Building renovation

Climate change mitigation:

The renovation of existing buildings to increase their energy efficiency makes a substantial contribution to climate change mitigation by reducing energy consumption and GHG emissions for the remaining operational phase of the buildings, and by avoiding emissions that would be associated with the construction of new buildings. Condition for non-eligibility: to avoid lock-in and undermining the climate mitigation objective, the renovation of buildings occupied for the purpose of extraction, storage, transportation or manufacture of fossil fuels is not eligible. Use of alternative schemes as proxies: outside EU Member States, established schemes such as “green building” certifications or building regulations may be used as alternative proof of eligibility, provided that this is verified by the Sustainable Finance Platform. The organisation responsible for the scheme will be able to apply for official recognition of its scheme by presenting evidence that a specific level of certification/regulation can be considered equivalent (or superior) to the taxonomy mitigation and DNSH threshold. The Sustainable Finance Platform will assess the evidence and approve or reject the application.

Metric and threshold:

The thresholds used to assess the renovation rely on either the respective metrics set in the applicable building regulation for ‘major renovation’ transposing the EPBD, or, in the case of relative improvement, on Primary Energy Demand (PED) defined as follows: the annual primary energy demand associated with regulated energy use during the operational phase of the building life-cycle (i.e. ‘module B6’ according to EN15978), calculated ex-ante according to the national methodologies for asset design assessment, or as defined in the set of standards ISO 52000, expressed as kWh/m2 per year. 

A renovation is eligible when it meets either one of the following thresholds: 

a) Major renovation: the renovation is compliant with the requirements set in the applicable building regulations for ‘major renovation’ transposing the Energy Performance of Buildings Directive (EPBD) 

b) Relative improvement: the renovation achieves savings in net Primary Energy Demand of at least 30% in comparison to the baseline performance of the building before the renovation. 

The baseline performance and predicted improvement shall be based on a specialised building survey and validated by an accredited energy auditor. The methodology used for the measurement of floor area must be declared by referring to the categories established by the International Property Measurement Standard.

The choice of a threshold based on the requirements for ‘major renovation’ is strongly affected by the necessity of substantially increasing the annual rates of renovations that include energy-efficiency measures. Such requirements are established in EU Member States at national or regional level in building regulations implementing the EPBD and are based on calculations of cost-optimality. Access to advantageous financing conditions is meant to incentivise homeowners and businesses to undertake a renovation that includes energy efficiency measures. The threshold for ‘relative improvement’ is given as alternative to allow the eligibility of renovations that may not meet the ‘major renovation’ requirements but still deliver considerable energy savings, as well as to provide a threshold that is easily applicable outside EU Member States. Since the focus of the criteria is the renovation project and not the building in itself, any renovation can be eligible, independently from the absolute performance of the building as long as it meets either one of the two thresholds.

Climate change mitigation do no significant harm:

The main potential for significant harm to the other environmental objectives associated with the renovation of existing buildings is determined by: • Lack of resistance to extreme weather events (including flooding), and lack of resilience of to future temperature increases in terms of internal comfort conditions (only for large buildings). • Excessive water consumption due to inefficient water appliances. • Landfill and/or incineration of construction and demolition waste that could be otherwise recycled/reused. • Presence of asbestos and/or substances of very high concern in the building materials. • The unprotected handling of building components that are likely to contain substances of concern (e.g. asbestos containing materials) and of any hazardous construction and demolition waste arising from the building renovation; • Indirect damage to forest ecosystems due to the use of timber products originating form forests that are not sustainably managed (only for large buildings).

• Refer to the screening criteria for DNSH to climate change adaptation.

All relevant new water appliances (shower solutions, mixer showers, shower outlets, taps, WC suites, WC bowls and flushing cisterns, urinal bowls and flushing cisterns, bathtubs) must be in the top 2 classes for water consumption of the EU Water Label.

Based on legislation:

European Water Label

Circular economy:
At least 80% (by weight) of the non-hazardous construction and demolition waste (excluding naturally occurring material defined in category 17 05 04 in the EU waste list ) generated on the construction site must be prepared for re-use or sent for recycling or other material recovery, including backfilling operations that use waste to substitute other materials.

Based on legislation:

EU Waste List

5.a - It is ensured that building components and materials do not contain asbestos nor substances of very high concern as identified on the basis of the “Authorisation List” of the REACH Regulation. 5.b - Before starting the renovation work, a building survey must be carried out in accordance with national legislation by a competent specialist with training in asbestos surveying and in identification of other materials containing substances of concern. Any stripping of lagging that contains or is likely to contain asbestos, breaking or mechanical drilling or screwing and/or removal of insulation board, tiles and other asbestos containing materials shall be carried out by appropriately trained personnel, with health monitoring before, during and after the works, in accordance with national legislation.

Based on legislation:

REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) Regulation

If the renovation project covers more than 1000 m2 of floor area (over one or more buildings): at least 80% of all timber products used in the renovation for structures, cladding and finishes must have been either recycled/reused or sourced from sustainably managed forests as certified by third-party certification audits performed by accredited certification bodies, e.g. FSC/PEFC standards or equivalent.

Based on legislation:


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