Climate Change Mitigation Through Green Buildings: Energy efficiency in EU Climate Change Law.
Tichaona Dande, 277203 Master of International and Comparative Law (MICL):
Environmental and Climate Change Law Department of Law, University of Eastern Finland March 2018 Supervisors: Seita Romppanen & Harro van Asselt Master’s Degree Thesis
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ABSTRACT
UNIVERSITY OF EASTERN FINLAND Faculty
Faculty of Social Science and Business Studies
Unit
UEF Law School Author
Tichaona Dande Name of the Thesis
Climate Change Mitigation Through Green Buildings: Energy efficiency in EU Climate Change Law.
Major
Environmental and Climate Change Law
Description Master’s thesis
Date
March 2018
Pages XX + 75
Abstract
EU building stocks accounts for 40% of energy consumption resulting in 36% of CO₂ emissions, thus offering a great potential to reduce GHG emissions. The EU has resorted to energy efficiency of buildings to target this potential and mitigate climate change through the EED and EPBD recast framework. This research has explored, examined and given an account of the EU, Germany, UK and Finland’s energy efficiency legal frameworks that governs, promote and regulate energy efficiency of buildings to achieve EU wide climate change mitigation objectives in the context of green buildings.
This study has revealed that despite many achievements by the EED and EPBD recast in meeting climate change mitigation objectives in Member States, more can still be done. Regulative law has been viable; however, the success of the green buildings should be driven by a robust climate change legal framework. This thesis concluded that the EU needs to continue developing energy efficiency laws that promote carbon neutral economic viability.
Germany, UK and Finland case studies have demonstrated that energy efficiency of buildings is a major tool to tap the potential of energy savings and address EU climate change objectives cost effectively. The case study comparative outcomes have further highlighted the legal prospects and challenges for regulating energy efficiency of buildings and this will influence future EU energy efficiency legal reforms considering that the EU energy efficiency regulation is still evolving over time.
Key words:
Energy efficiency, Energy efficiency Directive, Energy Performance of Buildings Directive, Climate change, Climate change mitigation, Green buildings.
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TABLE OF CONTENTS
ABSTRACT ... i
TABLE OF CONTENTS ... ii
REFERENCES ... v
LIST OF ABBREVIATIONS ... xxiii
1 INTRODUCTION ... 1
1.1 Objective and research question ... 4
1.2 Methodology ... 5
1.3 Outline ... 6
2 GREEN BUILDINGS AND CLIMATE CHANGE MITIGATION ... 7
2.1 Green buildings and energy efficiency ... 8
2.2 Reaping the potential of green buildings ... 10
3 EU REGULATORY FRAMEWORK ON ENERGY EFFICIENCY AND GREEN BUILDINGS ... 14
3.1 EU energy efficiency legal basis and competence ... 15
3.2 Core legislative instruments at EU Level-Energy Efficiency Directive ... 16
3.2.1 Public buildings ... 19
3.2.2 Energy efficiency obligation schemes, audits and energy management systems ... 20
3.2.3 Promotion of efficiency in heating and cooling ... 22
3.2.4 Metering and Billing ... 23
3.2.5 EED challenges and opportunities ... 24
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3.3. Energy Performance of Buildings Directive ... 25
3.3.1 Nearly zero-energy buildings ... 27
3.3.2 Energy Performance Certificates ... 28
3.3.3 Technical building systems and renovations ... 29
3.3.4 EPBD challenges and opportunities ... 30
3.4 Other Directives ... 32
3.4.1 EU Emissions Trading System ... 33
3.4.2 Renewable Energy Directive ... 35
3.4.3 Eco-Design Directive ... 37
3.5 EU future legislation plans: EPBD update ... 38
4 ENERGY EFFICIENCY IMPLEMENTATIONS IN MEMBER STATES ... 44
4.1 Germany regulatory framework ... 45
4.1.1 Energy Performance Certification regulation ... 46
4.1.2 Metering and billing ... 48
4.1.3 Funding of energy efficiency renovation ... 49
4.1.4 German construction and renovation policies and measures ... 50
4.1.5 Germany legislation impacts ... 51
4.2 Finland regulatory framework ... 51
4.2.1 Energy Performance Certification implementation ... 52
4.2.2 Mobilizing investments in energy efficiency renovation ... 54
4.2.3 National Building Code of Finland ... 54
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4.2.4 Construction and renovation policies and measures ... 55
4.2.5 Metering and billing ... 58
4.2.6 Finland legislation impacts ... 58
4.3 UK regulatory framework ... 59
4.3.1 Funding of energy efficiency renovation ... 60
4.3.2 EPCs-the energy performance of buildings ... 61
4.3.3 Construction and renovations obligations and policies ... 63
4.3.4 Metering, billing and utility companies’ obligations ... 65
4.3.5 UK legislation impacts ... 66
5 CONCLUSIONS... 70
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xxiii
LIST OF ABBREVIATIONS
BMUB Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety
BMWi Federal Ministry for Economic Affairs and Energy
CBA Cost Benefit Analysis
CDM Clean Development Mechanism
CO₂ Carbon Dioxide
COP Conference of Parties.
DEC Display Energy Certificates
DIBt German Institute for Building Technology ECJ European Court of Justice
EED Energy Efficiency Directive
EIA Energy Information Administration EEG Renewable Energy Sources Act EEWärmG Renewable Energies Heat Act
EFSI European Fund for Strategic Investments EnEG Energy Savings Act
EnEV Energy Conservation Ordinance
EPBD Energy Performance of Buildings Directive EPCs Energy Performance Certificates
ESIF European Structural and Investment Funds
EU European Union
EU ETS European Union Emission Trading System.
EU European Union
FNRP Finnish National Reform Programmes
GHG Greenhouse gases
IEA International Energy Agency
IPCC Intergovernmental Panel on Climate Change LEED Leadership in Energy and Environmental Design MEPS Minimum Energy Performance Standards
xxiv
NZEB Nearly Zero-Energy Building
NEEAP National Energy Efficiency Action Plan RED Renewable Energy Directive
REHA Renewable Energies Heat Act 2009
SEA Single European Act
SDGs Sustainable Development Goals
TEU Treaty on European Union
TFEU Treaty on the Functioning of the European Union
UN United Nations
US EPA United States of America Environmental Protection Agency.
US United States of America.
UK United Kingdom
USGBC United States Green Building Council
1
1 INTRODUCTION
Climate change is rapidly causing disastrous global impacts transforming the natural and built environments. The adverse consequences have threatened “human existence, health, communities, ecosystems, economic markets, and legal systems”1 due to the constant rise in anthropogenic global greenhouse gas (GHG) emissions.2 Climate change has increasingly taken centre stage in international affairs3 and has become a central and constant item for debate on the European Union4 (EU) agenda5 with the focus on energy efficiency of building stocks amongst key issues.
Buildings are responsible for a larger proportion of GHGs compared to other sectors such as energy, industry and transportation. In the EU buildings6 utilize 40% of energy consumption resulting in 36% of CO₂ emissions.7 In 2010, buildings were recognized as the main energy end- use sector in EU countries at 42% while the transport sector was at 32%, industry at 24% and agriculture at 2%.8 The energy consumption of EU building stocks has increased by 1% every year from 1990 to 2010 and “more than two thirds of the total energy consumption is linked to
1Climate change law is fast growing. There are many issues that can be addressed by relevant international law, but these laws are not well suited to address them since they were not specifically designed to address them, e.g. Climate Justice cases. See, Green Washburn LJ, 54, 2014. p. 528.
2 The Fourth Assessment Report of the IPCC estimated that between 1970 and 2004, global greenhouse gas emissions due to human activities rose by 70 percent. See, IPCC (2007).
3 Oberthür et al. 2010. p.12.
4 The EU is made up of 28 Member States: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and UK.
5 Oberthür et al. VUBPress 2010. p.12.
6 Statistically, “the EU has a total building stock of 25 billion square meters (sqm), increasing 1% per year, one of the lowest growth rates in the world. The majority of the EU's built environment is residential, representing 75% of the total stock (split between 64% single family houses, and 36% apartment blocks). Non-residential buildings represent the remaining 25% of the total stock (with 28% wholesale and retail; 23% offices; 17% educational; 11% hotels and restaurants; 7% hospitals; 4% sports facilities; and another 11% other uses)”, See, Parejo-Navajas, Seattle J. Envtl. L 2015. p.346.
7COM/2013/0225 final.
8 Lapillonne et al. 2012.
2
residential buildings.”9 The challenges and prospects presented by high energy usage have resulted in the establishment of energy efficiency of buildings10 as a legally enforceable goal for Member States to promote ambitious commitments to the Energy Union11 and the Energy and Climate Policy Framework for 2020-2030 (short term) and 2050 (long term).12 The 20+20+20 by 2020 objectives clearly highlights the EU’s recognition that climate change and energy efficiency are intrinsically intertwined issues hence should be addressed together. The EU is therefore dedicated to harness the energy efficiency’s cost effective and long-lasting climate change mitigation potential, as will be discussed in this thesis.
Building stocks are responsible for a good chunk of GHGs, and therefore reducing emissions from buildings is very crucial to climate change mitigation and promotion of green buildings. Green buildings or green-intent buildings, “aim to reduce environmental impact by using less energy in both the construction and operation phase.”13 The IPCC report (AR5) 8 indicate that “buildings represent a critical piece of a low-carbon future”14 and “improving energy efficiency will be the primary means of reducing GHG emissions in coming years.”15 The potential has also been acknowledged by the International Energy Agency (IEA) that projected that “end-use energy efficiency measures can achieve an astounding 50% reduction in global emissions by 2030.”16 The IEA also reiterated that “energy efficiency laws are a low-cost approach to climate change mitigation and a 'no regrets' measure.”17 In this respect, the IEA estimated that if “US$8.3tn is invested internationally in energy efficiency investment, cost savings of US$8.6tn will be realized by 2030, primarily by energy end-users.”18 Energy efficiency of buildings improvements has a
9 Lapillonne et al. 2012.
10ec.europa.eu, Section energy efficiency target
11 Peeters, Maastricht journal of European and comparative law 2014. p.40.
12 ec.europa.eu, Section 2030 Climate & Energy Framework.
13 Deuble, Building and Environment, 2012. p. 21.
14IPCC 2014, Mitigation of Climate Change 671-738.
15 Energy efficiency has also been recognized by National Science Foundation and NASA as a tool to establish a low carbon community. See, Daniela et al. 12 Frontiers in Ecology and the Env't 2014.
16Bruce, Journal of Energy & Natural Resources Law 2013, p.313.
17 Bruce, Journal of Energy & Natural Resources Law 2013, p.313.
18 iea.org, Section IEA Offers Blue Print to Deliver on Ambitious Climate Change Goals
3
potential to reduce total EU energy consumption by 5% to 6%, translating into 5% CO₂ emissions reductions.19 About 75% of EU building stocks are energy inefficient with 0.4-1.2% of the stock renovated each year.20 The 2030 energy efficiency target of 30% will achieve a 23% cut in energy consumption mainly from buildings.21
The EU treaties do not define energy efficiency, and the only reference is from Article 194 of the Lisbon Treaty (Treaty on the Functioning of the European Union-TFEU).22 Article 194 (c) establishes that the EU promotes energy efficiency among other objectives as a shared competence with the Member States.23 The prominence of energy efficiency in EU policy was reinforced by the new 20+20+20 initiative making it one of the key targets of the EU 2020 climate and energy package.24 Under this initiative, the EU’s ambitious target is to achieve a 20% energy efficiency improvement by 202025 and subsequently a 30% binding target by 203026 as proposed by the EU Commission in November 2016.27 The recast Energy Performance of Buildings Directive28 (EPBD) defines energy efficiency as, “the amount of energy actually consumed or estimated to meet the different needs associated with a standardized use of the building, which may include, inter alia, heating, hot water heating, cooling, ventilation and lighting.”29
The EU has made significant impact on GHG emissions and energy use reduction in buildings through its robust legislations that focuses primarily on new and existing buildings to promote sustainable buildings. The EED and the recast EPBD are the main legislative instruments
19europarl.europa.eu, Section Energy Performance of Buildings Directive review.
20 COM (2016)765. p.2.
21 ec.europa.eu, Section energy efficiency target
22 Hancher 2012, p. 367.
23 Schiavo Maastricht J. Eur. & Comp 2013, p.322.
24 Schiavo Maastricht J. Eur. & Comp 2013, p.322.
25 ec.europa.eu/climate/policies/strategies, Section Climate & Energy Package.
26 ec.europa.eu, Section energy efficiency target
27 COM (2016) 860 final.
28 Directive 2010/31/EU of the European Parliament and of the Council of 19 May 2010 on the energy performance of buildings. A recast of Directive 2002/91/EC.
29 Directive 2002/91/EC of 16 December 2002 on the energy performance of buildings [2003] OJ L 1/65, Art. 2.
4
addressing energy efficiency of buildings at EU and Member State level as transposed into national laws and will be the main focus of this thesis.30 Member States’ national energy performance targets of buildings are influenced mainly by these directives and are supplemented by other legislative instruments to significantly promote energy efficiency goals and objectives.31
1.1 Objective and research question
It is evident that climate change is an energy related threat, a result of anthropogenic activities interconnected with energy usage and energy efficiency. It is against this background that the main objective of this thesis is to explore and examine how EU law regulates energy efficiency in building stocks to achieve EU wide energy and climate change mitigation objectives in the context of green buildings. The research will focus on the EU EED and EPBD recast, which are the core pieces of legislation addressing the EU’s ambitions on energy efficiency and promoting green buildings as transposed by Member States into national laws.
The thesis further seeks to examine the climate change mitigation potential for energy efficiency of building stocks in Finland, United Kingdom (UK) and Germany. These Member States’ legal and regulatory landscape will demonstrate and highlight how Union law is variably transposed to national law and how the EU monitors the application of Union law on energy efficiency of buildings. The case studies will further highlight the legal prospects and challenges to regulating energy efficiency of buildings. These lessons could be relevant to future EU energy efficiency legal reforms.
In order to understand EU energy efficiency legislation and legal framework to address the above objective, the main research questions are as follows:
30 Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC and Directive 2010/31/EU of the European Parliament and of the Council of 19 May 2010 on the energy performance of buildings.
31 Renewable Energy Directive, Eco-Design Directive, Regulation (EU) 2017/1369 on energy labelling repealing (Energy Labelling Directive, No longer in force since 31/07/2017) and the EU ETS Directive significantly complement the efforts of the EED and EPB Directive.
5
1. What is the EU legal framework applying to energy efficiency in buildings?
2. How likely is the EU current legislation to lead to emission reductions from building stocks?
3. How is EU law in energy efficiency implemented in three EU Member States?
1.2 Methodology
This thesis will look at energy efficiency of buildings legal framework of the EU. The focus on the EU is important mainly because of the high GHG emissions in the EU block. To address the first research question, I followed a desk based qualitative research. This relied upon the analysis and critique of relevant EU primary and secondary legal documents that address energy efficiency laws such as the TFEU, EED, EPBD, the Renewable Energy Directive32 (RED), Eco-Design Directive33 and the EU Emissions Trading System (EU ETS).34 This was the best way of approaching the research question considering the availability of relevant literature. While examining the legal framework I also attempted to examine the impacts of the legislation on building stocks emissions reduction that is addressed by research question two.
The thesis further examined how EU energy efficiency law is implemented in Member States building stocks to answer research question three. The implementation case studies of Germany, Finland and UK are not in-depth because of language limitations affecting research information base due to lack of English literature on Germany and Finland. These are important case studies due to their distinct variations on EU law transposition, implementation and monitoring, renewable energy drive, retrofitting ambitions and investments in EU energy efficiency matrix. These case studies give an implementation review of the EED and EPBD recast directives. No comparative studies have been conducted on these 3 countries, so this thesis will provide new insights on the EU climate and energy laws and how they can influence the future of EU legal reforms.
32 Directive 2009/28/EC.
33 Directive 2009/125/EC of the European Parliament and of the Council of 21 October 2009 establishing a framework for the setting of ecodesign requirements for energy-related products.
34 Directive 2009/29/EC of the European Parliament and of the Council of 23 April 2009 amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the Community.
6
To achieve the main objectives of this thesis, Member States reports to the EU institutions, national laws in the form of soft and hard laws, policies on energy and climate change, directives as transposed by Member States, EU regulations, Green papers, climate change and energy package policies were all important sources of information. Theoretical perspectives and legal analysis of scholars through books, articles, journals, government and international organizations official documents have been used to interpret various sections of the laws, their applications and implications.
While building on the existing literature, this thesis will be limited to a few legal instruments regulating energy efficiency of buildings.
1.3 Outline
This thesis contains five broad chapters. Chapter one presents the general introduction covering energy efficiency, green buildings and climate change mitigation briefly. It outlines the research questions and methodology while highlighting the impacts of building stocks on GHGs emissions.
Chapter two further explores the concept of green buildings focusing on the connection between green buildings and energy efficiency. It further explores the technical options and strategies that can be adopted to reap the potential from green buildings giving a reader a broader understanding of green buildings and their role as climate change mitigation tools.
Chapter three addresses the EU legal framework applying to energy efficiency in buildings. It also explains the EU energy efficiency legal basis and highlight the competence of the EU on energy efficiency. The provisions, challenges and opportunities of the principal energy efficiency laws- EED and EPBD and supporting legislation-RED, Eco-Design Directive and the EU ETS are broadly examined.
Chapter 4 focuses on how EU energy law is implemented in three Member States-Finland, Germany and UK. This seeks to provide answers to research question two and three while drawing similarities and differences in the implementation of the laws. Finally, chapter five provides the concluding remarks of the thesis answering conclusively the three main research questions.
7
2 GREEN BUILDINGS AND CLIMATE CHANGE MITIGATION
This chapter will further explore the concept of green buildings and what it entails in creating a sustainable future that mitigates climate change. The components of buildings that generate GHG emissions such as building design are outlined. The chapter also argues that in recent years there has been an increase in legal literature focusing on energy efficiency of buildings as a climate change mitigation tool. The first section will explain the connection between green buildings and energy efficiency while the second section explore the technical options and strategies adopted to reap the potential of green buildings.
Green building or sustainable building is widely known “as the practice of creating structures using processes that are environmentally friendly and resource-efficient throughout a building's life- cycle.”35 Sustainable processes are observed throughout the designing, construction, operation, maintenance, renovation and deconstruction of private and commercial buildings, schools, workplaces or hospitals to create a more sustainable future that address climate change’s wicked problems.36
Green buildings are aimed at addressing diverse components of buildings that generate GHG emissions. The main components and issues such as renewable energy generation, land cover change, energy efficiency, water use and treatment efficiency, eco-conscious materials, and indoor environmental quality,37 appliances, reduction of thermal energy demand, resource efficient and increased fuel efficiency are important aspects of green buildings.38 Green buildings are also known as a movement that empowers the consumers to make informed decisions that can advance structures “that are environmentally responsible, profitable and promote healthy places to live and
35 Tolan Pub. Cont. LJ 2011, p.233.
36 The US Environmental Protection Agency (US EPA) stressed that, Green building practices “address building design, construction, and operation in a comprehensive manner to reduce the overall environmental impact of the built environment, increase the efficiency of energy, water, and other resource use, and reduce waste, pollution, and environmental degradation,” See, archive.epa.gov Section Components of Green Building.
37 Geoffrey 2010. p.15.
38 Graichen et al..2016. p.12.
8
work.”39 Some of the issues covered by green buildings have global implications while others affect certain regions or countries. As such, green buildings generally implement a “whole systems” approach by directing changes in how buildings are constructed and used. Green building strategies therefore provide tools to advance climate change mitigation, including the flexibility gained by reducing infrastructure and resource reliance.40
Green buildings are one of the wide range of measures that are used to reduce GHG emissions from the atmosphere. While the scholarly literature on green buildings has increased over the years, the legal literature focusing on energy efficiency of buildings has only recently focused on green buildings as a climate change mitigation tool.
2.1 Green buildings and energy efficiency
Several elements play an essential role in determining what kind of green building is an energy efficient building. Building design, building envelop, on-site or distributed generation, energy end uses, and embodied energy are major elements that influence the GHG emission of a building and efficiency.41 The wide variety of shapes, sizes, purposes and time of construction also has a major influence on the energy efficiency of buildings.
On green buildings and energy efficiency, the key question that comes to mind is, what connects green buildings and energy efficiency? Although green buildings and energy efficiency both focuses on reducing energy consumption and energy use of buildings to promote environmentally friendly utilization of energy resources, a building can’t be green if it isn’t energy efficient.42 Energy efficiency is therefore the low hanging fruits of green buildings. Green buildings provide numerous ways to cut emissions such as energy efficiency and adoption of clean power. As noted by the energy star, “no building should define itself as “green” unless it consumes less energy and generates fewer GHG emissions than average.”43 The most important aspect of a building towards
39 usgbc.org Section the U.S. Green Building Council.
40 Hirokawa Jonathan Verschuuren 2013. p.35.
41 Yau Renewable and Sustainable Energy Reviews 2013, p.430.
42 Energystar.gov Section green buildings and energy star
43 Energystar.gov Section green buildings and energy star
9
green certification is therefore its ability to be energy efficient. Not all green buildings are energy efficient. Although many buildings are designed to be green, “just because a new building is built to be green, doesn't mean it will be energy efficient.”44 The implementation of a variety of green building practices produces aggregate effects on energy efficiency and climate change mitigation.45 Energy efficiency as an aspect of green buildings therefore aims to reduce energy consumption, GHG emissions and eliminate negative impacts of buildings on their occupants and the environment and has become a complex business in climate change mitigation in the EU.
Green buildings explore the interrelationship between energy efficiency and climate change mitigation thereby strengthening the connection with energy efficiency. They have demonstrated how energy efficiency is interrelated with climate change and hence should be addressed together.
Green building champions the idea “that a more informed approach to the built environment can result in buildings that complement the natural environment,”46 instead of conflicting with it.47 The EU energy efficiency laws explicitly highlight the interconnected relationship of climate change and energy efficiency of buildings. The legislation ties climate change together with energy efficiency to seek EU-wide solutions with a global appeal thereby strongly demonstrating the Union’s assertiveness in climate change law. Energy efficiency of buildings addresses the demand side of energy in the EU. Within the EU and globally, green buildings have become the industry and regulatory response to the adverse impacts of buildings and presents an opportunity to make enormous strides toward a sustainable future.48
Green buildings and energy efficiency measures focus on sustainable development goals by pursuing solutions that represent a healthy and dynamic balance between environmental, social, and economic benefits. Greening today’s buildings focus on the holistic approach to the natural,
44 Energystar.gov Section green buildings and energy star
45 Builditgreen.org Section Building Design & Construction Overview.
46 Hirokawa Environmental Law 2009, p.510.
47 In this context, the role of the building sector in exacerbating the world’s existing environmental crises, directly or indirectly (ozone depletion, air pollution, floods, heat waves, fresh water pollution, waste pollution) should not be underestimated.
48 Fox Va. Envtl. LJ 2010, p.299.
