Energy-efficient building renovation: a Franco-German challenge

To achieve climate neutrality by 2050, the question of renovating buildings to be more energy-efficient is of crucial importance. More than ever before, it is the subject of debate on both sides of the Rhine. EURACTIV France and Germany report.

Even before the EU adopted its climate neutrality target for 2050, many EU countries had committed themselves to achieving that goal at the national level, in line with the Paris Agreement.

Since the building sector is responsible for 36% of the EU’s greenhouse gas emissions, energy-efficient renovation of existing buildings is seen as an essential element in the fight against climate change.

France and Germany have been working on this issue for several years, with mixed success so far.

But the debate has gained fresh momentum in recent months on the back of the European Commission’s “renovation wave” initiative, one of the flagship programmes of the European Green Deal.

EU launches 'renovation wave' for greener, more stylish buildings

The European Commission launched a renovation wave and a “new European Bauhaus” on Wednesday (14 October), aiming to rally popular support behind plans to cut emissions from buildings and reduce energy bills.

New investments in France

In France, the building sector is responsible for almost a quarter of greenhouse gas emissions. This pollution is all the more worrying as the number of buildings undergoing thermal renovation remains low. According to the French low-emission buildings observatory, only 18,500 units have undergone thermal refurbishment since the beginning of the year.

To reach its climate targets, the French government has announced that it will make energy efficiency improvements a “national priority”.

As part of a renovation plan presented last September, almost €7 billion in fresh money will be dedicated to this project for the period up to 2022. These will be allocated in particular to public buildings with €4 billion and private homes with €2 billion.

Germany still far from climate neutrality 

In Germany too, there is still a long way to go to make the building sector climate-neutral. And this despite the fact that enormous sums have been invested in the climate-friendly repair of buildings since 2010. According to the Federal Economy Ministry, almost €500 billion were invested in energy-efficient building renovation by 2018.

According to the German Institute for Economic Research (DIW), however, the CO2 savings achieved as a result are quite modest.

Although the DIW Warmth Monitor of 2019 shows that CO2 emissions in two and multi-party buildings have fallen by 21% since 2010, this is also due to warmer temperatures and the resulting lower heating costs over the last decade.

Adjusted for temperature, the CO2 savings in the building sector since 2010 are only about 3%.

To achieve climate neutrality by 2050, the German Energy Agency (DENA) claims that the energy requirements of German homes must be reduced by 80% by then.

Both the DIW and DENA are therefore calling for stronger incentives for energy-efficient building renovations, for example through tax incentives for replacing heating systems, installing new windows or insulating roofs and external walls.

This is the moment to renovate your buildings, EU tells member states

Now is the time for member states to renovate buildings and make them energy efficient, the EU’s climate chief Frans Timmermans said today (27 October), despite a lack of clarity on minimum requirements at EU level, which won’t be introduced until next year.

In France, an ambitious game of chance

France also has a monumental building task ahead of them. By 2050, the entire French housing stock is to be brought up to a legally stipulated low level of energy consumption. This would require the renovation of almost 500,000 private homes each year, half of which are low-income households.

But the appropriate measures for these ambitions are still lacking. According to Andreas Rüdinger, a researcher at the Institute for Sustainable Development and International Relations (IDDRI), the €7 billion of the economic stimulus package allocated to energy-efficient renovation will not be enough.

“Some of the elements presented by the government are interesting, such as the idea of encouraging households to renovate their homes extensively through various subsidies. But we are a long way from the revolution needed to give a sustainable boost to energy-efficient renovations,” the researcher notes in an interview with EURACTIV France.

The CCC has made some very interesting suggestions, says Rüdinger: “Make energy-efficient refurbishment compulsory, massively increase public aid and set up support systems for households to enable them to carry out their work. Only by combining these various measures will energy-efficient refurbishment become socially acceptable.”

A German strength: Subsidy with conditions

The idea of the CCC in France to support households in their renovation work with a loan already exists in Germany. Rüdinger sees the strength of the German model for building renovation in the grants from the Kreditbank für Wiederaufbau (KfW), which he explained in a 2013 report.

The loans are linked to conditions. As an example, Rüdinger cites  the condition under which apartments must meet a certain energy requirement in order for energy-related refurbishment to be subsidised by the KfW. In addition, a heating specialist must always be called in for renovation work. “This support helps to ensure the quality of the renovation and compliance with legal requirements,” he says.

In his assessment, Rüdinger also refers to the impact studies of KfW. According to these studies, every euro of public investment in energy-related renovation aid should save the state between €1 and €2.40 in tax revenue and avoided costs associated with lower unemployment.

Beyond that however, the German approach is still incomplete, Rüdinger said in his 2013 report, especially with regard to the adequacy of assistance for the needs of smaller households and owner-occupied housing.

On these points, the French approach to combating energy poverty is more appropriate, Rüdinger said.

Comparative study from DENA and ADEMA

Both Germany and France have an annual renovation rate of just 2% into energy-efficient buildings. However, the regulatory framework for renovations differs in both countries, as a comparative study by the German Energy Agency (DENA) in cooperation with its French counterpart ADEMA shows. France demands by law that existing buildings be made more energy efficient, while Germany tends to rely on voluntary measures.

The biggest difference between the two countries lie in their funding strategies. In Germany, funding is provided independently of income and depending on the impact of the measures taken. In France, on the other hand, the income of the household to be supported is taken into account and low-income households in particular are supported.

The greatest commonality: Although both countries want to have an energy-neutral building sector by 2050, they have so far lagged behind their own ambitions when it comes to making buildings more energy-efficient through renovation.

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(Edited by Frédéric Simon)

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