Why national building renovation plans are key for the recovery

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

Recent research has shown that for every €1 million invested in energy renovation of buildings, an average of 18 local and long-term jobs are created that will stimulate economic activity, says Oliver Rapf. [Kecko / Flickr]

Renovating a country’s buildings and homes represents a massive opportunity for sustainable economic recovery, health, well-being, and CO2 reduction, writes Oliver Rapf.

Oliver Rapf is executive director of the Buildings Performance Institute Europe (BPIE).

The European Commission has proposed a €1.85 trillion recovery plan to help the European Union exit the economic crisis resulting from the COVID-19 pandemic. How some of this money will be spent will be defined in national Recovery and Resilience Plans, which national governments must prepare to access the funding. Within this context, financing building renovation is one of the smartest moves national governments could make and will respond to societal and environmental needs and urgencies.

Buildings are an important pillar of both our society and our economy. The pandemic has shown that buildings can be a safe haven to reduce risk of infection. However, they can also be an infection hotspot or make lockdown more painful for people in poor living conditions. The ball is now in the court of EU national governments to finalise their renovation strategies and to develop a recovery plan, which integrates the investment and growth opportunities of building renovation initiatives.

Recent research from BPIE has shown that for every €1 million invested in energy renovation of buildings, an average of 18 local and long-term jobs are created that will stimulate economic activity. Holistic, energy efficient renovation of office buildings increases productivity by about 12% leading to a potential benefit of about €500 billion to the economy per year, and well-designed and executed energy renovation of hospitals reduces the average patient stay by about 11%, producing potential savings of about €45 billion per year to the healthcare sector. For homes, in France for example, medical costs of about €930 million per year are linked to poor quality housing. Including the indirect consequences of such ill-health (absenteeism, lower productivity etc.), poor quality housing could be costing the French economy as much as €20 billion per year.

Like anything worthwhile, tapping into these benefits requires grit and strategic planning. To date, the majority of EU countries are late in delivering their long-term renovation strategies, the key national planning tool used to drive decarbonisation of the building sector; the deadline was March 10th. If national governments continue to drag their feet, the risk is that they will miss a golden opportunity to fund the most rewarding investments.

EU countries dragging their feet on building renovation plans

Only five EU member states have submitted long-term renovation strategies that were due last month under the revised energy performance of buildings directive: Belgium, Denmark, Finland, The Netherlands and Sweden.

Examples of such investments include building renovations that drastically reduce energy consumption and integrate renewable heat technologies, including in public buildings such as schools and hospitals. Such investments often require higher upfront costs and longer payback times, but bring high societal benefits, such as increased health and well-being (which have many positive spillover effects such as lower public spending on public health).

In Europe, recovery money to help renovation will soon be available. This money must be quickly and well spent. Having a renovation strategy in place will help guide this process and ensure that European countries have the resources to support short-term economic recovery with a clear long-term decarbonisation objective in mind, while stimulating growth of the green economy and improving living conditions.

Those countries who have not yet submitted their strategies should now prioritise finalising them, and all countries should ensure that their Recovery and Resilience Plans are used to finance national renovation priorities. Building renovation is a huge challenge for public and private players, both big and small, but the opportunity for long-term, positive change is too great to ignore.

Now is the time for EU countries to aim high. The European recovery initiative is a unique opportunity to overcome earlier financial hurdles of renovation. Prioritising building renovation will bring immediate and long-term benefits to citizens, the economy and the climate.

EU building 'renovation wave' set for launch in September

The European Commission’s energy chief, Kadri Simson, has flagged the upcoming building renovation wave, rooftop solar, and offshore wind as key priorities for the energy sector in the recovery phase from the coronavirus crisis.

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