European policy developments

EU Renovation Wave & NextGenerationEU

Some numbers

• In the Netherlands buildings are responsible for 35% of the overall energy consumption.
• Only 1% of buildings undergo energy efficient renovation every year.
• Currently, roughly 75% of the building stock is energy inefficient.
• yet almost 85-95% of today’s buildings will still be in use in 2050.
• Buildings are responsible for approximately 40% of EU energy consumption and 36% of the greenhouse gas emissions.
• Given the labour-intensive nature of the building sector, which is largely dominated by local businesses, renovations of buildings also plays a crucial role in the European recovery of the COVID-19 pandemic. To kick-start the recovery, the Commission has identified doubling the renovation rate in its dedicated recovery plan.

Steps:

• the Commission published on 14 October 2020 a new strategy to boost renovation called “A Renovation Wave for Europe – Greening our buildings, creating jobs, improving lives”.
• European Bahaus: The initiative is both a network and a contact point at the crossroads between culture, social inclusion, science and technology.
• National energy and climate plans

Renovation Wave

The European Green Deal of 11 December 2019 underlined that long-term signals are needed to direct financial and capital flows to green investments and avoid stranded assets. It announced that the Commission will present a renewed sustainable finance strategy in 2020, focusing on a number of actions, including making it easier for investors to identify sustainable investments and ensuring that they are credible. The European Green Deal Investment Plan of 14 January 2020 announced that the Commission will establish an EU Green Bond Standard.

Green bonds play an increasingly important role in financing assets needed for the low-carbon transition. However, there is no uniform green bond standard within the EU. Establishing such a standard was a recommendation in the final report of the Commission’s High-Level Expert Group on Sustainable Finance. It was then included as an action in the 2018 Commission Action Plan on Financing Sustainable Growth. And finally it was assessed by the Commission’s Technical Expert Group on Sustainable Finance, which provided detailed input on this subject in its final proposal for an EU GBS in June 2019.

This work should be seen in the broader context of transitioning to a sustainable economy and triggering the significant additional investment efforts needed across all sectors to reach the EU’s current 2030 climate and energy targets (approximately EUR 260 billion a year in the core polluting sectors alone, and well beyond the capacity of the public sector) and the EU’s environmental policy objectives. It links with other initiatives on sustainable finance, such as the Regulation on a classification system (so-called ‘EU Taxonomy’) of sustainable economic activities and the Regulation on sustainability disclosures in the financial services sector. As the euro is already the main currency of denomination for the issuance of green bonds world-wide, an official EU green bond standard could also bolster the international role of the euro, and help to consolidate the EU as a global hub for green finance.