SPECIAL REPORT / Newly adopted EU rules requiring governments to revamp old buildings will generate industrial renovation in cities, say commentators who welcome the energy efficiency directive approved by the European Parliament's energy committee last week (12 July).

The directive requires EU member states to renovate at least 3% of the total floor area of building of more than 500 square meters which are "owned and occupied by their central government".

Although these buildings represent just 12% of the EU's building stock, the European Commission believes this should set the example for private owners, creating a snowball effect.

Adam McCarthy, Director of Government Relations at Johnson Controls and President of EuroAce, representing companies in the building-efficiency sector, said that for every €1 million spent on building regeneration, "you create 19 jobs in and around the construction industry, building or supplying equipment.”

US example shows private sector latches on to public

McCarthy said that in the United States, a decision taken during the 1990s at the federal level to retrofit companies using third-party finance had gone on to generate €7 billion of private construction.

“We have seen over time the proportion of that business [in the US] moving from the public to the private sector. So that is a concrete case of the leading role of the public sector,” McCarthy said.

It is likely that local authorities will follow the example of central governments, according to a spokeswoman for the Building Performance Institute Europe, a non-profit group dedicated to energy savings in the built environment.

A stimulus in the construction market could result from ambitious levels of renovation flowing from the new rule, the spokeswoman said, adding: “In this way [the 3% rule] will provide a positive example to society, will improve the buildings’ public procurement and may catalyse the high quality renovation market.”

Construction industry needs a boost

Claude Turmes, the Green MEP from Luxembourg who is the chief Parliament negotiator on the efficiency bill, claims that the building renovations attached to the directive will constitute an important part of Europe’s growth initiative, which EU leaders agreed on 29 June.

The new 3% renovation provisions involve a phase-in, and will apply to buildings with a "total useful floor area" of more than 500 m2 up until July 2015, and 250 m2 thereafter.

And old industrial buildings could be among the first to benefit from the positive ripple effect of the new EU law.

2011 survey from English Heritage, a public-funded organisation, has found that almost half of listed industrial buildings could be put to new economic uses.

"Forty percent of these buildings could be reused to house new advanced manufacturing, the sorts of technology, green engineering and creative and inventive businesses on which the country's economic future now depends," said Simon Thurley, chief executive of English Heritage.

However, most developers "can be put off by a site's scale, possible contamination, conversion costs," says the public group. To encourage them, the association has launched a website that offers advice relevant to re-using industrial buildings. Developers interested in taking these on will get additional help from English Heritage to guide them through the process.

"Although not easy, there are countless examples that have been saved by committed local groups as conserved sites in the landscape, often with public access or as visitor attractions," the association said.