New Buildings Under the Revised EPBD: From Nearly Zero-Energy to Zero-Emission

2 March 2026

Introduction

In our first article in this series, we examined the broad architecture of the revised Energy Performance of Buildings Directive (EU) 2024/1275 and its implications for European real estate portfolios. In this second instalment, we turn our attention to the provisions that will reshape the development pipeline: the requirements for new buildings.

The revised EPBD replaces the “nearly zero-energy building” (nZEB) standard that has governed new construction since 2020. Under Article 7 of the recast Directive, all new buildings owned by public bodies must be zero-emission buildings (ZEB) from 1 January 2028, with the requirement extending to all new buildings from 1 January 2030.

In addition to energy efficiency requirements, Article 10 mandates the deployment of suitable solar energy installations on all new non-residential buildings from 31 December 2026 and new residential buildings by 31 December 2029. The Directive requires that all new buildings also be “solar-ready” and designed to optimise solar generation potential from the outset, avoiding costly structural interventions later.

Under Article 7(2), life-cycle Global Warming Potential (GWP) must also be calculated and disclosed in the energy performance certificate for all new buildings above 1,000 m² from 2028, and for all new buildings from 2030. By January 2027, Member States must publish roadmaps introducing limit values on the total cumulative lifecycle GWP of new buildings, with targets from 2030 and a progressive downward trend. This introduces whole-life carbon accounting into the regulatory baseline for the first time.

Article 13 addresses technical building systems in new buildings, requiring self-regulating temperature devices in each room, indoor environmental quality standards, and facilitating the effective installation of low-temperature heating systems. Taken together with the prohibition on financial incentives for stand-alone fossil fuel boilers from January 2025, there is a clear direction of travel towards fully electrified, renewable-powered buildings.

For asset managers and investors with exposure to European development activity, the implications are material. Compliance with ZEB standards, LCA disclosures and renewable energy requirements will be a prerequisite for building permits. Access to subsidies and financing opportunities may be determined by alignment with energy and carbon performance as well.

This article examines the key new-build requirements and assessing the practical significance of EPBD alignment for portfolio strategy and asset-level decision-making.

Key Provisions for New Construction

Practical Implications for Asset Managers and Investors

Practical Implications for Asset Managers and Investors

 The most immediate consequence of the revised EPBD is straightforward: from 2030, no new building will receive a permit unless it meets ZEB requirements, which includes a GWP disclosure and meeting minimum renewable energy requirements. As the deadline gets closer, any development in the pipeline that has not been designed to ZEB standard risks being unable to secure the approvals needed to proceed.

At a project level, designing to the ZEB standard rather than the existing nZEB baseline will impact design standards and construction costs. Over time, assets that fail to meet ZEB requirements at completion may face valuation challenges as the performance gap between buildings becomes visible in market pricing. Buildings currently in the pipeline that are designed only to existing minimum standards may also be entering the market with lower comparative performance, especially if they reach practical completion after the ZEB deadlines.

Research across European markets demonstrates a measurable green premium for high-performing buildings. Studies of Italian real estate markets, for instance, have found that residential properties with the highest EPC ratings command an average price premium of approximately 25% compared to the worst-performing equivalents, though with significant regional variation.[1] More granularly, moving from the worst to the best energy class has been found to generate a price premium of around 6% in some markets, with spillover effects benefiting nearby properties.[2] While much of this evidence base is drawn from existing stock, the principle will likely increasingly apply to new-build differentiation as ZEB becomes the regulatory baseline.

At a portfolio level, EPBD implementation will require country-specific requirement mapping, a significant challenge for pan-European portfolios. Member States must each set their own maximum energy demand and operational greenhouse gas emission thresholds for ZEB under Article 11, and transposition timelines and ambition levels will vary across jurisdictions. Investors must carefully track these requirements and prioritise action in the highest-risk jurisdictions where thresholds are most demanding or where transposition is most advanced.

Beyond compliance, the operational cost implications of ZEB design and renewable energy integration is significant for asset managers and investors as well. The Directive requires that the energy demand threshold for zero-emission buildings be at least 10% lower than the threshold for nZEB established at Member State level (Article 11(3)). Combined with the requirement that the total annual primary energy use of a ZEB be covered by energy from renewable sources, whether generated on-site, from nearby installations, from renewable energy communities, from efficient district heating, or from the grid where it can be certified as renewable, ZEB buildings should offer occupiers fundamentally different operating costs.

The mandatory solar installation requirements contribute to this as well. A new building designed from the ground up to optimise solar generation potential, with integrated on-site renewable capacity, can materially reduce its dependence on grid energy. Renewable energy integration and independence from the can be highly valuable to both managers and tenants, especially in the context of energy price volatility.

For asset managers, OpEx reduction achieved through ZEB design and renewable energy integration is not merely a cost-saving measure, it can also be a yield-enhancing strategy. Lower energy consumption, reduced exposure to energy price shocks, and greater operational predictability all support stronger rental income and lower vacancy risk over an asset’s life. These operational advantages flow directly through to net operating income, which in turn drives both valuation assessments and lending decisions.

In Practice: NZEB versus ZEB

While the nZEB standard has been embedded into new-build regulations in all Member States, definitions and thresholds vary widely. A 2024 review shows new nZEBs consume roughly 30% less non-renewable primary energy than renovated buildings, however in some markets, renewable contributions remain below 10% while others approach 50% or more.[3] In several cases, national definitions still do not meet the European Commission’s benchmark.

This uneven baseline matters because the EPBD revision does not simply “tighten” nZEB requirements. ZEB standards must be at least 10% more ambitious in primary energy limits and eliminate on-site fuel emissions. That shift removes the regulatory tolerance for hybrid solutions, particularly gas boilers by rooftop PV, that have previously characterised nZEB compliance in parts of Europe.

The practical consequences will be material:

1. Further energy demand reduction beyond “easy wins”
2. Full electrification of building systems
3. Greater reliance on heat pumps and high-performance envelopes
4. Clearer operational GHG emissions constraints and increased embodied carbon requirements
5. Integration of sufficient renewable energy systems

In the near term, however, ZEB formalises the transition from “very efficient” to “fully fossil-free with defined operational carbon limits,” and that is likely to carry additional capital and design complexity.

In Practice: How We Have Supported Clients

The following case study demonstrates how assets can align with the solar PV requirement under the EPBD. As it is implemented across Member States, Longevity Partners can support asset and portfolio managers in navigating the EPBD’s new requirements for new construction.

Case Study

Longevity advised on the acquisition of a European logistics asset incorporating a 17.3 MWp rooftop solar installation structured under a long-term third-party agreement.

Under the revised EPBD, rooftop solar will become mandatory across new commercial buildings. As such, new developments will increasingly be taken to market encumbered with long-term third-party solar lease agreements. At face value, the installation enhanced ESG credentials and aligned with forthcoming EPBD requirements. However, the structure had been negotiated at development stage, embedding long-dated contractual terms, risk allocation and revenue mechanics prior to institutional ownership.

Longevity approached the asset accordingly. We developed and applied a dedicated underwriting framework to assess:

1. Long-term roof control and optionality
2. Allocation of regulatory, policy and performance risk across a 25-year horizon
3. Structural and operational interface liabilities
4. Revenue capture versus opportunity cost under alternative ownership scenarios
5. Sensitivity of long-term NOI under different power price and policy pathways

This shifted how the investment was viewed internally. The solar installation was no longer treated simply as a sustainability benefit, but as a long-term infrastructure agreement that required proper oversight and governance. The impact also went beyond the individual transaction. The client introduced a consistent screening approach for embedded rooftop infrastructure, ensuring that future acquisitions assess solar not just as a compliance feature, but as a contractual commitment with potential valuation consequences.

As EPBD drives universal deployment, competitive advantage will lie not in installing panels, but in underwriting and structuring rooftop energy infrastructure correctly.

What Asset Managers Should be Doing Now

The revised EPBD’s new-build requirements are no longer distant regulatory proposals. The 2030 deadline is now within the standard development cycle for most European markets. As requirements begin to be published, we recommend the following actions:

Map your exposure. EPBD implementation will vary materially by each member state, including on ZEB definitions, renewable energy criteria and exemptions and LCA calculations. A development programme spanning multiple European markets faces multiple regulatory timelines. Our policy and sustainable design teams can support you in mapping the key requirements relevant to your portfolio and develop an alignment action plan to address risks and opportunities. 

Embed whole-life carbon at design stage, not at handover. The EPBD Recast introduces mandatory whole-life GWP disclosure from 2028 for public buildings and 2030 for all other new buildings, with emissions limits expected to follow. The structural and envelope choices made now for concrete specification, insulation, glazing, will be compliance variables. Our EN 15978-aligned whole-life carbon assessments, integrated alongside energy modelling from feasibility design stage, ensure your design brief is calibrated to future thresholds from the outset.

Build a phased delivery roadmap. ZEB compliance for new developments will require sequencing across multiple workstreams. Design specification, renewable energy procurement, grid connection, EV charging infrastructure and whole life carbon modelling each have their own lead time and cost implications. Addressing them in isolation, or deferring decisions to later design stages, may lock in cost premiums that are avoidable. Longevity’s sustainable design team can integrate these workstreams into a single, phased programme. Coupled with our operational and embodied carbon calculations and ZEB gap analysis, delivered at feasibility stage, development teams can have the performance data they need to make the right design decisions before costs are locked in.

Map solar PV compliance obligations across your portfolio. Under the EPBD, Member States must ensure solar energy systems are installed on all new commercial buildings from 2028, with further requirements extending to existing buildings undergoing major renovation. Longevity Power, our dedicated renewable deployment subsidiary, helps asset managers assess the technical and commercial implications and structure solar solutions to maximise long term value while reducing risk.

Looking Ahead

The revised EPBD’s new-build provisions represent both a challenge and an opportunity for European real estate investors. Early movers who design for ZEB alignment, integrate solar and low-carbon heating from inception, and embed life-cycle carbon into their development processes will be best positioned to capture preferential financing, attract quality tenants, and deliver resilient assets.

In our next article, we will examine the EPBD’s implications for existing buildings, where the renovation challenge is greatest and the MEPS deadlines most pressing.

Transposition Tracker

1. France: The DADUE Bill, which includes provisions on energy performance, is currently under consideration in Parliament.
2. Germany: Transposition of the EPBD is being led by the Federal Ministry for Economic Affairs and Energy (BMWE) and the Federal Ministry for Housing, Urban Development and Building (BMWSB).
3. Italy: There is currently no publicly available information indicating progress on the transposition of the EPBD.
4. Netherlands: The Dutch government has confirmed that provisions relating to Zero-Emission Buildings (ZEB), renovation passports, and Energy Performance Certificate (EPC) requirements are currently being drafted.
5. Spain: Public consultations on transposition into national law have commenced; however, no draft regulations have been published to date.

References

[1] Abate, L., Lionetti, V. & Michelangeli, V. (2024). ‘Is the Italian green mortgage market ready to take off?’ Bank of Italy Occasional Papers No. 868.

[2] Loberto, M., Mistretta, A. & Spuri, M. (2023). ‘The capitalization of energy labels into house prices: Evidence from Italy.’ Bank of Italy Occasional Papers No. 818.*

[3] Sartori, I., Noris, F., Herkel, S. ‘Cost analysis of nZEB/Plus energy buildings’ REHVA, 2023.