10 March 2026
The EU’s revised Energy Performance of Buildings Directive (EPBD) introduces a new standard for all new construction in Europe. From 2030, any new building that cannot demonstrate zero on-site fossil fuel emissions will not receive a building permit. Public-sector buildings face the same requirement from the start of 2028.
This article explains what the new zero-emission building (ZEB) standard requires, how it differs from the current rules, and what it means for development and investment decisions being made today.
Key Dates
Defining zero-emission buildings
A zero-emission building has two defining characteristics: it produces no carbon emissions from fossil fuels on-site, and its energy consumption falls below a maximum threshold set by each Member State. That threshold must be at least 10% lower than the country’s current nearly zero-energy building (nZEB) limit.
The energy a ZEB uses must come from renewable sources, whether that’s rooftop solar, heat pumps, a local renewable energy community, district heating, or certified renewable electricity from the grid. Being highly energy-efficient is no longer enough on its own, buildings must be fossil fuel-free too.
What this means in practice
Much of Europe’s current new-build stock meets the nZEB standard by combining a gas boiler with rooftop solar panels. Under ZEB, that approach will no longer be sufficient and gas boilers will be phased out regardless of what else is installed. The practical shift means:
● Heat pumps replacing gas for heating and hot water
● Better-insulated building envelopes to keep energy demand low
● More on-site renewable generation
Solar panels become standard
The Directive makes solar PV mandatory on new non-residential buildings from the end of 2026, and on new homes from the end of 2029. All new buildings must also be designed as “solar-ready” and built in a way that makes future installation straightforward and avoids the need for costly structural changes.
For anyone developing commercial property now, this is an immediate design consideration. Buildings completing from the end of 2026 without solar PV provision risk failing to secure planning permission.
Embodied carbon requirements
From 2028, whole-life carbon must be calculated and disclosed for new buildings over 1,000 m². This extends to all new buildings from 2030, and limit values are expected to follow. Whole-life carbon assessments cover both operational and embodied emissions, including emissions produced from construction, energy and demolition.
This matters most for materials decisions made early in the design process: the type of concrete, insulation and glazing. These choices will increasingly be required for regulatory alignment, rather than design decisions.
Why this matters for investment and development
The 2030 deadline is closer than it looks. A project entering design in the coming years may need to meet ZEB requirements in the permit application.
There is also growing evidence that energy performance affects asset value. Research on the Italian residential market found that the highest-rated properties command a price premium of around 25% over the worst-performing equivalents, though this varies significantly by region. ¹ A separate study found a premium of around 6% per energy class improvement. ²
Beyond pricing, ZEB buildings should cost less to run. No fossil fuel exposure means lower susceptibility to energy price volatility, and reduced operating costs feed directly through to net income.
For portfolios spanning multiple European countries, tracking compliance will require a country-by-country approach. Each Member State sets its own ZEB thresholds, renewable energy criteria and lifecycle carbon methodology, and transposition into national legislation is at different stages across the EU.
Sources
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 Regulation (EU) 2024/1275 of the European Parliament and of the Council of 24 April 2024 on the energy performance of buildings (recast). OJ L 1275. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L_202401275
