Does one size fit all? Impact of Minimum Energy Performance Standards in the revision of the Energy Performance Building Directive

Housing Europe has asked Copenhagen Economics to provide a study that focuses on three key questions: What is the overall structure of energy performance for the EU building stock and the resulting potential for energy savings? What are the key economic, social, and environmental factors to be considered when implementing measures to improve energy performance standards at local, national and EU level? Which policy recommendations follow from this analysis?

The main conclusions of our study are:

Energy renovations have sharply declining returns to the point where they no longer pay for themselves

We find strong evidence, inter alia from the Netherlands, Germany and Austria, that aiming for the highest EPC label in energy renovations delivers poor returns for society. Increasing the EPC label from B to A is substantially more costly than raising it from e.g. D to C. At the same time, the typical energy savings associated with the energy renovation are relatively smaller. In other words, higher marginal costs for a smaller benefit.

The success of energy renovations varies across the EU due to varying climate conditions…

Not surprisingly, the economic and environmental value from insulating a house in the European north differs from undertaking the same measure in the European south. Hence, uniform measures across EU countries with substantial variations in weather conditions are likely to provide very unequal benefits in the different locations.

…and varying access to renewable energy

The cost of producing renewable energy has decreased immensely in recent years and even become competitive to fossil fuel energy production. However, at the moment, not all parts of the EU have equal access to heating based on renewable energy. This also implies that the most cost-effective away to achieve decarbonisation of the housing stock is very much affected by local energy systems and their development in the coming years.

Affordability of housing is essential in the social housing sector

Tenants in the social housing sector are vulnerable and hence, investment costs cannot easily be passed on without worsening affordability. Access to financing is thus crucial for social housing associations, alongside well-balanced minimum energy efficiency requirements.

Copenhagen Economics proposes three concrete policy recommendations

While there is a strong case for supporting major energy renovations of the EU building stock, there is also a need for targeted measures that specifically address the key factors outlined above:


The study is commissioned by Housing Europe.