EU Parliament approves unprecedented energy efficiency standard on mortgages to unlock the renovation wave
Strasbourg, March 14th
Today the European Parliament has adopted its position on the proposed revision of the Energy Performance of Buildings Directive (EPBD), which includes unprecedented measures to involve banks in the financing of renovation.
During a plenary session on Tuesday 14th March, the Parliament adopted (343 votes in favour, 216 against, 78 abstentions) a more ambitious position than the original proposal by the European Commission.
The main objective of the EPBD directive is to substantially reduce carbon emissions by increasing the rate of renovations of energy-inefficient buildings across the entire EU’s building stock.
As demanded by the Unlock campaign, the Parliament proposes to reinforce the article 15 of the directive, in particular by emphasising the role of commercial banks in offering renovation loans. Under the so-called “mortgage portfolio standards”, banks would be required to improve energy-efficiency level on their mortgage portfolios.
Commenting on the vote, Stanislas Jourdan, Head of Policy at Positive Money Europe said:
“As all renovations cannot be financed by public money, banks must raise their game and offer adequate and affordable loans for families and communities needing to renovate their homes. The creation of binding Mortgage Portfolio Standards is a milestone towards getting banks to hardwire energy efficiency into their business strategies”.
Peter Sweatman, CEO at Climate Strategies & Partners, added:
“The inclusion of the Mortgage Portfolio Standards in the final text of the Energy Performance of Buildings Directive (EPBD) was an absolutely necessary step in order to align retail banks with the EU’s Renovation Wave strategy. It will help ensure that all mortgage issuers will get ready to respond and provide millions of European households with affordable renovation loans to upgrade their homes”.
The EPBD introduces mandatory energy performance standards (MEPS), whereby all existing residential buildings would have to reach at least energy performance class E by 2030, and D by 2033. The Parliament also calls on the European Commission to put forward new proposals to increase public funding as part of the next Multiannual Financial Framework for 2028-2034.
Mathilde Nonnon, policy officer at WWF-European Policy Office said:
“While the requirement for Member States to renovate their worst-performing buildings is a significant step in the right direction, it must be complemented with measures to support citizens in financing these renovations, with a robust combination of public and private funding at scale. It is imperative that MEPs continue to champion mandatory Mortgage Portfolio Standards for all banks and demand a Delegated Act to facilitate their implementation”.
After today’s vote, Members of Parliament will start negotiating with the Council and the European Commission under the so-called “trilogue” procedure.