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27.03.2024 | KPMG Law Insights

EU Buildings Directive: life cycle greenhouse potential becomes relevant

On March 12, 2024, the EU Parliament approved the amendment to the EU Buildings Directive. The directive obliges member states and, indirectly, building owners and construction companies to determine the life cycle greenhouse potential of new buildings from 2028 or 2030.

With the approval of the EU Parliament, the reform of Directive 2010/31/EU on the energy performance of buildings, Energy Performance of Buildings Directive, EPBD (COM (2021) – CP-0469/2021 – 2021/0426 (COD)) has cleared the penultimate hurdle.

Buildings account for 40 percent of the Union’s final energy consumption and 36 percent of its energy-related greenhouse gas emissions (see recital 3 of the EPBD). The European Union’s vision for a decarbonized building stock by 2050 is part of the EU climate protection package “Fit for 55” and goes beyond the current focus on operational greenhouse gas emissions (see recital 7 of the EPBD). In addition to emissions during operation, for example from heating and air conditioning buildings, the greenhouse gas emissions caused by the construction of buildings should also be taken into account in future. The production of building materials such as concrete and steel, for example, causes considerable greenhouse gas emissions, whileCO2 is bound in wood as a building material for decades. Materials, planning and construction methods therefore have a strong influence on the life cycle emissions of the building and thus on its life cycle global warming potential (GWP).

Obligation to determine the life cycle global warming potential

Art. 7 para. 2 EPBD requires Member States to calculate the life cycle GWP in accordance with Annex III from the following dates and to disclose it in the energy performance certificate of the building:

  • from January 1, 2028 for all new buildings with a usable area of more than 1,000 m²
  • from January 1, 2030 for all new buildings.

For the calculation of the life cycle global warming potential of new buildings in accordance with Article 7 para. 2 EPBD, Annex III EPBP specifies the total life cycle global warming potential as a numerical indicator, expressed in kg CO2eq/(m²) (floor area) for each life cycle phase, calculated over a reference period of 50 years. Data selection, scenario definition and calculations are carried out in accordance with EN 15978. This includes determining the greenhouse gas potentials of the production phase (A1-3) and the construction phase (A4-5) as well as the disposal phase (C1-4) of a building.

All data is collected in national databases for the energy performance of buildings. The aggregated and anonymized data on the building stock is stored in accordance with Art. 22 Para. 2 EPBD in compliance with Union and national data protection rules.

Outlook and conclusion

The draft still has to be approved by the Council of the European Union. The Transport, Telecommunications and Energy Council, to which the matter has been assigned, will formally deal with the draft on May 30, 2024 at the earliest. The directive must then be transposed into national law.

From January 1, 2028 – or for buildings smaller than 1,000 m² from 2030 – the life cycle greenhouse potentials pursuant to Art. 7 para. 2 EPBD must be determined. For new buildings, all those involved in construction should already be prepared to take the life cycle greenhouse potential into account during the planning stage. Pursuant to Art. 7 para. 5 EPBD by January 1, 2027, a roadmap detailing the introduction of limit values for the total cumulative life cycle global warming potential of all new buildings and setting targets for new buildings from 2030.

In its report dated January 19, 2022, the Bundesrechnungshof stated that, taking sustainability aspects into account, an alternative course of action can be economical that would otherwise have been uneconomical without taking these aspects into account.

Determining the life cycle greenhouse potential creates a basis of information and control options for building owners and construction companies. In their economic feasibility study in accordance with Section 7 of the Federal Budget Code (BHO), clients can identify climate costs based on the life cycle greenhouse potential and a shadow price onCO2 emissions and evaluate them as part of their procurement. We have described in detail howCO2 emissionscan be taken into account under budgetary law, public procurement law and contract law via a shadow price in an impulse paper commissioned by the Federation of the German Construction Industry (Hauptverband der Deutschen Bauindustrie) and provided practical examples.

 

 

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