Implementing the EPBD: how do CO2-prices affect the target achievements?

Extended abstract 7-296-26

Article 9 of the EPBD (2024/1275) introduces Minimum Energy Performance Standards (MEPS) for non-residential buildings, and trajectories for progressive building renovation in residential buildings. The effectiveness of these instruments will depend on the CO2-price. The declining primary energy factor (PEF) for electricity and district heating as well as expected construction of new buildings in some countries may also play a role in achieving targets. The following research questions guide this contribution, carried out in the EPBD.wise project: What impact do CO2-prices in the ETS2 have on the effectiveness of MEPS in non-residential buildings and on the target achievement in residential buildings? How will this be affected by the extent to which the PEFs will decrease? We adapt the Invert building stock model by updating building stock data, cost database and policy settings. Next, we derive MEPS thresholds for non-residential buildings and worst performance buildings (WPB) in the residential sector. Third, we perform a scenario analysis for the EU-27 by modifying levels of CO2-prices (75 €/t CO2 (regulatory and moderate scenarios) – 300 €/t CO2 (Mix scenario) and the uptake of regulatory policies (ban of new fossil heating systems, MEPS in residential sector, regulatory+ vs. regulatory scenario) under different PEF assumptions. Finally, we assess how scenarios achieve the targets set out in Art 9. While the impact of CO2-prices on achieving MEPS thresholds and the impact on non-residential buildings is ambiguous, since a strong regulatory instrument is anyway in place, for residential buildings in most countries, CO2-prices show a considerable effect, in particular if no regulatory schemes are in place. In both cases, the assumed reduction in PEFs play a significant role in achieving the short-term targets (by 2030/2035). In these cases, the targets for the trajectories of progressive building renovation can be achieved even under moderate CO2-prices. However, this creates a risk of lost opportunities in the long-term. In other countries, where reducing the PEF cannot have such a significant impact, targets are difficult to achieve without high levels of CO2-prices and regulatory measures such as MEPS in the residential sector, too.

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