Edition 2020 Ninth edition

require higher renovation rates, fuel switching with a large majority of homes that 
will be using renewable heating (electricity, district heating, renewable gas or solar 
thermal), diffusion of the most efficient products and appliances, smart building/
appliances management systems, and improved materials for insulation. Sustaina-
ble renewable heating will continue to play a major role and gas, including liquefied 
natural gas, mixed with hydrogen, or e-methane produced from renewable elec-
tricity and biogas mixtures could all play a key role in existing buildings as well as 
in many industrial applications. To achieve and sustain higher renovation rates, 
adequate financial instruments to overcome existing market failures, sufficient 

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353
workforce with the right skills and affordability for all citizens are of central impor-
tance. An integrated approach and consistency across all relevant policies will be 
necessary for the modernisation of the built environment and mobilisation of all 
actors. Consumer engagement, including through consumer associations, will be 
a key element in this process."
4.8. 
Governance Regulation — One of the key instruments for achieving these long-
term ambitions is the Energy Governance Regulation 2018/1999. Its specific 
purpose is to establish a governance mechanism to ensure that the EU and Paris 
targets are met. It organises a form of perpetual, rolling oversight by the Euro-
pean Commission of Member State progress on all fronts, via the obligation on 
Member States to produce integrated national energy and climate plans, updates 
of these plans, progress reports on the plans and updates, and separate long-term 
strategies. Member States will be reporting all the time, and all of these plans, 
updates, progress reports and long-term strategies have to specifically cover na-
tional measures taken as part of the long-term building renovation strategy which, 
in its new, enhanced version in the revised Energy Performance of Buildings Di-
rective 2010/31/EU, covers the transformation of existing buildings into nearly ze-
ro-energy buildings. On top of this comes the annual State of the Energy Union 
report which also specifically covers, biennially, an overall progress report on the 
renovation of the national stock of residential and non-residential buildings, both 
public and private, in line with the roadmaps set out in the long-term renovation 
strategies that each Member State shall establish in accordance with Article 2a of 
Directive 2010/31/EU and, every four years, an overall progress report on Member 
States' increase in the number of nearly zero-energy buildings in accordance with 
Article 9(5) of Directive 2010/31/EU.
4.9. 
European Green Deal — On 11 December 2019, the European Commission unveiled 
the European Green Deal which announces a European Climate Law enshrining 
2050 carbon neutrality and a new EU 2030 climate target of 50% — 55% reduc-
tion of GHG emissions compared to 1990. These much more radical targets will 
mechanically increase the pressure on the building stock as it accounts for by far 
the most important portion of total EU energy consumption and carbon footprint. 
The European Green Deal outlines a package of initiatives the EU and its Member 
States should undertake in order for the EU to achieve its climate goal, addresses, 
amongst others, the need for a (building) renovation wave throughout the EU, and 
announces new initiatives related to the energy performance of buildings:
"To address the twin challenge of energy efficiency and affordability, the EU and the 
Member States should engage in a 'renovation wave' of public and private buildings. 
While increasing renovation rates is a challenge, renovation lowers energy bills, and 

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European Valuation Standards 2020
can reduce energy poverty. It can also boost the construction sector and is an op-
portunity to support SMEs and local jobs.
The Commission will rigorously enforce the legislation related to the energy perfor-
mance of buildings. This will start with an assessment in 2020 of Member States' 
national long-term renovation strategies. The Commission will also launch work 
on the possibility of including emissions from buildings in European emissions 
trading, as part of broader efforts to ensure that the relative prices of different 
energy sources provide the right signals for energy efficiency. In addition, the Com-
mission will review the Construction Products Regulation. It should ensure that the 
design of new and renovated buildings at all stages is in line with the needs of the 
circular economy, and lead to increased digitalisation and climate-proofing of the 
building stock.
In parallel, the Commission proposes to work with stakeholders on a new initia-
tive on renovation in 2020. This will include an open platform bringing together the 
buildings and construction sector, architects and engineers and local authorities to 
address the barriers to renovation. This initiative will also include innovative financ-
ing schemes under InvestEU. These could target housing associations or energy 
service companies that could roll out renovation including through energy perfor-
mance contracting. An essential aim would be to organise renovation efforts into 
larger blocks to benefit from better financing conditions and economies of scale. 
The Commission will also work to lift national regulatory barriers that inhibit energy 
efficiency investments in rented and multi-ownership buildings. Particular atten-
tion will be paid to the renovation of social housing, to help households who strug-
gle to pay their energy bills. Focus should also be put on renovating schools and 
hospitals, as the money saved through building efficiency will be money available 
to support education and public health."
4.10. 
Impact on property valuation — This framework has direct and indirect effects on 
property and its use. Valuers may therefore find it important to consider the com-
mercial issues arising from this framework when appraising immovable proper-
ty. Predictable events are accelerated depreciation of non-renovated properties, 
significant EU and national subsidies for the renovation of the owner-occupied 
housing stock and obligations on landlords to renovate at 'trigger points' evoked in 
revised Energy Performance of Buildings Directive 2010/31/EU, probably points of 
rental or sale, as, for example, in the new requirement under Dutch law that offices 
can only be put up for rent as of 2023 if they have a 'C'-grade EPC. In addition, the 
EU framework on energy may affect the economics of some businesses.

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4.11. 
Legislation
Directive 2010/31/EU of the European Parliament and of the Council of 19 May 2010 
on the energy performance of buildings
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
Directive (EU) 2018/844 of the European Parliament and of the Council of 30 May 
2018 amending Directive 2010/31/EU on the energy performance of buildings and 
Directive 2012/27/EU on energy efficiency
Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 De-
cember 2018 on the promotion of the use of energy from renewable sources
Directive (EU) 2018/2002 of the European Parliament and of the Council of 11 De-
cember 2018 amending Directive 2012/27/EU on energy efficiency
Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 De-
cember 2018 on the Governance of the Energy Union and Climate Action, amend-
ing Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parlia-
ment and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 
2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the 
Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regula-
tion (EU) No 525/2013 of the European Parliament and of the Council
Communication from the Commission to the European Parliament, the European 
Council, the Council, the European Economic and Social Committee and the Com-
mittee of the Regions of 11 December 2019 — The European Green Deal