are already in regular contact with building owners, such as facility or building energy management companies or those carrying out inspections, may also be suited to taking over a role in MEPS governance.

The clear identification of implementing authorities, roles and responsibilities and communicating this to building owners is particularly important. This allows building owners to be able to better understand the scheme and, critically, be able to direct enquiries or submit necessary documentation to the relevant authorities.

An important task for the implementing authority is to identify owners of those buildings with energy use above the different applicable thresholds. The architecture of the scheme must clarify how to access owners of buildings that are likely to be part of the MEPS obligation. Implementing MEPS at a regional/local level may be advantageous as local actors, in particular municipalities, may make use of locally available data and information, such as registries of landlords, local homeowner associations, business registers and others.

A centrally administered scheme may however allow for a more consistent enforcement of the scheme.

2.3.3.1.2.   Engaging with building owners

It is recommended to make publicly available all the thresholds, timeline, compliance mechanism, penalty schemes and other elements of the enforcement procedure for all the relevant actors as soon as possible and in a clear way.

When informing the building owners/tenants about the compliance requirements, it is recommended to emphasise the subsequent thresholds and the timeline that may apply to their buildings. This way, the owners of the worst-performing 16 % and 26 % of non-residential buildings are able to plan a renovation in view of the energy performance thresholds for 2030, 2033, 2040 and 2050. This will maximise benefits, minimise costs, avoid lock-in effects and encourage building owners to align the level of ambition of the renovation and planning of their individual renovation projects with the NBRP (Article 3).

Outreach to specific building owners should be accompanied by information provided to building owners on details of the requirements, subsequent thresholds, timeline, general benefits of renovation, available one-stop shops and other available technical assistance, financing instruments, the post-renovation compliance mechanism and any other relevant information (see also STEP 4: Set up an enabling framework).

Engagement with building owners can occur at different stages of the compliance mechanism designed by the relevant authorities. Examples include:

—	Informal support to help understand the MEPS scheme, e.g. through workshops, information through owner associations, stakeholder associations, communication in media, flyers, etc.

—	Technical support, e.g. from one-stop shops, to help identify the most appropriate renovation measures for improving energy performance.

—	Formal compliance actions by relevant authorities such as a formal notice for compliance.

—

Timing (procedure and deadlines) and means to provide evidence for compliance if building owners consider the energy use of their building to not be above the applicable threshold. If, for example, the building owner registers a valid EPC proving that the building is performing better than the threshold, they can free themselves from the requirement to renovate the building.

—	Timing (procedure and deadlines) and means to provide evidence when a building falls under a building category exemption or under an individual exemption (case of hardship).

—	Timing (procedure and deadlines) and means to provide evidence for compliance after renovating the building due to MEPS.

—	In the case of failure to comply, a formal action according to Article 9(7), taken by relevant authorities and if necessary, by courts can be the following stage.

2.3.3.2.   Compliance: identifying buildings/owners to comply with MEPS

The relevant authorities need to develop a method to identify the buildings that must meet the thresholds of the MEPS scheme. The EPBD recast does not specify how this should be done, giving Member States flexibility on this point.

A starting point can be the characterisation of non-residential building stock as explained in STEP 1: Identify data sources and characterise the non-residential building stock. Estimates on final or primary energy use based on certain technical characteristics of buildings can be used to identify the buildings that are likely to have energy use above the applicable threshold. This method alone might however not be sufficient and it is recommended to combine it with other strategies to identify the buildings and their owners that need to comply with the MEPS scheme.

For buildings with an EPC, authorities can use the data in the EPC database to assess whether the building meets the threshold. Owners of these buildings can then be notified in advance about the need to comply with the MEPS obligation. Adjustments to the values in the EPC might be necessary if the assumptions for calculating energy performance have changed, such as changes in primary energy or weighting factors. In addition, the data in the EPCs might be outdated if a renovation occurred since the EPC was issued.

Another option is to use building owner registers or landlord licensing systems (7). These can be put in place at local or national level to promote self-registration of building owners and supply information on the energy performance of their building. Landlord licensing systems that require minimum information about the properties and owners can also make it easier to identify buildings in the rental market that are above the maximum energy performance threshold.

Coordination across public institutions and offices that issue different licences or permits may enable the identification of targeted buildings. If e.g. a building owner applies for a rental licence or other permits (e.g. hotel operating permit), this can be an opportunity to check/request evidence on the energy performance of the property. Whenever a new EPC is issued due to the building being sold, rented out to a new tenant or when a rental contract is renewed, this represents an opportunity to identify the energy performance of the building as well. The relevant authority responsible for compliance with the MEPS scheme could be automatically notified when a new EPC above the current applicable threshold is registered in the national EPC database. Similarly, an update to an EPC that brings the performance below the threshold could be used to exclude the relevant building from the category of non-compliant buildings.

2.3.3.3.   Compliance: Establishing a compliance mechanism

To meet the MEPS obligation, buildings with energy use above the thresholds shall be renovated to improve their performance to levels below the respective thresholds. Renovation measures shall improve the performance of the building in terms of energy use directly considered when determining the energy performance of the buildings according to Annex I (1). The eligible measures to improve the energy performance of the building and comply with the MEPS obligation therefore include the energy renovation of the building envelope and replacement of technical building systems, including the technical equipment for space heating, space cooling, ventilation, domestic hot water, built-in lighting, building automation and control, on-site generated renewable energy, or a combination of them.

Evidence that the threshold has been met should be derived from a consistent approach, with a clear methodology and timeline to avoid ambiguity. The compliance mechanism should consist of three key elements:

—	established mechanism recognised at national level;

—	evidence to be supplied;

—	subject to quality assurance.

Examples of a compliance mechanism include EPCs, a checklist with predefined measures, existing national benchmarking schemes (e.g. BREEAM, DGNB), and others. If such benchmarking schemes do not exist or require modifications, it is necessary to develop them early within the timeline of the enforcement period.

Evidence could be issued by a third-party provider (e.g. a registered independent expert for an EPC). This is both to exclude conflicts of interest and to ensure that the assessment has been done according to the recognised methodology.

The evidence must go through a quality assessment procedure carried out by an independent party. It is recommended to involve the relevant authorities to validate the quality.

The EPC scheme, available in all Member States, is a recognised evaluation tool and complies with all the criteria above. It is therefore recommended to use EPC as the basis for the compliance mechanism.

The following subsections provide more information on the timing of compliance, together with two examples of compliance mechanisms: EPCs and a list of renovation measures.

2.3.3.3.1.   Compliance timing

It is necessary to clearly define which compliance mechanism will be applicable and the rules in terms of the issuing, quality and characteristics of each of them. It is recommended to establish these elements early enough so they can be communicated explicitly and on time to the building owners that must comply with the MEPS obligation.

The timeline should be aligned with the provisions in Article 9(1), i.e. the first applicable threshold by 2030, second applicable threshold by 2033 etc. It is recommended to include regular reminders of the MEPS obligation and compliance deadlines. Consequences and penalties for non-compliant building owners should be communicated as well (see STEP 5: Set up monitoring mechanism and penalty scheme).

Compliance checks are relevant in two points in time: a) for cases where building owners consider that their property is already compliant at the time of notification of the MEPS obligation, therefore well before the threshold dates as defined in Article 9(1); b) for regular cases where building owners conduct renovation activities after the notification of the MEPS obligation to improve the energy performance of the building below the applicable threshold. In both cases, the quality and control requirements (clear methodology, issued by a third party, subject to quality checks) of the compliance mechanism must be applied.

Since the identification of buildings and building owners that must comply with the MEPS obligation may rely in some cases on data collected before the implementation of the MEPS scheme and estimations, there may be cases where buildings identified as buildings with energy use above the maximum threshold are in reality already compliant with the MEPS obligation as their energy use is indeed lower than the threshold.

Where the identified buildings have an energy performance above the applicable threshold, the compliance timeline can be aligned with the timeline described in Article 9(1), i.e. 2030 for the first threshold, 2033 for the second threshold, etc. In these cases, building owners must conduct renovation activities to bring the building’s energy performance below the applicable threshold by the specified dates. Member States could also establish earlier timelines for building owners to show compliance.

2.3.3.3.2.   Evidence of compliance by EPCs

Proving compliance by EPC requires the building owners to provide a valid EPC of their property to show the energy performance of the building calculated according to Annex I (1).

To be valid as a compliance mechanism, an EPC shall include the information on the indicator selected for the MEPS scheme, i.e. the information on final energy use or primary energy use. If the EPC does not include the data about the main indicator (e.g. final energy consumption) or is not up to date (e.g. the building underwent renovation measures after the EPC was obtained), other compliance mechanisms shall be applied.

If the renovation triggered by the MEPS is a major renovation, an EPC must be issued according to Article 20. Member States should make use of this trigger and leverage the EPC as a compliance mechanism. The relevant authority responsible for compliance with the MEPS scheme could be automatically notified when a new EPC for buildings under the MEPS scheme is registered in the national EPC database. This can be linked to the monitoring mechanism and the national database for the energy performance of buildings that needs to be set up in accordance with Article 22.

2.3.3.3.3.   Evidence of compliance based on a list of renovation measures

Another compliance mechanism could require building owners to provide evidence on the implementation of renovation activities taken from a list of measures linked to minimum technical requirements and resulting estimations of energy performance improvements.

This compliance mechanism can be implemented in two ways: a) based on a predefined list of minimum measures with requirements for the building components; b) based on the list of renovation measures recommended in the individual building EPC or renovation passport (if available). In both cases, Member States shall establish a clear methodology, including a definition of the evidence that must be provided, who must provide it (self-disclosure, third party), and a methodology to assess whether the energy performance of the building was improved to levels below the maximum energy performance threshold applicable. This approach must in any case ensure that the energy performance of the building is well established, and that the energy performance threshold established at national level is met.

For the first approach, Member States define a list of minimum measures that would improve the energy performance of the building so it complies with the MEPS obligation. The list would for example provide a default value for the replacement of windows with a maximum U-value (lower than the previous windows) or an increase in wall insulation by a few centimetres. These values can be estimated based on current renovation practices and technological developments, common measures implemented in different non-residential building segments, or energy modelling of multiple representative buildings.

The measures shall improve the performance of the building in terms of energy use for space heating, space cooling, domestic hot water, ventilation, built-in lighting or other technical building systems as these are the elements that have an impact on the calculation of the energy performance of the buildings according to Annex I (1). Examples of measures include:

(a)	improving external wall insulation, roofs and other envelope elements such as windows and doors:

(b)	replacing the heating system by a more energy-efficient one;

(c)	installing building automation and control systems to monitor, control and optimise energy performance;

(d)	installing a renewable energy system on site.

Building owners or a designated third party (e.g. contractor, external assessor) shall provide evidence (e.g. proof of payment) of the renovation measures from the predefined list of minimum measures that were implemented in the building. The energy performance of the building after applying the estimated energy improvements shall be below the maximum energy performance threshold applicable. The energy improvements achieved can be estimated by adding up the energy improvement potential (8) of the renovation measures implemented. Member States shall ensure that a suitable methodology is implemented. The choice of indicator may have implications on the choice of renovation measures (see Table 2).

The second approach for compliance based on a list of renovation measures is linked to buildings with a valid EPC (including renovation recommendations) or a renovation passport. In this case, building owners or a designated third party shall provide evidence to demonstrate that the renovation measures recommended in the EPC or renovation passport of the building were implemented.

Like in the previous approach, the energy performance of the building after applying the overall energy improvements achieved through the renovation measures implemented must be lower than the maximum energy performance threshold applicable. The overall energy improvements can be estimated based on the energy savings projected in the EPC or renovation passport (if included). Alternatively, they can be based on predefined default values for energy improvements associated with each measure, as discussed for the previous approach.

2.3.3.3.4.   Other considerations regarding compliance

Member States shall ensure the quality of compliance evidence. If compliance is based on EPCs, EPCs issued after the recast EPBD has been transposed must fulfil the relevant provisions introduced in Articles 19 and 20, and in Annexes I and V.

If Member States implement any of the two approaches based on a list of renovation measures, it could be established that the evidence provided and the estimations for the energy performance improvements are subject to third-party quality checks and control. Also, the relevant authority shall validate the quality based on random sampling at least.

If building owners provide the evidence themselves, the checks and control shall be stricter to ensure adequate quality of the evidence provided and ensure equal treatment.

Allowing different ways to prove compliance may offer more flexibility to building owners to fulfil the requirement and encourage reporting from building owners.

Member States may use different compliance mechanisms for different building categories.

Compliance mechanisms can be linked to additional benefits or incentives, such as receiving certification for the improvement achieved or registering the property in a public list of compliant buildings, which building owners/tenants can use to promote their properties.

Financial institutions can play a key role not only in providing information on benefits and opportunities for renovation, but also in facilitating loans to cover renovation investments necessary to comply with MEPS.

2.3.3.4.   Optional: allowing for exemptions of individual buildings

The recast EPBD allows Member States to exempt certain categories of buildings under Article 9(6) and to exempt individual buildings under Article 9(1). Both provisions are optional and have different effects on the application of MEPS. For the exemption of building categories under Article 9(6), please see Section 2.3.2.2.1. This section covers the exemptions for individually identified buildings under Article 9, paragraph 1, subparagraph 8.

The buildings exempted on an individual basis through the criteria established by the Member States shall not be removed from the baseline for the MEPS scheme. Instead, the sum of the unrealised energy performance improvements must be compensated by achieving equivalent energy performance improvements in other parts of the non-residential building stock (see section 2.3.3.4.3.2 ‘Quantifying equivalent energy improvements’).

If Member States decide to implement the option of exempting individual buildings, they shall establish a set of criteria that is clear, precise and stringent. These criteria must be reported in the NBRPs as per Article 3 of the recast EPBD. The criteria to exempt individual buildings may reflect three reasons: a) expected future use of the building; b) serious hardship; c) unfavourable cost-benefit assessment (see ‘Criteria for exemptions for more details’).

They must be selected in such a way that exemptions are allowed only in exceptional cases and on the condition that evidence shows that compliance with the requirements is impossible for a specific building. Such conclusions can only be made on a case-by-case basis, and Member States should not introduce systematic exemptions for any category of building. Building owners must prove that a specific criterion applies to request an individual exemption.

The conditions under which the application of exemption criteria is evaluated should be defined at Member State level or, where regional conditions affect only part of a Member State’s territory, at regional level. However, in the latter case, regional conditions should be described in the NBRPs. In all cases, these conditions should be documented (e.g. as part of technical guidelines) and should apply uniformly to the national, or, where applicable, regional territory. Exemption criteria should be clearly communicated to building owners as part of the overall MEPS scheme. Finally, the non-application of requirements should be assessed using clear procedures established and supervised by public authorities.

It is recommended to publish the criteria early on and set up a clear timeline and procedure for building owners to notify exemptions. The applicable evidence (e.g. demolition certificate, unfavourable cost-benefit assessment carried out by a third party) must be unambiguous and clear for each of the three exemption categories.

2.3.3.4.1.   Ex ante report on estimated individual exemptions

If Member States allow for individual exemptions based on criteria in accordance with Article 9(1), subparagraph 8, they must carry out an ex ante assessment of the potential share of buildings covered by these exemptions. This assessment must be reported in the NBRPs as referred to in Article 3. Member States must ensure that they do not exempt a disproportionate number of non-residential buildings. Factors influencing whether the number of exempted buildings is disproportionate include the additional administrative effort to monitor exemptions and plan for alternative measures.

There are different ways to carry out the ex ante assessment of the potential share of individually exempted buildings. Member States could make estimates based on the typical use and characteristics of the building stock and their occupants. Alternatively, they could require building owners to apply for an exemption upfront by registering it in a central register by a specific date and proving that they meet the criteria established by the Member States. The second approach is more precise and may increase building owners’ awareness of their buildings’ energy performance. It also allows for better planning of renovation measures to be implemented elsewhere. Member States may also opt for a combination of those approaches.

It is recommended that Member States check the number and floor area of exempted buildings ex post to verify if the number aligns with the ex ante estimates.

2.3.3.4.2.   Criteria for exemptions

Under Article 9(1), the criteria to exempt individual buildings may reflect three reasons: (a) expected future use of the building; (b) serious hardship; and (c) unfavourable cost-benefit assessment.

The criteria must be defined as specifically and clearly as possible and be underpinned with indicators to demonstrate eligibility. It is recommended that the building owner applies for an exemption before the enforcement date and provides proof of eligibility that can be verified by a third party or relevant authority. Evidence for the exemption application shall be defined according to the applicable criteria. Examples of criteria are presented in the following subsections.

2.3.3.4.2.1.   Expected future use of the building

The criterion related to the expected future use of the building addresses situations where, due to a change in usage pattern, renovating the building would not be beneficial or the building would no longer fall within the scope of the requirement. Examples of this:

Plans to convert the building into a residential building: If a building owner plans to convert an existing non-residential building into a residential building, it may be exempted from the MEPS obligation. The building will then fall under Article 9(2). Adequate proof must be provided, e.g. a valid building permit, contracts to prove that construction work has been commissioned etc.

Plans to convert the building into another category of non-residential building within the scope of Article 9(1): The conversion of a non-residential building from one category to another (e.g. from hotel to office building) does not qualify for an exemption to comply with the MEPS obligation. The threshold for the future use category of the building would apply in this case.

Plans to convert a non-residential building into another category of non-residential building that would fall within the scope of Article 9(6): The conversion of a non-residential building under Article 9(1) to a building that would be eligible for exclusion from the MEPS scheme under Article 9(6), e.g. buildings used for worship, conversion to a non-residential agricultural building or a building to serve national defence purposes, may be exempted from compliance with the MEPS obligation. Another example can be buildings within the process of becoming officially protected as part of a designated environment or because of their special architectural or historical merit. If exempted, the building needs to be removed from the baseline, or energy performance improvements must be achieved in other parts of the building stock. Adequate proof must be provided, e.g. a valid building permit, contracts to prove that construction work has been commissioned, or a certificate proving the status of a protected building.

Plans to demolish the building: Planned demolitions are explicitly mentioned as a special situation that qualifies for individual exemptions under Recital 26 of the recast EPBD. When individual buildings to be demolished are exempted from the MEPS obligation, Article 9 states that equivalent savings must take place in other parts of the non-residential building stock. A demolition permit can serve as proof of the intended future use of a building.

If the future use of a building qualifies for an exemption from the MEPS obligation, the building owner must provide appropriate evidence. It is recommended to establish a clear timeline for the application process, aligned with the enforcement procedure of the MEPS scheme.

It is also recommended to establish a clear timeline in terms of fulfilling the change of use. For example, if a building owner plans to change the use of the building, but does not do so within a given timeframe, then the obligation to renovate should apply.

2.3.3.4.2.2.   Serious hardship

The criterion of serious hardship is intended to reflect a severe but temporary situation and needs to be justified by the individual situation of a building owner or tenant. As indicated in Recital 26, ‘cases of serious hardship justify an exemption for as long as the hardship persists’. Serious hardship exists, for example, if the building’s owner or tenant faces liquidity problems, is threatened with bankruptcy or made a certain percentage of staff redundant within the past year.

Liquidity problems: These could be proven e.g. by financial statements, bank statements, tax returns, credits reports, audit reports and others. Clear conditions and rules should be defined to make sure that exemptions based on this criterion are applied fairly.

Threatened with bankruptcy: If threatened with bankruptcy, the building owner has to provide similar evidence as for liquidity problems. In addition, the owner needs to indicate future profit projections for the upcoming year that should be based on previous years and compared to the investment costs or rent increases due to renovation work. These costs must be substantiated, e.g. by three independent advisors’ offers. Additionally, actual profits should be submitted annually to demonstrate that the assumptions were reasonable. If the profits are higher than projected, the criterion does not apply and the exemption may be lifted, and the obligation to comply with MEPS will apply.

Sickness: Serious individual situations (such as sickness) may be considered as serious hardship if the building owner is a small or medium-size company or private building owner. The building owner then has to provide a medical certificate and show that there is no alternative person who can be responsible for fulfilling the MEPS obligation.

Recently becoming a building owner: There are circumstances whereby a person suddenly became a building owner (e.g. by inheriting a leased building) that would make it very difficult to carry out required renovation work immediately. This case may qualify for a short exemption from the requirement to comply with the MEPS obligation.

2.3.3.4.2.3.   Unfavourable cost-benefit assessment

For the criterion based on c) (unfavourable cost-benefit assessment), Member States’ criteria need to be able to assess whether the costs to conduct the renovation measures in order to comply with the MEPS obligation are proportionate, and whether the expected benefits outweigh the costs, allowing for a comparison of alternatives. They shall do this by carrying out a cost-benefit assessment for planned renovation measures at individual building level.

A cost-benefit assessment is a tool used to evaluate the costs and benefits of various renovation measures for a building. This evaluation is conducted in monetary terms and considers factors such as construction costs, energy savings, increased property value and maintenance savings. The calculation should also include the costs and benefits of environmental and health externalities, aligning with the aim of the recast EPBD of increasingly take environmental and health externalities into consideration (see e.g. Articles 2(32 iv) and 13). A thorough cost-benefit assessment needs to consider the lifespan of the building and each renovated component, as different elements will have varying durations of effectiveness and costs over time.

If Member States allow for individual exemptions due to unfavourable cost-benefit assessments, they need to provide a clear and publicly available framework to carry out the assessment. This involves defining the calculation steps and parameters to be considered in the assessment, including average values for the lifetime of building components, discount rates to determine the net present value, reference values of costs for certain measures, etc. Member States should set up a scheme to verify the calculations, e.g. checklists to be verified by the relevant authority or requiring independent experts to provide calculations to validate the findings. Member States may reject applications if the cost-benefit assessment is not carried out according to the pre-established framework.

A cost-benefit assessment is considered unfavourable if the resulting net present value, including its externalities, is negative throughout the remaining lifetime of the building. Alternatively, the return on investment could be calculated, i.e. the net benefits (i.e. total present value of the benefits minus total present value of costs) divided by the total costs, and be used as an indicator.

The calculation must detail the costs and benefits associated with single measures to evaluate which measures would still result in a favourable cost-benefit assessment. Article 9(1) subparagraph 10 states that Member States must require, in the event of an unfavourable cost-benefit assessment, that at least those individual renovation measures with a favourable cost-benefit assessment are implemented. The calculation should therefore allow for a comparison of the alternatives. For example, for the replacement of an old and depreciated boiler the assessment of economic costs should e.g. consider alternatives such as a gas boiler and a heat pump and compare the costs for the gas boiler with the costs of the heat pump, taking the lower operating costs and environmental benefits of the latter into account.

The renovation passport (Article 19, Annex XIII) could be a useful tool to help Member States and building owners carry out a cost-benefit analysis if the passport is available. It provides details on the different renovation steps and the costs associated with those measures, taking the individual buildings renovation roadmap into account over time.

2.3.3.4.3.   Equivalent improvement in other parts of the building stock due to exemptions

2.3.3.4.3.1.   Quantifying unrealised energy improvements

The sum of the unrealised energy improvements due to the exemption of individual buildings must be compensated by achieving equivalent improvements in other parts of the non-residential building stock. Member States shall monitor the renovation activities for these equivalent improvements. An estimation of equivalent energy performance improvements shall be reported in the NBRPs as referred to in Article 3.

The total unrealised energy improvements correspond to the sum of the unrealised improvements of all the buildings exempted. The unrealised energy improvements for a single exempted building can be estimated based on the difference between the current energy performance and the threshold to be reached as described by the equation below. For instance, if an exempted building with a floor area of 500 m2 and an energy performance of 350 kWh/(m2y) was expected to comply with the MEPS obligation of a threshold of 280 kWh/(m2y), the unrealised energy improvements would correspond to 35 000 kWh/y. The floor area must be the same floor area that was used to determine the energy performance of the building to ensure consistency in the calculation.

—	Unrealised improvementsj: unrealised improvements of building j, in kWh/y

—	EPerformancej: current energy performance of building j, in kWh/(m2y)

—	Aj: floor area of building j

The unrealised energy improvements shall be calculated for every single building that is exempted. The total unrealised improvements are then calculated by adding up the unrealised improvements of all exempted buildings:

The unrealised energy improvements can also be estimated based on the effect of a list of minimum measures that would be necessary to improve the energy performance of the building so it goes below the threshold. The allocation of standard energy savings to these measures will allow for an estimate of their impact on the overall energy performance. The implementation of the measures in the list should improve the building’s energy performance in terms of energy use for space heating, space cooling, domestic hot water, ventilation, built-in lighting or other technical building systems as specified within the common general framework for calculating the energy performance of buildings in Annex I (1). Examples include installing a renewable energy system on site, improving external wall insulation, roofs and other external elements such as windows and doors, replacing the heating system with a more energy-efficient one, installing building automation and control systems to monitor, control and optimise energy performance.

For this approach, default energy savings are allocated to each measure based on common practices, renovation statistics, technical studies, etc. The effect in terms of energy performance improvements of implementing them on the building being exempted is then estimated, i.e. the energy performance of the building before and after the hypothetical implementation is compared and the unrealised energy improvements calculated. The floor area must be the same floor area that was used to determine the energy performance of the building to ensure consistency in the calculation.

—	Unrealised improvementsj: unrealised improvements of building j, in kWh/y

—	EPerformancej: current energy performance of building j, in kWh/(m2y)

—	Aj: floor area of building j

—	Measure energy savingsi: energy savings associated with the implementation of the renovation measure I, in %

—	i: set of renovation measures in the predefined list

As before, the unrealised energy improvements shall be calculated for every single building that is exempted. The total unrealised improvements are then calculated by adding up the unrealised improvements of all exempted buildings:

2.3.3.4.3.2.   Quantifying equivalent energy improvements

The total unrealised energy improvements must be compensated by achieving equivalent energy performance improvements in other parts of the non-residential building stock. Taking the example from the previous section: the unrealised 35 000 kWh/y energy improvements of the exempted building could be obtained by renovating a building with a floor area of 700 m2 and energy performance of 250 kWh/m2y if its energy performance is reduced to 200 kWh/(m2y) (calculated as 250 kWh/(m2y) – (35 000 kWh/y/700 m2)). The energy improvements can be calculated using the following equation:

—	Energy improvementk: energy improvement achieved in an individual building in other part of the non-residential building stock, in kWh/y

—	EPerformance: Energy performance in kWh/(m2y)

—	Ak: floor area of building k

The unrealised energy improvements can be implemented on a one-by-one basis. This requires monitoring that the unrealised energy improvements of exempted building j are equal to the energy improvements of building k in other parts of the building stock. However, the total equivalent energy improvements of all renovated buildings in other parts of the building stock can also be aggregated and then compared to the total unrealised energy improvements calculated in the previous section. The total equivalent energy improvements can be calculated by adding up the improvements of each single building k:

The total equivalent energy improvements achieved in all buildings in other parts of the non-residential building stock shall be equal to or higher than the total unrealised energy improvements as calculated in the previous section.

2.3.3.4.3.3.   Ways to achieve equivalent energy improvements

There are different ways to achieve equivalent improvements. One approach is to achieve the unrealised improvements by renovating individual buildings in the better performing part of the non-residential stock, as illustrated in Figure 11. In the example, the red building (see Figure 11 (a)) applied for an exemption (9). Figure 11 (b) illustrates how to quantify the unrealised improvements. Equivalent improvements equal to or larger than the unrealised improvements are to be achieved by renovating other buildings out of the MEPS scheme (green buildings). This may require additional renovation schemes that target those buildings. This approach provides flexibility in targeting different buildings, but may require a high monitoring effort to keep track of where the equivalent improvements are being achieved.

Figure 11. Exemptions: (a) Building exempted; (b) Achieving equivalent improvements in other parts of the non-residential building stock

A second approach aims to achieve additional energy improvements when renovating the buildings that are above the next threshold (see Figure 12). This approach facilitates the monitoring process since the targeted buildings for the equivalent improvements correspond only to the next set of worst-performing buildings instead of the entire portion of buildings out of the MEPS scheme. This approach also accelerates the renovation of the worst-performing buildings, but may require additional support mechanisms to encourage building owners to renovate their buildings earlier than the predefined deadline.

Figure 12. Exemptions: (a) Building exempted; (b) Achieving equivalent improvements in the next worst-performing non-residential buildings

2.3.4.   STEP 4: Set up an enabling framework

2.3.4.1.   Purpose of the enabling framework and key considerations

In order to support compliance, Member States must set up an enabling policy framework in accordance with Article 9(4) and Articles 17 and 18. While the policy framework in accordance with Article 9(4) has to be fully available, not all measures need to be available for all types of buildings or building owners. The choice for enabling measures partly depends on the national or local context as well as specific MEPS design choices. An analysis of existing practice shows that there are key general supportive measures, including:

a.	Financial support schemes to ease the financial burden put on certain groups.

b.

Technical assistance at several levels: a. Providing (free) advice to building owners throughout the entire renovation journey, from initial advice, in-depth analysis, support in securing financial incentives and finding contractors to quality control, e.g. through one-stop shops. b. Skills in the construction value chain: a skilled workforce is required to realise the renovation boost that will be triggered by MEPS. Investments are needed in training and capacity building, developing staff and structures to make sure there are enough skilled workers to deliver the renovation wave when it arrives, in line with Article 17(12). c. Supporting relevant authorities, e.g. local actors, to be able to implement the scheme.

c.

Incentivising real estate investors and owners who are considering deep renovations through instruments like subsidies, tax incentives, and green bonds to go beyond the minimum requirements in line with the provision in Article 9(4) point c) on ‘designing integrated financing schemes which provide incentives for deep renovations and staged deep renovations’ and under Article 17 and Article 17(16).

d.	Setting up or adapting financing schemes so that they include financial incentives for the issuance of renovation passports, and possibly additional investment incentives for measures recommended in a renovation passport.

e.

Actions to increase public awareness and acceptance for effective implementation of MEPS. Support can be dedicated to carrying out tailored communication campaigns and to creating a network of integrated renovation services, such as one-stop shops as required by Article 18, to make the renovation journey smoother.

f.

Special attention should be given to removing non-economic barriers such as split incentives (Article 9(4) paragraph d)) through the combination of measures, e.g. raising awareness about the increase in building value following energy renovation, technical support and legislation, for example as regards co-ownership rules, or allowing an increase in basic rent to recover the renovation cost in line with energy cost savings for tenants.

2.3.4.1.1.   Addressing split incentives

While MEPS implicitly helps to overcome the lack of investments due to split incentives, the cost implications of split incentives remain. The guidance on Article 17 in Annex 2 provides options and examples of existing schemes that address split incentives.

2.3.4.1.2.   Incentivising renovation of buildings eligible for individual exemptions

To be eligible for (temporary) exemptions from requirements under Article 9(1), building owners will have to individually prove compliance with the criteria set up at Member State level. This process could be used as a trigger for renovation by automatically linking the exemptions to the (partial) financing of a renovation passport, or an automatic invitation to a one-stop shop, similar to Article 19(13), where a building owner receives an invitation to a one-stop shop if an EPC label lower than C is issued.

2.3.4.1.3.   Incentivising renovation of categories of buildings that Member States may exempt from MEPS requirements

Certain categories of non-residential buildings may be exempted from the requirements of Article 9(1), making use of Article 9(6), and might possibly be overlooked in the national renovation strategies. Having an enabling framework that directs special support to these building categories may lead to substantial additional energy performance improvements in these parts of the building stock.

2.3.4.2.   Mechanisms of support

Article 9(4) requires Member States to provide financial measures and integrated finance schemes as well as technical assistance as part of the enabling framework.

2.3.4.2.1.   Financial support to encourage deep renovation (Article 9(4)(c))

Building owners and investors should be incentivised to go beyond the maximum energy performance thresholds defined in Article 9(1). This can be achieved through premiums for one-stage deep renovations that directly meet the longer-term requirements. The early determination of the 2040 and 2050 targets for non-residential buildings at Member State level is therefore highly recommended. Financial support can then be staggered according to the performance level achieved. If building owners opt for a stepwise renovation, financing a renovation passport as well as supporting the implementation of the proposed steps before the MEPS enforcement dates is another way to design financial support.

Additional clarifications and examples are provided in The guidance on Article 17 in Annex 2.

2.3.4.2.2.   Technical assistance

Building owners who are affected by MEPS should be well informed before it enters into force. Targeted information campaigns, for example distributed through property associations or municipalities, must be easy to grasp when explaining the reasons behind the requirements, as well as when and how to comply, including links to energy experts, one-stop shops or financial support programmes.

One-stop shops are particularly well positioned to distribute information on the requirements for building owners, but also to guide them through the renovation process, including financing (see Article 18 of the recast EPBD, Article 22(3) point (a) of Directive (EU) 2023/1791 and the respective guidance documents).

Revenues from emissions trading or from fines collected through the penalty mechanism to enforce MEPS can be partly used to finance the necessary institutional settings and technical assistance, and partly to finance targeted support to the building owners experiencing serious hardship (see ‘Criteria for exemptions’).

2.3.5.   STEP 5: Set up monitoring mechanism and penalty scheme

Article 9(7) states that ‘Member States shall take the measures necessary to ensure the implementation of minimum energy performance standards, including appropriate monitoring mechanisms and penalties in accordance with Article 34.’ In that sense, Article 9(7) can be considered as a reminder of the general obligation of Member States to monitor and enforce EU Directives.

2.3.5.1.   Monitoring

The first task is therefore to define a mechanism to identify (non-)compliance by the reference dates 2030, 2033 and later. One way to do this is to establish a registry for non-residential buildings above the maximum energy performance thresholds in accordance with Article 9(1). The registry could be created when identifying these buildings for compliance purposes (see ‘Compliance: identifying buildings/owners to comply with MEPS’) and can be linked to the national database for the energy performance of buildings, which needs to be set up in accordance with Article 22. The registry would be updated once a building owner provides evidence of the necessary energy performance improvements bringing the building below the maximum threshold and therefore complying with the requirements of the MEPS scheme.

To support compliance, relevant authorities could remind building owners on a regular basis, e.g. once a year before the reference date of the upcoming duty to comply (e.g. 2030). On that occasion, building owners should be informed about potential penalties in case of non-compliance as well as available measures to support implementation. Immediately after the reference date (e.g. after 2030), remaining non-compliances would be retrieved from the database, and another last reminder could be sent with a last deadline of a few months to prove compliance. After that deadline, an enforcement procedure would need to be started.

2.3.5.2.   Penalty scheme

Member States shall introduce rules and sanctions for breaches of the MEPS obligation. The penalties must be effective, proportionate and dissuasive, as set out in Article 34 of the recast EPBD. Article 9(7) specifies that when laying down the rules on penalties, Member States shall take into account the financial situation and access to adequate financial support of homeowners, in particular for vulnerable households.

Penalties can be defined for different stages of the enforcement process. For instance, if a Member State implements a building owner register or a landlord licensing system and a deadline for the self-registration of building owners and properties, a penalty for not registering the relevant data on time can be implemented. At another stage, a penalty scheme can be set for building owners who stated that their building was already compliant at the moment of the notification of the MEPS obligation and failed to provide the evidence required by the compliance mechanism according to the deadline. Finally, a penalty scheme can be implemented for building owners who fail to comply with the applicable MEPS obligation by the respective deadline.

Examples of penalty mechanisms include public disclosure of non-compliant buildings, fines, restrictions on increasing the rent or selling/renting the property, and others. It is important to consider that the application of a penalty should not remove the obligation to comply. For each penalty mechanism established, it is recommended to define the timeline, the penalty for failing to comply (the first time), and the penalty for a recurrent failure to comply.

One example of a penalty mechanism would be the disclosure of non-compliant buildings in a non-compliant properties database. If building owners fail to comply with the MEPS obligation, the property is listed in the database, which could be accessed by potential renters/buyers, public authorities, key stakeholders, or even the general public. Such a penalty could be combined with other measures to increase effectiveness.

Fines as a penalty mechanism can be defined based on:

—	a fixed amount, same value in euro for all non-compliant building owners;

—	based on the size of the property, a certain amount of euro per m2;

—

the difference between the current energy performance of the building in kWh/(m2y) and the threshold that was not complied with. For instance, if the current energy performance is 350 kWh/(m2y) and the applicable threshold is 250 kWh/(m2y), the fine is defined based on the difference (100 kWh/(m2y)) and a certain amount of euro per kWh/(m2y);

—	the time without complying, e.g. a certain amount of euro per month after the deadline without complying with the MEPS obligation;

—	a combination of the previous options, e.g. a fixed amount plus an extra amount based on the size of the property.

If fines are deployed as a penalty mechanism, the requirement to take into account the financial situation of building owners is particularly relevant. The fine scheme should consider the principle of proportionality so as not to impose an excessive burden on individual building owners compared to the objective of the MEPS scheme. Special circumstances such as building owners who have gone bankrupt or have another exceptional financial status shall be considered.

3.   TRAJECTORY FOR THE PROGRESSIVE RENOVATION OF THE RESIDENTIAL BUILDING STOCK

3.1.   Scope of the requirements

The purpose of Article 9(2) is the progressive renovation of the residential building stock to ensure that the residential segment contributes to transforming the national building stock into a zero-emission stock by 2050. It requires Member States to set out a trajectory for the gradual renovation of the residential building stock. The trajectory is expressed as a decrease in the average primary energy use in kWh/(m2y) of the entire residential stock, with binding milestones for 2030, 2035, 2040, 2045, and 2050.

This trajectory has to be in line with the national roadmap and the targets included in the Member State’s NBRP and directed towards transforming the national building stock into a zero-emission stock by 2050.

The trajectory aims at improving the overall energy performance of the residential building stock, with a focus on the worst-performing buildings. The trajectory must ensure that at least 55% of the decrease in the average primary energy use for the indicated years is achieved through the renovation of buildings that belong to the 43 % worst-performing residential buildings. This means that in designing the trajectory for residential building stock, Member States will identify the number of residential buildings and residential building units or floor area to be renovated annually, including the number or floor area of the 43 % worst-performing residential buildings and residential building units.

To achieve the targets in their national trajectory, Member States will apply measures such as minimum energy performance standards, technical assistance and financial support to lower the average primary energy use of the entire residential building stock. While doing this, Member States will not disproportionately exempt rental residential buildings or building units from the policy measures. Member States are free to decide whether to set minimum energy performance standards at national level and adapted to national conditions.

3.2.   Definitions

3.2.1.   Definition of residential buildings within the scope of Article 9

A residential building or building unit is defined in Article 2(18) as a ‘room or suite of rooms in a permanent building or a structurally separated part of a building which is designed for all-year habitation by one private household’.

For mixed-used buildings, i.e. buildings that include both residential and non-residential building units (e.g. a residential building with shops on the ground floor), Member States may identify the most appropriate approach and, according to Recital 34, may continue to choose whether to treat them as residential or non-residential buildings, or a mix of the two.

If a mixed-used building is being renovated, double counting of energy performance improvements must be avoided, so improvements must be clearly categorised as either residential or non-residential. All residential buildings come within the scope of Article 9(2), regardless of whether the owner or user is a public or private-sector body. Residential public buildings, including social housing, fall within the scope of Article 9(2).

3.3.   Designing a trajectory for renovating the residential building stock

There are several steps involved in designing a trajectory and the measures needed to progressively renovate residential building stock.

Figure 13. Recommended steps for designing a trajectory for the progressive renovation of the residential building stock

To make sure all design elements are covered and a proper framework is set up, the following four steps are proposed:

—	identify data sources and classify the residential building stock;

—	set up the trajectory and milestones to achieve a progressive decrease in the average primary energy use;

—	set the sub-target to achieve at least 55 % of the decrease in the average primary energy use through the renovation of the 43 % worst-performing buildings;

—	adopt policy measures to reduce the average primary energy use.

The sections below provide examples and options for the different features of the Article 9 trajectory following the four steps set out in Figure 13.

3.3.1.   STEP 1: Identify data sources and classify the residential building stock

Under Article 9(2), Member States must express their national trajectory as a decrease in the average primary energy use of the entire residential building stock from 2020 to 2050. The reference year against which any progress in average primary energy consumption is compared is therefore 2020 (from 1 January 2020 to 31 December 2020). Member States need to identify their residential building stock and its characteristics, i.e. collect and process information describing the building stock according to its main characteristics and to derive its energy performance on that basis.

The aim of this process is to set a reference value for the average primary energy use of the residential building stock in 2020, based on representative data. It should also enable Member States to set an energy performance threshold that distinguishes the 43 % of residential buildings with the worst energy performance, based on either the number of buildings or their total floor area. Member States may use data for a more recent year than 2020 along with the relevant assumptions (such as new construction rates and records of renovations or demolitions) to supplement the data and achieve a realistic characterisation of the building stock in 2020.

The recommendations on planning the resources and time needed to classify the stock, on using data from EPCs (Energy Performance Certificates), the link to the database described in Article 22, the reuse and extension of existing databases and data protection that apply to residential building stock are similar to those for the non-residential building stock.

As for the non-residential stock, at least two general approaches can be used to classify the residential stock and identify its characteristics, either individually or in combination. The first approach is to use a) EPC data alongside complementary data sources and the second is b) statistical sampling and ad hoc data collection. These approaches are described in the sub-sections below.

3.3.1.1.   Data sources and preliminary classification and building categories

Member States may use EPC data in conjunction with other data sources such as research results, censuses, results from energy audits or aggregated energy metering data to classify the residential building stock. Data on the physical characteristics and other features of the residential building stock such as use, construction date, typology, location, geometric features or data on technical building systems can be collected from sources that include 3D urban models, satellite images, digital building logbooks, cadastral data, building permit registers and interviews with architects or developers. It is recommended that Member States assess the quality, completeness and representativeness of the datasets to ensure that different segments of the residential stock are properly represented.

As for non-residential buildings, it is recommended to have a preliminary overview of the stock in order to classify residential buildings. It is useful to start with the overall size of the residential building stock and then estimate, for instance, the share of single-family houses, apartment blocks and other types of residential buildings.

To classify the residential building stock, it is advisable to divide it into manageable segments by size, type, façade material and building system. Patterns of common local or regional building practices can also be used as criteria for defining categories. Examples of other criteria include date of construction, climate zone and heating system technology. Reference building categories used for the purposes of the comparative methodology framework to identify cost-optimal levels of energy performance requirements could also be used. This helps divide the housing stock into building segments sharing similar characteristics, which makes it easier to develop assumptions for each segment if required, and to improve the results when estimating the energy performance of buildings for which no data is available.

3.3.1.2.   Estimating the energy performance of residential buildings based on EPCs and data on the physical characteristics of the buildings

It is important to ensure that the EPCs are sufficiently representative (10) of the residential building stock. Thus, EPC coverage of the residential building stock needs to be specifically assessed, including the extent to which they cover different building types, date of issue and other relevant factors.

The available EPC data can be combined with information on the physical characteristics and other features of the same buildings to create a set of reference residential buildings for each category. Data from EPCs may also be used to approximate the energy performance of buildings in the same category and buildings with very similar physical characteristics in the same area.

If the information on the energy performance of subgroups or segments of the residential sector is not representative, information on the use, construction date, typology, location, geometric characteristics or technical building systems for each individual building can be used as input into energy models to simulate the operation of buildings and estimate their energy performance. Once a set of reference buildings from the residential building stock has been selected, a simplified approach could be used to estimate the energy performance of the reference buildings.

Coupling bottom-up data (buildings' physical characteristics, location, energy performance, etc.) with top-down data (aggregated data for different energy carriers’ consumption, final energy consumption, national statistics on building construction practices, etc.) can refine the classification of the residential building stock. The estimates made using bottom-up data can be compared with the available top-down data to calibrate the assumptions and estimates made.

For the purposes of Article 9(2), Member States have to describe the data sources and methodology they use in characterising the residential building stock and its energy performance in their NBRPs.

3.3.1.3.   Statistical sampling and ad hoc data collection

Where the data on the energy performance of the residential building stock from EPCs or other data sources is not sufficiently representative, statistical sampling and ad hoc data collection can be used to help classify different building segments. New data can be collected to complement existing data and fill specific gaps, e.g. on building typologies, geographical areas or climate zones. Backward extrapolation techniques can help by using more recent data together with data on new buildings and demolition trends to calculate the primary energy use of a specific building segment over a previous period of time. This approach can be used on its own or alongside existing data to verify the findings and assess their plausibility.

When using statistical sampling, it is recommended to have a preliminary overview of the residential building stock that breaks it down into different categories of buildings with similar characteristics in terms of type, typology, location, date of construction and more. The different categories of buildings should be represented in the final statistical sample.

The collected information can be put into a simulation model to estimate the energy performance of the buildings. The results can then be extrapolated to the entire building stock based on the initial classification. The results can also be cross-checked with available aggregated data on the energy performance of the building stock. In this case, it is important to ensure that the indicators used reflect the energy uses covered by Annex I to the EPBD (e.g. excluding cooking).

3.3.2.   STEP 2: Set the trajectory and milestones to achieve a progressive decrease in the average primary energy use

The trajectory is expressed as a decrease in the average primary energy use from 1 January 2020 to 2050. Figure 14 illustrates this concept. The average primary energy use of the residential building stock in 2020 serves as the reference point for milestones in: 2030, 2035, 2040, 2045, and 2050. Article 9(2) sets out the milestones to be achieved by 2030 and 2035, targeting reductions in average primary energy use of 16 % and 20-22 %, respectively. Under Article 9(2), Member States must set milestones for 2040, 2045, 2050 in line with a progressive decrease in average primary energy use with the aim of transforming the residential building stock into a zero-emission building stock by 2050.

Figure 14. Overview of the trajectory and milestones for the progressive renovation of the residential building stock

In addition to average primary energy use, Member States may draw up additional indicators of non-renewable and renewable primary energy use and of operational greenhouse gas (GHG) emissions produced in kgCO2eq/(m2y) in accordance with Article 9(3). Using these additional indicators can improve how the decarbonisation of the energy supply for buildings and the greenhouse gas emissions of the residential building stock are monitored, aligning the trajectory with national emissions targets and existing heating and cooling plans. If Member States choose to include these complementary indicators in their approach, milestones for these indicators should be set for the same years as the main trajectory (2030, 2035, 2040, etc.), as illustrated in Figure 15.

Figure 15. Illustration of complementary indicator of GHG emissions for the residential building stock

3.3.2.1.   Average primary energy use in 2020

Under Article 9(2), the average primary energy use of the entire residential building stock is the metric used to set the trajectory for the progressive renovation of the residential building stock. The average primary energy use of the residential stock relates to the primary energy of the building stock in (kWh/y) and its floor area (m2) as described by the equation below. It is important to recall that the exclusion and exemption from the baseline set out under Article 9(6) in relation to non-residential buildings do not apply here. The baseline should therefore include all residential stock buildings.

—	Total primary energy: Primary energy use of the residential building stock in kWh/(y)

—	Total A: total building floor area of the residential building stock, m2

The required data for calculating the average primary energy use of the residential building stock can be obtained through different approaches. As described in STEP 1 on classifying the building stock, Member States may use a combination of data on individual buildings such as EPCs, censuses, results from energy audits, energy metering data, surveys and ad hoc data collections and aggregated data derived from energy statistics or data collections. The choice of the approach depends greatly on data availability.

A combination of different data sources is recommended to ensure that all buildings segments are represented and all end uses are considered. It is recommended that the method Member States use to calculate average primary energy use is in line with the energy performance of buildings described in Annex I to the EPBD. To this end, when measured data is used, Member States should ensure that these are corrected for climate and behaviour, and aligned with the energy performance described in Annex I (e.g. energy used for cooking should be excluded).

If the characterisation of the building stock enables the individual primary energy use and floor area of each residential building to be determined, the total primary energy use of the residential building stock could be calculated as per the equation below.

—	PEU: Primary energy use in kWh/(m2y)

—	A: building floor area, m2

—	i: from 1 to N (total number of residential buildings)

Another possible approach to calculating the total primary energy use is to use aggregated data on the final energy use of the residential building stock (e.g. from Eurostat) combined with national primary energy factors to obtain the total primary energy of the residential building stock in (kWh/y) as below.

—	E: Final energy by energy carrier in (kWh/y)

—	PEF: Primary energy factor by energy carrier

Once the total primary energy use of the residential building stock is calculated, the average primary energy use can be obtained by dividing the total primary energy use by the total floor area of the residential building stock or by the number of buildings.

Member States must describe the data sources and methodology they use in their NBRPs . The methodology should be consistent throughout the implementation and reporting periods to ensure that the trajectory and the reporting on the results are consistent. Any adjustment to the methodology applied over time should be described in detail in the plans.

3.3.2.2.   Milestones and sub-targets

The provisions under Article 9(2) related to the national trajectory for the progressive renovation of the residential building stock can be divided into two requirements:

1)	reaching the overall milestones to lower the average primary energy use by the deadlines (e.g. 16 % by 2030); and

2)	reaching the sub-target to achieve at least 55 % of this reduction (e.g. 55 % of the 16 % reduction by 2030) through renovation of the 43 % worst-performing buildings, specifying the number of buildings or floor area to be renovated.

While the decrease in the average primary energy use refers to the entire residential building stock, the sub-target to be achieved among the 43 % worst-performing buildings needs to be achieved specifically through renovation works.

Figure 16. Trajectory to achieve a progressive renovation of the residential building stock

The total floor area of the residential building stock will change due to demolitions and new buildings built after the reference year, 2020. Demolitions after 2020 will remove floor area from the building stock, while new buildings will add new floor area. The building floor area removed and added will reduce and increase the primary energy use in different proportions. These changes in floor area and primary energy use will influence the average primary energy use of the entire residential building stock.

However, the demolition of buildings and the construction of new buildings cannot be considered as renovation measures, while the 55 % sub-target must explicitly be ‘achieved through the renovation’ of the 43 % worst-performing residential buildings’. Therefore, the effects of demolitions of worst-performing buildings on the average primary energy use cannot be considered in the context of the 55 % sub-target.

Figure 17. 2050 zero-emission building stock

The major milestones on the path to achieving a zero-emission building stock by 2050 apply to the building stock as a whole; not every single building needs to become a zero-emission building as defined in Article 11. Several factors will contribute to achieving a zero-emission building stock in the long term: the progressive renovation of buildings to enhance their energy performance will be a key factor, but a role will also be played by the overall decarbonisation of the energy supplied to buildings, especially the decarbonisation of heating systems, together with further transformation of energy systems and socio-demographic dynamics. Member States should take into account all these factors when setting the 2050 milestone.

When setting longer-term milestones, Member States could usefully draw on national projections or the scenarios developed for their national decarbonisation strategies, national energy and climate plans (NECPs), for the achievement of renewable energy and energy efficiency targets, as well as nationally determined contributions. The assumptions for the trajectory for the progressive renovation of the residential building stock should be consistent with the underlying assumptions of the NECP scenarios, especially the assumptions related to the energy mix (e.g. primary energy factors). This would ensure consistency across national strategies.

According to the final paragraph of Article 9(2), Member States may adjust the milestones for 2030 and 2035 if the average fossil share of energy use in residential buildings is lower than 15% to ensure that the average primary energy use of the entire residential building stock by 2030, and every five years thereafter, is equivalent to, or lower than a nationally determined value derived from a linear decrease in the average primary energy use from 2020 to 2050, in line with the transformation of the residential building stock into a zero-emission building stock.

3.3.2.3.   Eligible measures for reducing the average primary energy use of the residential building stock

As explained above, the eligible measures will be different for the two sub-targets contributing to the achievement of each milestone. The 45 % sub-target can be achieved through building renovation measures and changes in the energy performance of the building stock due to new buildings and demolition. The 55 % sub-target can only be achieved through renovation works reducing the average primary energy use of the 43 % worst-performing buildings. Behavioural measures do not count towards either sub-target.

An increase in the share of renewable energy in power generation will have an impact on the primary energy use of a building and is therefore to be considered as an improvement of the energy performance of the building stock for the overall targets as per Article 9(2). If adjustments to primary energy factors or weighting factors for energy carriers result in improved calculated energy performance, Member States must explain these changes to the Commission and demonstrate that they accurately reflect a real shift in the energy mix. The choices made and data sources are to be reported using the EN 17423 format or any superseding document. It is also expected that the documented primary energy factors for 2030 will be aligned with those used in the national climate and energy plans.

The measures to achieve the 55 % sub-target (reduction of at least 55 % in average primary energy use must come from renovating the 43 % worst-performing residential buildings) should therefore focus on renovations improving the energy performance in line with the energy performance calculations set out in Annex I of the EPBD (see STEP 3). This includes renovation of the building envelope and changes in technical building systems including the technical equipment for space heating, space cooling, ventilation, domestic hot water, built-in lighting, building automation and control, on-site generated renewable energy, or combinations thereof.

Under the fifth subparagraph of Article 9(2), Member States’ renovation efforts to achieve the sub-targets must not disproportionately exempt rental residential buildings or building units.

If a reduction in primary energy consumption is achieved through the renovation of buildings affected by natural disasters, these savings can be counted towards the targets involving the 43% worst-performing buildings. Member States are recommended to monitor the number of buildings or the floor area of renovated buildings that were affected by natural disaster, and the reduction in primary energy use due to their renovation and to report on it in their NBRPs (Article 3).

The two previous sections form the starting point for setting the target path and the milestones to be achieved to reduce the average primary energy consumption of the residential building stock in the specified years. Under Article 9(2) and as part of the assessment of the NBRPs , the Commission must monitor the decrease in average primary energy use including the number of buildings and building units or floor area of the 43 % worst-performing residential buildings and make recommendations if necessary. Therefore, it is recommended that Member States’ NBRPs report the effect of the various measures implemented to reduce the average primary energy use of the residential building stock.

3.3.2.4.   Reporting requirements on the trajectory

Under Articles 3 and 9(2), Member States’ NBRPs must include the methodology as well as the data they use to set the trajectory, estimate the milestone values, determine the 43% worst-performing residential buildings, and also the number of buildings and building units or floor area to be renovated annually.

Figure 18 illustrates the main items to be reported as part of the national trajectories.

Figure 18. Reporting the trajectory of the progressive renovation of the residential building stock

3.3.2.5.   Estimating the number or floor area of buildings to be renovated to achieve the decrease in the average primary energy use

Estimating the number (or floor area) of buildings to be renovated depends on a number of variables such as the physical characteristics of the portions of the building stock targeted, their characteristics (use, ownership, occupancy, etc.), and the policies in place or to be in place for renovating these buildings.

Multiple considerations apply to the number (or floor area) of buildings to be renovated from the 43% worst-performing buildings to achieve the sub-target, as described in STEP 3.

For the number (or floor area) of other buildings to be renovated to contribute to the overall target, Member States should consider what renovation works contribute to the remaining portion of the target. This is closely related to the assumptions made for the trajectory in terms of other factors such as decarbonisation of the building energy supply and the changes in the energy performance of the building stock due to new buildings and demolition, etc. (see Section 2.3.2.2). Member States must, therefore, estimate the number (or floor area) of buildings to be renovated for the remaining portion of the overall milestones in line with the assumptions and estimations made in their analyses for upgrading the building stock into a zero-emission building stock by 2050.

3.3.3.   STEP 3: Setting the sub-target to achieve at least 55 % of the decrease in the average primary energy use by renovating the 43 % worst-performing buildings

3.3.3.1.   Setting the threshold for the 43 % worst-performing buildings

To identify the 43 % of worst-performing buildings, it is recommended to rank the residential buildings in the 2020 stock based on their energy performance, measured by primary energy use (kWh/(m2y)). A threshold can then be set to identify the bottom 43 % of the residential building stock. This threshold can be calculated using either the number of buildings or the total floor area. The buildings can be ranked either by creating a frequency distribution or by analysing individual data points. For a frequency distribution, the range of primary energy use (e.g. 0-500 kWh/(m2y)) is divided into specific intervals or classes. Each class represents a defined range (e.g. class 1 for 0-19 kWh/(m2y), class 2 for 20-39 kWh/(m2y), etc.). Buildings are then assigned to these classes based on their primary energy use, and the frequency of buildings or floor area within each class is calculated.

If the threshold is calculated by the number of buildings, the worst-performing buildings are counted, starting with the building with the poorest energy performance, until 43 % of the total number of buildings is reached, as shown in Figure 19 (fictional residential building stock with 25 buildings). The energy performance in primary energy use (kWh/(m2y)) of the building immediately following the 43 % mark sets the threshold of the 43 % worst-performing buildings. All residential buildings with an energy performance that is worse than this threshold will be part of the 43 % worst-performing buildings.

Figure 19. 43 % worst-performing buildings from the residential building stock

If the threshold is set based on building floor area, the approach mirrors the method used for the number of buildings. Starting with the worst-performing building, the floor area is ranked until it reaches 43 % of the total. The primary energy use of the next building, after surpassing the 43 % floor area, defines the threshold in (kWh/(m2y)) for the 43 % worst-performing buildings.

Selecting either the number of buildings or the floor area may result in identifying different portions of the residential building stock, either smaller or larger. When using floor area to identify the 43 % worst-performing buildings, building size is taken into account, but using the number of buildings may lead to small buildings (which may have a limited potential for renovation) to be overrepresented. Member States are advised to assess data availability and the characteristics of their residential building stock, such as the breakdown by single-family and multi-family buildings (by number or floor area) and the average size of buildings in each group. This information should be used to determine a suitable approach to identifying the set of 43 % worst-performing buildings (based on number of buildings or floor area) with the largest potential for energy savings and renovation.

When drafting a new NBRP (after the first plan, which is due in draft by 31 December 2025 and in its final version by 31 December 2026), the composition of buildings in the 43 % worst-performing category may change due to improvements in the building stock resulting from renovations triggered by Article 9(2). It is therefore recommended that Member States adjust the ranking to reflect the updated composition of the 43 % worst-performing residential buildings.

The following calculation can be used to estimate the contribution to each milestone required from the renovation of the 43 % worst-performing buildings:

—	WPB Sub-target: decrease in the average primary energy use to be achieved through the renovation of 43 % worst-performing residential buildings, in kWh/y

—	PEU2020: Primary energy use in kWh/(m2y) in 2020

—	A: building floor area in m2

—	i: from 1 to N (total number of residential buildings)

3.3.3.2.   Estimating the number or floor area of buildings to achieve each sub-target

According to Article 9(2), Member States must identify the number or floor area of residential buildings and residential building units to be renovated annually, including from the 43 % worst-performing buildings.

A number of different variables can significantly affect the estimate of this figure. For instance, assumptions about the energy performance of buildings before renovation (e.g. 150 kWh/(m2y) versus 500 kWh/(m2y)), as well as the extent (or depth) of the renovations, can result in widely varying estimates of the number or floor area of buildings that would need to be renovated to meet the sub-target. In a simplified approach, changing the intended depth of renovation from 30 % to 60 % will halve the estimated number of buildings that need to be renovated.

It is recommended, therefore, that Member States consider multiple factors related to the physical characteristics of buildings, other specific attributes (e.g. occupancy and ownership structures), and the expected impact of the policy measures (and required resources) envisaged to stimulate the renovation of residential buildings.

Additional objectives, such as not disproportionately exempting rental residential buildings or building units in the renovation plan under Article 9(2), or the protection of vulnerable households may also influence the categorisation of buildings. It may be useful, in order to better target the policy measures, to differentiate vulnerable households within the group of owner-occupied buildings. This reflects the intent of the provisions in Article 17(18), which require, as a priority, that the financial incentives created by Member States target vulnerable households, people affected by energy poverty, and people living in social housing, in accordance with Article 24 of Directive (EU) 2023/1791.

It is recommended that Member States conduct a detailed study of the characteristics of the 43 % worst-performing buildings, along with additional specific factors, while concurrently developing policies and measures to encourage the planned renovations. Analysing these aspects and how they are linked can produce a more comprehensive and accurate estimate of the number or floor area of buildings that need to be renovated to achieve the sub-target.

3.3.4.   STEP 4: Adopt policy measures to reduce the average primary energy use

Member States have the discretion to select policy instruments to meet the Article 9(2) requirements and to implement renovation measures to achieve the required decrease in average primary energy consumption. Article 9(2) explicitly mentions minimum energy performance standards (MEPS), technical assistance and financial support measures as examples of possible policy instruments and measures. Figure 20 provides an overview of these measures.

Figure 20. Policy measures to achieve the required decrease in average primary energy use

According to Article 9(2), Member States are not to disproportionally exempt rental residential buildings or building units from renovation work. They should therefore ensure the fair distribution of renovation works and benefits between rental and owner-occupied buildings. The policy mix, including measures such as MEPS, financial support, and technical assistance should be designed to meet the specific needs of both segments and provide mechanisms to ensure a fair distribution of benefits. If the main policy measure does not explicitly tackle split-incentives, additional measures should be implemented to overcome any remaining barriers.

The following sections present examples of policy measures that can be implemented by Member States to achieve the required reductions in the average primary energy use of the residential building stock while also ensuring that benefits are distributed fairly.

3.3.4.1.   MEPS for residential buildings

Member States may use the MEPS scheme to trigger the renovation of residential buildings and comply with Article 9(2). According to Article 2(4), ‘minimum energy performance standards’ are the rules that require existing buildings to meet an energy performance requirement as part of a broad renovation plan for a building stock or at a trigger point on the market. Trigger points include sale, rent, donation or change of purpose in the cadastre or land registry, set time periods or by a specific date, all points that trigger the renovation of existing buildings. It is for the Member States to choose the design options and scope of any MEPS scheme for the residential building stock.

Several EU countries have already used the MEPS scheme for the residential building stock as have other non-EU regions, in different contexts and with different characteristics (11). If Member States also aim to implement MEPS for residential buildings, they need to set the share of the target they want to achieve through this policy instrument and the subset of the buildings that will be covered by the MEPS scheme (e.g. all worst-performing or only the very worst-performing buildings (EPC class G, or classes F and G)). Member States may also opt to implement MEPS for a specific sub-segment of the residential building stock, such as rented properties or rented multi-family buildings in a particular age category. Separate schemes for structurally weak regions within Member States can be used to improve the fair distribution of renovation work and their benefits. Generally, the suitability of policy instruments for different segments of the residential stock will increase in proportion to the thoroughness with which the building stock and its segments have been analysed in STEP 3. Based on these decisions, Member States can set a threshold within the chosen segment for those worst-performing buildings that must comply with the MEPS requirement by a certain date. A similar approach to the steps for non-residential buildings can be taken to set thresholds and identify the residential buildings to comply with MEPS. Any regulatory measures, such as a MEPS scheme, should be supported by an enabling framework to ensure effective implementation and a fair distribution of the costs and benefits. In principle, the features of an enabling framework for MEPS in non-residential buildings can also be applied to residential buildings, since specific measures are needed to address and protect tenants and vulnerable groups in both building segments.

Financial incentives and technical assistance are central to any enabling framework and are essential for the implementation of provisions related to the residential building stock. These aspects are discussed individually in the following sections.

3.3.4.2.   Financial support (12)

Most EU Member States have adopted financial support schemes to encourage building renovations. A wide range of literature highlights the approaches taken, innovative strategies, and best practices in this area (13).

Financial support should incentivise early action by encouraging building owners to complete renovations ahead of the milestones outlined in the set trajectory.

Given that Article 9(2) requires a sub-target for renovating the worst-performing buildings, and recognising the strong connection between Article 9 and Article 17 of the Directive, the following sections focus on financing strategies aimed at: (a) the worst-performing buildings, (b) vulnerable groups, and (c) performance-based mechanisms.

3.3.4.3.   Financial support for renovating worst-performing buildings

Financial support can be granted to support the renovation of worst-performing buildings. The type of public support may vary. For example, it can take the form of low-interest or interest-free loans, a repayment bonus that reduces the amount of interest to be repaid and thus shortens the loan term, or tax relief. The level of support may also vary and may be designed as a bonus on top of existing support programmes or to fully finance the renovation of selected worst-performing buildings owned by energy-poor households.

To qualify for support, building owners should provide evidence that their property is among the 43% worst-performing buildings. The simplest way to verify this is by presenting a valid energy performance certificate (EPC). Member States are free to set other eligibility criteria. Examples include focusing on buildings constructed in certain years or periods, alongside additional factors such as unrenovated building envelopes (or sections of them), the age of fossil-fuel heating systems, or recent metered energy consumption data.

3.3.4.4.   Financial support for vulnerable groups to renovate buildings

There is an overlap between the worst-performing buildings and buildings inhabited by vulnerable households, including households in energy poverty. To provide direct financial support to those in need and also renovate the worst-performing buildings, support schemes can be designed especially for this target group.

In practice, those support schemes often cover a high share of the costs. See, for example, Ireland’s Better Energy Warmer Homes scheme, Slovenia’s ZERO500 programme, the Scottish government's considerable support provided under the Social Housing Net Zero Heat Fund to ensure Scotland’s Energy Efficiency Standard for Social Housing was met and the Basque one-stop-shop Opengela, providing loans to cover up to 100 % of renovation costs. In general, the lower the income level of the vulnerable household, the higher the support should be.

The Social Climate Fund (14), which was set up alongside the Emissions Trading System for fuel combustion in buildings, road transport and additional sectors (ETS 2), provides Member States with a facility to design support measures for the direct benefit of vulnerable groups. It is specifically designed to channel investment into the renovation of buildings occupied by these groups, besides other measures and investments in the building and transport sectors. The worst-performing buildings and vulnerable households are often distributed differently across different regions of the Member States. Public authorities at national and regional level should ensure that there is sufficient support available to vulnerable households to renovate their buildings, whether or not related to MEPS. Central authorities should provide higher levels of support to regions with a higher share of worst-performing buildings and vulnerable households. Technical support from central contact points (one-stop shops) can play a crucial role in ensuring a fair distribution of the financial support available.

Further clarification on support to vulnerable households is provided in the guidance on Article 17 (Annex 2).

In addition, a dedicated financing scheme could be created to fund the renovation of worst-performing social housing buildings, whether or not linked to MEPS. This is particularly useful if social housing buildings in the Member State have a lower energy performance compared to other buildings in which vulnerable households live.

3.3.4.5.   Performance-based support schemes

Financial support alone does not inherently guarantee that energy performance improvements are carried out. For this reason, Article 17(14) requires Member States to link their financial measures to the targeted or achieved energy performance improvements specified by one or several criteria, listed in the paragraph. This can be achieved by designing schemes that, for example, are tied to the measures laid down in a renovation passport, or schemes that incorporate a plausibility check through metering energy use before and after the works. Additionally, running tenders for energy savings could produce favourable cost-benefit renovation solutions if projects that commit to the highest savings at the lowest cost qualify for extra support. These schemes would require at least minimal post-intervention monitoring.

In line with Article 9(4)(c), priority should be given to deep, performance-driven renovations that offer enhanced support for upgrades resulting in future-proof buildings, such as the upgrades specified in a renovation passport. This approach helps prevent lock-in effects and ensures long-term energy efficiency and sustainability.

To partly tackle the issue of split-incentives, performance-based modernisation fees could balance rent increases from renovations by capping them while ensuring that tenants benefit from the improvements. At the same time, these fees would provide property owners with a stable source of income for refinancing the renovation costs (see e.g. the energy performance allowance known as EPV (15) in the Netherlands). Another way to tackle split-incentives is to allocate CO2-pricing costs between tenants and landlords based on the energy performance of the building (as in Germany). This approach encourages both parties to invest in energy efficiency improvements.

3.3.4.6.   Technical assistance

Article 18 requires Member States to create and widely implement one-stop shops to assist building owners in improving the energy performance of their buildings.

The guidance on Articles 21, 22 and 24 of the Energy Efficiency Directive (16) provides clarifications on the set-up and role of these one-stop shops, in particular under Section 5.3. ‘OSS for the provision of technical, administrative, and financial advice for energy efficiency – Article 22(4), (5) and (6)’ and Section 6.5. ‘Foster technical assistance and roll-out of enabling funding and financial tools – Article 24(3)(d)’.

In addition, the Commission will publish guidelines to develop those one-stop shops addressing key policy considerations for public authorities, as per Article 22(6) of the EED and Article 18(1) of the EPBD.

The paragraphs below highlight only some specific aspects relevant to implementation of Article 9(2).

To effectively implement policy measures like MEPS schemes and ensure that financial aid is directed to the buildings occupied by vulnerable groups, one-stop shops should focus on providing targeted support. These centres should offer specialised assistance to meet the unique needs of these specific groups, ensuring equitable access to resources and guidance.

To be effective and ease access for different societal groups, one-stop shops should also be set up as physical advisory centres, rather than solely operating online.

One-stop shops play a key role in supporting policy measures deployed as part of the renovation efforts. For instance, if hard-to-reach segments such as co-owned large apartment blocks are covered by MEPS schemes, building owners will need to accelerate and streamline decisions on renovations. Providing expert advice and appointing a central coordinator would be particularly helpful in assisting such a procedure.

Similarly, one-stop shops could be dedicated to assisting vulnerable households and direct them to financial support for the renovation activities.

Renovation passports are a tailored roadmap for the deep renovation of buildings following a set number of steps. They are another key tool to provide advisory and technical assistance to residential buildings owners. The EPBD brings in a common framework for renovation passports in Article 12 and Annex VIII and further provisions to promote their use. For more details on renovation passports please see the dedicated guidance in Annex 4.

3.3.4.7.   Monitoring impact

In accordance with Articles 3(5) and 9(2), the Commission will assess NBRPs, explicitly considering the reduction targets for average primary energy use in 2030, 2035, 2040, 2045 and 2050. The Commission will also evaluate whether the target share has been achieved in the 43 % of residential buildings with the worst energy performance. The assessment of the first NBRP will feed into the review of the Directive, which the Commission is required to conduct by 31 January 2028 pursuant to Article 28. According to Article 28, if the assessment of the Directive and related legislation indicates that the policies and measures reported in the plans are unlikely to achieve the targets, including those under Article 9(2) for the residential building stock, the Commission will consider proposing mandatory minimum energy performance standards across the entire building stock.

To monitor the impact of policy measures on progress on the trajectory for the progressive renovation of the residential building stock, it is essential to track several additional aspects: the number of buildings renovated and the energy improvement delivered by renovation, the social impacts of implemented MEPS, and other key variables such as renovation rates, the scope and depth of renovations and the building energy supply mix.

Member States must ensure that energy performance improvements in individual buildings are not counted more than once. Improvements should be clearly attributed to a specific policy instrument. If a renovation is driven by multiple policy instruments, the energy performance improvements should be attributed to each instrument proportionally.

Monitoring progress along the trajectory could be aided by drawing on data in national databases for the energy performance of buildings referred to in Article 22. The data aggregated in the database developed by each Member State can help to monitor the overall reduction in average primary energy use across the residential building stock.

A bottom-up approach is recommended, e.g. by using EPC registers or self-reporting systems, to monitor target achievement in the worst-performing-building segment. Regularly updated or new EPCs issued after a major renovation under Article 20 can be an important tool to monitor progress in energy performance in certain segments of the building stock, especially the worst-performing buildings.

To better use policy feedback for future policymaking, annually monitoring the impact of individual measures from the policy mix implemented under Article 9(2) is highly recommended. It can subsequently be used for the purpose of wider reporting obligations, e.g. under Regulation (EU) 2018/1999 (the Governance Regulation) and may be designed to be compliant with Article 10(2) of Directive (EU) 2023/1791.

If MEPS are used as part of the policy mix for the progressive renovation of the residential building stock, Member States must bring in a monitoring mechanism to evaluate the impact of MEPS according to Article 9(7). Apart from monitoring target achievements, Member States must monitor social impacts, in particular on the most vulnerable groups, following Article 9(4e). This can include monitoring the reduction in energy expenses for households, especially low-income households (alongside monitoring the energy poverty rate), the percentage of vulnerable or low-income households benefiting from renovation and conducting social cost-benefit analyses of a set of reference renovation projects.

TABLE OF CONTENTS

1.

Introduction

52

2.

Barriers to renovation, financing instruments and accessibility of financing (Article 17 - paragraphs 2 to 9, 11 and 13)

54

2.1.

Scope and objectives of the requirements

54

2.2.

Choice of policy measures to fulfil the requirements

57

2.2.1.

Enabling funding and financial tools and promotion of lending products for building renovations

57

2.2.2.

Addressing split incentives

57

2.2.3.

Co-ownership structures

58

2.2.4.

Administrative complexity, uncertainty and delays for planning energy renovations

60

2.2.5.

Accessibility: simple and streamlined applications and procedures for receiving support

60

2.2.6.

Accessibility: easily accessible information on financing options

62

3.

Use of financing (Article 17 - paragraphs 12 and 14 to 16)

63

3.1.

Scope and objectives of the requirements

63

3.2.

Choice of policy measures to meet the requirements

65

3.2.1.

Linking the financial measures to the targeted or achieved energy savings and improvements

65

3.2.2.

Greater support for deep renovations and sizeable programmes

65

3.2.3.

Support for training and capacity building

67

4.

Social fairness (Article 17 (3) and Articles 17(17) to 17(19))

67

4.1.

Scope and objectives of the requirements

67

4.2.

Choice of policy measures to fulfil the requirements

68

4.2.1.

Providing greater support to building owners with lower financial capacity

68

4.2.2.

Addressing the risk of ‘renoviction’ and the owner-tenant dilemma

69

5.

One-stop shops (Article 18 and Article 19 (3))

72

5.1.

Introduction: scope, legal context and policy context

72

5.2.

Relevant definitions and concepts

73

5.3.

Availability of one-stop shops across national territories

73

5.3.1.

Geographical coverage

74

5.3.2.

Combining online and physical approaches

75

5.4.

Invitation to a one-stop shop

76

Appendix I:

Other relevant Commission documents for transposing Article 17 of Directive EU/2024/1275

78

1.   INTRODUCTION

This document contains guidance and recommendations on Article 17 and Article 18 of the recast Energy Performance of Buildings Directive (‘the recast EPBD’) (1).

Article 17 lays down requirements for the financing framework to support energy-performance improvements in buildings. The aim of this financing framework is to optimally address the barriers to the energy renovation of buildings. This aim is reflected in the first paragraph of the Article, which states that ‘Member States shall provide appropriate financing, support measures and other instruments able to address market barriers in order to deliver the necessary investments identified in their national building renovation plan to transform their building stock into zero-emission buildings by 2050’.

Member States are advised to rely on the process for preparing their national building renovation plans to:

—	identify such barriers, both economic and non-economic, and assess how they can best tackle them through financing instruments and other types of measures, regulatory or not, including through their: (i) ‘policies and measures’  (2); (ii) ‘public investments’; and (iii) ‘budgetary sources’  (3);

—	ensure that the investments estimated to take place by 2030, 2040 and 2050 match the total investment needs (4).

On financing instruments specifically, Article 17(6) also stipulates that ‘Member States shall make best cost-effective use of national financing and financing available established at Union level, in particular the Recovery and Resilience Facility, the Social Climate Fund, the Cohesion Fund, InvestEU, auctioning revenues from emission trading pursuant to Directive 2003/87/EC of the European Parliament and of the Council (31) and other public funding sources. Those funding sources shall be deployed consistently with a path to achieving a zero-emission building stock by 2050’. As per this paragraph, Member States have to ensure that the share of national financing (national budget) and EU financing they rely on for building renovation is in line with both the potential and needs for buildings to meet their energy and climate targets (5). In addition, Article 17(6) also states that Member States must ensure they achieve a zero-emission building stock by 2050 in a cost-effective way.

Article 17(6) should be read jointly with the planning and reporting requirements set out in Article 3 and Annex II on the national building renovation plans, based on which Member States must provide an outline of: (i) the investment needs for the implementation of their national building renovation plan; (ii) the financing sources and measures for implementation of the plan; and (iii) their administrative resources for building renovation (6).

The process of preparing their national building renovation plans will allow Member States to shape their financing framework so that it supports those objectives, but also delivers on other key priorities as also laid down in the recast EPBD (7). These other key priorities include: (i) alleviating energy poverty; (ii) empowering vulnerable households; and (iii) making housing affordable.

Against this background, this document provides guidance on:

—	addressing the barriers to renovations by ensuring both the deployment of enabling instruments and the accessibility of financing schemes and permitting procedures (Section 2);

—	ensuring the best cost-effective use of financing (Section 3);

—	prioritising vulnerable households (Section 4).

Member States are therefore invited to refer to this document not only when transposing the recast EPBD but also when preparing their national building renovation plans.

For several provisions of Article 17, this guidance refers to other recent Commission recommendations and documents, either directly in the main body of the document or in Appendix I ‘Other relevant Commission documents for transposing Article 17 of Directive EU/2024/1275’. Appendix I lists those other guidance documents and reports, etc. In particular, Appendix I lists the relevant subsections of Article 17 for transposing, and links these relevant subsections to the provisions of Article 17 of the recast EPBD.

Article 18 has a different focus. It requires Member States to set up technical assistance facilities to assist members of the public throughout the renovation process.

The establishment of these technical assistance facilities, most commonly known as one-stop shops, should involve all necessary actors, including: homeowners; administrative personnel; technical experts; businesses; banks.

Member States must ensure adequate coverage of these one-stop shops throughout their territories and to all members of the public. The EPBD provides different criteria to evaluate and ensure this outreach capacity, including: (i) the number of facilities per citizen; (ii) the time it takes a member of the public to reach one of these one-stop shops; or (iii) the geographical coverage of these one-stop shops.

On Article 18, this document provides guidance in four areas, each of which are discussed in the bullet points below.

—

The first area of guidance is on the types of services and support that technical assistance facilities and one-stop shops must provide. In that respect this guidance should be read together with the following two documents: — Commission Recommendation (8) (EU) 2024/2481 setting out guidelines on Articles 21, 22 and 24 of the Energy Efficiency Directive (EED) recast ‘Information and awareness raising’; and — the upcoming joint guidelines responding to the requirement of Article 22(6) of the EED recast and Article 18(1) of the EPBD recast, to include indications, suggestions and examples of practices as inspiration for Member States setting up and operating their one-stop shops.

—	The second area of guidance covers recommendations to ensure the effective deployment of technical assistance and one-stop shops across the national territory according to the criteria indicated in Article 18(1).

—	The third area of guidance covers recommendations on how to efficiently combine online and physical/on-the-ground approaches.

—	The fourth area of guidance covers recommendations on invitations to one-stop shops such as the mandatory invitations (i.e. when an invitation to one-stop shops has to be issued) pursuant to Article 19(13).

These one-stop shop facilities are one of the main elements of the enabling framework to effectively encourage and support renovations. They should therefore be an integral part of both the development and delivery of national building renovation plans. Member States are therefore invited to refer to the one-stop shops both when transposing the provisions in Article 18, and when preparing their national building renovation plans (the Annex II template includes a specific section to describe policies and measures related to ‘the creation of one-stop shops or similar mechanisms pursuant to Article 18’).

2.   BARRIERS TO RENOVATION, FINANCING INSTRUMENTS AND ACCESSIBILITY OF FINANCING (ARTICLE 17 - PARAGRAPHS 2 TO 9, 11 AND 13)

2.1.   Scope and objectives of the requirements

Article 17 refers to barriers to renovations (9) in several paragraphs.

Article 17(1) requires Member States to ‘provide appropriate financing, support measures and other instruments able to address market barriers’.

Article 17(3) asks Member States to ‘assess and, where appropriate, address barriers related to upfront costs of renovations’.

Problems related to the upfront costs of renovations are typically due to three main causes: (i) a lack of solvency (the structural ability of the building owner to meet its financial obligations, e.g. repaying a loan); (ii) a lack of liquidity (ability to cover the cost of renovation at a certain moment in the short term, i.e. ability to provide the necessary capital to renovate the building before the works have taken place and the benefit of the renovation have materialised); or (iii) a failure to prioritise the renovation works compared to other spending considered by the building owner. These three different situations warrant different approaches.

Given these different barriers, Article 17(7) requires Member States to give financial assistance to promote the energy renovation of buildings. It states:

‘To support the mobilisation of investments, Member States shall promote the effective development and use of enabling funding and financial tools, such as energy efficiency loans and mortgages for building renovation, energy performance contracting, pay-as-you-save financial schemes, fiscal incentives, for example reduced tax rates on renovation works and materials, on-tax schemes, on-bill schemes, guarantee funds, funds targeting deep renovations, funds targeting renovations with a significant minimum threshold of targeted energy savings and mortgage portfolio standards. […] Member States may also promote and simplify the use of public-private partnerships.’

Article 17(9) complements this by stating that ‘the enabling funding and financial tools may include renovation loans or guarantee funds for energy performance renovations, including in combination with relevant Union programmes, where applicable’  (10).

On fiscal incentives specifically, Member States have many options. For example, they can impose lower rates of value added tax for energy renovations as opposed to non-energy renovations or new construction. They can also give incentives through the property tax system. Property tax is usually attached to the value of the building unit, but Member States could impose a reduced rate for building units where it can be demonstrated that the building unit has undergone an energy renovation. The property tax incentive could also take the form of a discount or refund given through annual income taxes. (11)

Article 17(7) also refers to ‘mortgage portfolio standards’. This mechanism is defined in Article 2(39) as ‘mechanisms incentivising mortgage lenders to establish a path to increase the median energy performance of the portfolio of buildings covered by their mortgages towards 2030 and 2050, and to encourage potential clients to improve the energy performance of their property in line with the Union’s decarbonisation ambition and relevant energy targets in the area of energy consumption in buildings, relying on the criteria for determining environmentally sustainable economic activities set out in Article 3 of Regulation (EU) 2020/852’ (Taxonomy Regulation (12)).

Member States’ support for such innovative financial instruments will make it possible to remedy the different types of difficulties in upfront cost financing while providing more value for money for the public funding dedicated to renovations (higher leverage effect). This greater value for money in public funding can be achieved by lowering the share of financial support provided through grants by prioritising the use of grants only for vulnerable households. As part of their national energy and climate strategies, and in the framework of their national hub on energy efficiency financing as part of the European Energy Efficiency Financing Coalition (13), Member States could consider discussing potential trajectories that would allow national credit institutions to progressively allocate a higher share of their turnover to mortgages and non-collateralised loans targeting the energy renovation of worst-performing buildings.

The leverage factor is the proportion of private investment mobilised through public funds. The leverage factor for the energy renovation of buildings will vary significantly depending on the type of support provided. A mix of public subsidies and private mortgages will be different from a mix of public and private funds in a financial scheme (e.g. through the use of guarantees), and these will be different again from a scheme that provides technical assistance (e.g. the ELENA facility (14)).

In addition to Articles 17(7) and 17(9), Article 17(11) relates i.a. to the bundling of energy-renovation loans into products that can be traded and invested in by banks and other financial actors. Article 17(11) asks Member States to ‘facilitate the aggregation of projects to enable investor access as well as packaged solutions for potential clients. Member States shall adopt measures that promote energy efficiency lending products for building renovations, such as green mortgages and green loans, secured and unsecured, and ensure that they are offered widely and in a non-discriminatory manner by financial institutions and are visible and accessible to consumers. Member States shall ensure that banks and other financial institutions and investors receive information on opportunities to participate in the financing of the improvement of the energy performance of buildings’.

On the scope of this innovative funding and these financial tools, please refer to Section 2.2.1 of the annex to the Commission Recommendation on transposing Article 30 of the Energy Efficiency Directive recast (‘EED recast’) (15) ,  (16).

For rented buildings specifically, split incentives, as defined in Article 2(54) of the EED recast are a significant barrier to renovation. Removing these split incentives is required as part of the enabling framework for minimum energy performance standards (MEPS) schemes as per Article 9(4)(d) of the recast EPBD. In addition, Article 22(9) of the EED recast stipulates that ‘Member States shall take the necessary measures to remove regulatory and non-regulatory barriers to energy efficiency as regards split incentives between owners and tenants, or among owners of a building or building unit’. The recast EPBD also requires Member States to ‘report such barriers and the measures taken’ to address these barriers in their national building renovation plans (17).

Higher rents, compliance with minimum standards, and the increase in a property’s value from a future-proofed building can provide economic incentives for building owners to engage in energy renovation of their building. However, these individual economic incentives may have to be complemented by additional measures such as financial instruments or updates to tenancy laws to ensure that existing tenants do not face eviction or dramatically higher rents following an energy renovation of their dwelling.

Article 17(5) refers to both the issue of non-economic barriers to building renovation and ways to overcome these non-economic barriers. It stipulates that Member States ‘shall take appropriate regulatory measures to remove non-economic barriers to building renovation. With regard to buildings with more than one building unit, such measures may include removing unanimity requirements in co-ownership structures, or allowing co-ownership structures to be direct recipients of financial support’. Depending on the framework prevalent in Member States, co-ownership structures are not considered legal persons and therefore might not be legally able to: (i) be direct recipients of funding (public or private); (ii) carry out administrative procedures; or (iii) be legally responsible for the works. This generates uncertainty and complexity in the renovation process. Member States should evaluate whether these constraints are justifiable in the case of energy renovations. Removing such non-economic barriers also forms part of the required enabling framework for MEPS schemes as defined in Article 9(4)(d).

In multi-apartment buildings in co-ownership structures (18), the owners of different units may have differing needs, understandings, motivations and practical reasons for undertaking or not undertaking a renovation. In such buildings, it may be more difficult to carry out renovations compared with single building units, due to the shared nature of the façade, heating systems, and other common elements. The owners typically have to reach agreement on the distribution of the investment costs, related typically to the distribution of benefits. Co-ownership structures, such as multi-storey apartments, present a distinctive set of challenges and opportunities for renovation compared with single buildings or building units. Typical challenges in these co-ownership structures include the need to reach agreement on the distribution of the investment costs or the distribution of benefits. This may include a requirement to obtain unanimous consent from all unit owners. However, there are also a number of opportunities to be gained from updating co-ownership structures. These include: (i) simplifying the administration process by reducing the number of individual applications, agreements and monitoring processes; (ii) achieving economies of scale by allowing the bulk procurement of materials; (iii) sharing labour costs and streamlining project management; and (iv) incentivising comprehensive renovation in areas not strictly related to energy performance (such as structural upgrades, and improvements to accessibility and indoor climate).

Complex and lengthy administrative procedures around energy renovation projects can create further uncertainty and add significant barriers to renovation efforts. For changes to buildings that require permits, the time taken by local authorities to reach a decision can vary, and longer procedures make projects more challenging for a variety of reasons (e.g. seasonal weather requirements). Complex and lengthy administrative procedures are also a problem when waiting for decisions on financing applications or other support. These complexities and uncertainties can lead to difficulties in securing additional financing, purchasing the necessary materials, or scheduling renovation works with the involved professions (electricians, architects, plumbers, etc.).

The accessibility of financing is the focus of three paragraphs in Article 17. The three bullet points below discuss these three paragraphs in more detail.

—

Article 17(2) requires Member States to ‘ensure that applications and procedures for public financing are simple and streamlined in order to facilitate access to financing, especially for households’. Potential recipients of financial support, and households in particular, may indeed be discouraged by complex procedures.

—

Article 17(8) requires Member States to ‘ensure that information about available funding and financial tools is made available to the public in an easily accessible and transparent manner, including by digital means’. Transparency implies information on the available budget, section or allocation procedure and processing times.

—	In addition, Article 17(13) states that ‘Member States shall ensure that […] programmes [with the aim of increasing the energy performance of buildings] are developed in a way that they are accessible to organisations with lower administrative, financial, and organisational capacities’.

2.2 below describes criteria for ensuring compliance with those provisions.

2.2.   Choice of policy measures to fulfil the requirements

2.2.1.   Enabling funding and financial tools and promotion of lending products for building renovations

The Commission Recommendation on transposing Article 30 of the EED recast (Section 2.2.2. of the annex thereto) provides several potential measures to fulfil the requirement to promote the effective development and use of enabling financial and funding tools (i.e. the requirements set out in Articles 17(7) and 17(9)). In addition, useful information on innovative products is contained in the report on the evolution of financing practices for energy efficiency in buildings (19).

Information on on-bill and on-tax financing specifically is provided in Section 2.3 of the annex to the guidance on Article 30 of the EED recast (20).

On compliance with the Eurostat guidance on the recording of energy performance contracts in government accounts, further explanations are provided in the annex to the guidance on Article 29 of the EED recast (21), Section 4.3.

Options for how Member States can promote energy efficiency lending products for building renovations and ensure a wide offering of such products (Article 17(11) EPBD) are listed in Section 2.2.2 of the annex to the guidance on Article 30 of the EED recast.

2.2.2.   Addressing split incentives

On top of the financing instruments listed in Article 17(7) (which include direct financial and fiscal incentives towards the target groups of tenants/landlords and on-bill finance), other mechanisms target the problem of split incentives. For example, Section 5.5 of the annex to the guidance on Article 22 of the EED recast (22) provides ways to remove such barriers related to split incentives, that can be of a regulatory or financial nature. Regulatory measures include: (i) minimum performance standards; (ii) a revision of rent laws and condominium laws; and (iii) individual metering or submetering, as required under Directive EU/2023/1791, which enables tenants to become more aware of their energy consumption.

The EED recast states that individual meters must be installed to measure the consumption of heating, cooling or domestic hot water for each building or building unit, subject to technical feasibility and cost-effectiveness.

Article 15(3) of the EED recast also addresses the case of multi-apartment or multi-purpose buildings supplied from district heating or cooling or relying on their own common heating or cooling systems. For such buildings, Member States must also have in place national rules to ensure transparency and accuracy of accounting for individual consumption. Detailed guidance on those transparency and accuracy rules (such as on heat allocation to individual apartments) is provided in Section 5, (‘Heat allocation rules’) of the Annex to the Commission Recommendation on metering and billing provisions (23).

Some Member States rely on indoor-temperature-based rental agreements, such as all-inclusive rents (‘warm rent’), whereby owners (i.e. landlords) and tenants agree on the indoor temperature for the heating or cooling season, and rents are set on this basis (24). This can be monitored by indoor temperature sensors and linked to individual energy meters based on weather normalisation and calibration (25), in compliance with Article 18(1) of the EED recast (26). In this way, building owners, who pay the heating costs, benefit from the reduced energy costs resulting from the renovation. Tenants in this scenario typically pay for the rebound effects which would arise if they were to (significantly) increase the indoor temperature post renovation. ‘Warm rent’ models may lead to higher energy use in situations when tenants would open the windows for ventilation purpose, in particular in less energy-efficient buildings with no automated ventilation, but the use of individual meters will limit this risk.

Section 4 of this document discusses some considerations for situations affecting vulnerable tenants specifically.

2.2.3.   Co-ownership structures

Dedicated financing instruments for co-ownership structures: The accessibility of financial instruments for co-ownership structures can ensure the renovation of building units under co-ownership is viable. Some members of the co-ownership structure may find it difficult to finance or obtain loans individually and through conventional channels. As a result, the renovation of the entire building may not be possible because the necessary capital cannot be raised. The availability of financing instruments that allow co-ownership structures to make combined applications for financial support (or – depending on their legal nature – making the co-ownership structure itself the direct recipient of support), enables the renovation of a number of dwellings under a single financial assistance programme. As the examples below show, such specific instruments for multi-unit buildings in the form of loans and loan guarantees can facilitate access to finance for renovation.

Existing practice: financing of co-ownership structures The Estonian Business and Innovation Agency (formerly KredEx) oversees the administration of renovation financing programmes dedicated to apartments. These programmes comprise a combination of grants, loans and guarantees. Examples of four of these programmes are set out in the four bullet points below. — The Reconstruction Grant 2022-2027  (27), offers a grant that covers some of the investment costs that improve energy performance in apartment buildings with three or more apartments. The apartment buildings must have been in use before 2000 and at least 80 % of the apartments must be owned by natural persons. The government of Estonia has earmarked a total of EUR 300 million from the European Union Structural Funds for this programme. — The Apartment building renovation loan  (28) is available for apartment associations that encounter difficulties in obtaining financing through conventional channels. The minimum loan amount is EUR 15 000. Loan conditions include a requirement for self-financing of at least 5 % (i.e. the apartment owners must finance at least 5 % of the renovation cost to be eligible to receive a loan for the remaining 95 %). — The Loan guarantee for apartment associations  (29) provides a guarantee of up to 80 % of the loan amount for apartment associations that require a guarantee to secure a bank loan for renovation work. However, this programme is not dedicated only to energy efficiency improvements. — The Factory reconstruction grant  (30) for apartment buildings facilitates the adoption of new technical solutions in apartment buildings, such as factory-assembled and prefabricated building elements and components that improve the energy performance of the buildings and achieve a better indoor climate.

Removing unanimity requirements in co-ownership structures: In co-ownership structures, such as apartment buildings, it is crucial to foster a consensus among owners on collective decisions, such as those pertaining to maintenance, renovations, or other significant actions affecting the property. However, requiring a unanimous vote may lead to stalemate situations where there are not enough owners willing to finance a renovation project with the result that energy renovation never happens. Removing the requirement for a unanimous vote by replacing it with a requirement for simple majority may facilitate the decision-making process and encourage the participation of building owners.

Existing practices: voting rules in co-ownership structures In Estonia, a decision on the scope and budget of renovation works can be implemented if a majority of 51 % of building owners agree (31) ,  (32). In Spain, amendments to the law on condominiums, particularly through Law 8/2013 (33), have replaced the unanimity vote requirement with a majority vote requirement. This majority vote requirement also allows the costs of decisions on the installation of energy or water efficiency equipment to be shared based on based on owners’ participation quotas (i.e. based on the usual share of the building’s common costs paid by the condominium owner) (34). This legislative change aims to streamline decision-making processes within condominiums, making it easier for communities of owners to implement environmentally beneficial upgrades without facing the previous hurdles posed by unanimity requirements. For example, Article 15 of Spain’s Law 8/2013 sets out rules for procedures needed to undertake energy renovations in a multi-residential property. This article states that energy renovation works can be carried out with the approval of at least one third of the neighbours, who must finance the works. In the Netherlands, a super-majority of 70% of residents in favour of home improvement work is sufficient to allow the work to go ahead (35). In Germany, under the ‘WEG’ reform (the 2020 reform of the Housing Ownership Act), the community of apartment owners can decide by simple majority that renovation measures must be carried out. On the distribution of costs, a graduated procedure applies: if the decision is only passed by a simple majority resolution, only those owners who voted in favour of the measure share the costs. However, if the community decides on the measure with a two thirds majority of the votes cast, everyone has to pay - in proportion to their co-ownership shares (36). Similar measures to ease the governance structure of jointly owned apartment buildings are in place in Austria, France and Lithuania.

The role of building managers: Ensuring the involvement of managers throughout the renovation is essential. Within the building co-ownership, these building managers could contact owners to explain legal requirements, building regulations, financing conditions, etc. This is particularly helpful before decisions are taken (e.g. before assemblies), but is also necessary throughout the renovation process (i.e. by keeping owners involved and informed). Building managers could also contact the one-stop shops, which could provide them with information and tools to carry out their role or engage them directly in the process if relevant.

2.2.4.   Administrative complexity, uncertainty and delays for planning energy renovations

One-stop shops offer a significant opportunity to facilitate administrative procedures and overcome the difficulties that may be associated with them. For more on one-stop shops, please refer to the annex to the guidance on Articles 21, 22 and 24 of the EED recast (37) (Section 5).

In addition, Member States are required to submit to the Commission their first national building renovation plan by 31 December 2026 and the first draft by 31 December 2025. Member States are invited to include in their plan an assessment of the administrative procedures around permitting and financial support instruments, with the goal of speeding up decision-making on building permitting and financing support. In their national building renovation plans, Member States could: (i) analyse the durations of procedures for permitting and finance, and set time limits for these procedures; and (ii) allocate more resources to the enforcement of those time limits, similar to the requirements stemming from Directive 2023/2413/EU (RED III) (38), which addresses common challenges in administrative and authorisation procedures for renewable energy projects (39).

Existing practice: permitting processes Czechia introduced substantial changes to the permitting process for construction projects. Law 283/2021 (40) restructures the responsibilities of permitting authorities by creating single contact points for different building categories. The law also introduces a primarily digital procedure that enables permit seekers and authorities to communicate through an online platform. There are limits to the duration of processing times between initial application and the time a decision is reached and these limits must be communicated to the applicant. For residential buildings, this limit is 30 days (41).

2.2.5.   Accessibility: simple and streamlined applications and procedures for receiving support

Clarity and transparency are critical parameters for accessible financing instruments. Clarity should include ensuring that instructions for applications are detailed and understandable to a non-expert audience. In addition, application templates should be provided to all applicants, and required support documents should be clearly listed. If applicable, the submission deadlines for calls and selection criteria should be disclosed to allow sufficient planning and preparation times.

To maximise clarity and transparency, the use of digital procedures should be strongly considered. The digital submission of applications offers solutions for: (i) completeness checks; and (ii) pop-up windows with explanations or requests for additional information based on the inputs made. In addition, digital tools enable the fast exchange of data between authorities and direct communication with financing applicants.

Existing practice: administrative support A good example of administrative support is Vienna’s Clean Heating for all programme. This programme is featured in the EU’s Social Climate Fund guidance on cost-effective measures and investments (42), and the programme uses a simple online portal and supports beneficiaries throughout the application process.

Support programmes should also aim to avoid short rounds of a stop-and-go approach where there are multiple requests for additional information. Avoiding these multiple exchanges is critical when the length of the application process may be the decisive factor in determining whether the energy renovation project proceeds or not.

When the demand for financial support is expected to exceed the public budget earmarked for it, calls for applications for financial support that have sufficient timespans and clear selection criteria are the preferred option, on top of adaptations of the financial support (typically by lowering the percentage of eligible costs covered by grants).

Where different authorities are involved in the allocation of financing, or when the decision on financing is connected to a decision on permits, close collaboration between all authorities can help to streamline benefits and result in faster reactions to applicants.

One-stop shops are highly relevant solutions as they combine the necessary expertise on financial and technical support. Their benefits are also highlighted in the guidance for Article 22 (43) and for Article 30 (44) of the EED recast. It is also recommended to take a combined approach on Articles 17 and 18 of the recast EPBD (i.e. to address both articles at the same time) to combine awareness raising with technical and financial support targeted at the appropriate governance level.

Existing practices: advice to households There are several initiatives in place that provide combined advice to households. For example, the pilot project OpenGela in the Basque region of Spain offers advice and support at neighbourhood level. The advice and support cover administrative, technical and financial issues for energy-related issues, but also for other relevant topics, such as accessibility for people with a disability. In addition to the one-stop shop service itself, OpenGela also developed an online tool with an energy map of all buildings in the Basque region. The tool provides an integrated framework to support the development of renovation plans complemented with estimates of financial implications at multiple levels: national, regional, neighbourhood and individual dwelling. OpenGela also supports the development of strategies to apply the measures set out in the national building renovation plans, for example, by identifying needs, including identifying the worst-performing buildings. This information can then be used to determine the areas where it would be most beneficial to set up one-stop shops. Finally, the tool can also be used as a basis or starting point for each building to determine its energy-renovation needs. In the Basque Country, the model is based on identified building typologies and information from the property register (45). A similar initiative specifically intended for multifamily apartment buildings exists in Vilnius, Lithuania, where the ‘Renovate the City’ project (Atnaujinkime miestą in Lithuanian) offers advice to both owners and tenants about renovation benefits, technical options and financing opportunities, depending on the tenant structure of the building (46).

Households may not be very familiar with financing applications and the necessary project documentation. Beyond general application procedures, access to ambitious energy renovation financing usually requires calculations of energy performance or potential improvements in GHG emissions. To account for this and allow for a wide range of households to access financing programmes, the involvement of external experts such as energy advisers should be actively considered. External experts could be allowed to prepare and submit applications.

Existing practice: submission of applications In the German support scheme for replacing fossil-fuelled boilers with heat pumps, energy advisers are allowed to submit applications on behalf of property owners (47).

Such support for the preparation of assessments, documentation and applications should be covered financially by the programme based on realistic estimations.

The consideration of accessibility and support should also be made available to small and medium-sized enterprises (SMEs) as they face similar constraints.

2.2.6.   Accessibility: easily accessible information on financing options

Easily accessible information about financing support schemes is a crucial design feature for public policy on energy renovation. This is because easily accessible information supports inclusivity and broader participation across diverse household demographics, enterprises (especially SMEs), and building owners overall. A key criterion for this accessibility is the use of language and wording that is understandable to non-expert audiences. By avoiding technical jargon and presenting information clearly, policymakers can engage a wider audience, ensuring that all households and enterprises (especially SMEs), regardless of their expertise in energy efficiency or finance, can understand and benefit from available support schemes. This inclusivity is essential in promoting widespread energy renovations, leading to greater energy efficiency and reduced carbon footprints across communities.

Integrating both digital and non-digital information streams makes it possible for public policy to effectively support and encourage comprehensive energy-renovation efforts.

—

Digital platforms, such as websites, offer significant advantages for disseminating information about financing support schemes. These platforms provide wide access and can be regularly updated, ensuring the best possible transparency on programme deadlines, funding volumes, and other critical details. Furthermore, digital services can offer targeted information based on pre-selected data related to building location, type, and energy performance, making it easier for households to find relevant support options. Such websites are in place in many EU countries already, but should be evaluated based on the user experience and clarity of the information they present.

However, to accommodate households with limited internet access or literacy, non-digital means, such as local events and brochures, should also be employed. This multi-channel approach ensures that all households, regardless of their access to digital resources, can stay informed and take advantage of available energy renovation financing. Approaching households locally can be an appropriate way to create awareness of energy renovations and support programmes.

Existing practice: physical and mobile provision of information The city of Freiburg in Germany set up an ‘Energy Caravan’ to inform building owners from different neighbourhoods about energy renovation (48). Such an approach offers great opportunities to combine financial and technical support information as part of a one-stop shop as defined in Article 18.

The local-level approach also makes it possible to reach areas with higher shares of vulnerable households with targeted information, and can be considered as creating the enabling framework for a MEPS instrument according to Article 9(4)(b) of the EPBD.

3.   USE OF FINANCING (ARTICLE 17 - PARAGRAPHS 12 AND 14 TO 16)

3.1.   Scope and objectives of the requirements

Article 17(14) of the recast EPBD states that financial assistance has to be tied to the energy savings or improvements created by the energy renovation project. It states that ‘With due regard to vulnerable households, Member States shall link their financial measures for energy performance improvements and reduced greenhouse gas emissions in the renovation of buildings to the targeted or achieved energy savings and improvements, as determined by one or more of the following criteria:

(a)

the energy performance of the equipment or material used for the renovation and the related greenhouse gas emission reduction; in which case, the equipment or material used for the renovation is to be installed by an installer with the relevant level of certification or qualification and shall comply with at least minimum energy performance requirements for building elements or higher reference values for an improved energy performance of buildings;

(b)	standard values for the calculation of energy savings and greenhouse gas emission reduction in buildings (49);

(c)	the improvement achieved due to such renovation by comparing energy performance certificates issued before and after renovation;

(d)	the results of an energy audit;

(e)	the results of another relevant, transparent and proportionate method that shows the improvement in energy performance, for example by comparing the energy consumption before and after renovation with metering systems, provided it complies with the requirements set out in Annex I.’

This requirement applies to all types of financial measure, including tax measures.

The requirement applies irrespective of whether the renovation in question constitutes a ‘major renovation’ within the meaning of Article 2(22) of the recast EPBD.

Member States must use one or more of the above-mentioned criteria (a) to (e). They must also ensure that the works have actually been carried out.

Criterion (e) is about employing alternative, suitable, transparent and proportionate methodologies to demonstrate improved energy performance. For instance, a comparison of the metered energy consumption before and after the renovation may be employed. Nevertheless, the procedure and basis for using metered energy consumption must comply with the requirements set out in Annex I. This means that the calculation methodology for metered energy consumption must be capable of capturing the influence of occupant behaviour and the local climate (the influence of the local climate (deviations from typical temperatures, etc.) should be excluded from the result).

The reference ‘with due regard to vulnerable households’ should be read in conjunction with Article 17(18), which states that ‘Financial incentives shall target, as a priority, vulnerable households, people affected by energy poverty and people living in social housing […]’. This means that Member States must ensure that their financing schemes address jointly those two priorities: (i) prioritising higher support to vulnerable households; and (ii) including criteria related to the targeted or achieved energy savings and improvements (50). One cannot be prioritised over the other. These two requirements must be complied with simultaneously to deliver on those two essential objectives, namely to ensure cost-efficient energy renovations and help vulnerable households to carry out energy renovations.

Article 17(14) should also be read together with Article 17(12), which stipulates that ‘Member States shall put in place measures and financing to promote education and training with a view to ensuring that there is a sufficient workforce with the appropriate level of skills corresponding to the needs in the building sector, especially targeting SMEs, including microenterprises, as appropriate. One-stop shops set up pursuant to Article 18 may facilitate access to such measures and financing.’

Skills are central to ensuring the quality of a renovation, so financial measures for energy performance should require that renovation measures are implemented by qualified or certified installers. This is particularly important in the case of criterion (a) above, according to which a qualified and certified installer must be involved to both: (i) install the equipment or material used for the renovation; and (ii) verify the improvements. Member States should review their national regulations on relevant professions of installers to ensure that only qualified and certified installers are involved in the renovation process.

The limited availability of workers equipped with the right skills can in turn be a barrier to the wide rollout of energy renovations. Therefore, Article 17(12) requires measures and financing to be put in place to train and qualify workers with the skills needed to improve the energy performance of buildings. The inclusion of this paragraph highlights: (i) the importance of a workforce capable of carrying out the needed work; and (ii) the responsibility of Member States to support training and education at all levels of the building value chain. Examples of the skills needed to transform the building stock through energy renovations include: (i) performing energy audits; (ii) installing energy-efficient and renewable-energy-fuelled building systems; and (iii) determining appropriate insulation solutions.

SMEs, including microenterprises, face particular difficulties in training their employees. Among other factors, these difficulties are related to their limited financial capacity and the inherent constraints of their size, which result in less flexibility to take on new work when employees are in training or out of the jobsite. When designing training or qualification schemes, Member States should pay close attention to the situation, needs and constraints of SMEs. This includes the design of the training and qualification schemes (i.e. the requirements for workers), as well as the design of support measures specifically targeting SMEs. This is particularly relevant given the very high proportion of SMEs in the building sector (over 90% of construction companies are SMEs).

Article 17(16) provides that deep renovations and staged deep renovations should benefit from greater support, including financial, fiscal, administrative and technical support. The relevance of the prioritised support for deep renovations is also highlighted in Article 9(4)(c) as part of the enabling framework for a MEPS scheme.

The terms ‘deep renovation’ and ‘staged deep renovation’ are defined in Article 2(20) and 2(21). From 2030 onwards, zero-emission buildings should be the default result of a deep renovation process. Article 11 further lays down the requirements for these buildings in terms of carbon emissions and energy demand.

Renovations to achieve zero-emission buildings may not always be feasible. In such cases, the lack of feasibility can be determined based on technical or economic conditions. The requirement to comply with the definition of ‘zero-emission building’ (laid down in Article 11) can be adapted for these difficult renovation cases, and for the specific purpose of Article 17, a 60% reduction in primary energy use can therefore be considered a deep renovation and receive priority support. Given the depth of renovation needed to achieve this 60% reduction, and the proportionally higher funding rates that this 60% reduction can be awarded, the Commission recommends that, when using public funds, the energy savings should be calculated on the basis of: (i) comparing energy-performance certificates (EPCs) issued before/after the renovation; (ii) an energy audit; or (iii) another relevant, transparent and proportionate method.

It should be noted that a major renovation may need to take place to bring a building up to nearly zero-energy building or zero-emission building standard in one single renovation, particularly if starting from a worst-performing building. In this case, the issuance of an EPC after the renovation works have been completed is already a requirement (Article 20(1)). Furthermore, Article 23(8) requires Member States to put in place inspection schemes or alternative measures to certify the quality of the delivered works.

Existing practices: relying on EPCs before and after the works In Greece, the ‘SAVING’ programme for residential property owners uses EPCs in the initial application and later for the certification of the project. These EPCs are used both to prioritise the worst-performing buildings during the application process, and to confirm that buildings have achieved significant energy savings following the works. In Romania, an EPC is required for the pre-renovation state of the building (together with the energy audit report), and a new EPC is required for the renovated building (after all the work has been completed) together with an implementation report (describing how the impact indicators have been met). The impact of the refurbishment is assessed on the basis of the difference between the initial EPC and the final EPC in: (i) the difference between final and primary energy; (ii) CO2 emissions; and (iii) renewable energy (and other key performance indicators). In Portugal, the EPC is used to evaluate the success of the incentive programme itself, at aggregate level.

For further guidance on the criteria for feasibility, please refer to the guidance on Technical Building Systems, Indoor Environmental Quality and inspections (Annex 10) – Section 5.

3.2.   Choice of policy measures to meet the requirements

3.2.1.   Linking the financial measures to the targeted or achieved energy savings and improvements

On the choice of tool(s) to be used, EPCs can play a key role in assessing the impact of a given renovation measure, while also supporting the quantification of the energy performance of the national building stock (51). EPCs are also used by credit institutions to verify energy savings and meet the requirements of financial instruments. The integration of EPCs and building renovation passports with incentive programmes would improve their effectiveness by: (i) giving clearer guidelines for public administrations on what renovation interventions should be incentivised as a priority; (ii) tying the exact amount of funds to specific and measurable energy improvements; and (iii) providing building owners with clear, reliable and actionable information, thus making renovations more accessible.

The framework for the introduction of renovation passports and the requirements to be met by a renovation passport system are set out in Article 12 and Annex VIII. Some of these provisions are mandatory, while others are not. In essence, the renovation passport provides an estimate of energy improvements after each step in the renovation process, including: (i) the improvement in energy performance; (ii) savings in primary and final energy consumption; and (iii) the reduction of operational greenhouse gas emissions.

Therefore, a Member State could decide, for example, to either require an EPC before and after renovation or to rely on a renovation passport, while ensuring that the works are carried out.

Having chosen the quality criteria to be applied, Member States should disseminate and communicate the national measures transposing Article 17(14) of the recast EPBD to all appropriate authorities/agencies (i.e. operational authorities) responsible for designing and implementing financial measures. This is important to ensure that the design and implementation of the measures are linked to one or more of the criteria.

3.2.2.   Greater support for deep renovations and sizeable programmes

To offer greater support for deep renovations, specific financing instruments or criteria can be created or made accessible in addition to the more general schemes for energy renovations which sometimes achieve only minimum energy performance improvements. On financial support, different levels of support can be determined according to the increase in energy performance as measured by an EPC, an energy audit or a renovation passport.

Existing practices: modular coverage of costs through grants In Vienna, the Wohnfonds Wien offers low-interest loans for which energy renovations in general are eligible. However, for renovations to achieve specific minimum energy performance improvements and reaching a high energy performance, increasing parts of the loan can be transformed into grants (52). In Germany, the Bundesförderung für effiziente Gebäude (Federal support for energy-efficient buildings) increases the level of grant support depending on the resulting energy performance of a building (53). In addition, it offers a range of options to increase the level of support for: (i) renovations that result in the use of renewable energy sources; (ii) the renovation of a worst-performing building; or (iii) renovations conducted through a serial renovation process. A third example is the MaPrimeRénov’ scheme in France. The regular scheme can be upgraded through the additional support scheme MaPrimeRénov’ Parcours accompagné (parcours accompagné means ‘guided procedure’  (54)). In this additional support scheme, the number of energy classes gained through the renovation (e.g. an upgrade in EPC from F to C) increases the eligible grant amount. In the German example above, the renovation of worst-performing buildings is rewarded with additional support. Moreover, the costs for technical assistance from an energy adviser throughout the renovation process are covered by the scheme. MaPrimeRénov Parcours accompagné further differentiates the support levels based on the household’s income, making it a good example of how to help vulnerable households to undertake deep renovations. This feature is further highlighted in Section 4.2 of this report and creates strong synergies with the enabling framework for a MEPS framework in residential buildings in line with Article 9(4) by targeting vulnerable households while improving worst-performing buildings with deep renovations.

On administrative support, Member States could require the relevant authorities (in most cases the local authorities) to take into consideration deep renovations, for instance by: (i) simplifying procedures for deep renovation; (ii) providing greater flexibility in the application of specific rules for deep renovation (e.g. permits for RES installations); or (iii) prioritising the processing of applications for deep renovation. Providing clear information on the timeframe for procedures and any subsequent updates in the process is particularly relevant for deep renovations, which require detailed planning of works and resources. Therefore, Member States are encouraged to revise both the procedures for these deep renovations and the information they provide to the public on these deep renovations. Additional support or assistance, especially tailored assistance, has been demonstrated to be a useful tool to facilitate deep renovation processes.

On technical support, Member States could provide specific advice tailored for deep renovations, for instance through one-stop shops. This could include not only advice on efficiency measures or the installation of renewable energy equipment on-site, but also advice on other building aspects such as: fire protection, accessibility, structural stability or seismic protection. These are all important aspects to consider when a building is deeply renovated. It should be noted that these and other aspects may already be part of existing requirements when carrying out a deep or major renovation (e.g. bringing a building up to modern fire-safety standards or updating the electric installation).

Article 17(16) also requires greater incentives for sizeable programmes to renovate several buildings or neighbourhoods. This approach can be particularly relevant for systematic approaches to connected blocks of worst-performing buildings or vulnerable households.

In this respect, the terms ‘sizeable programmes’ and ‘high number of buildings’ are not to be understood in absolute terms. It is instead important to consider: (i) the size of the programme in relation to the budget size of the public authority running the programme; (ii) the size of the programme in relation to the number and share of buildings targeted on the territory covered by such a programme; and (iii) the relative energy performance of the buildings that are to be renovated. Specific support options that combine greater and dedicated financial, fiscal, administrative and technical support or that enable the use of different support elements are well suited for sizeable programmes. A minimum energy efficiency gain (defined as a reduction in primary energy use of at least 30%) and tiered support depending on the improvement in performance should form part of these instruments.

Member States should provide greater support to deep renovations and medium renovations at scale, not only through direct financial instruments from national governments to end recipients like building owners, but also through their regulations, guidance and financial support to lower levels of government and financial intermediaries.

3.2.3.   Support for training and capacity building

The limited availability of skilled workers has been identified as a significant bottleneck to the uptake of renovations. This limited availability results in delays, increased costs and potential quality issues. In line with the national building renovation plans, Member States are encouraged to put in place measures to support the development of a skilled workforce. (55) Member States may do this by supporting both the supply and demand side of skills.

On the demand side, Member States may introduce requirements to ensure that works are carried out by trained professionals with sufficient skills or with specific requirements for qualifications. This may include changing existing requirements or creating new ones if such requirements are not already in place. To allow for the progressive introduction and adoption of requirements, Member States may make these requirements compulsory when financial support is provided through public funds (e.g. subsidies, fiscal incentives or financial instruments).

On the supply side, Member States may support the development or deployment of the training themselves. This may include, for example, subsidies or fiscal incentives to companies when they provide training for their employees. Given the significant challenges faced by SMEs (including microenterprises) Member States are strongly encouraged to develop specific measures to facilitate their access to training. This could include especially tailored schemes (56).

When developing their measures to support training and capacity building in the construction sector, Member States are encouraged to use the lessons learnt from the BUILD UP Skills initiative.

The BUILD UP Skills initiative (57) managed by the EU’s Climate, Infrastructure and Environment Executive Agency (CINEA) has supported more than a hundred projects since 2011. These projects provided a framework for the upskilling actions needed across Europe to make energy renovations possible at the scale implied by the targets for energy efficiency and energy performance of buildings. BUILD UP Skills has supported the development by key stakeholders of national skills strategies, which in 2024 had been updated in 15 Member States. In addition, the supported projects piloted innovative approaches that are now available for replication and upscaling at national level. These innovative approaches included: (i) qualification and training schemes reflecting emerging skills; (ii) awareness campaigns to increase the demand for skills; and (iii) measures to increase demand for skills and qualifications in procurement procedures. The Commission encourages Member States to take advantage of the work done throughout multiple projects (from identifying needs to implementing training) in the further development of their actions on skills. This could apply both when Member States are drafting their national building renovation plans and when Member States are developing financial schemes for training.

4.   SOCIAL FAIRNESS (ARTICLE 17 (3) AND ARTICLES 17(17) TO 17(19))

4.1.   Scope and objectives of the requirements

The definition of ‘vulnerable households’ in Article 2(28) refers to both: (i) households struggling to afford energy or at risk of not being able to afford energy in the future due to price increases; and (ii) households that cannot afford the investment necessary for a renovation. This scope of definition means that vulnerability can include both property owners and tenants. The bullet points below discuss these two categories in more detail.

—	Vulnerable homeowners often live in buildings with poor energy performance because they are unable to afford the necessary renovation works. Loans for covering the upfront investments may be unavailable or carry high additional costs, due to the financial situation of the prospective borrower.

—

Vulnerable tenants are in a different situation but can also face financial challenges before – or as a result of – energy performance renovations. In worst-performing buildings they may face high energy bills. Going beyond the concept of energy poverty and the definition of ‘vulnerable households’ in Article 2(28) strictly speaking, certain tenants may face a rent increase after an energy renovation that is more than the amount the tenant saves thanks to the reduced energy costs. This can lead to a situation where low-income households are forced out of their home as an indirect result of the energy renovation. This effect is also referred to as ‘renoviction’ in the EU Commission staff working document on energy poverty (58) on which the Commission Recommendations on energy poverty (59) are based.

Several provisions from the recast EPBD are linked to vulnerable households, including in Article 3, Article 9, Article 17 and Article 18. Member States are therefore expected first to identify the segments of their population that would fall under the scope of ‘vulnerable households’.

The Commission’s staff working document ‘EU guidance on energy poverty’  (60) discusses the situation of households in energy poverty. It sets out indicators and data sources and also explains challenges in diagnosing whether a tenant or owner is vulnerable. The information provided in that document is a highly relevant basis for determining eligible target groups for financing support and rent safeguards (61).

Member States should also lay down criteria to define the other categories of ‘vulnerable households’, not just energy-poor households.

Specific attention to vulnerable households is required as part of the enabling framework for minimum energy performance standards. As defined in Article 9(4)(a), appropriate financial measures are a key element to support the implementation of MEPS, including when MEPS are laid down for residential buildings.

The considerations and instruments described in the following section offer guidance on how to also comply with the additional requirements for a MEPS framework for residential buildings.

4.2.   Choice of policy measures to fulfil the requirements

4.2.1.   Providing greater support to building owners with lower financial capacity

As stated in Article 17(18), incentives for renovations must be available as a priority to vulnerable households and people living in social housing. To target those recipients, Member States are invited to set eligibility rules, based for example on: (i) income ceilings (no eligibility above a certain income); (ii) degressive support, linked to the household’s income (the higher the income, the lower the support); (iii) number of dependent family members (such as children); and (iv) number of properties owned and type of property (for instance no financial support for holiday homes or for owners of many properties).

Another complementary option is to reserve a minimum share of the overall funding to vulnerable households and social housing providers.

To ensure that the measures target the relevant groups, Member States should ensure that criteria for prioritisation are linked – or proportional – to the available indicators related to social fairness, vulnerable households or energy poverty. For example, criteria could be linked to the national definition of energy poverty or ‘low-income household’.

Existing practices: linking the financial support to household income Several existing instruments provide examples of linking financial support to household income. The ‘Gent Knapt Op’ (‘Gent is renovating’) programme provides grant amounts ranging from EUR 15 000 to EUR 30 000 in funding for homeowners with limited income to renovate their homes. This initiative aims to improve living conditions by addressing essential repairs, improving energy efficiency, and increasing overall comfort. By offering substantial financial support, the programme helps vulnerable households reduce energy costs and improve their quality of life (62). The ‘Klimabonus’ programme in Berlin provides tenants with supplemental rent support ranging from EUR 0.40 to EUR 0.60 per square metre per month, depending on the energy efficiency measures put in place by the landlord/owner and the standards achieved by these energy-efficiency measures. This bonus aims to mitigate the impact of rising living costs due to necessary energy-saving renovations made by the landlord/owner, ensuring that low-income households can afford their rent despite improvements that might otherwise increase their housing expenses (63). The Warmer Homes Scheme, managed by the Sustainable Energy Authority of Ireland, offers free energy-efficiency upgrades to eligible low-income households. The scheme covers improvements such as attic and wall insulation, energy-efficient lighting, and heating system upgrades, aiming to reduce energy costs and improve comfort. Eligibility criteria include: (i) owning and living in a home built before 2006; (ii) the home having a Building Energy Rating Certificate (BER) of C, D, E, F or G; and (iii) receiving certain welfare payments (64). Another example of degressive support is the French support scheme MaPrimeRénov Parcours accompagné (65), which has already been mentioned above. This scheme helps owner-occupiers to finance energy renovation works, including energy audits. The scheme offers different funding categories based on income ceilings and allows homeowners to combine incentives and local grants, enabling low-income homeowners to receive support of up to 90% of the total project cost. To benefit from the grant, homeowners must visit the government’s website, create an account, follow the application steps, and provide necessary documents (latest income tax return, valid email address, etc.).

In addition to those ‘in-built’ parameters, Member States are invited to contact vulnerable households, who may not be aware of the financial support at hand or may not feel entitled to ask for it.

4.2.2.   Addressing the risk of ‘renoviction’ and the owner-tenant dilemma

According to Article 17(17), ‘Member States shall address the eviction of vulnerable households caused by disproportionate rent increases following energy renovation of their residential building or building unit’. It is for Member States to lay down the criteria specifying the level at which the rent increase would be ‘disproportionate’ for vulnerable households.

As non-exhaustive indications, the rent increase could be disproportionate compared to:

—	the costs incurred by the building owner and compared to the estimated payback on those costs based on the higher rent, or

—	the improved energy performance.

Article 17(17) goes on to say that Member States should take those steps ‘without prejudice to their national economic and social policies and to their systems of property law’. What this means is that a Member State can decide to assess whether there are measures that would not require fundamental changes to its property laws, but that would still protect tenants. As an example, in a Member State where rents are not currently capped or rent increases not regulated, a Member State may decide either to introduce rent regulations, or direct support to tenants or both.

At the same time, financial instruments should be put in place to financially benefit both tenants and owners (Article 17(19)). Building renovation is beneficial for vulnerable households because: (i) it improves the indoor environmental quality of their dwelling; and (ii) it can lower their energy bills. However, as mentioned in Section 2.1. of this guidance, the split incentives (‘split’ because the owner/landlord pays for the upgrade, but the tenant receives the benefit of a warmer house that is cheaper to heat) can deter the building owner from undertaking the works.

The following considerations can serve as guidance to address this split-incentive barrier, including in MEPS schemes.

Options for reconciling the split between incentivising owners to renovate and safeguarding tenants from high rent increases would usually involve tenancy regulations and payments to owners or tenants.

Tenancy and rental regulations are a key policy instrument for protecting tenants from the risk of disproportionate or excessive rent increases and evictions resulting from the expenses incurred by building owners for renovations. Overall, regulations must encourage dialogue between landlords and tenants about rent increases, inconveniences, etc. Rent increases should be proportionate to the cost of renovations, meaning also that: (i) rent increases should not discourage deep renovations; (ii) there should be sufficient safeguards for tenants to mitigate rent increases and ‘renoviction’ in the form of appropriate welfare measures; and (iii) there should be legal recourse for potentially disproportionate increases.

In addition, and depending on the national or regional tenancy regulations, if the building owner can increase the rent substantially following the energy renovation, then some percentage of the subsidy they received for the energy renovation should be clawed back.

Existing practice: owner-tenant dialogue and capped rent increases In Denmark, as per the Tenancy Act and the Housing Regulation Act (66), rent increases must be mutually agreed upon and based on the documented cost of the energy improvement work. This increase should provide a reasonable return on the expenses incurred, covering depreciation, maintenance, administration, and insurance costs. For works resulting in energy savings, landlords can raise the rent based on the total reasonable expenses, but not exceeding the savings achieved for tenants. Landlords may be required to offer temporary accommodation to tenants who have the right to return to the same flat after the renovation. According to the German Civil Code (Section 559), the share of implementation costs of energy renovations allowed to be passed on via rents is capped at 8% per year and may not exceed EUR 3 per m2 per month in the six years following the implementation, subject to other conditions (67). Additionally, in Germany, the environmental-protection ordinance (Milieuschutzgesetz) was introduced to prevent as much as possible: (i) the composition of an area’s population from being completely changed as a result of expected renovation measures; and (ii) less assertive population groups (i.e. lower income groups or groups with lower levels of education) from being pushed out of an area that has recently undergone energy renovation. Several actions by building owners are subject to approval by local government and if these actions change the overall character of a dwelling (e.g. merging of apartments) they are usually not approved. Rent caps are possible by mutual agreement (68). In France, rent increases must follow the rules of the rent reference index. In areas of high rental demand, the adjustment of the annual rent cannot exceed 15% (69) of the actual cost of renovation carried out since the last renewal of the lease (including non-energy-related improvement works), including taxes (70). In the Netherlands, the energy performance of a rental property affects its maximum rent through a point system (woningwaarderingsstel  (71)). Better energy efficiency, determined by energy labels and indices, adds more points, thereby increasing potential rent. From 2021, the energy performance of a rental property influences its rent points based on its energy label (72). The points system varies for independent and shared living spaces, with better energy labels leading to higher points, thus allowing higher rents. Energy renovations that improve performance can thus lead to higher rents, but tenants must be informed of these changes. In Sweden, tenants have multiple avenues for protection and recourse, including rent reductions, temporary relocations, and legal mediation through organisations, such as the Tenants’ Union (Hyresgästföreningen) and the Rent Tribunal (Hyresnämnden), which mediates disputes between tenants and landlords about renovations.

In addition to regulation, the rent increases for vulnerable tenants can be alleviated through direct financial support payments, an example of which is given in the box below.

Existing practice: payment to cover the rent increase In Germany, the Wohngeld scheme (73) is available to low-income households and provides financial support to cover housing costs. The support rates are determined in part by energy and carbon costs, but since the latest revision in 2022 they also include a component to account for higher rents in energy renovated buildings).

Many programmes exist to alleviate the cost of energy for ordinary citizens. Member States could use similar measures to compensate for rent increases after renovation.

A robust approach to reducing the split-incentive problem is by combining different financing instruments that support both owners and tenants while also limiting negative impacts for both sides. For example, making a direct link between investment costs for energy renovations and the combined total of permitted rent increases for all tenants in a building is an important underlying element. This also makes it possible to factor in any public grants that reduce the cost of the private investments made by the owner and deduct these from the project investment costs.

Incentives for building owners to carry out energy renovation should remain in place, while not penalising vulnerable households. Combining the capping of rent increases (not the capping of the rent) and support payments to tenants can provide an effective balance between incentives and safeguards. Table 1 below describes attention points for policy development depending on whether either of the two instruments or both are already in place.

Table 1

Policy options to address split incentives depending on the existing safeguards in place for vulnerable tenants

		Tenant protection through capped rent increase in place
		Yes	No
Direct support to tenants for rent payments in place	Yes	Additional support payments could be introduced to cover the remaining difference, if any, between (measured) monetised energy cost savings for the tenant and the rent increase resulting from the renovation.	The sole reliance on support payments for vulnerable tenants in the context of increasing renovations of residential buildings, particularly worst-performing ones, may require the Member State to substantially increase these support payments in response to energy renovations. This factor has to be considered in the planning of necessary financing volumes for rent support in order to safeguard vulnerable tenants. Alternatively or in complement, a cap on rent increases may be introduced.
	No	Without additional support to vulnerable households, the role of caps on rent increases is critical. However, such caps may limit the incentives for building owners if these caps do not allow the building owner to recover enough of their incurred costs. Specific support instruments targeted at owners of rented buildings for the works they undertake could be set up to complement the cap. Alternatively or in complement, tenant support payments may be envisaged (see cell above).	Without either of the two instruments, tenants may be left exposed to large increases in rent. The introduction of an aligned policy framework should be considered. Such a framework could combine regulation for rent increases and tenant support payments to cover cost differences.

5.   ONE-STOP SHOPS (ARTICLE 18 AND ARTICLE 19 (3))

5.1.   Introduction: scope, legal context and policy context

Article 18(1) of the EPBD recast requires the Commission to provide guidelines on setting up one-stop shops (OSS) to improve the energy performance of buildings. These guidelines respond to this requirement and aim to support Member States in ensuring that technical assistance facilities (including one-stop shops) are available across their territory in compliance with Article 18 of the EPBD recast. They also clarify other aspects relevant to one-stop shops such as inviting building owners to a one-stop shop pursuant to Article 19(13) of the EPBD recast.

The present guidelines are to be read together with the following two documents.

—	The first document is Commission Recommendation (74) (EU) 2024/2481 setting out guidelines on Articles 21, 22 and 24 of the EED recast ‘Information and awareness raising’.

—	The second document is the upcoming joint guidelines responding to the requirement of Article 22(6) of the EED recast and Article 18(1) of the EPBD recast.

5.2.   Relevant definitions and concepts

The concept of ‘one-stop shop’ (OSS) is not legally defined in the EED and EPBD recast. Nevertheless, Articles 18(2) and 18(3) of the recast EPBD detail the services that technical assistance, including inclusive one-stop shops to be set up by Member States pursuant to Article 18(1), must offer. These services include: (i) providing streamlined technical and financial information; (ii) providing independent advice; (iii) providing holistic support with a particular focus on households affected by energy poverty and worst-performing buildings; and (iv) providing support covering the different stages of the retrofit project.

In addition, Commission Recommendation (EU) 2024/2481 setting out guidelines on Articles 21, 22 and 24 of the EED recast (Section 3.2.2. of the Annex) indicates that one-stop shop refers ‘to a virtual or physical place where stakeholders are supported in all questions as well as implementation stages of renovation project[s] related to energy efficiency, ranging from advice on the topic to all information and services they need to implement an ambitious global energy efficiency/renovation project’. One-stop shops typically provide technical, administrative and financial advice and assistance on energy efficiency, in particular for building renovations.

Section 5.3 below provides examples of one-stop shop services.

The concept of the one-stop shop expresses the idea of a simplification of the practical renovation journey for building owners, particularly by reducing and simplifying contacts to be made and procedures to be undertaken. The objectives pursued when setting up one-stop shops vary and may include all or some of the objectives set out in the following five bullet points.

—

The first possible objective is to disseminate information and practical advice on building renovations, with a major effort to ensure both: (i) the consistency of the messages and information provided by all the actors involved in renovations; and (ii) the credibility of the entity (or entities) disseminating these messages and this information. The objective is to make simple, practical and clearly understandable the actions to be taken to improve and renovate the buildings.

—	The second possible objective is to rationalise access to financial support (e.g. by setting up a single funding portal) by streamlining objectives and eligibility conditions, and optimising management costs.

—

The third possible objective is to clarify liabilities and secure trust, a necessary condition for more ambitious refurbishments. Clarifying liabilities and securing trust also helps to structure new markets which, while they could eventually be supplied by the private sector, are not spontaneously structured by private initiatives, or at least not at the desired pace.

—	The fourth possible objective is to pool skills by bringing together specialist skills and supporting the development of new skills.

—

The fifth possible objective is to aggregate small-scale investments and reach critical mass with some of these investments. Achieving this critical mass for investors could then justify the development of dedicated financial solutions, including financial instruments and dedicated partnerships with financial institutions (75).

5.3.   Availability of one-stop shops across national territories

Financing alone will not be enough to meet the need for renovation. Together with financial support, it is also indispensable to provide the right enabling framework and break down non-financial barriers to renovation. One of the ways this can be done is by setting up accessible and transparent advisory tools and assistance instruments such as one-stop shops that provide integrated energy renovation services.

To be effective, one-stop shops should provide technical assistance and be easily available to all those involved in building renovations, including homeowners, administrators, and providers of financing, and businesses such as SMEs and microenterprises.

This section provides some clarifications on how to effectively implement the obligation to ensure easy and smooth access to one-stop shops for every relevant stakeholder in terms of geographical coverage and format (online vs physical).

5.3.1.   Geographical coverage

Article 18(1) of the EPBD recast sets out that:

‘Member States shall ensure that technical assistance facilities are available across their territory by establishing at least one one-stop shop:

(a)	per 80 000 inhabitants;

(b)	per region;

(c)	in areas where the average age of the building stock is above the national average;

(d)	in areas where Member States intend to implement integrated district renovation programmes; or

(e)	in a location that can be reached within less than 90 minutes of average travel time, on the basis of the means of transport that is locally available.’

The key requirement in the above provision is that Member States must set up and operate by the EPBD transposition deadline (29 May 2026) one-stop shops in their territory in accordance with one or several of the five criteria of (a) to (e) set out in Article 18(1). Although the minimum requirement is to comply with one of the criteria only, Member States are responsible for ensuring the effective implementation of the obligation to ensure that technical assistance facilities are available across their territory. Therefore, they are encouraged to structure the ecosystem and the distribution of one-stop shops across the territory to tap into the potential of one-stop shops, including by going beyond Article 18(1) when appropriate. The already established networks of local energy agencies with relevant expertise could also be used to set up one-stop shops for energy renovations.

As a preliminary clarification, ‘one-stop shops’ can have different names in the Member States as long as they comply with the EPBD requirements.

When implementing the provision in Article 18(1), Member States need to ensure that its objective is achieved, namely that technical assistance facilities are available across their territory. To ensure the effective implementation of this requirement, Member States could follow a step-by-step approach combining the above criteria, for example:

—	Step 1: Set up at least one one-stop shop offering the services listed in Article 18(2) and 18(3) per region (76) (criterion b).

—

Step 2: Set up additional one-stop shops in regions where the one-stop shop established as per step 1 cannot be reached within less than 90 minutes of average travel time from every part of these regions (criterion e). This step should ensure effective availability and accessibility across the territory.

—

Step 3: In areas/regions with high population density such as metropolitan areas: assess the need to ensure the availability of at least one one-stop shop for every 80 000 inhabitants (criterion a). This step should ensure accessibility of the one-stop shops in a reasonable time for the greatest number of users.

—	Step 4 (if relevant): set up additional one-stop shops in areas (77) where the government or local municipality intends to implement an integrated district renovation programme (criterion d) or where the average age of the building stock is above the national average (criterion c).

The criterion of accessibility in a reasonable time (within 90 minutes of average travel time) indicates that a minimum level of on-site presence with physical offices needs to be ensured, where reasonably possible (78). The set up of a ‘network of physical one-stop shops at local level where independent experts are available to follow up’ was also recommended by the citizens’ panel on energy efficiency (79).

To comply with criterion (d), Member States will need to ensure that they have comprehensive and up-to-date knowledge of initiatives for integrated district renovation programmes. Integrated district renovation programmes address the renovation of buildings that are spatially related such as housing blocks. By targeting a high number of buildings, they may help to increase the cost-effectiveness of the renovations and offer a variety of solutions at a larger scale. They may also address complementary issues related to urban planning such as: energy supply, mobility, green infrastructure, waste, and water treatment. In addition, they may consider local and regional resources, circularity and sufficiency.

In addition, as per Article 18(1) EPBD recast, ‘Member States may designate the one-stop shops established pursuant to Article 22(3), point (a), of Directive (EU) 2023/1791 as one-stop shops for the purposes of this Article’. In other words, Member States may rely on the one-stop shops set up to comply with the EED requirement to transpose the EPBD requirement. It is important to note that Member States that decide to do this must comply with the obligation to ensure availability across the territory as per Article 18(1) EPBD recast and ensure that those one-stop shops offer the services described in Articles 18(2) and 18(3).

5.3.2.   Combining online and physical approaches

As mentioned in the previous section, the provision on availability across the territory in Article 18(1) has to be understood as ensuring an on-site presence with physical offices.

This is because a fully online approach is insufficient for the type of renovation work that is called for (i.e. integrated renovations contributing to the EU’s climate, competitiveness and energy-security objectives). Firstly, this is because citizens have different levels of digital literacy, and even the best online tool will inevitably miss a significant proportion of the population, often the oldest and most vulnerable. But more fundamentally it is because it is less likely that a household would undertake major works in their living space at a significant cost without having multiple in-person interactions with the person(s) specifying the work, i.e. providing detailed instructions or guidance on what needs to be carried out during the project.

In this context, it is relevant to recall what emerged during the citizens’ panel on energy efficiency, which the European Commission organised between February and April 2024. The panel consisted of 150 randomly selected citizens from all EU Member States. They adopted 13 final recommendations. Recommendation 1 highlights the importance of the accessibility of one-stop shops across the entire territory of the Member State. In this context, participants highlighted the importance of ensuring that all citizens have access to these establishments (including citizens from smaller towns, rural areas, or remote areas or citizens with reduced mobility). The recommendation from the panel highlights the importance of the local level which is closest to the citizens. The panel recommended that Member States set up ‘a network of physical one-stop shops at municipal level (city halls, libraries) where independent experts are available to follow up. The network should not discriminate between rural/urban areas, and social groups. The one-stop-shop should provide advice on legislative, financial, technical aspects, and local service providers. Local actors are called upon to spread awareness of the service’  (80) .

Not all one-stop shops in the relevant territory need to provide all the services described in Article 18(2) and Article 18(3) of the EPBD recast, but all those services have to be provided according to the criterion or criteria chosen by the Member State. The services may also be provided in a complementary way by various one-stop shops and/or other technical assistance facilities.

Member States are invited to refer to the guidelines on Article 22(6) of the EED recast, which provide inspiring cases, examples and models of different types of one-stop shop.

Furthermore, in order to ensure the greatest outreach at a moderate cost, Member States could also set up additional online one-stop shops. Online one-stop shops can be helpful in raising the awareness of building owners as to how they consume energy, the importance of controlling their energy consumption, and the means of controlling their energy consumption. The impact of the advice provided can be increased if it is well combined with information on available financial support. Online tools can be used to identify and pre-select owners who could benefit the most from such targeted services. For a moderate cost, online approaches are likely to reach a large audience, and may not only trigger immediate actions but also inspire more people to engage in renovation.

Finally, recommendation 1 from the citizens’ panel on energy efficiency also highlighted the importance of the accessibility of information provided to consumers to empower households and organisations to become more energy efficient. The panel recommended the creation of ‘an online portal with a self-audit function to help consumers assess their needs regarding transport, home improvements, and low-costs tips. It would provide them with a solutions package, including next steps and contact information’  (81). This recommendation confirms the importance of an online tool serving as a first step in the process. Nevertheless, it is essential to complement an online offer with a physical presence, at least in dedicated regional/local offices, but also on the site of the property to be renovated as is already the case in many regions and municipalities.

5.4.   Invitation to a one-stop shop

Setting up a network of one-stop shops is necessary but not sufficient to ensure they are used and that they contribute to the renovation efforts needed to improve the energy performance of buildings. Therefore, this section examines the factors and means that can encourage people to contact one-stop shops – either off their own initiative or due to mandatory requirements.

While information and marketing may be enough to trigger the simplest renovation actions, they are not sufficient to trigger deep energy renovations, which are more complex and expensive and which are typically undertaken at specific moments in time.

For example, it is particularly important to approach households when they are in the process of buying their home, as they may be inclined to carry out significant renovation works before moving in. Households may also be encouraged to carry out work when their family expands or, conversely, when children leave home. Using energy more efficiently and reducing energy bills is not necessarily a central trigger in any of these situations, but these can be complementary goals in a process initiated by other concerns. A typical example of an energy ‘trigger’ is when a boiler or another piece of energy equipment is faulty or breaks down. However, if a boiler breaks down, the household is more likely to be focused on the urgency of fixing the boiler, and less likely to be considering a comprehensive energy renovation.

Another triggering event can be an obligation to renovate stemming from the implementation of MEPS as laid down for non-residential buildings in Articles 9(1) and possibly 9(2) of the recast EPBD, depending on a Member State’s measures. When identifying building owners that need to comply with any national MEPS, the relevant authorities may ensure that they are invited to a one-stop shop to receive renovation advice.

Finally, pursuant to Article 19(13) of the recast EPBD, owners of buildings with an EPC below level C must be invited to a one-stop shop to receive renovation advice on whichever of the following two dates is earlier:

—	immediately after the energy performance certificate of the building expires; or

—	five years after the issuance of the energy performance certificate.

To ensure this provision is effectively implemented, Member States and relevant authorities are invited to plan well in advance: (i) the additional demand for technical assistance services that this provision will create for one-stop shops; and (ii) the related budget.

They could do so by:

(1)	estimating and identifying the number of buildings that fall under this category and/or are concerned by MEPS using the national EPC database or other relevant source (e.g. landlord registry, application form of financing scheme);

(2)

planning accordingly the one-stop shop resources to cope with the invitations, in part to ensure that this provision leads to meaningful results (e.g. that a minimum percentage of invited owners end up embarking on the energy renovation and related renovations works) and no frustration from the building owner if faced with too much delay for meeting with an expert.

In addition, Member States should:

(1)	determine the best ways to identify the concerned owners, such as through registries of landlords, local homeowner associations, business registers and others;

(2)	ensure that all concerned owners receive the invitation, for which Member States can rely on a combination of letters, emails, phone calls and informative workshops.

Appendix I

Other relevant Commission documents for transposing Article 17 of Directive EU/2024/1275

Guidance and existing practices provided in other EU Commission documents
Paragraph of Article 17	Specific provision	Annex of Commission Recommendation C/2023/1553 of 12 December 2023 on transposing Article 30 on national energy efficiency funds, financing and technical support of the Directive (EU) 2023/1791 on energy efficiency (‘EED recast’) (82)	Commission Recommendation 2023/2407 of 20 October 2023 on energy poverty (including SWD(2023) 647 final) (83)	Unlocking private investment in energy efficiency – guidance to Member States and market actors, as per Article 30(10) EED [upcoming]	Support for the implementation of the Social Climate Fund. Note on good practices for cost-effective measures and investments (June 2024) (84)	Report on the evolution of financing practices for energy efficiency in buildings, SMEs and in industry, Energy Efficiency Financial Institutions Group (EEFIG, 2022) (85)	Other documents and reports
1	Appropriate financing, support measures and other instruments to address market barriers						Description of barriers to energy renovations in Section 2.2 or the impact assessment accompanying the proposal for the EPBD recast (SWD)(2021 453 final) Link: https://op.europa.eu/en/publication-detail/-/publication/daf643a4-5da2-11ec-9c6c-01aa75ed71a1/language-en
1	Deliver the necessary investments identified in their national building renovation plan to transform their building stock into zero-emission buildings by 2050						See template for the national building renovation plans for the necessary investments.
2	Member States shall ensure that applications and procedures for public financing are simple and streamlined in order to facilitate access to financing, especially for households		Importance of trust, engagement and communication for households at risk of energy poverty described in Chapter VIII (SWD)		Examples on support and use of intermediaries for access to financing instruments from vulnerable households (Section 3.5.4)		Guidance on Article 24 EED, and guidelines on setting up one-stop shops as per Article 22(6) of the EED and Article 18(1) of Directive EU/2024/1275 (to be published)
3	Address barriers related to upfront costs of renovations					Mentions barriers (financial and non-financial) together with drivers for renovations in Section 2.4. Instruments described in Section 2.3
4	Consider whether to use revenue-based parameters
4	Member States may use the national energy efficiency funds, where such funds are set up pursuant to Article 30 of Directive (EU) 2023/1791, to finance dedicated schemes and programmes for energy performance renovations	Covered in detail in Section 3
5	Member States shall take appropriate regulatory measures to remove non-economic barriers to building renovation.					Lists barriers (financial and non-financial) together with drivers for renovations in Section 2.4	Summary of the full range of barriers in Section 2.2 or the impact assessment accompanying the proposal for the EPBD recast (SWD(2021 453 final) Link: https://op.europa.eu/en/publication-detail/-/publication/daf643a4-5da2-11ec-9c6c-01aa75ed71a1/language-en More detailed description of non-economic barriers mainly, such as hassle factor, perceived risks, etc. in European Environment Agency (EEA) report ‘Accelerating the energy efficiency renovation of residential buildings’. Link: https://www.eea.europa.eu/publications/accelerating-the-energy-efficiency
5	With regard to buildings with more than one building unit, such measures may include removing unanimity requirements in co-ownership structures, or allowing co-ownership structures to be direct recipients of financial support		Split incentives discussed in Chapter VII Part 2.c.i. (SWD)			Some relevant instruments and lessons learnt mentioned in Section 2.3.3 (page 67)	European Commission Joint Research Centre (2017): Overcoming the split-incentive barrier in the building sector. Unlocking the energy efficiency potential in the rental & multifamily sectors, Link: https://op.europa.eu/en/publication-detail/-/publication/ae5716d7-fb39-11e7-b8f5-01aa75ed71a1/language-en
6	Make best cost-effective use of national financing and financing available established at Union level and of other public funding sources		EU financing options to combat energy poverty are described with several examples in Chapter X (SWD)		Recommendations on cost-effective support for energy renovations and protection of vulnerable households in Section 3.1.5, examples in Section 3.1.1-3.1.4		For EU-level financing, specific reports on the Cohesion Fund, the European Regional Development Fund (ERDF), InvestEU, etc. e.g: link: https://managenergy.ec.europa.eu/publications/2021-2027-cohesion-policy-support-energy-efficiency-and-building-renovation_en.
6	Those funding sources shall be deployed consistently with a path to achieving a zero-emission building stock by 2050						See template for the national building renovation plans for the necessary investments.
7	Member States shall promote the effective development and use of enabling funding and financial tools, such as energy efficiency loans and mortgages for building renovation, energy performance contracting, pay-as-you-save financial schemes, fiscal incentives, for example reduced tax rates on renovation works and materials, on-tax schemes, on-bill schemes, guarantee funds, funds targeting deep renovations, funds targeting renovations with a significant minimum threshold of targeted energy savings and mortgage portfolio standards.	Guidance for potential measures to promote enabling financing tools in Section 2.2.2; descriptions of on-bill financing and on-tax schemes covered in Section 2.3	Relevance of energy performance contracting for vulnerable housing outlined in Chapter VII Part 2.c.ii. (SWD) Examples of different financing and policy instruments, including innovative ones are collected in Chapter X (SWD)	In the scope of the guidance		Summary of financing instruments in Section 2.3.1 with additional examples in Annex D. Specified recommendations for commercial buildings (Section 2.3.2) and residential ones (Section 2.3.3).	European Commission Joint Research Center (JRC) report (2019): ‘Accelerating energy renovation investments in buildings’. It covers a range of finance schemes Link: https://publications.jrc.ec.europa.eu/repository/handle/JRC117816. More information and analysis on Energy Performance Contracting and its implementation on building renovation can be found in this report: Moles-Grueso, S., Bertoldi, P. and Boza-Kiss, B., Energy Performance Contracting in the EU – 2020-2021 Link: https://publications.jrc.ec.europa.eu/repository/handle/JRC133984
7	They shall guide investments into an energy-efficient public building stock, in line with Eurostat guidance on the recording of energy performance contracts in government accounts.						Section 4.3.2. of the annex to the Commission guidance on Article 29 EED provides clarifications on how the rules of the European System of National and Regional Accounts should apply to energy performance contracts Link: https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=OJ:L_202402476
7	Member States may also promote and simplify the use of public-private partnerships	Mentioned in Section 2.4.1				European Energy Efficiency Fund is mentioned as a public-private partnership for public buildings (Section 2.3.4)
8	Member States shall ensure that information about available funding and financial tools is made available to the public in an easily accessible and transparent manner, including by digital means	Described in relation to general energy efficiency finance in Sections 2.2.1 and 2.2.2	Importance of trust, engagement and communication for households at risk of energy poverty described in Chapter VIII (SWD)		Covered with some example of good practice in Section 3.4 and Section 4.1
9	The enabling funding and financial tools may include renovation loans or guarantee funds for energy performance renovations	Loan guarantees described in Section 2.5.2				Part of the list of financing instruments in Section 2.3.1 and Annex D
9	including in combination with relevant Union programmes, where applicable	Use of InvestEU and cohesion policy framework described in Section 2.5.2
10	By 29 May 2025, the Commission shall adopt a delegated act in accordance with Article 32 supplementing this Directive by establishing a comprehensive portfolio framework for voluntary use by financial institutions that supports lenders in targeting and increasing lending volumes provided in accordance with the Union’s decarbonisation ambition and relevant energy targets, in order to effectively encourage financial institutions to increase lending volumes provided for energy performance renovations. The actions set out in the comprehensive portfolio framework shall cover increasing lending volumes for energy renovations and shall include suggested safeguards to protect vulnerable households through blended funding solutions. The framework shall describe best practices to encourage lenders to identify and act upon the worst-performing buildings within their portfolios.
11	Member States shall facilitate the aggregation of projects to enable investor access as well as packaged solutions for potential clients	Covered in Sections 2.4.1 and 2.4.2		In the scope of the guidance		Part of the instruments described in Sections 2.3.1 and 2.5
11	Member States shall adopt measures that promote energy efficiency lending products for building renovations, such as green mortgages and green loans, secured and unsecured, and ensure that they are offered widely and in a non-discriminatory manner by financial institutions and, are visible and accessible to consumers	Almost identical wording in Section 2.2, particularly information on the scope of innovative enabling financing tools and non-discrimination in Section 2.2.2				Part of the list of financing instruments in Section 2.3.1 and Annex D
11	Member States shall ensure that banks and other financial institutions and investors receive information on opportunities to participate in the financing of the improvement of the energy performance of buildings	Covered in Section 2.4.2		In the scope of the guidance
12	Member States shall put in place measures and financing to promote education and training with a view to ensuring that there is a sufficient workforce with the appropriate level of skills corresponding to the needs in the building sector, especially targeting SMEs, including microenterprises, as appropriate.		Examples for the promotion of green skills in construction and building sectors are described in Chapter IX (SWD)
12	One-stop shops established pursuant to Article 18 may facilitate access to such measures and financing	One-stop-shops covered in Section 2.1.2, but not specific to training				Mentioned as an important driver of investment and renovation in Section 2.3.3	Guidance on Article 24 EED, and guidelines on setting up one-stop shops as per Article 22(6) of the EED, and Article 18(1) of Directive EU/2024/1275 (to be published)
13	The Commission shall, where appropriate and upon request, assist Member States in setting up national or regional financial support programmes with the aim of increasing the energy performance of buildings, especially of existing buildings, including by supporting the exchange of best practice between the responsible national or regional authorities or bodies.
13	Member States shall ensure that such programmes are developed in a way that they are accessible to organisations with lower administrative, financial, and organisational capacities.
14	With due regard to vulnerable households, Member States shall link their financial measures for energy performance improvements and reduced greenhouse gas emissions in the renovation of buildings to the targeted or achieved energy savings and improvements, as determined by one or more of the following criteria: (a) the energy performance of the equipment or material used for the renovation and the related greenhouse gas emission reduction; in which case, the equipment or material used for the renovation is to be installed by an installer with the relevant level of certification or qualification and shall comply with at least minimum energy performance requirements for building elements or higher reference values for an improved energy performance of buildings; (b) standard values for the calculation of energy savings and greenhouse gas emission reduction in buildings; (c) the improvement achieved due to such renovation by comparing energy performance certificates issued before and after renovation; (d) the results of an energy audit; (e) the results of another relevant, transparent and proportionate method that shows the improvement in energy performance, for example by comparing the energy consumption before and after renovation with metering systems, provided it complies with the requirements set out in Annex I.
16	Member States shall incentivise deep renovation and staged deep renovation with higher financial, fiscal, administrative and technical support.
16	Where it is not technically or economically feasible to transform a building into a zero-emission building, a renovation resulting in at least a 60% reduction of primary energy use shall be considered to be a deep renovation for the purposes of this paragraph.
16	Member States shall incentivise sizeable programmes that address a high number of buildings, in particular the worst-performing buildings, such as through integrated district renovation programmes, and that result in an overall reduction of at least 30% of primary energy use, with higher financial, fiscal, administrative and technical support, according to the level of performance achieved.
17	Without prejudice to their national economic and social policies and to their systems of property law, Member States shall address the eviction of vulnerable households caused by disproportionate rent increases following energy renovation of their residential building or building unit		Definition of energy poverty in Chapter IV, with indicators, data sources and further explanations (SWD) General elements for tackling energy poverty, including social tariffs and rebates described in Chapter VI (SWD) Examples of practices to avoid renovictions in Chapter VII Part 2.c.ii. (SWD) Further examples of financing and policy instruments in Chapter X (SWD)		Eviction not described in dedicated section, but several practice examples include measures relevant for this provision (e.g. Sections 3.2.3, 3.3.5)
18	Financial incentives shall target, as a priority, vulnerable households, people affected by energy poverty and people living in social housing, in accordance with Article 24 of Directive (EU) 2023/1791		Good practices in Chapter VII Part 2.c (SWD) Further examples of financing and policy instruments in Chapter X (SWD)		Recommendations and best practices collected across the document (e.g. Sections 2.1, 3.1.5, 3.4.2, 3.4.3, 3.5.4)
19	When providing financial incentives to owners of buildings or building units for the renovation of rented buildings or building units, Member States shall aim at financial incentives benefiting both the owners and the tenants		Description of options to reduce split-incentive challenges in Chapter VII Part 2.c.i., including examples of on-bill financing and energy performance contracting (SWD) Further examples of financing and policy instruments in Chapter X (SWD)				Section 5.5 of the guidance on Article 22 of Directive EU/2023/1791 provides options on how to remove such barriers related to split incentives European Commission Joint Research Centre (2017): Overcoming the split-incentive barrier in the building sector. Unlocking the energy efficiency potential in the rental & multifamily sectors, Link: https://op.europa.eu/en/publication-detail/-/publication/ae5716d7-fb39-11e7-b8f5-01aa75ed71a1/language-en
19	Member States shall introduce effective safeguards, to protect in particular vulnerable households, including by providing rent support or by imposing caps on rent increases, and may incentivise financial schemes that tackle the upfront costs of renovations, such as on-bill schemes, pay-as-you-save schemes or energy performance contracting, as referred to in Article 2, point (33), and Article 29 of Directive (EU) 2023/1791.		Examples of on-bill financing and energy performance contracting described in Chapter VII Part 2.c.i., Examples of regulatory safeguards in tenancy regulations mentioned in Chapter VII Part 2.c.ii. (SWD) Details and examples on affordability for energy poverty households in Chapter VI (SWD) Further examples of financing and policy instruments in Chapter X (SWD)

TABLE OF CONTENTS

1.

Introduction

100

2.

Energy performance certificate classes

100

2.1.

Setting energy performance classes, timeline and visual identity

100

2.2.

Definition of class A

101

2.3.

Definition of class G

102

2.4.

Distribution of classes B-F

102

2.5.

Class A+

103

3.

provisions on quality, reliability and affordability of EPCs

106

3.1.

Affordability

106

3.2.

On-site checks complemented by virtual means and visual checks

106

3.3.

Accessibility, legibility and machine-readable format

107

4.

Recommendations

108

4.1.

General aspects

109

4.2.

Operational greenhouse gas emissions

110

4.3.

Indoor environmental quality

110

4.4.

More efficient temperature settings

111

4.4.1.

Terminology for hydronic heating systems and key parameters

111

4.4.2.

Defining ‘low-temperature heating’

112

4.4.3.

Assessment steps proposed

112

4.5.

Remaining lifespan of heating or air-conditioning systems

113

5.

Validity of EPCs and simplified certification procedures

114

5.1.

Validity of EPCs

114

5.2.

Simplified update procedures

116

5.3.

Renovation advice to building owners

117

5.4.

Communication of revised EPC schemes

117

6.

Issuing and Displaying EPCs

118

6.1.

Trigger points

118

6.2.

Display of EPCs

119

7.

Annex V - Template for energy performance certificates

119

7.1.

Mandatory elements

119

7.2.

Voluntary elements

121

8.

Implementation of obligations under Annex VI

124

8.1.

Definition of a valid EPC

124

8.1.1.

Validity of the calculations

124

8.1.2.

Minimum number of elements differing from default or standard values

124

8.1.3.

Validity checks on input data

125

8.1.4.

Maximum deviation from the energy performance of a building

126

8.1.5.

Additional elements

127

8.1.6.

Validity and rating of an EPC following an assessment by the independent control system

128

8.2.

Analysis of the quality of the independent control system for EPC schemes

129

8.2.1.

Definition of quality objectives in Member States

129

8.2.2.

Evaluation of the quality level through sampling

129

8.2.3.

On-site visits for verifying input data

131

8.2.4.

Delegation of EPC schemes and independent control systems

132

8.3.

Quality management of EPC schemes

132

8.3.1.

Qualification and certification

132

8.3.2.

Training

132

8.3.3.

Embedded control and advice in calculation tools or EPB databases

133

8.3.4.

Ongoing quality control and verification

133

8.3.5.

Enforcement / penalties

134

8.3.6.

Total quality management

134

8.4.

Independent control systems and EPB databases

135

8.5.

Availability of EPCs

135

8.6.

Public disclosure of information on quality levels

136

8.6.1.

Differences between the calculated/estimated and measured energy performance

136

1.   INTRODUCTION

This guidance document provides clarifications and practical recommendations on how to implement and make operational most of the requirements regarding energy performance certificates (EPCs) which have been substantially updated or added in the recast Energy Performance of Buildings Directive (EPBD), Articles 19-21 and Annexes V and VI.

2.   ENERGY PERFORMANCE CERTIFICATE CLASSES

2.1.   Setting energy performance classes, timeline and visual identity

Article 19 of the recast EPBD, with Annex V, sets the framework for classifying buildings. At opposite ends of the scale, class A is for zero-emission buildings, and class G corresponds to the very worst-performing buildings in the national building stock at the time when the scale was introduced. Member States that on 29 May 2026 already designate zero-emission buildings as A0 may continue to use that designation instead of class A. For the remaining classes from B to F, or A to F for Member States using A0, Member States have to ensure an appropriate distribution of energy performance thresholds among the energy performance classes.

The introduction of classes A to G, with definitions for classes ‘A’ and ‘G’, is a step towards a clearer and simpler way to classify buildings in each country and across the EU. It is also crucial for removing barriers in the EU-wide housing market and it will facilitate the work of cross-border players such as banks, insurance companies, financial operators, construction companies and real-estate companies. However, a direct comparison of buildings across countries based only on their classes could be misleading and imprecise given the possible differences between national methodologies for calculating energy performance.

The energy performance of the building must be expressed in the EPC as a number indicating primary energy use in kWh/(m2.y), while the energy performance class must expressed as a letter from a closed scale from A to G. The energy performance of the building must be determined in accordance with Annex I, to be consistent with the use of energy performance as the key metric and indicator in other provisions in the EPBD. The reference to closed scales means that each class should be defined by an upper and lower value and be clearly distinguished from the adjacent classes.

Of particular relevance in this context is the provision in Annex I (point 1, fourth subparagraph) which clarifies that the energy performance of a building must be expressed by a numeric indicator of primary energy use per unit of reference floor area per year, in kWh/(m2.y) for the purposes of both energy performance certification and compliance with minimum energy performance requirements.

The national classification scheme should therefore establish that the attribution of classes must be based on energy performance, which should be calculated in accordance with Annex I.

Member States may continue to use a methodology based on reference buildings to classify buildings, provided they comply with the requirements for establishing and attributing classes A-G based on energy performance.

Alongside EPC classes based on energy performance, Member States may add further indicators to the EPC. Member States may for instance consider establishing additional greenhouse gas (GHG) emission classes (optional indicator in Annex V.2b) to show how far the building is from being climate-neutral. However, such a voluntary additional classification can only work as a secondary rating, for instance to raise awareness about specific aspects and issues. It cannot be a substitute for the obligatory classes based on energy performance.

Article 19(1) further indicates some of the mandatory elements to include in the EPCs, which are complemented by the provisions in Annex V regarding mandatory and voluntary elements for EPCs (see Section 7).

Article 19(3) requires Member States to ensure that EPCs have a common visual identity throughout their territory. This is already common practice now and ensures that, even though EPCs are issued by several different operators, they are based on the same calculation and assessing methods and they have a uniform look across the country. Member States have some discretion to adapt the visual identity to address differences across regions and should also take into account regional or linguistic differences within their territories, making the information accessible to the public.

As regards the timeline for transposing and implementing such requirements, as for most other provisions in the EPBD, Member States have until 29 May 2026 (transposition deadline) to make sure that their national classification scheme is in line with the new provisions. If necessary, they must redefine the national energy performance classes for buildings by then, and adapt the methodology used to attribute them. An exception applies to Member States that already rescaled their energy efficiency classes between 1 January 2019 and 28 May 2024. The date of rescaling is taken as the date of official publication of the legal act or equivalent document that defines the energy classes. These Member States may postpone the introduction of the new classification scheme required by Article 19(2) until 31 December 2029 at the latest. This exception ensures that national classification systems are not changed too often, to have stability in the classification system for operators in the market and building owners. For Member States where EPCs are defined and managed at regional level, it is understood that the obligation applies at regional level.

While not specifically mentioned in Article 19, Member States may attribute different energy performance levels and classes to different building categories and types of both residential and non-residential buildings. This is a common and good practice already now, and it is justified by the differences in energy use patterns and building types. Member States may also differentiate energy performance levels based on climatic zones in the country. The differentiation of classes between building categories will also have the advantage of facilitating monitoring and compliance with specific provisions on individual buildings, such as minimum energy performance standards based on Article 9.

This approach is also consistent to the energy demand level which constitutes one of the criteria for zero-emission buildings (class A). Under Article 11(2), a maximum threshold must be set for the energy demand of a zero-emission building. Under Article 11(6), this energy demand threshold may be set by building type and with reference to climate zones within a country. Maximum thresholds could also be different for new and existing buildings being renovated.

2.2.   Definition of class A

Under Article 19(2), from 29 May 2026, EPCs must specify the energy performance class of a building based on a closed scale using the letters from A to G.

The article stipulates that the letter A is for ‘zero-emission buildings’. A clear equivalence is therefore established in the legal framework between the definition of ZEBs and the attribution of class A. The definition of a ZEB includes criteria that go beyond energy performance. Notably, it requires the absence of on-site carbon emission production from fossil fuels and zero or a very low amount of operational greenhouse gas emissions; energy demand must be below a given threshold and total primary energy use on an annual basis must be covered by a closed list of energy sources. These criteria are set out in Article 2 and are further specified in Article 11 of the EPBD, while the guidance in Annex 7 on zero-emission buildings provides detailed clarifications on these provisions.

This means that even buildings whose energy consumption is within the range set at national level for class A in kWh/(m2.y) would also need to meet the other ZEB requirements in order to be labelled as class A.

As a consequence, if a building has an energy performance level that meets the threshold set at national level for class A but does not meet the other ZEB requirements, for instance because the building is heated by a gas or oil boiler and hence has on-site carbon emissions, it should be attributed a lower-class B.

In the assessment, therefore, the EPC-certifier must consider the other mandatory criteria for ZEBs, such as the absence of emissions from technologies that use fossil fuels for heating and cooling.

For the purpose of establishing EPC class A, Member States need to use the maximum energy demand threshold for ZEBs in place when the new EPC scale is introduced. The maximum threshold should be used to set the maximum value of energy performance for class A (the minimum being equal to zero). While the maximum threshold must be revised every time the cost-optimal levels are revised (every five years), there is no obligation to update the EPC class A and rescale it every time the cost-optimal levels are revised.

Under Article 19(2), Member States that already designate zero-emission buildings as defined in Article 2 and Article 11 as class ‘A0’ before 29 May 2026, may continue to use this instead of class ‘A’. The remaining classes would then be ‘A’ – ‘G’.

2.3.   Definition of class G

Under Article 19(2), letter G represents the lowest step of the scale and corresponds to the very worst-performing buildings in the national building stock when the scale is introduced. The definition of class G should not set a highest maximum energy use; only the threshold corresponding to the ‘border’ with class F should be defined. The worst-performing buildings are those with the poorest energy performance and therefore with the highest value for primary and final energy use (kWh/m2.y) in the national building stock. Member States have to provide a definition of worst-performing buildings in their national building renovation plans.

The stipulation that only the very worst-performing buildings should be rated as G class means that Member States should make sure class G is not populated by an overly large share of the building stock. A very large share of the overall building stock categorised as class G might jeopardise proper monitoring of the building stock and would make it difficult to track and document improvements to its energy performance. Moreover, it would make it more difficult to put in place measures specifically targeting the buildings segment(s) with the lowest energy performance. In addition, if too many buildings are categorised as very worst-performing, there will be less differentiation within the other classes.

As a benchmark for defining energy performance under class G, Member States are encouraged to consider the threshold used in the EPBD for the purpose of establishing minimum energy performance standards for non-residential buildings established under Article 9. This threshold matches the maximum level of energy performance of the lowest 16 % of the building stock (by number of buildings or floor area). Accordingly, a benchmark inside the range of 14-18 % of the building stock (residential or non-residential) would be considered ideal. Alternatively, Member States could also link class G to both their 2030 and 2033 targets for non-residential buildings. This would result in a class G for residential buildings representing 26 % of the building stock. While this gives a comparatively large G class for a relatively short period of time, it also provides longer term stability for the EPC classification. The total number of buildings in G class should not exceed 26 % to avoid overcrowding class G.

2.4.   Distribution of classes B-F

While energy performance classes A (plus A0 and A+) and G are defined by specific criteria, under Article 19(2) the remaining classes B to F (or when ‘A0’ is used, A to F) have to be distributed appropriately. ‘Appropriate’ in this case is understood as meaning not resulting in artificially small or large classes. This may be achieved by a more or less ‘even bandwidth’ – a similar-sized range of energy performance indicators for each class – allowing proportionate steps from the upper limit of class G until the energy performance level representing the lower bound of class A.

Figure 1

Example of even bandwidth energy performance classes in primary energy use in kWh/(m2.y)

This approach has the advantage of simplicity as even ranges between the scales are easy to understand. Each class represents a clear and equal step in the scale. Another advantage is its consistency, as with an even bandwidth the difference between adjacent scales (e.g. B to C or D to E) remains constant.

Such a classification system will be able to show the improvement in energy performance over time by changes in the population of the classes in a clear way. However, it will result in different populations of buildings in each class. If some classes are disproportionately populated, the bandwidth may be adapted to avoid empty classes across the scale. At the same time, it is expected that some classes will be emptier than others. For example, class A and B will be less populated than class D or E. Member States therefore have to decide on how an appropriate distribution of scales can be best applied to their national building stock, taking account of the current energy performance.

Figure 2 shows an example using an appropriate bandwidth with not evenly distributed scales. It also shows a case with an A0 class in the scale.

For residential buildings, Member States may consider the potential synergies of distributing the scales in such a way that, together, EPC classes E, F, and G cover the worst-performing 43 % of buildings, a figure significant for the purposes of Article 9(2). This would mean that the lower boundary of the primary energy performance indicator for the letter ‘E’ would have to be the same as the threshold for the worst-performing buildings. According to Article 9(2), ‘Member States shall ensure that at least 55 % of the decrease in the average primary energy use referred to in the third subparagraph is achieved through the renovation of the 43 % worst-performing residential buildings ’. This correspondence would make it easier for building owners and authorities to identify the worst-performing buildings for implementation of Article 9(2) on residential buildings.

Figure 2

Example of a varying bandwidth energy performance classes with the optional ‘A0’ class (primary energy use in kWh/m2 per year)

2.5.   Class A+

Article 19(2) allows Member States to establish an A+ energy performance class. Class A+ is therefore voluntary and, when introduced, will represent the very top of the scale.

If Member States decide to introduce such a class, it will become an integral part of their EPC system. The A+ energy performance class defined by Member States must meet the following criteria:

(1)	the buildings’ energy demand should must be at least 20 % lower than the maximum threshold for ZEBs under class A;

(2)	in line with Article 11, buildings using any amount of fossil fuels while otherwise complying with the energy demand indicators would not qualify for class A or A+;

(3)	buildings must generate more renewable energy on site annually than their total annual primary energy demand;

(4)

in addition to energy performance, class A+ is relevant to life cycle global warming potential (GWP) because Article 19 requires Member States to ensure that for existing buildings renovated to A+ class, the life-cycle GWP is estimated and disclosed in the building’s energy performance certificate. It should be noted that the Union framework for the methodology for life-cycle GWP calculation, set out by the European Commission in the delegated act to be adopted by 31 December 2025, in accordance with Article 7(3), is designed only for the purpose of life-cycle GWP calculations of new buildings. To estimate the life-cycle GWP in relation to existing buildings undergoing renovation, Member States are free to adapt the methodology with the necessary steps or to use their own calculation methodology, in accordance with the relevant standards.

Criterion 3 is the one that most clearly identifies a building as being ‘positive’. It requires the building to generate more renewable energy on site than the total amount of energy that it would demand from the grid. In this calculation, special care must be taken when considering renewables. The following numerical examples clarifies the concept.

Example A: the threshold for primary energy demand is set at 65 kWh/(m2.y) (1).

A building has the following energy needs (before system inefficiencies or primary energy factors (PEFs) are accounted for):

Total energy required by the system (before renewable energy sources (RES) are taken into account)
Heating	55
Domestic hot water (DHW)	15
Others (e.g. ventilation, lighting)	5
Total	75

The building analysed uses a heat pump and has photovoltaic (PV) panels installed. The distribution of energy would be as follows:

Energy required by the system (per carrier)	Energy use (FE)	Energy carrier	PEF	PE
Heating (HP - electricity)	11,0	Electricity	1,5	16,5
Heating (HP - ambient)	44,0	Ambient	0,0	0,0
DHW (HP - electricity)	3,8	Electricity	1,5	5,6
DHW (HP - ambient)	11,3	Ambient	0,0	0,0
Others (e.g. ventilation, lighting)	5,0	Electricity	1,5	7,5
RES (PV - used on site) (*1)	15,0  (*1)	Electricity (*1)	0,0  (*1)	0,0  (*1)
RES (PV - exported)	5,0	Electricity	-0,9	-4,5

Total energy demand (before PV exported)	7,1
Total energy generated on site	-4,5
Energy balance	2,6

In the scenario above:

—	the building would comply with criterion 1 related to the threshold for energy demand (Building ED 7.1 < (65- 65*20 %));

—	the building would comply with the no-fossil fuel on-site criterion (heat pump installed);

—	the building would not comply with the requirement on energy generation (criterion 3) as the energy demand is more than the RES generated on site.

In order to fulfil the A+ criteria the building could increase the amount of PV generated on-site or reduce the energy demand. The following examples B and C both comply with criteria 1-3.

Example B: increasing PV generated on-site.

Energy required by the system (per carrier)	Energy use (FE)	Energy carrier	PEF	Primary energy PE
Heating (Heat pump HP - electricity)	11,0	Electricity	1,5	16,5
Heating (HP - ambient)	44,0	Ambient	0,0	0,0
DHW (HP - electricity)	3,8	Electricity	1,5	5,6
DHW (HP - ambient)	11,3	Ambient	0,0	0,0
Others (e.g. ventilation, lighting)	5,0	Electricity	1,5	7,5
RES (PV - used on-site)*	15,0 *	Electricity*	0,0 *	0,0 *
RES (PV - exported)	10,0	Electricity	-0,9	9,0

Total energy demand (before PV exported)	7,1
Total energy generated on-site	-9,0
Energy balance	-1,9

Example C: reducing energy demand.

Energy required by the system (per carrier)	Energy use (FE)	Energy carrier	PEF	PE
Heating (HP - electricity)	9,0	Electricity	1,5	13,5
Heating (HP - ambient)	36,0	Ambient	0,0	0,0
DHW (HP - electricity)	3,8	Electricity	1,5	5,6
DHW (HP - ambient)	11,3	Ambient	0,0	0,0
Others (e.g. ventilation, lighting)	5,0	Electricity	1,5	7,5
RES (PV - used on-site)*	15,0 *	Electricity*	0,0 *	0,0 *
RES (PV - exported)	5,0	Electricity	-0,9	-4,5

Total energy demand (before PV exported)	4,1
Total energy generated on-site	-4,5
Energy balance	-0,4

3.   PROVISIONS ON QUALITY, RELIABILITY AND AFFORDABILITY OF EPCS

Article 19(4) requires Member States to ensure the quality, reliability and affordability of EPCs.

3.1.   Affordability

Measures to ensure that EPCs are affordable for building owners may depend on specific national or local circumstances and therefore Member States are recommended to assess whether in specific circumstances EPC market prices are too high. To reduce the costs for owners, measures could be taken either to reduce the amount of work involved for assessors (thus limiting the cost of producing EPCs), or to avoid market imbalances and speculation. Alternatively, dedicated support for vulnerable households could be considered.

The use of standard protocols with default values, or virtual means (see also Section 3.2) could reduce the time needed to produce and issue an EPC and therefore its costs. In relation to those measures, Member States are recommended to strike a balance between costs and quality of EPCs based on their national circumstances.

Price caps could also be set at national level with the aim of keeping the costs for building owners within limits and avoiding speculation. In this case too, the price caps should allow for the issuance of a quality EPC. Experience with the use of price caps in some Members States has shown the importance of regularly indexing the price caps.

Article 19(4) specifically requires Member States to consider whether to provide financial support for vulnerable households to make EPCs more affordable. Member States might for instance consider setting up specific support measures for low-income households or extending financial schemes supporting energy renovations to cover the cost of EPCs (e.g. before and after a renovation) for low-income building owners.

3.2.   On-site checks complemented by virtual means and visual checks

Article 19(4) requires Member States to ensure that EPCs are issued on the basis of an on-site visit, which may be carried out, where appropriate, by virtual means with visual checks. In either case, the quality and reliability of EPCs must be ensured.

Physical on-site visits are preferred because they allow for a seamless assessment and a direct interaction between the independent expert and the building owner/representative. Nevertheless, experience has shown that virtual visits can, if appropriately carried out, be a valid alternative to physical visits. They could improve the affordability of EPCs especially in cases where on-site visits would require disproportionate logistical efforts (e.g. in remote areas). Member States may want to lay down criteria and conditions for the cases in which virtual checks can replace on-site visits.

As a general rule, a virtual building visit would be considered appropriate if the independent energy expert is able to carry out the same type of assessment based on the same level of access to the building as they would have during a physical visit and if it results in the same level of quality. A virtual visit could also be used to confirm the validity of data obtained through other means (e.g. plans, drawings, technical specifications). Access should include all relevant parts of the building or building unit, including for instance the cellar, the heating system, the roof, the garden or yard, and at least one flat, as well as a clear view of details of the windows/doors.

The issuance of an energy performance certificate by virtual means with visual checks would typically be based on a building visit in an online environment. In practical terms, to accomplish a virtual building visit, the building owner or their representative (building manager, construction supervisor, etc.) on-site would connect virtually with the independent energy expert, for example via a video-call platform. For residential buildings, these virtual visits could be organised via virtual platforms commonly available and familiar to the public. For big non-residential buildings it might be more appropriate to use special video platforms that allow for a 360° video conferencing. From a technological point of view, the building owner or building representative would need to provide a stable internet connection and an electronic device (smart phone, tablet, laptop etc.) with a camera of sufficient quality.

Where necessary and appropriate, a virtual building visit should be supported by additional documents and photos, collecting and showing specifications of selected building systems such as heating or ventilation systems. EPC experts/assessors might draw up checklists to inform building owners about the necessary preconditions and/or additional data needs.

If the technical preconditions are not met and the assessment cannot be carried out at a sufficient level of quality, the virtual inspection would need to be repeated or complemented by a physical visit.

The independent expert/assessor is ultimately responsible for determining the validity of a virtual visit for the purposes of producing an EPC. If the independent expert determines that a virtual visit may result in an EPC of insufficient quality (e.g. the expert is not capable of identifying key parameters through the virtual visit), then the expert will need to proceed with an on-site visit. Similarly, an on-site visit cannot be used by the independent expert to justify errors or inaccuracies in the EPC.

3.3.   Accessibility, legibility and machine-readable format

Article 19(4) establishes that ‘the energy performance certificates shall be clear and easily legible, available in a machine-readable format’, while Annex V specifies that ‘persons with disabilities shall have equal access to the information in energy performance certificates’. As Article 20(1) of the EPBD establishes that EPCs should be issued in a digital format, unless a paper version is requested, the following recommendations mostly refer to digital documents.

Machine-readable

Directive (EU) 2019/1024 on open data and the re-use of public sector information defines the concept of machine-readability at EU level as a format structured in such a way as to allow software applications to easily identify, recognise and extract specific data from it (2). Some examples of machine-readable formats are CSV, JSON or XML. Data that are coded in a file format which limits their extraction or automatic processing cannot be considered machine-readable (3). For example, printed or hand-written documents that have subsequently been digitalised are not machine-readable, but the equivalent text in a simple ASCII text file can be processed by a machine (4).

Accessibility and legibility

The introduction of accessibility and legibility requirements for EPCs has been recognised as an significant step towards inclusion for people with disabilities (5). EU legislation contains not only accessibility requirements for the built environment but also for (digital and non-digital) information, including websites. The legislation is supplemented by recommendations for which accessibility requirements to use in specific circumstances.

Relevant requirements on the accessibility of products and services (and the built environment in which the services are provided) for people with disabilities are also provided in Annexes I and III of Directive (EU) 2019/882 on the accessibility requirements for products and services (European Accessibility Act) (6). While EPCs as such fall outside the material scope of that Directive, the annexes to the Directive nonetheless lay down requirements that are relevant to the information provided in the EPC’s (7).

To be accessible, non-digital EPCs should comply with the following requirements.

—	Labels and instructions should be made available via more than one sensory channel, presented to users in ways they can understand and perceive, with fonts of suitable size and shape, with sufficient contrast and adjustable spacing between letters, lines and paragraphs.

To be accessible, digital EPCs should:

— (i)

be made available via more than one sensory channel;

— (ii)

be presented in an understandable way, for example, using the same words in a consistent manner or in a clear and logical structure so that persons with intellectual disabilities can better understand them;

— (iii)

be presented to users in ways they can perceive, for example, EPCs should be designed to allow for additional contrast in foreground images so that people with low vision can see them; colour should not be used as the only way of conveying a certain piece of information (e.g. in the energy label illustration);

— (iv)

be presented in fonts of suitable size and shape, taking account of foreseeable conditions of use and using sufficient contrast, as well as adjustable spacing between letters, lines and paragraphs;

— (v)

with regard to content, be made available in text formats that can be used for generating alternative assistive formats to be presented in different ways and via more than one sensory channel; for example information provided by voice or Braille using screen readers;

— (vi)

be accompanied by an alternative presentation of any non-textual content; for example, diagrams (such as the energy label illustration) should be accompanied by a text description identifying the main elements or describing key actions (8).

Moreover, when providing EPCs on paper, the option for printing in Braille should be made available (9).

4.   RECOMMENDATIONS

The EPBD recast introduces several novelties as regards the EPCs recommendations for improving the energy performance of a building. The recommendations were already a mandatory part of an EPC but the EPBD recast has enlarged their scope. Recommendations in the EPC are expected to be concise, while a renovation passport (Article 12) is a more suitable place to explain in detail what specific improvements can be made to the building, providing much more comprehensive technical and practical information, including on the sequencing of steps.

This section covers the most relevant new requirements, which are also highlighted in the table below next to existing ones.

Table 1

Mandatory and voluntary elements for recommendations for improvements

Elements / scope	Mandatory	Voluntary
	Cover measures to improve energy performance	Provide an estimate for the range of payback periods or costs and benefits over its economic life cycle (new)
	Cover measures to reduce GHG emissions (new)	Provide information on available financial incentives, administrative and technical assistance (new)
	Cover measures to improve indoor air quality (new)	Provide information on the financial benefits broadly associated with achieving the reference values (new)
	Provide an estimate of energy savings and the reduction in operational GHG emissions (new)	Provide other information on related topics, such as energy audits, incentives (financial and other) and financing possibilities, or advice on how to increase the climate resilience of the building
	Cover both (a) measures carried out in connection with a major renovation of the building envelope or technical building system or systems and (b) measures for individual building elements
	Include an assessment of whether the heating, ventilation, air conditioning and domestic hot-water systems can be adapted to operate at more efficient temperature settings (new)
	Include an assessment of the remaining lifespan of the heating system or air-conditioning system. Where relevant, the recommendations must indicate possible replacements for the heating or air-conditioning system, in line with the 2030 and 2050 climate targets, taking account of local and system-related circumstances (new)
	Provide an indication as to where the owner or tenant of the building or building unit can receive more detailed information, including as regards the cost-effectiveness of the recommendations made in the energy performance certificate
	Contain information on the steps to be taken to implement the recommendations, contact information for relevant one-stop shops and, where relevant, financial support options

4.1.   General aspects

Under Article 19(5), EPCs must include recommendations for:

—	making cost-effective improvements to the energy performance of the building;

—	reducing operational greenhouse gases emissions; and

—	improving the quality of the indoor environmental.

These last two have been added to the existing requirements on recommendations.

Another novelty is that the provisions on recommendations do not apply to buildings that already achieve energy performance class A. In the EPC of class A buildings (and by extension also A+ buildings) the section on recommendations could therefore be left empty.

The recommendations must address two types of measures: (a) measures carried out in connection with a major renovation of the building envelope or technical building system or systems and (b) measures for individual building elements independent of a major renovation of the building envelope or technical building system or system. This differentiation has not changed from the existing requirements.

The recommendations may also include an estimate for the range of payback periods or costs and benefits over the economic life cycle of the building and information on available financial incentives, administrative and technical assistance, as well as financial benefits which are broadly associated with the achievement of the reference values.

Finally, if the EPC is issued together with or close in time to a renovation passport, under Article 19(6) the recommendations can be replaced by the renovation passport.

4.2.   Operational greenhouse gas emissions

Under Article 19(5), EPCs must include recommendations for a cost-effective reduction in operational greenhouse gas emissions. Operational greenhouse gas emissions are defined as ‘greenhouse gas emissions associated with the energy consumption of the technical building systems during the use and operation of the building’ (Article 2(23)). This is new; the provisions on recommendations which were in force before the recast concerned only cost-effective measures to improve energy performance.

Measures for reducing operational greenhouse gas emissions combine those for improving energy performance through energy efficiency measures and those relating to the use of renewable energy produced on site. Therefore, all measures improving the energy performance of buildings also reduce in parallel operational greenhouse gas emissions. As the type of measures to improve energy performance and reduce GHG emissions are the same, what is required in the recommendations is to provide a clear ranking and to include in them the quantifiable impacts of the measures recommended in terms of reducing operational GHG emissions. To this end, Article 19(7) further specifies that the recommendations must include an estimate for the energy savings and the reduction of operational GHGs emissions.

4.3.   Indoor environmental quality

Indoor environmental quality (IEQ) is defined as ‘the result of an assessment of the conditions inside a building that influence the health and wellbeing of its occupants, based upon parameters such as those relating to the temperature, humidity, ventilation rate and presence of contaminants’ (Article 2(66)).

Article 19(5) provides that EPCs must include recommendations for the improvement of IEQ of a building or building unit. This new requirement links with other new measures in the EPBD recast targeting thermal comfort and IEQ (in particular Article 5(1), Article 8(3), and Article 13).

It will often be possible to recommend measures that improve energy performance and IEQ at the same time, but in other cases recommendations to improve IEQ should be specific and tailored to the use of the building (residential or non-residential).

Where existing and relevant, recommendations could make reference to the voluntary national requirements mentioned in Article 13 for the implementation of adequate IEQ standards in buildings to maintain a healthy indoor climate.

IEQ recommendations may include, depending on the specific conditions and use of the buildings:

—	improvement of thermal insulation which will also reduce draughts and local thermal discomfort, both in winter and summer;

—

passive cooling solutions, such as installation of solar shading devices, optimisation of ventilative cooling, and improvement of building thermal mass to address overheating issues; active cooling solutions (e.g. radiant or air-based systems, fans) can be used to cool when passive systems are insufficient to ensure comfort and health;

—	upgrading of the current heating and/or cooling system or replacing it with a more energy-efficient one, e.g. with better thermal regulation;

—	installation of a ventilation system, using heat recovery;

—	measures to improve thermal comfort (e.g. adjusting the air temperature or improving the humidity level);

—	installation of self-regulating devices for the separate regulation of the temperature in each room or in a designated heated or cooled zone of the building unit;

—	installation of sensors that monitor the IEQ;

—	installation of fixed controls that respond to the levels of IEQ;

—	filter replacement, installation of air cleaners or components for air disinfection (where relevant);

—	improvement of the performance or replacement of the existing ventilation system;

—	if IEQ is already monitored in the building (voluntary indicator in Annex V.2) (10), the recommendations for improvement can/should be based on it, if appropriate.

Although this is a new requirement in the EPBD, some Member States already have elements related to IEQ in their EPCs. For instance, in Greece, there is a specific box for ‘comfort conditions and quality of indoor air’. Summer comfort issues are included in the Romanian EPC (11). In Portugal, for each of the recommended measures to improve energy performance, the EPC can indicate if they have other benefits like thermal comfort, indoor air quality or acoustic comfort improvements (12).

4.4.   More efficient temperature settings

Article 19(8) requires that the EPC recommendations also include an assessment of the potential for heating, ventilation, air conditioning and domestic hot-water systems to operate at more energy-efficient temperature settings. This assessment includes evaluating the feasibility of low-temperature emitters for water-based heating systems, which are designed to optimise energy efficiency and support the integration of renewable energy sources. This new element in the EPC recommendations also has links with other requirements in the EPBD recast for technical building systems, minimum energy performance requirements and inspections (13), and is complemented by specific indicators in the EPC template (14).

In the following subsections, clarifications of the relevant terminology and concepts related to low-temperature heating in hydronic systems are provided, together with the recommended assessment steps needed to determine the potential of heating systems to achieve energy-efficient performance within residential buildings. These sections are part of a broader technical report which will be issued separately from this guidance document.

4.4.1.   Terminology for hydronic heating systems and key parameters

The following terms describe the temperature regimes in hydronic heating systems.

—	The system temperature is the average of the supply and return temperatures in a heating system.

—	The supply temperature refers to the temperature of the fluid supplied from the heat generator (e.g. boiler, heat pump) to the emitters.

—	The return temperature is the temperature of the fluid returning from emitters to the generator.

—	Delta T (ΔT) refers to the difference between supply and return temperatures, impacting system efficiency.

—	The excess temperature is the difference between the average emitter fluid temperature and the ambient temperature, used for calculating emitter heat output.

Characterising the precise temperature regime of an existing heating system is complex and cannot rely on sporadically recorded low temperatures. Therefore, only two main parameters, the system design temperature and the seasonal average system, supply and return temperatures, are useful indicators of the heating system’s operational regime and help to assess potential performance improvements in the energy performance certificate.

For existing buildings, determining these values involves assessing the current heat load and installed emitter capacity. Calculation tools, using data like climate zone, heat generator specifications and distribution flow data, can be used to estimate achievable system temperatures.

4.4.2.   Defining ‘low-temperature heating’

Low-temperature heating is typically recognised in standards such as EN 14825:2022 (for heat pumps) and EN 442:2014 (for metallic radiators and convectors). These standards classify heating systems by design temperatures:

—	low temperature: ≤ 35 °C for design supply temperature;

—	intermediate: ≤ 45 °C;

—	medium: ≤ 55 °C;

—	high: ≤ 65 °C.

For EPBD purposes, the following definitions are proposed:

—	medium-temperature regime: system design temperature ≤ 55 °C, seasonal average ≤ 50 °C;

—	low-temperature regime: system design temperature ≤ 45 °C, seasonal average ≤ 42 °C.

4.4.3.   Assessment steps proposed

To assess whether heating systems can be adapted to operate at more efficient temperature settings, the EPC expert/assessor could follow the simplified steps outlined below when there is an existing emitter and distribution system, without considering limiting factors such as generators, circulators or room temperature control systems.

(1)	Calculate the heat load and heated surface of the building or building unit, and the reference room, using data such as final energy used for space heating, year of construction and insulation conditions.

(2)	Determine the emitter capacity in the reference room, including floor area, type and installation settings.

(3)	Determine the maximum flow rate of the distribution pipes.

(4)	Calculate the achievable system temperatures based on the acquired data.

The data collected from the steps outlined above could be entered into a dedicated simple calculation tool which could be used for step 4 (15).

Several actions could be included in the recommendations to help reduce system temperatures further in the reference room, for instance, additional insulation on outer walls, floors and ceilings. These improvements in insulation and airtightness are crucial for decreasing the heat load. Other measures include upgrading glazing and window frames to materials with higher insulating capacities, sealing gaps to enhance airtightness and replacing extract ventilation with heat recovery ventilation systems to optimise energy efficiency and heat retention. These recommendations might overlap with those aimed at improving the overall energy performance of the building.

Beyond reducing heat load, the recommendations could suggest increasing emitter capacity by replacing standard emitters with low-temperature ones of similar size or increasing the number or size of emitters. This modification supports more effective heat distribution at lower temperatures, ensuring compatibility with a low-temperature regime. The optimisation of flow rates within the distribution system by either maximising the flow in existing pipes or upgrading to one-size larger pipe dimensions could also be an effective measure. These adjustments further improve the system’s efficiency, enabling it to operate effectively even under reduced temperature conditions.

Additionally, the assessor is recommended to check if other system properties could affect the implementation of lower system temperatures, in order to formulate specific recommendations for energy improvements. This involves:

(1)	determining the type of room temperature control system;

(2)	identifying the type and capacity of the generator and circulator/pump;

(3)	checking the heat load/emitter capacity-ratio in other critical rooms.

Once again, these steps help determine the best achievable flowrates and system temperature given the existing distribution system.

4.5.   Remaining lifespan of heating or air-conditioning systems

Another new recommendation pertains to the ‘mandatory assessment of the remaining lifespan of the heating or air-conditioning system’ (Article 19(9)). This provision is linked to others in the EPBD recast: the projected lifespan of the heating systems has to be included in the data on the building system (Article 16(1)). Linked to those, a voluntary indicator in the EPC template (Annex V, 2.m) focuses on ‘expected remaining lifespan of the heating or air-conditioning systems and appliances, where applicable’.

The remaining lifespan is an important indicator for building owners, which helps raising awareness on the expected end of life of such installations, so that replacements are planned in advance and supported by comprehensive information on the options available, instead of being driven by force majeure when a heating or air-conditioning system breaks down.

The remaining lifespan of heating and air-conditioning systems varies and depends mainly on its age. In some countries values for lifespans are standardised in national legislation. Based on existing literature (16) and manufacturer’s information, the following general indications can be used to assess it.

—	A heating system can last from 7 to 25 years (average lifespan) depending on the type of heating system and specific technology, sometimes even longer.

—	A modern heat pump has an average lifespan of 20-25 years, older models have an average life expectancy of 10-15 years.

—	The average lifespan of an air-conditioning system ranges from 10 to 15 years

Several factors beyond the age of the heating or air-conditioning system influence the expected lifespan:

—	the quality of installation;

—	the regularity and quality of maintenance (e.g. regularly scheduled inspections in accordance with Article 23, filter replacements, cleaning, immediate repair of defective parts);

—	the conditions of use (frequency and intensity, proper sizing).

To assess the remaining lifespan, the EPC expert/assessor must weigh the relevant factors above, based on the specific characteristics of the individual heating or air-conditioning system assessed.

Article 19(9) also requires that, where relevant, the recommendations must ‘indicate possible alternatives for the replacement of the heating system or air-conditioning system’. This has to be in line with the 2030 and 2050 climate targets and also has to take account of local and system-related circumstances. If the EPC expert/assessor concludes that the remaining lifespan of the heating or air-conditioning system is quite short (e.g. approx. two years), alternatives to the existing system must be identified and indicated. In line with 2030 and 2050 climate targets and taking account of the lifespan of the new equipment, these alternative systems should be highly energy-efficient and non-fossil-fuel-based. It would also be very relevant to consider possible specific indications on boilers replacements in national legislation (17) ,  (18).

5.   VALIDITY OF EPCS AND SIMPLIFIED CERTIFICATION PROCEDURES

5.1.   Validity of EPCs

The recast EPBD has not changed the period for which the EPC is legally valid, which remains 10 years.

Given the long period of validity of the EPC, new EPCs will coexist with EPCs issued before the entry into force of the new requirements (by end of May 2026).

The EPBD provides flexibility on how to address this issue. Member States can decide which approach they want to follow. The main issues to evaluate when considering the validity of an EPC following rescaling are the following:

—	clarity and understanding – how clear it is for the general public to understand the difference between old and new EPC scales;

—

relationship with obligations – whether there are any relationships between the current EPC scales and obligations. This can affect minimum energy performance requirements (e.g. new buildings need to be at least ‘X’ on the EPC scale) or minimum energy performance standards if these are already in force in a Member State (e.g. buildings with EPC G need to be renovated by 2030);

—

effects from other changes (e.g. calculation methodology) – whether there are changes to other EPBD requirements that could influence the EPCs. The clearest link is with the calculation methodology. Changes in the calculation methodology may result not only in differences in the value of the main indicator in the EPC (e.g. from 100 to 93 kWh/(m2.y)) but also in the meaning behind the number (e.g. previously EPCs reported on non-renewable primary energy, while the new scale reports on total primary energy);

—

support measures and financial instruments – if financial support under a specific scheme is linked to or dependent on a particular EPC classification, then changes in a building’s classification may result in a change of beneficiaries which might not be in line with the initial objectives of the funding scheme. For example, if a scheme required an improvement of at least 1 or 2 classes, it may be necessary to provide guidelines on how this is addressed. Similarly, if there are changes to the number or indicator (due to changes in the methodology), then a direct comparison may not be feasible without some processing of data;

—	storage of EPCs – how EPCs are currently stored. If EPCs are stored in a database it is feasible to carry out certain measures (e.g. re-issuing them or re-calculating a class), which may not be feasible if they are not stored in a database, for instance.

The different options which could be considered are the following.

(a)

Old EPCs continue to be valid until the validity of the EPC expires following 10 years from their issuance. New and old EPCs will operate and coexist until all old EPCs are expired, which will depend on when the scheme is updated. This could be by 2036 if EPC schemes are updated on the transposition date (see Article 35) or later if Member States have already updated their EPC schemes recently and make use of the exception under Article 19. This option is simple in that the old EPCs continue to be valid and are unchanged. However, as multiple EPCs will coexist for a number of years, it is critical that the administration communicates what are the effects when it comes to obligations (e.g. minimum energy performance standards or funding schemes).

(b)

Old EPCs remain valid only until a given date. Old EPCs remain valid, but Member States provide an earlier date to end their validity. For example: all EPCs issued before the transposition date are valid until 1 January 2030. This approach is essentially similar to option A (validity until expiry), but it limits the period in which both schemes coexist and the negative impact this may have. As with option (a), it is critical that the administration clarifies the effects in terms of obligations and funding schemes. Also, it is important that building owners are aware that old EPCs may not be valid for the full 10-year duration.

(c)

Old EPCs are no longer valid. Under this option, old EPCs expire once the new scheme is introduced. This option is simple from an administrative perspective and eliminates confusion in terms of coexistence of both old and new system. However, this option would make many EPCs issued recently no longer valid and cause significant added costs to building owners.

(d)

Old EPCs are rescaled to its new label or value. Old EPCs are automatically, or upon request, updated to their new value. Old EPCs that are not updated (either because it is not possible technically or because the update is not requested) expire. This can be done centrally, particularly if EPCs (and input data used for the calculation of the energy performance class) are stored and available through databases. Under this option, the EPC managing authority establishes equivalences between the old and new EPC classes (e.g. an EPC with 150 kWh/(m2.y) was a D in the previous labelling system and is now an E under the new system) or the new energy performance value (e.g. an EPC with 70 (kWh/(m2.y) non-renewable energy was a D in the previous label and it is now 150 kWh/(m2.y) total primary energy with an E label). This option requires work from the EPC managing authorities, but it reduces the complexity that would ensue from the lack of coexistence of both systems. It also generates no additional costs for building owners, although they should be communicated of the new EPC values. In this case, the validity of old EPCs is not extended following the re-classification. The validity of the EPCs would continue to be 10 years from the date of the issue of the original EPC.

Options (b) to (d) are provided as examples, whereas option (a) describes what will happen if no specific or additional measure is taken at national level beyond transposition of the requirements in Article 19. Member States may also choose different options for different building categories (e.g. option (a) for residential buildings and option (d) for non-residential). Under all options, communication to building owners, independent experts, building designers and the building sector as a whole remains the most important aspect.

It should be borne in mind that the EPC database and the storing of input data could support and facilitate the dynamic updating of EPCs (or some of their elements and indicators) over time, as in option (d). EPCs are generally understood as the result of an analysis at a given moment (a snapshot of the energy performance and other qualities and characteristics of a building). Storing EPCs in a database makes it possible to use the input data for an EPC to keep the building rating up to date, and so to show changes in the buildings’ energy performance over time when this depends on external/exogenous factors and the technical characteristics of the buildings itself are largely unchanged.

For example, due to the expected pace of decarbonisation of the electricity grid, significant changes in primary energy factors are expected in the coming years. Changes in the primary energy factor for electricity applied at national level could have an effect on a building rating. When the EPC is based on data stored in a database and certain parameters are updated, the EPC will have an evolving value over 10 years (the value of the EPC is the value provided when checking on the database). The validity of the EPC would still be linked to the date of the original input data, unless the input data are also updated.

5.2.   Simplified update procedures

Article 19(14) requires Member States to introduce simplified update procedures in specific circumstances.

The aim of this provision is to facilitate the updating of the EPC when only limited changes are made to a building or when data and information are available from other reliable and relevant sources.

Member States should describe in their legislation which changes are eligible for simplified procedures and how these changes should be reflected in the EPC and the EPC databases.

The simplified procedure should be reflected in lower EPC-related costs for the building owner, given the reduced resources required to update the EPC compared to a full new EPC.

The validity of the EPC would depend on how Member States apply the simplified procedure. If the simplified procedure also requires the validation of existing input data (i.e. verification that there have not been any changes) then the validity of the EPC would be set from the moment the EPC is updated. If the simplified procedure does not require the validation of existing input data (i.e. the expert only vouches for the value of the element updated), then the validity of the EPC would remain linked to the date of the original input data.

Article 19(14) identifies three cases in which simplified procedures for updating an energy performance certificate have to be made available by Member States:

(a)   Updating an energy performance certificate when individual elements are upgraded

Upgrading individual elements, by means of single or stand-alone measures, may not have a decisive impact on the calculation and composition of a building’s overall energy performance and may therefore be handled differently from major renovations.

The simplified procedure for updating an energy performance certificate based on improvements to individual elements limits the assessment and issuing procedure only for these improved individual elements. For example, if the basement ceiling was insulated as an individual measure, although the full requirements for issuing an energy performance certificate (e.g. an on-site visit in accordance with Article 19(4)) still apply, the update of the energy performance certificate would focus exclusively on this aspect.

This focus may include a reassessment and revision on the updated energy performance certificate, of the energy performance indicator and class, indicator and class for operational greenhouse gas emissions, or indoor environmental quality. The revision might also result in the removal of a renovation recommendation, which might be related to the single or stand-alone measure that was implemented, from the list of recommendations in the updated energy performance certificate, or in an updating of any other information listed in Annex V to the EPBD and included in the national EPC template, which may have changed following the single or stand-alone measure.

(b)   Updating an energy performance certificate when measures identified in a renovation passport are put in place

A simplified procedure may not be appropriate to update an energy performance certificate after the implementation of recommended measures in the existing energy performance certificate. This is because the recommendations contained in the energy performance certificate and their related information on their energy savings are not detailed and precise enough to be used for a recalculation of the energy performance certificate.

The situation will be different if a building renovation passport has been issued for the building in question, as this contains a ready-to-use, personalised renovation plan with all the measures to be carried out, including the expected benefits such as energy savings and reduced greenhouse gas emissions. If the measures in the building renovation passport are implemented as recommended, it can be assumed that the energy savings will be achieved as indicated. If these measures lead to a major renovation of a building, it will usually be necessary to update the energy performance certificate. Provided no major renovation is involved, the simplified procedure can be followed.

A simplified procedure in this case has to include a compliance check of recommended measures in the building renovation passport compared to the measures actually implemented. This must be carried out as part of an on-site visit in accordance with Article 19(4), by the energy expert responsible for issuing the energy performance certificate. If the energy expert concludes that the measures have been carried out in accordance with the recommendations of the building renovation passport, the corresponding data can be used to issue the updated energy performance certificate.

(c)   Updating an energy performance certificate when a building digital twin, other certified methods, or data from certified tools determining the energy performance of a building are used.

If new figures on the building’s performance indicators are available, these can be used to update the energy performance certificate. New data may result if a digital twin has been set up for the building, and data included in it are changed following, for example, the implementation of renovation measures or other changes to building data relevant for the energy performance certificate, or if the energy performance has been determined on other occasions (e.g. sustainable building certifications) using certified methods or certified tools.

A simplified procedure in this case would involve adopting the determined data from the digital twin or certified method or tool for the EPC. Further calculations or on-site visits would only be required if data were missing or the energy expert discovered discrepancies.

5.3.   Renovation advice to building owners

The recast EPBD introduces a new requirement to ensure that owners of buildings issued an EPC below level C are invited to a one-stop shop at the following points:

—	when the EPC expires;

—	when the EPC has reached 5 years after the last issuance.

The aim of the visit is to provide renovation advice to the building owner and encourage them to act upon it. This information could cover technical administrative and financial issues (see the guidance on Article 17 and Article 18 in Annex 2 for more information on the scope of activities which could be covered and the options for inviting the building owners).

5.4.   Communication of revised EPC schemes

The recast EPBD introduces significant changes to the EPC scheme. The rescaling is one of the most obvious, but the changes also affect the content of EPCs (e.g. template, recommendations), when the certificate must be made available, access to information through databases, quality elements, etc. The communication of all these changes will be a key aspect for the acceptance of the revised scheme.

It is therefore recommended that the revision of the EPC classes is communicated in detail and clearly, comparing the old and new provisions. Appropriate information campaigns and online frequently asked questions (FAQs) can support the swift acceptance of the new scale. Most Member States already have experience with a rescaling of the energy performance classes or introducing changes to their schemes.

Promotional campaigns lead to greater awareness among stakeholders and market players, but also among the public. Member States should consider launching separate campaigns, differentiating based on the target audience, e.g. campaigns for professional and stakeholder groups, and campaigns for end users such as building owners or tenants. These campaigns should convey the information in a manner commensurate with the target audience’s level of knowledge. The Member States should consider adopting a clear comparative approach, to showcase the differences associated with the rescaling of the energy performance classes (19). The Member States could also consider collaborating with social partners, non-governmental organisations and other stakeholders to streamline the dissemination of information among different audiences within the general public.

6.   ISSUING AND DISPLAYING EPCS

6.1.   Trigger points

Article 20(1) requires new EPCs to be issued for:

(a)	buildings or building units when they are constructed, when they have undergone a major renovation, when they are sold, when they are rented out to a new tenant, or for which a rental contract is renewed; and

(b)	existing buildings owned or occupied by public bodies.

The recast Directive therefore introduces more trigger points for the issuance of EPCs, including major renovations and the renewal of a rental contract. Moreover, it also expands the scope of the EPC requirement to encompass all existing buildings owned or occupied by public bodies (20), independently of the building’s surface area.

In relation to major renovations, Article 2(22) provides two options for the Member States. As such, a renovation may be considered ‘major’ if:

(a)	the total cost of the renovation relating to the building envelope or the technical building systems is higher than 25 % of the value of the building, excluding the value of the land upon which the building is situated; or

(b)	more than 25 % of the surface of the building envelope undergoes renovation.

As regards buildings not owned or occupied by public bodies, the requirement for the issuance of an EPC is also triggered by the construction, major renovation, selling or renting out of a building or the renewal of a rental agreement for it. Furthermore, no new EPC need be issued if there is already an available and valid certificate, issued in accordance with either Directive 2010/31/EU or the EPBD recast.

As under the current rules, Member States will be able to exempt the categories of building referred to in Article 5(3)(b), (c) and (e) (21) from the requirement to issue of an EPC. As regards residential buildings which are used or intended to be used for less than four months of the year or, alternatively, for a limited annual time of use and with an expected energy consumption of less than 25 % of what would be the result of all-year use (Article 5(3)(d)), Member States which chose to exempt these buildings by 28 May 2024, may continue to do so.

Article 20 also provides greater clarity on the requirements relating to the availability of EPCs and checks or other controls to ensure that EPCs are available online and offline in advertisements of buildings on sale or rent, including in property search portal websites. These aspects are addressed in section 8 of this guidance on Annex VI.

6.2.   Display of EPCs

Article 21 of the EPBD recast widens the existing obligation to display EPCs to all buildings occupied by public bodies and buildings frequently visited by the public, irrespective of their size. In addition, non-residential buildings which have a valid EPCs are also required to display it in a prominent and clearly visible place.

For buildings occupied by public bodies and frequently visited by the public and non-residential buildings, obligatory EPCs issued pursuant to the EPBD (irrespective of whether based on the previous or the recast EPBD) will need to be displayed. Where a building was not obliged to have an EPC under the previous EPBD, it would only be obliged to display the EPC once it is obliged to have an EPC. As an example, a shop which has an EPC issued in 2019 after a sale would need to display an EPC for as long as the EPC is valid (2029).

7.   ANNEX V - TEMPLATE FOR ENERGY PERFORMANCE CERTIFICATES

Annex V, in reference to Article 19, provides a template to be used for EPCs in all Member States. Annex V includes a list of indicators that must be displayed in the EPC (Annex V 1.) and a list of voluntary indicators (Annex V 2.) for which Member States can choose whether to include them or not and in which circumstances. A few additional mandatory indicators are also indicated in Article 19(1). Additionally, Annex V specifies the data that have to be displayed on the energy performance certificate’s front page.

Several of the indicators are to be read and interpreted in close connection to the requirements in Annex I which provides the general framework for calculating the energy performance of buildings.

While there are no specific requirements on the layout and how to present the assessed indicators, to improve the accessibility of EPCs, diagrams with a textual description of the main elements or a description of key action points are generally recommended to accompany the values of the indicators (see Section 3.3 of this guidance).

7.1.   Mandatory elements

The following section provides an overview of the mandatory elements to be displayed in the EPC. Tables 2, 3 and 4 list the indicator itself, the unit in which it has to be displayed, plus a reference where information is provided on how to calculate the indicator or where to find the information for the indicator.

Table 2

Mandatory elements on the energy performance certificate’s front page

	Indicator	Unit	How to / Source
(a)	Energy performance class	A+, A-G	To be calculated according to the national methodology established following the requirements in Annex I and based on the requirements in Article 19-20 (22).
(b)	Annual primary energy use — displayed per energy carrier	kWh/(m2..y)	National calculation methodology established based on Annex I
(c)	Annual final energy use — displayed per energy carrier	kWh/(m2.y)	National calculation methodology established based on Annex I
(d)	Renewable energy produced on site as a percentage of energy use	%	National calculation methodology established based on Annex I
(e)	Operational greenhouse gas emissions — based on energy use	kgCO2eq/(m2.y)	National calculation methodology established based on Annex I
(e)	Value of the life-cycle GWP (if available)	kgCO2eq/(m2)	To be calculated and reported in accordance with the Delegated Act referred to in Article 7(3)

The elements in the following table are mandatory but do not have to be displayed on the energy performance certificate’s front page.

Table 3

Mandatory elements on the energy performance certificate (Annex V)

	Indicator	Unit	How to / Source
(a)	Annual primary and final energy consumption — displayed per system	kWh / MWh	National calculation methodology established based on Annex I
(b)	Renewable energy production — if applicable	kWh / MWh	National calculation methodology established based on Annex I
(b)	Main energy carrier and type of renewable energy source — if applicable	e.g. electricity and PV	National calculation methodology established based on Annex I
(c)	Energy needs Energy need is the energy that needs to be delivered to maintain the requirements for indoor environmental quality regardless of its source or the efficiency of systems. Displayed per system	kWh/(m2y)	National calculation methodology established based on Annex I
(d)	Indication of whether the building has a capacity to react to external signals and adjust the energy consumption For example, whether the building is equipped with sufficient (digital) demand response and demand management capabilities	Yes / No, description	To be indicated in accordance with Article 13
(e)	Indication of whether the heat distribution system inside the building is capable of working at low-temperature levels, where applicable	Yes / No, description	Linked to the requirements relating to the recommendations, see Section 4.4 of this guidance
(f)	Contact details for the relevant one-stop shop for renovation advice	e.g. name, address, webpage	One-stop shops as defined in Article 18

Not explicitly mentioned in Annex V, but required by Article 19(1), the energy performance certificate must include reference values such as minimum energy performance requirements, minimum energy performance standards, nearly zero-energy building requirements and zero-emission building requirements that enable owners or tenants to compare the energy performance of their building or building unit with the requirements for those at the top of the scale. The EPC assessor should identify which requirements are most relevant for the building being assessed.

In addition, under Article 19.5, the recommendations for improvement must be included in the energy performance certificate. The table below summarises the mandatory elements under Article 19.

Table 4

Mandatory elements on the energy performance certificate (Article 19)

	Indicator	Unit	How to / Source
	Nearly zero-energy building requirements — for new and existing buildings	Maximum threshold	As set in Article 2(3), link to Article 5
	Zero-emission building requirements — for new and existing buildings	Maximum energy demand threshold; GHG emission threshold	Link to Article 11
	Minimum energy performance standards — if applicable	Final or primary energy threshold	Link to Article 9(1) for non-residential buildings or to national policies
	Minimum energy performance requirements — where relevant	Maximum thresholds	Reference values for major renovations, buildings elements or technical building systems in terms of U-value (W/m2K) derived from the latest cost-optimal methodology. Link to Article 5
	Recommendations for cost-effective improvement of the energy performance, reduction of operational GHGs emissions and improvement of indoor environmental quality of a building or building unit — unless the building or building unit achieves at least energy performance class A	Description

7.2.   Voluntary elements

In addition to the mandatory indicators, Annex V provides a list of voluntary indicators that can be displayed on the EPC. Member States can either decide which of the voluntary indicators have to be included on the EPC or leave the decision on which to include to the issuer of the certificate. In general, the EPC is compliant without these voluntary indicators.

As for the mandatory indicators, the following table lists the indicator itself, the unit in which it has to be displayed in the energy performance certificate, plus a reference where information is provided on how to calculate the indicator, the legal basis or where to find the information for the indicator.

For some voluntary indicators, an accompanying text can be useful to describe the reasons for and the significance of the indicator.

Table 5

Voluntary elements of the energy performance certificate (Annex V)

	Indicator	Unit	How to / Source
(a)	Energy use — displayed for each of the uses: space heating, space cooling, domestic hot water, ventilation and in-built lighting	kWh/(m2y)	On-site visit, manufacturer’s information
(a)	Peak load — displayed for each of the uses: space heating, space cooling, domestic hot water, ventilation and in-built lighting	kW	On-site visit, manufacturer’s information
(a)	Size of generator or system — displayed for each of the uses: space heating, space cooling, domestic hot water, ventilation and in-built lighting	kW	On-site visit, manufacturer’s information
(a)	Main energy carrier and main type of element — displayed for each of the uses: space heating, space cooling, domestic hot water, ventilation and in-built lighting	Description	On-site visit, manufacturer’s information
(b)	Greenhouse gas emission class — if applicable	e.g. from A to G	Only applicable if the Member State has introduced GHG emission classes
(c)	Information on carbon removals associated with the temporary storage of carbon in or on buildings	t CO2eq	The CRCF Regulation (23) can be used as a credible standard for declaring the carbon removal indicator on the EPC. It ensures that carbon removals are quantified and verified using established methodologies and third-party verification
(d)	Indication of whether a renovation passport is available for the building	Yes / No	Information from the building owner
(e)	Average U-value for the opaque elements of the building envelope	W/(mK)	On-site visit or through the energy performance calculation methodology
(f)	Average U-value for the transparent elements of the building envelope	W/(mK)	On-site visit or through the energy performance calculation methodology
(g)	Type of most common transparent element	e.g. single, double or triple glazing	On-site visit, manufacturer’s information
(h)	Results of the analysis on overheating risk (if available)	Description	Link to Article 13
(i)	Presence of fixed sensors that monitor the indoor environmental quality	Yes / No	On-site visit, link to Article 13
(j)	Presence of fixed controls that respond to the levels of indoor environmental quality	Yes / No	On-site visit, link to Article 13
(k)	Recharging points for electric vehicles	Number and type	On-site visit, manufacturer’s information, link to Article 14
(l)	Energy storage systems	Presence, type and size (in kWh)	Manufacturer’s information, link to Article 13
(m)	Expected remaining lifespan of the heating or air-conditioning systems and appliances, where applicable	Years	On-site visit, manufacturer’s information if available. Link to Article 13 and Article 19
(n)	Feasibility of adapting the heating system to operate at more efficient temperature settings	Description	Relation to Section 3.3 of this guidance, technical report, link to Article 13
(o)	Feasibility of adapting the domestic hot-water system to operate at more efficient temperature settings	Description	See Section 3.3 of this guidance, technical report. Link to Article 13
(p)	Feasibility of adapting the air-conditioning system to operate at more efficient temperature settings	Description	Link to Article 13
(q)	Metered energy consumption	kWh / MWh	To be metered as set out in Annex I, national calculation method
(r)	Whether there is a connection to a district heating and cooling network, and, if available, information about a potential connection to an efficient district heating and cooling system	Yes / No, plus further information	Local overview of district heating or cooling systems
(s)	Local primary energy factors and related carbon emission factors of the connected local district heating and cooling network	Numerical factor, e.g. 1	Local database on energy and carbon emission factors
(t)	Operational fine particulate matter (PM 2.5) emissions	μg/m3, μg/kWh or g of PM2.5, which could inform an A to G rating	See Annex A7 of the report on increasing policy coherence between bioenergy and clean air policies and measures which provides a practical proposal on how to measure and assess buildings on the basis of their PM2.5 emissions

In addition to the indicators, information about links to other initiatives can be given, if these are relevant in the Member State.

	Indicator	Unit	How to / Source
(a)	A smart readiness assessment has been carried out for the building	Yes / No	Link to Article 15, Annex IV
(b)	Value of the smart readiness assessment	[-]	Link to Article 15, Annex IV
(c)	A digital logbook is available for the building	Yes / No

8.   IMPLEMENTATION OF OBLIGATIONS UNDER ANNEX VI

Member States must bring into force the laws, regulations and administrative provisions necessary to comply with Annex VI by the transposition deadline of 29 May 2026.

The third paragraph of Article 19(2) allows Member States that rescaled their energy performance classes between 1 January 2019 and 28 May 2024 to postpone the rescaling of the EPC classes. This derogation does not apply to the implementation of obligations related to the independent control system; therefore, the transposition deadline of 29 May 2026 cannot be postponed.

8.1.   Definition of a valid EPC

Annex VI(1) requires Member States to set out a clear definition of what is considered a valid EPC in their EPC scheme.

The definition of a valid EPC must cover the elements listed in points (a) to (d) of Annex VI(1) of the EPBD. These points are described in Chapters 8.1.1 to 8.1.6.

Information relating to the definition of a valid EPC, including all the criteria and elements identified in Chapter 8.1 should be communicated and be made readily available to independent experts and all other relevant stakeholders. This information is also part of the obligation on public disclosure in Annex VI(5).

8.1.1.   Validity of the calculations

This refers to the calculation methodology and the calculation itself used to produce an EPC. Although it is technically possible to produce an EPC by hand, in most cases independent experts rely on calculation tools. For an EPC to be valid, it must have been produced using a calculation tool which is in line with the calculation methodology specified by the relevant Member State.

Member States use a variety of approaches with regard to the calculation tools available in their territories. Some Member States produce an official tool whose use is mandatory. Other Member States instead make use of commercial tools that are certified to be in compliance with their calculation methodology. Some Member States use a mixed approach, issuing an official tool, but also allowing for the use of certified commercial tools. These different options have their advantages and disadvantages, but are all valid and Member States may choose the approach they believe is best suited.

Regardless of the approach used, Member States must ensure that valid EPCs have been produced using a calculation tool valid in their territory and that there has been no tampering with the calculation engine. Member States may do so, for example, by ensuring that calculation tools are protected from modifications or by carrying out individual checks.

8.1.2.   Minimum number of elements differing from default or standard values

Member States must ensure that the definition of a valid EPC includes information on which variables must be filled in and with a value different from default or standard.

The calculation of EPCs and their input data may vary depending on the type of building. For example, EPCs for small existing buildings commonly require fewer elements or details than a large and complex new building. It may also depend on the complexity that the calculation allows for. EPCs across the EU vary quite significantly with regard to the number of elements considered in the calculations, ranging between 30 and 750 variables. Most EPC schemes are in the range between 100 to 200 variables (24).

It is common that calculation software pre-fills in some of these variables with standard values, which are pre-defined, typical or common values. Default or standard values are used in most calculation methodologies and calculation tools. For example, the calculation software may already have a pre-filled in value for the transmission performance of the wall in new buildings. Another example is where a calculation engine pre-fills in information about the type and performance of a heating system. In the case of existing buildings, the standard value may be set up to reflect typical building construction characteristics.

In the case of calculation methodologies that use a reference building, these standard values should not be confused with the values provided for the reference or notional building. In this approach, the performance of the building is evaluated by comparing the actual building to a theoretical building (known as the ‘reference building’, hence the name of the approach) which shares the same geometrical characteristics of the building but uses a given set of performance characteristics (e.g. wall insulation).

To ensure that an EPC is representative of its building, the building model and its characteristics require a minimum level of detail. Otherwise, important information may be missing. Member States should therefore ensure that a minimum number of building characteristics or specific characteristics are used in a calculation. These minimum characteristics must be different from default or standard values.

This could include, for example, building type and use, location, climate, the physical characteristics of the building (e.g. size, geometry, U-values) and its systems (e.g. performance).

8.1.3.   Validity checks on input data

This refers to the input data used in the calculation methodology. For an EPC to be valid, the input data used in an EPC must accurately represent the building, including its type, use, location, climate and characteristics (see Chapter 8.1.2). Otherwise, the model will not be representative, and the results of the assessments will be incorrect.

When carrying out the independent control of EPCs, Member States must verify that the input data reflects the building through a validity check.

The Commission recommends that the validity check is linked at least to those elements that are considered part of the minimum assessment (see chapter 8.1.2) or that are considered the most important contributors to the performance of a building (e.g. insulation values and performance of technical building systems).

Member States should specify how this validity check is to be carried out and what proof(s) will be deemed acceptable. For example, this could include provision of documentation (regarding plans, product specifications or certificates or on-site tests (e.g. blower door test)), random on-site checks, automated checks in calculation software or a mix of options.

Member States should communicate with experts about the validity check process and how their work on EPCs will be evaluated in this regard. This could be done through training, regular updates on expert databases, directly in the calculation software, etc.

8.1.4.   Maximum deviation from the energy performance of a building

The most visible and direct approach to evaluate if an EPC is valid or not is through the main indicator (kWh/(m2 y)). For this evaluation, it is necessary to compare the EPC value as assessed by the expert and the EPC value independent control system. Because this value may change depending on the stage or who is assessing the EPC, it is important to clarify the terms used henceforth:

—	‘Assessor value’: this is the value provided by the Independent Expert that has produced the EPC

—	‘Control value’: this is the value provided by the Independent Control System

—	‘Recorded value’: this is the value as recorded in the EPC at any given time

Member States must set the maximum deviation of the ‘assessor value’ from the ‘control value’. This assesses how far a given EPC can be from its control value before it cannot be considered a valid EPC any longer.

Article 19(1) requires that EPCs express the energy performance of a building by a numeric indicator of primary energy use in kWh/(m2/y). Pursuant to Article 19(1), it is preferable for the maximum deviation of a building’s energy performance to be based on this indicator. Additional indicators may also be used.

There are multiple ways in which the maximum deviation of a building’s energy performance can be set. The EPBD allows Member States some flexibility on how to evaluate the maximum deviation of the energy performance (i.e. which indicator is used) and how precise the evaluation of the performance needs to be (i.e. the tolerance).

The most common options for setting the maximum deviation are described in the following paragraphs.

Maximum deviation based on fixed amount

This defines the maximum deviation as a fixed amount of the unit used to measure the energy performance. For example, in the case of primary energy use, the maximum deviation could be set at ±10 kWh/(m2.y).

This criterion is clear and easy to understand for independent experts and stakeholders. Depending on the range (tolerance) provided, it is particularly suitable for detailed calculations and when the characteristics of the building and its systems are well known. This is typically the case for new builds or major renovations, where the independent expert can rely on available and up-to-date plans or specifications and where it is easy to verify the details on site. However, if the range (tolerance) is limited it may be problematic for existing buildings, where the information is not available or it is difficult to check the construction details on site.

It is therefore very important to set the tolerance for the maximum deviation at the correct level. Member States could set different tolerance levels based on the type of building, its use or when an EPC is produced. Member States could set different levels of tolerance depending on these elements.

In the example of a Member State that sets up a deviation of ±10 kWh/(m2.y):

—	An EPC where the assessor value is 85 kWh/(m2.y) and the control value is 93 kWh/(m2.y), would be valid.

—	An EPC where the assessor value is 85 kWh/(m2.y) and the control value is 100 kWh/(m2.y) would be not-valid.

Maximum deviation based on a proportional value

This defines the maximum deviation as a proportion of a building’s energy performance. For example, in the case of primary energy use, the maximum deviation could be set at ±5 % of the energy performance of a building (in kWh/(m2.y)).

This criterion is clear and easy to understand for independent experts and stakeholders. Since it is proportional, it provides flexibility for different levels of performance. Its use is well suited to existing poorly performing buildings or when there is limited information about the building. However, given that it is proportional to the value of the performance, it may become too strict when the value of a building approaches 0 (kWh/(m2.y)). In this scenario the tolerance becomes very tight and small differences in the assessment could make an EPC invalid. Given that calculation methodologies have an embedded level of flexibility, it is important to ensure that the maximum deviation allows also for a degree of flexibility.

Member States could set different tolerance levels according to the level or type of EPC. It should be noted that, for buildings approaching energy performance close to 0, the range (tolerance) may need to be higher, which can be counterintuitive and difficult to communicate.

In the example of a Member State that sets up a deviation of ±5 % of the energy performance (in kWh/(m2.y)):

—	An EPC where the assessor value is 96 kWh/(m2.y) and the control value is 100 kWh/(m2.y), would be valid.

—	An EPC where the assessor value is 90 kWh/(m2.y) and the control value is 100 kWh/(m2.y) would be not-valid.

Maximum deviation based on whether a building is in the correct class (Y/N assessment)

This criterion only evaluates whether a building has been assigned the correct class. The differences in the value of the indicator (kWh/(m2.y)) are not considered.

This criterion is very direct and easy to communicate and apply. It provides a sufficient level of information at the level of the EPC scheme (e.g. X % of EPCs correct/incorrect), although its value at individual EPC level is more limited.

However, it is subject to the energy classes and how these are defined. It can become very strict for buildings that have a performance close to the class limits.

Due to its limitations, the Commission does not recommend this approach.

Maximum deviation based on a mixed approach

As its name suggests, this approach relies on using at least two of the criteria previously described.

For example, the maximum deviation could be based on a fixed amount for buildings with good or very good performance (e.g. classes A, B and C) while using a proportional approach for worse performing classes (e.g. D, E, F and G).

The nature of the assessment of buildings performance may result in differences in the level of accuracy that can be achieved. For certain buildings (e.g. new buildings or major renovations), the independent expert may rely on readily available and detailed information, while for other buildings this information may be more difficult or costly to obtain. This limited access to information tends to be more prevalent in poor performing buildings.

Because it combines the benefits of the different approaches, a mixed approach is suitable to multiple situations. However, due to the use of a mix of criteria, it can be more prone to confusion. Nevertheless, given their qualifications or certifications, independent experts should be able to manage the different criteria. Member States that use this approach would need to ensure that the criteria are adequately communicated in order to avoid confusion.

8.1.5.   Additional elements

In line with the last sentence of Annex VI(1), Member States may introduce additional elements into the valid EPC definition, such as boundaries for specific input data values or other specific requirements.

This could include, for example, maximum deviation values (i.e. tolerance) for the physical characteristics of a building and its systems.

When setting requirements, Member States may also consider the type of building, use and purpose of the EPC. This could include, for example: building typology, orientation, geometry, location, climate data and the performance of its building elements or systems.

Member States have some discretion in setting the boundaries of these values. They may adjust these boundaries, for example, depending on the building characteristics (e.g. its size), its typology (e.g. residential, office, school) or its state (e.g. new construction, renovated or existing). For example, quality criteria could be stricter for new buildings, where information and access to the building is easier.

Member States may also introduce requirements in terms of the information necessary for the processing of the EPC. This could include, for example, complete address, cadastre reference, on-site photographs, plans, etc. While these elements may not directly affect the calculation of the energy performance of the building, they are still relevant for administrative and quality purposes. Proper reference to the building (address or cadastre reference), for example, is important to ensure that the EPC is correctly attached to the building or to integrate with databases. On-site photographs or plans can confirm the presence of the independent expert (where relevant) or provide necessary information for the independent control system.

Member States may also apply validity requirements to the recommendations included in an EPC. These could include, for example:

—	minimum number of recommendations;

—	recommendations appropriate to the building;

—	recommendations covering multiple building elements or technical building systems;

—	recommendations covering a mix of short, medium and long-term measures.

8.1.6.   Validity and rating of an EPC following an assessment by the independent control system

The purpose of the independent control system is to evaluate if an EPC is within the boundaries established by the definition of valid EPC. It is expected that there will be differences between the ‘assessor value’ for an EPC and the ‘control value’ determined by the independent control systems. This may create confusion as to which value is considered the correct one and which value is indicated in the EPC (the ‘recorded value’). Member States should specify what happens in these situations. The Commission recommends the following approach for different scenarios.

The EPC is produced by an expert and it is not evaluated by the independent control system.

In this scenario, the independent expert produces an EPC. The EPC may have gone through some automated checks or verification (e.g. to determine that it has fulfilled the minimum number of filled in values), but it has not been evaluated by the independent control system.

The ‘assessor value’ is considered valid and it will become the ‘recorded value’ in the EPC.

The EPC is produced by an expert and is evaluated by the independent control system as valid.

In this scenario, the independent expert produces an EPC, which then goes through verification and control procedures by the independent control system. This procedure identifies that the ‘assessor value’ is valid.

The ‘assessor value’ is considered valid and it is recommended that it becomes the ‘recorded value’ in the EPC, even if there are differences between the ‘assessor value’ and the ‘control value’.

The EPC is within boundaries and therefore there is no need to change it. This may be particularly relevant if the EPC rating has a bearing on the building’s legal status (e.g. for new buildings) or where it is linked to subsidies or financial schemes (e.g. when the EPC is used to demonstrate improvement). By keeping EPC rating EPC as originally assessed, the independent control system introduces no changes in any of these situations, therefore avoiding possible complications (e.g. recalculation of the value of a subsidy).

The EPC is produced by an expert and the independent control system identifies this as a non-valid EPC.

In this scenario, the independent expert produces an EPC, which then goes through the verification and control procedures by the independent control system. This procedure identifies that the ‘assessor value’ is non-valid.

If the EPC is deemed non-valid, then the Commission recommends that the control value become the rating of the building or that the original EPC is considered void (i.e. the building does no longer have an EPC rating). This may, of course, have consequences for the building and the building owners, for example the need to look for a different expert to issue the EPC. It is recommended that Member States abide by the principle of proportionality and consider the consequences in different circumstances. For example:

—

EPC for new buildings or buildings undergoing major renovation: if, following the independent control system, the building does not comply with the relevant legislation (e.g. ZEB or minimum energy performance requirements), the owner or developer of the building could be asked to rectify the situation and produce a new EPC afterwards;

—

EPC for buildings that are receiving subsidies: Member States may use the control value to recalculate the effects on subsidies or ask for a repeat of the assessment following remedial works. Member States may apply similar rules for other subsidy schemes where the subsidy is proportional to a set of criteria.

—

EPC for buildings that are being sold or renovated: if there are limited legal or economic consequences, Member States could make the recorded value equal to the control value. For example, if there are no minimum energy performance standards (obligation to renovate based on the EPC rating) or if the differences in the EPC rating do not represent a significant difference in the value of the building or subsequent running costs.

In all cases where the EPC is deemed non-valid, the owner or tenant of the building should be notified of the error, including the rating evaluated by the control system. This will allow them to carry out corrective measures, ask for any relevant compensation or simply be aware that the EPC may no longer be valid.

When considering the consequences of valid or invalid EPCs, Member States should also consider the level of responsibility of the independent expert and any legal consequences that they may face (see Chapter 8.3.5 Enforcement and penalties).

8.2.   Analysis of the quality of the independent control system for EPC schemes

Annex VI(2) of the recast EPBD introduces a new requirement to ensure that at least 90 % of EPCs are valid. It also introduces random sampling as the way to assess whether the overall EPC scheme complies with the 90 % valid EPC criteria.. Finally, the EPBD requires Member States to regularly publish the results of the quality assessment. The objective of this approach is to ensure a high level of quality in EPC schemes while also providing information for the public and users, therefore supporting the perception of quality of EPCs.

The following sections describe the different steps of the process.

8.2.1.   Definition of quality objectives in Member States

Annex VI(2) requires Member States to ensure at least 90 % of EPCs are valid in their EPC schemes.

In their definition of quality objectives, Member States may go beyond this minimum level or include additional objectives. This could include elements that Member States consider relevant for quality purposes, but that are not strictly part of the definition of valid EPCs. For example, Member States could include quality objectives relating to the level of quality in recommendations (if these are not part of the definition of a valid EPC), number of complaints from users or number of available assessors proportional to the building stock.

In the relevant national implementing (‘transposition’) measures, Member States must clearly state the quality objectives applicable to their schemes.

8.2.2.   Evaluation of the quality level through sampling

To ensure the quality of an EPC scheme, it is important to be able to assess the scheme as a whole. This would involve establishing if the scheme is reliable or not, and identifying how far from or close to the objectives the scheme is and what areas, if any, need improvement. However, evaluating 100 % of the EPCs issued in an evaluation period would be very complex, costly and could delay the process for issuing an EPC. A typical approach in quality systems is to instead rely on samples, which must comply with a number of criteria.

This is why the recast EPBD requires Member States to evaluate the overall quality level in an EPC scheme (defined in Chapter 8.2.1) through random sampling. To ensure that the sampling is sufficiently representative of the EPCs that have been issued during the evaluation period, the recast EPBD also requires that the random sampling is carried out with a minimum 95 % statistical confidence level.

The size of the random sample is determined by:

—	the total number of EPCs issued for the evaluation period (usually a year). This will depend on the Member State and the level of EPC activity;

—	the definition of a valid EPC. This will depend on the definition in force in the Member State and it mostly refers to the maximum deviation of the value of the indicator (primary energy in kWh/(m2.y));

—	the confidence level for the sample. This is set at 95 % by Annex VI(2).

Evaluating the quality levels of an EPC scheme can be made very complex by the choice of elements to be considered for the sampling process and the nature of the assessment of performance in buildings.

As indicated above, multiple elements determine what constitutes a valid EPC. If all the elements were taken into consideration for the calculation of the sample size, this would result in a complex assessment and a disproportionately large sample size. The aim of the provision in the EPBD is to provide a straightforward assessment of the overall level of quality of the EPC scheme. For this reason, the Commission recommends that only the maximum deviation of the main indicator (primary energy in kWh/(m2.y)) be taken into consideration. See Chapter 8.1.4 ‘Maximum deviation of the energy performance of a building’. This simplification ensures a sampling process that is proportionate to the objectives of quality assurance, without introducing an undue burden into the process. This simplification should not apply to the rest of the independent control system.

For example: a Member State uses multiple criteria to define the validity of an EPC, including maximum deviation for multiple indicators (e.g. total primary energy, GHG emissions, RES generation and individual U-values). To evaluate the quality level, Member States could consider just the main indicator (total primary energy) as the factor identifying if an EPC is valid or not. This would apply to both the calculation of the sample size and the obligation to ensure that 90 % are valid. The remaining elements would still need to be taken into consideration for the purposes of the independent control system.

As indicted in Chapter 8.1.4, it is possible for Member States to use different criteria for the maximum deviation from the energy performance. To simplify the process of calculating the sample size, it is recommended that, for that purpose, Member States assume a constant maximum deviation equal to the one used for the better performing energy classes.

For example: a Member State uses a maximum deviation of ±10 kWh(m2.y) for classes A-C, a maximum deviation of ±20 kWh(m2.y) for classes D-E and a maximum deviation of ±30 kWh(m2.y) for classes F-G. In this scenario, the Member State could calculate the sample size assuming a constant maximum deviation of ±10 kWh(m2.y) throughout the whole scheme, basically assuming a worst-case scenario. This simplification only applies to the calculation of the sample size. The criteria for evaluating the validity of an individual EPC must remain the same.

The recast EPBD requires that the evaluation period of the EPC scheme must not exceed one year. Member States may decide on the start and end of the evaluation period, which must be clearly identified and communicated. Member States must select the random sample from the EPCs issued during the evaluation period.

Given the number of EPCs commonly issued and current quality levels (e.g. maximum deviation) available in Member States, the size for the sample will typically range from:

—	100 to 150 EPCs sampled for Member States with lower EPC numbers and milder quality criteria;

—	300-350 EPCs sampled for Member States with large EPC numbers and stricter quality criteria.

Even if a selection is made randomly, it is worth nothing that it may not be fully representative. Some differences are to be fully expected, but the nature of random selection may result in some categories or types of EPCs being over-represented. If the sample is of sufficient size, this issue should be relatively minor, but it may still happen especially when there are EPC types/categories which are much smaller than other types/categories or when the sample size is relatively small. To ensure that a sample is representative, following selection, Member States should check that the distribution of building categories, types of EPC (e.g. new build or existing) and ratings are within reasonable boundaries. If the sample is considered not representative Member States may:

—	discard the first selection and re-select the full sample;

—	discard EPCs from over-represented categories and introduce new EPCs from under-represented categories. The selection of the individual EPCs to be discarded or introduced should be random.

For example, a Member State forms a random sample of 300 buildings. In this sample, it is detected that hospital buildings are over-represented (45 buildings or 15 % of the sample, when they only represent 5 % of the total EPCs issued in the evaluation year). In this case, the Member State could choose to deselect 30 of the hospital buildings (chosen randomly) and select 30 new EPCs from other categories (chosen randomly from under-represented categories).

Most Member States evaluate the quality of EPCs on an ongoing basis. This means that the random sample may not be selected at a specific moment, but the selection will instead take place overtime. For Member States that evaluate on an ongoing basis, the Commission recommends that, during the overall evaluation period, the independent control system make an evaluation at multiple instances to verify that the random selection is approximately representative of the overall population. After each of these evaluations, the independent control system could adjust which categories random EPCs are selected from, if needed.

Member States may choose other methods provided they ensure a random selection that is representative of the overall number of EPCs issued in the evaluation period.

8.2.3.   On-site visits for verifying input data

In many EPC schemes, the independent control systems check the validity of the input data against documentary evidence (e.g. plans or specifications). In some cases, this input data verification goes a step further by including an on-site visit to verify that the documentation provided reflects that actual building. This is because buildings undergo multiple changes and modifications during their lifetime, from the design stage, to construction, maintenance, renovation and normal use. The documentation available for a building may not always reflect these changes, so on-site verification is needed.

Annex VI(2) requires that, for on-site verification of input data, Member States select 10% of EPCs from the random sample taken for the quality evaluation of the EPC scheme (see Chapter 4.2.2). The selection of this 10 % sub-sample should also be done randomly.

In most cases, on-site visits will require the authorisation of the building owner and/or tenant to access the building. Building owners and/or tenants may not want to give access to the building for a variety of reasons. Access to a building must always follow relevant national legislation, and any personal rights must be respected.

The fact that buildings must be selected randomly but building owners and/or tenants may not provide access may make it difficult to ensure a random selection. In this case, a best-effort approach is warranted. The Commission recommends that, if access to a building is denied, the EPC for that building is discarded from the sub-set of 10 % of buildings that undergoes an on-site visit (it may still be part of the overall random sample). An EPC with a similar profile could be selected from the overall random sample to make up for it. For example: the owner of a residential building with a rating of E does not provide access to the independent control system. In this case, the independent control system could choose another residential building with an E rating and request access to it.

While this approach may not ensure a fully randomised sample, it would still ensure a representative sample, which is the aim of the recast EPBD.

Member States could offer incentives to building owners and/or tenants that provide access to their buildings. For example, Member States could offer free energy advice, a building renovation passport, or monetary compensation. Member States can choose whether or not they offer compensation and, if they do, what type of compensation.

The verification of input data via on-site visits may be carried via virtual means where appropriate. In this case, the criteria for virtual means set out in section 3.2 would apply.

8.2.4.   Delegation of EPC schemes and independent control systems

Article 27 allows Member States to delegate responsibilities for implementing the independent control system. Member States may decide how to apply the random sampling to measure the overall level of valid EPCs in the EPC scheme.

Member States may opt to evaluate a random sample and request EPCs from delegated bodies on the basis of total number of EPCs issued by each body.

Member States may also decide to delegate evaluation through random sampling. In this case there would be 2 options:

(a)	national authority fully delegates the evaluation of the quality level and assigns a quota of EPCs to be randomly checked by each delegated body;

(b)	national authority fully delegates the evaluation of the quality level and requires a separate random sampling (based on number of EPCs issued by delegated body and 95 % confidence) to each delegated body.

To ensure quality levels and clarity of responsibility, the Commission recommends the use of option (b).

If independent control systems are delegated to non-governmental bodies, Annex V(2) requires that at least 25% of the random sample must be evaluated by a third party. This third party can be a governmental body (e.g. a national agency) or another non-governmental body. Member States could require that the third-party verification is carried out by a company certified to carry this type of assessment.

8.3.   Quality management of EPC schemes

The evaluation tool described in Chapter 4.2. is a typical assessment tool applied in many quality systems. However, random sampling only measures if a quality level has been achieved. On its own, it is generally insufficient as a way of maintaining a satisfactory level of quality.

To ensure the required level of quality, an overall quality management approach is needed. The approach should look after the overall EPC scheme and the process for issuing issue EPCs. In Annex VI(2), the recast EPBD indicates that Member State must take pre-emptive and reactive measures to ensure the quality of the overall scheme. It allows Member States some flexibility in deciding which measures are most suitable.

In their approach to ensure the required level of quality, the Commission recommends that Member States take into consideration all the elements described in Chapters 8.3.1 to 8.3.6.

8.3.1.   Qualification and certification

Independent experts must have the necessary expertise to evaluate the performance of buildings. This level of expertise can be demonstrated thorough either qualification or certification schemes.

Member States should consider the importance of this when designing qualifications and/or certification of independent experts, following the requirements set out in Article 25 of the EPBD.

8.3.2.   Training

Training covers both initial training (e.g. if required for certification) and ongoing training throughout the years. It is one of the most important components of quality assurance, but unfortunately it seldom receives the necessary attention.

Training must cover all the aspects of the EPC issuing and validation process:

—	calculation methodology (e.g. understanding of the performance of a building, its different elements, and how the assessment is carried out);

—	assessment tools (e.g. training on the use of a specific calculation tool);

—	assessment to produce an EPC (i.e. how to carry out an EPC assessment);

—	conditions for the validity of an EPC (independent experts must understand how their work will evaluated);

—	administrative process – covering the non-technical aspects of issuing an EPC, such as documentation and uploading into the database;

—	penalties/enforcement; independent experts must understand the consequences of issuing EPCs that are then evaluated as non-valid.

The Commission strongly recommends that independent experts are provided with updates to their training. Member States may decide if these updates could take place at regular intervals (e.g. every three years) or when the EPC scheme is amended. Member States may also decide if these updates become compulsory to maintain accreditation or are only voluntary.

8.3.3.   Embedded control and advice in calculation tools or EPB databases

Independent experts may introduce errors during the evaluation process, especially given the number of variables to be considered. This can happen either by mistake or intentionally. A powerful technique for avoiding errors in the assessment is to embed control or advice in the issuing process itself, so that the independent expert receives a direct message. This can be done in the calculation tool or when the EPC is uploaded to the EPB database.

The advantage of this approach is that it works pre-emptively, helping the expert to avoid errors and facilitating the work of the independent control system. Usually, this approach results in a reduction of costs and administrative procedures. The Commission recommends its use where possible in the EPC issuing process.

For example, a calculation tool could generate messages for the independent expert indicating that one or more input/output values in the EPC are either incorrect or would need verification. Examples of messages could be:

—	‘Clash in geometric values (e.g. the surfaces of the different building elements do not add up to the total, more PV area than roof area)’;

—	‘Out of range values (e.g. the U-value of the building is excessively low/high)’;

—	‘Missing technical information (e.g. the heating system is missing information about insulation values, the U-value of the window frame has not been introduced)’;

—	‘Missing or erroneous administrative information (e.g. the address is incomplete the cadastre reference number is incorrect)’.

These messages could require the independent expert to make a correction or confirm the value. The error messages would ensure that the independent expert is aware that something may be amiss and confirm or correct it.

When combined with other sources of information, these support tools can be very specific. For example, the tool could detect that the U-value is very low for a specific building typology (e.g. buildings built in the 1960s). The expert could then confirm the value (if they have measured the insulation and are sure of the U-value) or make a correction.

The embedded control and advice should clearly differentiate between those values identified in both 8.1.2 and 8.1.3 and the rest of the values.

8.3.4.   Ongoing quality control and verification

In addition to the random sample required by the recast EPBD, Member States could introduce additional quality controls. As indicated above, random sampling is a key component for the evaluation of the overall EPC scheme, but on its own it may be insufficient to ensure and maintain the required level of quality. For this reason, Member States may consider the introduction of additional quality control measures.

There are multiple measures for quality control and verification that Member States may use.

—	Additional random samples. A larger sample base ensures that more EPCs are evaluated, which will increase the level of quality by reducing the number of invalid EPCs. This is a valid reactive measure, although it may not be as cost-effective as other measures (25).

—

Targeted quality control. In this case, the EPCs are not selected on a random basis, but instead, the independent control system selects EPCs with criteria which make them more likely to be incorrect. For example, Member States could concentrate on EPCs that are very close to the rating threshold or EPCs that are abnormally high/low performing for a given building category. Member States could also concentrate efforts on specific independent experts. For example, Member States could run more checks on those experts who issue an abnormally high number of EPCs. Specifically targeting EPCs that are more likely to be invalid makes the controls more cost-effective. On the other hand, this method may decrease the likelihood of spotting new types of errors or and is prone to selection bias.

—

Partial controls. These are similar to targeted quality control but applied to specific parts of EPCs which Member States may find relevant. For example, independent control systems could concentrate on the U-value of buildings because they have detected that this is the area where most errors occur.

Typical errors detected through random, targeted or partial controls are good candidates for embedded controls or advice. The results of the controls may also be used to develop or update training material.

The introduction of one or more additional control measures (on top of the overall random sampling) makes experts more mindful of the multiple controls, which generally makes them more attentive to the assessment and less likely to make errors.

Member States may combine several of these measures and, because of their effectiveness, are strongly encouraged to do so.

8.3.5.   Enforcement / penalties

In line with Article 34 (Penalties), Member States may introduce penalties for independent experts that fail to produce EPCs of sufficient quality, whether by error or intentionally. The application of penalties is a key part of ensuring a level playing field. Any penalties applied must be effective, proportionate and have a deterrent effect.

Member States have different options when applying penalties. They can:

—	require re-issuing of the affected EPC;

—	require re-issuing of a series of EPCs (if errors are suspected);

—	require re-training or re-certification;

—	impose a temporary ban (e.g. one-year ban on issuing EPCs);

—	permanent loss of certification or qualification;

—	monetary fines.

Member States should also consider the responsibilities of independent experts beyond enforcement and penalties. For example, in France the EPC can be legally challenged, which may result in economic compensation.

8.3.6.   Total quality management

Single quality measures are unlikely to produce the required results. Targeted sampling on its own may be less cost-effective than training. Penalties without training would be unfair. And penalties without a strong detection mechanism are a weaker deterrent .

For this reason, it is recommended that Member States take a structured and organised approach to the independent control system.

Since its inception, the Concerted Action EPBD project (CA EPBD) has carried out extensive work analysing and discussing multiple quality approaches for EPC schemes. The Commission highly recommends consulting the CA EPBD’s findings for the design of the independent control systems. These findings cover each of the elements described in Chapters 8.3.1 to 8.3.6.

There are also extensive quality management manuals and tools available, which Member States are encouraged to consider.

8.4.   Independent control systems and EPB databases

Article 20(8) requires that all issued EPCs are uploaded into the databases for the energy performance of buildings. This includes the full EPC, with all its outputs and recommendations, and all the data (i.e. input data) needed to calculate the EPC. The independent control system requires this information to evaluate the validity of EPCs and the overall quality of the EPC scheme.

For quality and traceability purposes, Annex VI 2(8) requires that when a new or an existing EPC is amended or modified, the EPB database, national authorities (including the independent control system) are able to identify the expert that uploaded, amended or modified the EPC. This should also apply to EPCs that have been amended through the simplified updating procedure.

To make EPB databases more compatible with other databases, it is strongly recommended that all databases use individual identifiers for the building or building unit. These identifiers could be linked to the cadastre, for example.

The use of interconnected databases can also be used for quality assurance purposes. For example, by having the EPB database connected to the national cadastre database, Member States could ensure that certain building information or data are cross-checked or even filled in pre-emptively (e.g. year of construction, building area).

8.5.   Availability of EPCs

The EPBD recast requires Member States to ensure that the EPC is available to prospective building owners and tenants. A primary function of the EPC is to enable people to take a budling’s energy performance into account in their decision-making process when buying or renting a building. The point at which the EPC is made available is therefore very important. When checking for the availability of EPCs, Member States should check they are available at the right time. For example, it is common to check for an EPC when the deeds are exchanged in a sale or after a lease has been signed in case of a rental. However, this only guarantees that the EPC was provided at some point in the process, which may have been too late to have an effect on the decision process.

The EPBD requires that, when a building is offered for sale or rent, the EPC indicator and class is stated in advertisements. Annex VI specifically requires Member States to verify the visibility of the EPC. Having the EPC available in advertisements means that the prospective buyer or tenant will have access to the relevant EPC information from the start.

Due to the cost of verification, the Commission recommends focusing efforts on those areas where it is easier and more cost-effective to verify. For example, a Member State could concentrate on verifying the presence of EPC ratings in real-estate websites, news media or listings. Given the prevalence of websites as a way of looking for properties and the number of buildings usually found on these sites, this is a prime location for the use of automated verification mechanisms.

Member States may also use other tools like audits or inspection of advertising media, manual survey of real-estate locations or mystery shopping. These can provide effective alternatives when automated verification is not possible (e.g. in physical real-estate agencies) or to address specific identified gaps.

Article 19(3) requires Member States to ensure a common visual identity for EPCs. The Commission recommends that, together with this common visual identity in the EPC, Member States issue guidance, recommendations or obligations on the use of the EPC visual identity in advertisement media. The communication of a clear approach towards the use of a common visual identity would not only facilitate the use of automated verification mechanisms but would also provide clarity for advertisers and users, and avoid confusion.

8.6.   Public disclosure of information on quality levels

Annex VI point 5 requires Member States to regularly publish information on the independent control system. The Commission recommends that this information be published following the evaluation period established in each Member State (e.g. at least yearly). The purpose of making this information available is to improve the perception of quality of EPCs. By providing up-to-date information on the evaluation process and its results, Member States can clarify some of the misconceptions about EPCs and their quality.

The EPBD requires at least the following information to be made available:

—	definition of a valid EPC – this clarifies meaning of ‘valid EPC’ and what level of quality is expected for each EPC;

—	quality objectives for the EPC scheme – this provides information about what the overall quality level of the scheme should be, including additional elements (see Chapter 4.1.5);

—	results of the quality assessment – this provides information about the actual level of quality of the EPC scheme. The Commission recommends that Member States include the following elements:

—	results of the random sample verification process (i.e. % of valid EPCs);

—	summary description of all quality measures employed;

—	summary of the results of the different quality tools used (e.g. % of valid EPCs in targeted sampling), including changes compared to previous years;

—	contingency measures to improve the overall quality level of EPCs.

The information above may be published in different formats (e.g. report or updated webpage alongside the EPB database).

8.6.1.   Differences between the calculated/estimated and measured energy performance

The differences between the calculated/estimated (asset rating) and measured energy consumption have been identified by Member States as a source of misunderstanding which affects the perception of the EPC system (26).

As an information tool, EPCs should enable comparisons between different buildings. Almost invariably, this requires an asset rating approach based on standardised values for multiple building characteristics and parameters, particularly those related to the building use, e.g. values relating to the number of occupants, occupancy patterns, and intensity of consumption for non-EPB uses. This is a similar approach to those used to compare different products (e.g. consumer products, motors or cars).

A common misconception about EPCs is that they must replicate exactly the actual energy consumption of any given building. This has given rise to the so-called ‘performance gap’ between the energy consumption indicated in EPCs and the measured consumption. In practice, the performance gap may be due to a number of reasons (in no particular order):

—	influence of user behaviour (expected differences);

—	errors in the EPC calculation;

—	improper installation of building elements or systems (e.g. windows not adequately draft-proofed, missing insulation, systems not properly commissioned);

—	systems not operating properly (e.g. boiler not working in condensing mode, heat pump working at higher temperatures);

—	deterioration or faults in systems (e.g. boiler broken down, ventilation operating at reduced levels).

The Commission recommends that Member States address the misconceptions about the differences between the calculated/estimated (asset rating) and measured energy consumption in its public information on quality levels and in general communication on EPCs. Specifically, they should provide information and explanations on the characteristics of the EPC and how relevant differences may be detected and resolved. It is important that users understand the purpose of the EPC and are empowered to act accordingly.

For this, Member States could use one or more of the following options:

—	publish information on the principles of asset rating, how it works and what type of differences could be expected (e.g. typical ranges for deviation in certain buildings);

—	provide access to independent experts, one-stop shops or any other service that may provide energy advice;

—	provide a way for building owners or tenants to object to or enquire about the results of an EPC;

—

provide users with information on how to evaluate if any observed differences in performance are due to the use of the building. For example: a by 1 °C increase in heating temperature translates into a 5-10 % increase in energy consumption; an increase in the number of occupants increases consumption by x %. Conversely, not switching on the heating until November reduces consumption by x %. This type of information may also be used to raise occupants’ awareness of the importance of user behaviour in building performance;

—	introduce EPC tools that allow building users to modify certain parameters in an EPC and observe the differences;

—	provide checklists of elements or systems to be checked in a building.

Member States may also use other relevant communication tools related to EPCs like websites, FAQ sections, EPB databases, manuals, information material and the EPC itself.