Topics discussed and partial agreement

The legislative proposal and the ambitious amendments proposed by the Parliament appear to have been watered down significantly towards the Council position, as expected.

Member States have successfully opposed a renovation obligation, softened the criteria for zero-emission buildings, and kept flexibility in the Energy Performance Certification (EPC) provisions. Other topics that were under discussion include inspection requirements for HVAC systems, and the Smart Readiness Indicator (SRI).

The precise text of the partial agreement has not been seen by Eurovent.

Article 11a on Indoor Environmental Quality

The detailed Article 11a on Indoor Environmental Quality as proposed by the Parliament has been deleted. Instead, a provision will be added to Article 11 which mandates Member States to set requirements for IEQ. The draft clause reads as follows:

“Member States shall set requirements for the implementation of adequate indoor environmental quality standards in buildings in order to maintain a healthy indoor climate.”

Next steps

It is expected that the next round of interinstitutional negotiations, which is taking place over the course of November, will conclude the file.

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Article 11a on Indoor Environmental Quality

The Parliament’s position includes a proposed new Article 11a which would require Member States to set minimum requirements for Indoor Environmental Quality. This was not included in the original Commission proposal nor in the Council’s position. Having adopted their respective positions, the three institutions now have to come to a compromise final text.

Parliament in favour

From the office of the EP rapporteur, we have learned that the Parliament has so far defended its position in favour of a strong Article 11a on IEQ.  But it is acknowledging it might have to soften its stance to reach a compromise.

Council opposition

Member States have very different perspectives, with some who could accept Article 11a and others totally against. Some large and influential countries are opposed. The current Council position in the trilogues is that IEQ is out of scope and proposed Article 11a should be scrapped.

From sources in the Parliament, we learned that the Council might be willing to show flexibility and accept an Article 11a if:

1. acoustics and lighting aspects are removed,
2. the reference to Level(s) is replaced with a reference to ISO 17772-1:2017,
3. flexibility of methods is left to Member States, and
4. the obligation is applied only for new buildings and not major renovations.

From sources close to the Spanish Presidency, we earned that another question in dispute is the scope of the requirements: Should they apply to all buildings? Only to public buildings? Should residential buildings be excluded?

The 4-column document prepared by the Council Presidency and seen by Eurovent confirmed that the Council is defending its position against Article 11a, but also sees room for a compromise

Next steps

The Parliament was in recess until end of August. Trilogues will now resume. The next trilogue meeting is scheduled for 31 August.

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Compromise text adopted

The draft compromise that was found between the EPP, S&D, Renew, Greens/EFA, and The Left at the end of January 2023, was approved by formal vote in the ITRE committee on 9 February 2023.

The ITRE report will go to the Plenary during its session of 13eurovent-market-intelligence/news/eurovent-market-intelligence/-16 March 2023. After adoption by the Plenary, the interinstitutional negotiations will start. The Council already adopted its negotiating position end of last year.

Decarbonisation

One of the important points in the compromise concerns the level of ambition on the fossil fuel phase-out and the role of renewable fuels like hydrogen for heating buildings. The adopted compromise text, under Article 7 paragraph 4a, aim to phase-out fossil fuels but makes an exemption for ‘boilers certified to run on renewable fuels’. This appears to be a loophole that allows the continued installation and use of fossil fuel boilers so long as they could potentially run on renewable fuels, shifting the decarbonisation onus to the gas supply rather than the building equipment.

Indoor Environmental Quality

The strong provisions on Indoor Environmental Quality (IEQ) were mostly preserved, including the dedicated Article 11a. This article binds Member States to set IEQ requirements in national buildings codes based on the LEVELs framework, which itself refers to EN 16798. Relevant indicators must be measured in the building, including CO₂ concentration, temperature and thermal comfort, relative humidity, and ventilation rates.

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ENVI opinion

The ENVI final opinion on the EPBD will feed into the discussion in the lead committee (ITRE). The opinion proposes more ambition than the Commission and Council proposals and contains strong provisions on indoor environmental quality (IEQ) including a definition based on EN 16798eurovent-market-intelligence/news/eurovent-market-intelligence/-1 and an inspection obligation.

Timeline

Following the publication of the Council’s general approach, the process was delayed in the European Parliament. The ITRE report has not yet been adopted and not placed on the agenda of the December plenary session. The ITRE committee is reconsidering its approach to prepare for difficult negotiations with the Council. Final adoption and publication expected in early to mid-2023.

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In the details, however, the Council’s position is less ambitious than the Commission proposal and would keep significant flexibility for Member States.

Summary of the Council position

The Council finalised its position on the EPBD revision proposal submitted by the Commission on 15 December last year. A summary of its position and differences with the Commission proposal is below.

Article 3 – National building renovation plans

Some amendments on the links with national energy and climate plans, and proposal to postpone the submission deadline of the first plan by 1 year.

Article 6 – Cost-optimal framework

Proposal to move up the revision of the cost-optimal framework by 1 year.

Article 7 – New buildings

Proposal that new public buildings should be zero-emission from 2028 instead of 2027 as proposed by the Commission. The deadline for all other new buildings remains 2030. However, the definition of zero-emission building is significantly amended (see Article 9b).

The injunction to ‘address the issues of healthy indoor climate conditions’ in both Article 7 (new buildings) and Article 8 (existing buildings) remains.

Article 9 – Minimum energy performance standards (for existing buildings)

Proposal to specify maximum energy performance thresholds expressed in primary energy use rather than energy performance classes (A-G) as proposed by the Commission.

Non-residential

The first threshold is defined at the energy performance that cuts off the 15% worst-performing non-residential buildings in 2020. This threshold should be met by all non-residential buildings by 2030.

The second threshold is the level that cuts off the 25% worst-performing non-residential buildings. This threshold should be met by 2034.

This is less ambitious than the Commission proposal, which required class F by 2027 and class E by 2030, where class F would have corresponded to the 15% worst-performing buildings.

Residential

MEPS proposed by the Commission (class F by 2030 and class E by 2033) rejected entirely. Instead, Member States shall set MEPS based on a national trajectory aimed at zero-emissions by 2050. The only specification is that the average energy use of the entire residential building stock should be at least equivalent to class D by 2033 and a nationally determined value by 2040. Moreover, Member States may opt not to apply these standards to single family houses, in which case they should ensure that those houses meet at least class D 5 years after they are next sold, rented, donated, or changed in the cadastre.

Article 9b – Zero emission buildings

Proposal to set the definitions of zero emission buildings at Member State level. The common definitional thresholds proposed by the Commission in Annex II are deleted.

It is only specified that a zero-emission building should (i) not cause any on-site carbon emissions from fossil fuels and (ii) its total annual primary energy use should be covered by renewables generated onsite, nearby, or from a renewable energy community (RED), or from an efficient district heating and cooling system (EED), or from carbon free sources.

Article 10 – Renovation passports

Proposal to introduce the renovation passport scheme by the end of 2025 rather than 2024 as proposed by the Commission. Moreover, the passport should be voluntary for building owners.

Article 11 – Technical building systems

Member States may set requirements related to the minimum part of renewable energy used for heating at building level and should strive to replace fossil-fuelled heat generators in existing buildings to achieve net-zero by 2050.

The requirement to equip zero-emission buildings with measuring and control devices for indoor air quality is kept, but the Council proposes to apply it only to non-residential buildings.

Article 12 – Smart readiness of buildings

Proposal to conclude the SRI test phase and have the Commission submit a report by 2026 to the Member States assessing the results. If the assessment is positive, only then shall the Commission adopt a delegated act requiring its application.

Article 15 – Financial incentives

Article 15 is a rare occasion where the Council proposes more ambition: the Commission had proposed to phase out subsidies for fossil fuel boilers by 2027. The Council suggests 2025.

Article 16 – Energy performance certificates

Proposal to move back by 1 year the compliance with the EPC template of Annex V. Harmonised scaling rejected – setting the scales left to the Member States. Introduction of a new mandatory class A0 for zero-emission buildings and voluntary class A+ for buildings that make a positive net annual contribution to the energy grid from on-site renewables. Agreement that EPC should be issued based on an on-site visit, but rejection of the shortened validity of EPC from 10 to 5 years proposed by the Commission.

Article 20 – Inspections of HVAC systems

Only relatively minor amendments on wordings and exceptions.

Annex I – Energy performance calculation framework

Option to use monthly time calculation intervals kept, whereas the Commission had proposed to use hourly or sub-hourly intervals.

The reference to EN 16798eurovent-market-intelligence/news/eurovent-market-intelligence/-1 survives.

Annex II – Template for national building renovation plans

Proposal to either scrap or makes optional many of the indicators proposed by the Commission. Health and well-being aspects are not included in the wider benefits.

Annex V – Template for energy performance certificates

Optional indicators for the presence of sensors and controls for indoor air quality maintained.

Next steps

With the Council position finalised, the process awaits the position of the Parliament. The Parliament’s ITRE Committee vote is scheduled for 26 November 2022. The indicative Plenary sitting date is December 2022. The trilogue negotiations between the co-legislators will begin shortly afterwards.

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Renewable Energy Directive (RED)

The Commission sent reasoned opinion to Denmark and France for not having fully transposed the EU rules on the promotion of renewable energy. The RED notably sets 2030 targets for renewable energy shares and establishes a framework to ensure support and simplify administrative procedures for renewable energy projects, including in heating and cooling. The deadline to transpose the RED into national law was 30 June 2021.

Energy Performance of Buildings Directive (EPBD)

Belgium, Germany, and Austria are deemed not to have fully transposed the EPBD, for which they have now received reasoned opinions from the Commission. The 2018 EPBD notably introduced new minimum energy performance requirements for new buildings and new rules on the inspection of heating and air-conditioning systems. The deadline to transpose the Directive into national law expired on 10 March 2020.

Energy Efficiency Directive (EED)

Reason opinions were sent to Austria and Slovenia for not ensuring full transposition of the EED. The EED notably sets 2030 targets for energy savings and establishes a framework to ensure support for energy efficiency measures. Member States were required to transpose the Directive by 25 October 2020.

Infringement procedure and next steps

When a Member State fails to declare full transposition of a Directive, the Commission sends a letter of formal notice to the Member State in question, giving the Member State the opportunity still to notify its transposition. 

If the Commission still considers that the Directive is not fully transposed after this, it may start a formal infringement procedure. In the first step, it issues a reasoned opinion to the Member State, which has another 2 months to comply with the transposition obligation and notify the Commission. Otherwise, the Commission may decide to refer the case to the Court of Justice of the European Union.

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ITRE draft amendments

The ITRE draft amendments are positive on the whole. There appears to be broad support for mainstreaming Indoor Environmental Quality into the legal text, including concrete policy measures.

The work on compromise amendments in the ITRE Committee has since kicked off.

Next steps

European Parliament:

• ITRE Committee vote: 26 October 2022
• Indicative Plenary Sitting Date: December 2022

Council of the EU:

• Energy Council (poss.) General approach: 25 October 2022
• Energy Council General approach: 19 December 2022

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The French Presidency of the Council proposed to compromise amendments in early May, whereas the European Parliament’s ITRE Committee published the draft report dated 6 June 2022. The focus is quite different between the two documents.

Council amendments

In the Council, the main focus of the debate is on the level of ambition. Among the issues under negotiation are the definition and thresholds of zero-emission buildings (ZEB), and the dates on which the ZEB requirements should come into force. The compromise proposes to scrap the thresholds in Annex III and allow Member States to set ZEB thresholds at national level.

Other aspects under discussion include, among others, the dates for the introduction of the renovation passport scheme, the MEPS schedule, and the fossil fuel subsidy ban. More information from the Council is expected after the meeting of the EU energy ministers on 27 and 28 June.

ITRE draft report

The ITRE Committee draft report, by contrast, proposes to increase the level of ambition and move up a lot of key dates. It would notably move up the ZEB requirement for new buildings to 2025 and require higher energy classes in the MEPS schedule. The draft report also proposes to require Member States to introduce prohibitions on fossil fuels in new buildings and buildings undergoing major renovations, aiming for full phase out by 2035 at the latest. It also places more emphasis on social aspects, including energy poverty and the protection of low-income households.

The ITRE rapporteur proposes to mainstream IEQ into the legal text, including concrete policy measures. A new article 11a would require Member States to set minimum IEQ standards in accordance with a methodological framework defined by the Commission, with which all buildings undergoing major renovation would have to comply. Moreover, HVAC system inspections are proposed to also check for compliance with IEQ requirements, and the EPC is proposed to include recommendations for IEQ improvement.

The deadline for tabling amendments to the ITRE draft report is 5 July 2022.

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Noteworthy elements

The ENVI Committee’s rapporteur for opinion on the EPBD file is Mr Radan Kanev (EPP, Bulgaria). His draft opinion was published on 19 April 2022. The draft opinion notably proposes:

• to allow for renewables from the grid in the ZEB definition
• to include final energy alongside primary energy use in the EPC and calculation framework
• to reduce the ambition on the timelines for ZEB and MEPS requirements

The rapporteur also stresses the importance of IAQ, and proposes several amendments that would strengthen IAQ considerations in the legal text, including:

• a new recital (53a) recognising the importance of HVAC systems, ventilation, and air filtration in preventing the spread of air-transmissible diseases
• a new definition of ‘indoor air quality’ in Article 2
• explicit IAQ wording in Articles 5, 7 and 8, and in Annex I
• a new requirement to assess IAQ as part of the mandatory inspection schemes in Article 20

Many of these proposed amendments are in line with the Eurovent position published 30 March 2022.

Legislative situation

The Commission’s EPBD proposal is with the Council and Parliament for co-decision. Within the Parliament, the ITRE Committee leads the file. Three other Committees are providing opinions. The ENVI Committee is one of the opinion-giving Committees. Mr Kanev’s draft opinion will be considered by the ITRE Committee on 17 May 2022. The ENVI Committee will vote on the draft opinion and amendments in September.

The ITRE rapporteur is Mr Ciaran Cuffe (Greens/EFA, Ireland). The ITRE shadow rapporteurs are:

• Seán Kelly (EPP, Ireland)
• Tsvetelina Penkova (S&D, Bulgaria)
• Morten Petersen (Renew, Denmark)
• Isabella Tovaglieri (ID, Italy)
• Ladislav Ilčić (ECR, Croatia)
• Marisa Matias (The Left, Portugal)

In the next steps, Mr Cuffe will produce the ITRE draft report, taking into consideration the opinions of the other Committees. This will be amended and voted on by the ITRE Committee. Then the final ITRE report will be submitted to the Parliament plenary, for final amendment and approval. This will be the basis for the negation position of the Parliament towards the Commission and Council.

On the Council side, a progress report is expected on 27 June 2022.

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