The Energy Performance of Buildings Directive (EPBD) is the EU’s main policy to decarbonise buildings. Member States must set minimum building performance standards using a cost-optimal approach. The European Commission is updating the cost-optimal methodology framework in line with the 2024 EPBD changes.

This update is an opportunity to better include the multiple benefits of energy efficient buildings. The report explains why these benefits should be part of the methodology and looks at how key economic factors impact cost-optimal calculations.

Energy efficiency does more than generate significant cost savings. It also brings many additional benefits, such as improved energy security, higher productivity, reduced energy poverty, and support for the energy grid. Recognising these benefits in cost-optimal calculations will better reflect the true value of energy efficiency and improve its economic appeal. This broader view aligns with the EU’s focus on social fairness in policy.

The key benefits that are discussed in this publication are:

– Energy security: Reduced reliance on fossil fuels and better integration of renewable energy.

– Productivity: Energy-efficient buildings improve work, education, and healthcare outcomes.

– Energy poverty: Lower energy costs free up income for essential needs and improve well-being.

– Grid benefits: Renovations reduce grid stress, such as lower line losses and less need for infrastructure investment.

The key economic factors that need to be considered are:

– Discount rate: Lower discount rates should be used to highlight the long-term benefits of building renovations.

– Energy prices: Current prices do not reflect long-term realities, and adjustments are needed in the updated framework.

The report recommends using methods that account for multiple benefits and gathering best practices to guide EU decarbonisation efforts.