11 September 2024
Jillian Giberson, Global Head of Policy & Regulation
The European Union’s revision of the Energy Performance of Buildings Directive (EPBD) entered into force in May 2024, and was a pivotal step in driving sustainable development across the continent. As Member States begin transposing this directive into national legislation, asset managers must adapt to the changing landscape of real estate regulation.
The updated EPBD aims to accelerate the decarbonization of Europe’s building stock by setting new targets for energy efficiency. One of the key changes includes new minimum energy performance standards (MEPS) for existing residential and commercial properties. This means that older, less efficient buildings will need to be upgraded to meet new requirements or face penalties.
For asset managers, this presents both a challenge and an opportunity. The challenge lies in assessing the energy efficiency of existing portfolios and identifying buildings that may require significant investment to meet compliance. Regular energy performance assessments, such as energy audits or certifications, will be crucial to understanding where improvements are needed.
Another key aspect of the revised directive is the push for automated building management systems (BMS) and smart technologies to monitor and optimize energy use. More buildings will be required to install a BMS system by 2029 and meet new indoor environmental quality standards.
Moreover, the EPBD encourages the adoption of renewable energy sources in building operations, such as solar panels and heat pumps. New non-residential buildings will be required to be designed as “solar ready” and must install rooftop solar PV systems where feasible beginning in 2027. Asset managers should factor in potential costs and incentives associated with integrating these technologies into their assets.
Most of the technical specifications and standards themselves will be set by the Member States. This will require diligent monitoring of regulatory changes for managers of pan-European portfolios, as the requirements in one Member State will likely differ from those in another.
As Member States gradually implement the revised directive, asset managers must stay informed about evolving national legislation and timelines. Longevity Partners offers comprehensive legislation reviews and regulatory monitoring services to support you in your management of the risks and opportunities that stem from EPBD implementation.
By embracing these changes early, asset managers can turn regulatory compliance into a strategic advantage.