Interview with Dominique Ristori*
* Director-General for Energy, European Commission.
Europe: THE CHALLENGE OF BUILDING RENOVATION
This interview was conducted by Frédéric de Monicault**
** Journalist, Le Figaro.
Frédéric de Monicault - Is construction a major concern for the European Commission, in the same way as Energy?
Dominique Ristori - Construction is at the forefront of European Union policies. It is a fundamental business sector that accounts for 9% of the Union's GDP and for about 18 million direct jobs. There is one element that causes it to stand out, making it particularly vital in terms of jobs, and that is the predominance of small enterprises. According to professional associations, just about the entire sector is made up of SMEs, accounting for 60% of produced value and 70% of the work force.
Improving building energy performance is at the root of energy transition. It is believed that buildings represent about 40% of the energy consumed in Europe. The figure climbs to 50% once you take into account the impact of construction when those installations reach their end of life. The orders of magnitude are similar for greenhouse gas emissions. Concurrently, waste related to construction and demolition accounts for 25 to 30% of all waste generated inside the Union, making it the largest flow of waste in both volume and mass. Yet beyond the figures, we are touching on a key aspect of daily life for European citizens. Indeed, we spend 90% of our time inside buildings. The quality of the building work, the care taken in designing the structures and harmonising the indoor settings have a direct impact on people's health and wellness. It also greatly affects work efficiency. Social issues too are critical: energy poverty and unhealthy housing are a plague that is harming the underprivileged. Something must be done.
F. de M. - Are you, on a personal level, conscious of the issue?
D. R. - I have always been very aware of how important construction is to the Union... the sector is directly related to energy issues, which I am in charge of at the European Commission. I was very involved in the negotiations leading to the review of a major law, the Energy Performance of Buildings Directive (EPBD), adopted in 2018. I can spot two primary challenges for the future. The first is to upgrade our buildings: we need to make an unprecedented effort in renovating and modernising, using innovative funding schemes. The second challenge is to digitise and to exploit the potential of smart technology.
F. de M. - What are the Commission's main avenues of work at this time?
D. R. - First we should remember the benefits of taking a collective approach to those issues. Our fight against global warming will be more effective if performed on the scale of the entire European Union, with consistent, appropriate adaptations being made at national, regional and local level. The EU took the path towards decarbonising its economy with great determination. It is playing out its leadership role in energy transition, in accordance with the ambitious commitments it accepted at the Paris Agreement. The transition rests upon a revised legal framework, namely the "Clean Energy for all Europeans" package adopted by Member States and the European Parliament. The framework is one of the most advanced in the world, featuring a list of measures intended to adapt the EU's assets to the new energy and climate challenges and to provide the Union with a driving role in energy transition. Given that perspective, the key pillars are: to give priority to energy efficiency; to further promote renewable energy; and to ensure that consumers have optimal access conditions to energy.
F. de M. - Is it possible to reconcile construction and the fight against global warming?
D. R. - When it comes to energy efficiency, the priority rests upon a consistent batch of policies and measures that aim at generating energy savings on all levels, from high voltage transformers to household appliances. In such a system, the role of a building - and therefore that of construction - is foremost. For this reason, the European Union has secured a specific instrument which I just mentioned: the Energy Performance of Buildings Directive. This directive has especially resulted in widespread minimum requirements in energy performance being demanded for new buildings and renovations. It has highlighted the need to improve the practices, the methods and the tools at every step of the way. Published in July 2018, the new revised EPBD tends towards increased objectives in energy performance. It puts the spotlight on renovating existing buildings, which is vital since the rate of renovations is too low (from 0.4 to 1.2% depending on the Member State). It also promotes ventilation and the gradual installation of charging spots, as well as the overall role of digital technology in order to support the transition towards smarter, better-connected buildings that are integrated into the energy grid.
F. de M. - Who are the units working on those sustainable construction issues inside the Commission?
D. R. - The European Commission is structured into various Directorates-General following a sector-based approach (energy, transport, health etc.). In that way, it is similar to a government administration. The construction and buildings sectors - and so the sustainable construction issues themselves - do not depend on a single Directorate-General but on a combination of departments. The Directorate-General for Energy, which I run, has a vital role. We are the ones in charge of checking on the implementation of the EPBD. To that end, we are constantly in touch with Member State administrations.
We have also launched a large number of initiatives to support the implementation of our policies and to boost their impact in the field. It is worth mentioning the funding of those building renovations, which we are supporting with European funds through our partnership with the European Investment Bank. The issue of sustainable construction is handled by the Commission through a cross-functional approach. Together with our colleagues from DG GROW and the Directorate-General for the Environment, we are working hard to promote innovation and best practises throughout the sector. Accordingly, we are building a consistent perspective which blends the various points of view (competitiveness, energy efficiency, circular economy) regarding a key topic for the future of the European Union. On that matter, I wish to thank the representatives from the national public sectors and from the private sector (construction, buildings) for their contribution to the forums of discussion set up by the European Commission.
F. de M. - How does the dialogue happen between the various players like the Commission, the Governments, the industrialists? Who ends up playing a steering role?
D. R. - Let me first highlight how important it is to have a European approach to the issue. This is the approach which guided the creation of the Energy Union in 2015 - a project that aims to revive integration into the energy sector and to ensure Europe's energy independence. It is also the approach which helped achieve significant progress in energy savings, especially in the construction sector.
This European dimension in energy challenges took on its full meaning with the recent adoption of the rules on Energy Union governance in December 2018. The idea is to make sure that the European Union's strategy on energy is implemented in a coordinated, consistent way and that it will achieve its objectives. In this entirely new scheme, the European Commission obviously has a key role to play in elaborating the perspective, the purpose and the articulation of the policies. It supervises and coordinates the implementation of the Union's road maps on the basis of the initiatives conducted in Member States by both national administrations and local authorities. The involvement of the private sector (building contractors as well as the financial sector and consumers) is absolutely vital.
F. de M. - What about funding?
D. R.- That is a major topic. In order to renovate Europe's buildings, it is estimated that we shall have to invest around E 177b per annum from now to 2030. This really is a challenge at a time when there are great demands on public funding, especially for the Union. For instance, over the period stretching from 2014 to 2020, about E 17b of Europe's structural funds will have been allocated to energy efficiency, including over E 13b for public and residential buildings. For its part, the European Fund for Strategic Investments has helped to generate over E 60b in investment for sectors like energy efficiency and renewable energy. That is a considerable amount, but it will not suffice; so it is vital, and urgent too, to unlock private sector investments. To that end, and following discussions with financial institutions, the Commission, together with the European Investment Bank, has launched a dedicated initiative, "Smart Finance for Smart Buildings". The initiative has three main avenues: to provide better information about the risks related to those investments; to support the development and aggregation of investment projects; and to guarantee an optimal use of public funds.
F. de M. - There are still in many countries a lot of energy leaks. How can we improve this situation?
D. R. - Yes, the upgrade of energy-inefficient dwellings, those "energy leaks", is indeed one of the locks we have to break open. It isn't just about saving energy, but also about ensuring decent housing for everyone. The least efficient buildings are often inhabited by the most underprivileged social categories, and poor energy performance usually goes hand in hand with a poor-quality indoor environment, like unsuitable temperatures, dampness etc. This is the issue of "fuel poverty" which the Commission has promised to deal with by all possible means.
In the latest revision adopted in 2018, the EPBD explains that Member States will have to determine long-term renovation strategies. Such strategies do exist already, but the directive has added new key elements. The first is a goal: the total decarbonisation of all public buildings by 2050. Second, there are prospects: the strategies must include measurements and indicators so it is possible to measure the progress made, as well as markers for 2030, 2040 and 2050. Third, a focus on the instruments to be set up in order to marshal the funds required to successfully achieve our building renovation objectives.
F. de M. - How will those building renovation projects be handled operationally?
D. R. - The strategies can make use of existing measures which have already proven their worth. Take the public building renovation projects: in addition to direct energy savings, they can help to promote innovative techniques, and to showcase the benefits of energy renovation. I can also mention the one-stop kiosks set up to assist owners in the renovation process: consulting, funding, choosing a contractor, works supervision etc. The "Île-de-France Energies" scheme has handled 2,700 housing energy renovation projects with support from the European Fund for Strategic Investment. There are also high expectations regarding the progress in construction techniques that can significantly cut renovation costs. I have one example: the "Energie Sprong" concept, which has already led to the renovation of several thousand housing units (that are now energy-positive) in the Netherlands, is now being deployed in France as part of the European Commission's "Transition Zero" project.
F. de M. - Looking at all the topics you have addressed, would you say that things have improved?
D. R. - Undoubtedly, and we're very glad about it. As a routine task in the Energy Union, launched in 2015, the European Commission periodically provides progress reports. Published in April 2019, the latest report does mention some encouraging signs. To begin with, it appears that the decoupling of greenhouse gas emissions and energy use on the one hand, and the economy on the other, continues. In particular, the Union should be in a position to achieve its goal in cutting greenhouse gas emissions by 2020, with a 20% drop as compared to 1990. The growth in renewable energy also goes on; the share of renewable energy in Europe's production was 17.5% in 2017, and should reach 20% in 2020.
F. de M. - Are all European countries concerned?
D. R. - The "Smart Finance for Smart Buildings" initiative which I mentioned earlier has led to setting up a guarantee fund to support renovation investments in Malta. Other similar pilot projects are being developed in other Member States, especially France and Spain. As part of that same initiative, the ELENA European support scheme, founded ten years ago, has provided many towns and regions in Europe with technical assistance to organise and implement their energy efficiency investment projects and to attract third-party funding. In France, for instance, the "Picardie Pass Renovation" project (2014-2018) received E 1.7m from ELENA, which went on to generate over E 33m in renovation investments.
Such positive signs and unquestionable progress should not conceal the need to pursue our efforts. This is especially true regarding energy efficiency; we should already be projecting ourselves into 2030 and making sure that the ambitious policies which the Union has set up should bear fruit. Energy renovation in buildings remains a priority. This is also true for renewable energy, where deployment is tempered both geographically (with differences between Member States) and in terms of sectors (more penetration in electricity production but a downturn in other segments like heating).
F. de M. - Looking forward, how do you imagine the city of the future? What will be the gateways between sustainable construction and energy efficiency?
D. R. - There probably isn't just one, but a host of ways of considering the possible and desirable changes in our cities. It is my feeling that the local dimension is decisive... it is up to municipalities, council communities and regional councils to find the best solutions, together with the citizens, given climatic and environmental imperatives. Air quality is a crucial issue; many urban areas experience excessive pollution, especially because of transport. We have an obligation to review urban mobility, by favouring non-motorised transport as well as alternative fuel, through electric vehicles. Regarding the latter point, the European Union, after revising its Energy Performance directive, has secured some targeted measures to support the deployment of charging kiosks inside all buildings.
Another section deals with the role of cities in our approach to energy and climate. Cities (where about 75% of Europe's population lives) account for a substantial share of our energy use and greenhouse gas emissions. That is why the European Commission supports all initiatives that aim at speeding up the decarbonisation of cities, like the Covenant of Mayors for Climate & Energy, the world's largest movement for local action in matters of climate and energy.