How energy efficiency renovations should address energy poverty in the COVID recovery in Europe

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The issue of energy poverty has been included by the European Union in some of its initiatives and programs, such as the Renovation Wave, the EU strategy which promotes the renovation of existing buildings to achieve energy efficiency, sustainability and affordability.

In the face of the COVID-19 scenario, the most vulnerable populations have faced increasingly harsh conditions, and it is key that recovery policies and measures provide an effective framework to promote renovations and alleviate energy poverty.

This roundtable invites experts, policymakers and representatives of the European Commission and the European Parliament to analyse the impact of EU Renovation Strategies in tackling the issue of energy poverty.

Moderator: Knut Hoeller – Executive Board Member, IWO (Housing Initiative for Eastern Europe)

Speakers:

  • Ciarán Cuffe – Member of the European Parliament
  • Stefan Moser – Head of Unit, Directorate-General for Energy, European Commission
  • Hennadiy Zubko – Former Deputy Prime Minister of Ukraine and Minister for Regional Development, Construction and Housing
  • Barbara Steenbergen – Head of EU liaison office, International Union of Tenants (IUT)
  • Ruth Owen – Deputy Director of FEANTSA, the European Federation of National Organisations Working with the Homeless

Interested in learning more? Watch other sessions here.

Panel summary

All European Union countries must establish a long-term renovation strategy of their national building stock into a highly energy-efficient and decarbonized solution by 2050.

There are many concrete statements and daring proposals that currently exist. There is still a very long way to go, but on a more positive note, we can at least recognize that these strategies exist and new ones are constantly being formulated.

Once we have a big enough pool of solutions, especially ones we’ve tested, we’re hoping to have more clarity around their cost and feasibility. Then we’ll know which ones to apply and where.

What impact can we expect from the EU strategies on refurbishment and energy poverty?

Common sustainability knowledge states that the sustainable building is the one that is already built. You don’t need to extract or produce new resources for it.

The existing building stock can allow the EU to meet its climate goals. Not only does refurbishment reduce greenhouse gas emissions, but it can also create green jobs and tackle energy poverty.

It’s known that 40% of the energy we use in Europe is from buildings. It’s also responsible for more than a third of greenhouse gas emissions. If complete renovations are undertaken, greenhouse gas emissions will reduce, and people can save money on energy costs.

One in four people across the EU cannot adequately heat, light, or cool their homes. They may also have leaking roofs, damp walls or floors, and rotten window frames. Thousands of Europeans die each year in cold homes, which is unacceptable. It’s why member states need to both create and coordinate the renovation strategies so they can exchange best practices.

The priorities of the European parliament

There is a strong alignment between the European parliament’s views and assessment of this situation.

The pandemic has reinforced the difficult situation for many vulnerable citizens by confining them to conditions that are problematic and difficult to sustain. However, it has put focus on improving this situation.

In the upcoming revision of the Energy Performance of Buildings Directive, the focus is to reinforce the ambition level while also bringing awareness of the shortcomings and addressing them through the current framework. One of the priority areas will be vulnerable citizens. An approach will look at the worst-performing buildings where investments make sense, and the most significant gains can be made. It does not just concern energy and climate but also the living conditions.

There’s also an opportunity to address the instance of a skills gap. It’s about anticipating any supply problems in the future where there are not enough professionals available to train new people. The European parliament would like to facilitate this process and bring forward recommendations.

Learnings from Ukraine – before the war

Ukraine is much like other European countries in that – prior to the current war – it was also at the epicenter of challenges such as climate change, COVID-19, and an energy crisis.

Assisted by European partners, energy efficiency reform began in 2019, with Germany becoming a key partner. The creation of the energy-efficient fund has become a powerful tool for overcoming energy poverty and will positively impact the entire economy.

Energy savings in households is expected to reach up to 60%. They have also forecasted a reduction in gas consumption by up to 10 billion cubic meters. In addition, it will create up to 75,000 new jobs for small and medium business construction businesses.

Another solution to help citizens implement energy-efficient activities is warm loans. This helps reduce household costs by promoting various programs. More than 850,000 households have participated in the program over five years. Ukraine also offered financial assistance for utility payments through subsidies, but the primary goal was to encourage people to save energy and participate in efficiency programs.

Bottlenecks to renovating the housing stock

There is a lot of help getting offered for renovating private rentals and housing stock. However, there isn’t a clear proposal for the public housing sector. These are the buildings where those living in these households are on low and medium incomes and are affected by energy poverty.

There is also a gap between homeowners and tenants. In many member states, a renovation is paid for either fully or partly by the tenants. It’s a massive problem as most of them have faced income losses due to the pandemic. Much of the relief was provided to homeowners to pay for their mortgage, but not for the people paying the rent.

One of the solutions proposed is housing cost neutrality. It refers to rental increases after renovations being balanced by energy savings. It’s currently only incorporated in the Netherlands. The state is putting a lot of money into it and removing any barriers to encourage homeowners to participate.

Another proposal is the introduction of minimum energy performance standards into rental law. For example, if a building is available for lease but does not meet these standards, then the homeowner cannot increase the rent. If this idea isn’t implemented, the funding provided to local authorities will get capitalized.

The road ahead

In regard to renovations, several things need to happen. There has to be a focus on low-income households facing energy poverty and poor housing conditions. Adequate funding and finance to support measures are also a priority. It’s vital to ensure they are operational and have sufficient capacity to deliver affordability outcomes.

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