The buildings sector is Germany’s largest energy consumer. It is responsible for 30% of greenhouse gas emissions. Deep renovation of its building stock is crucial to ensuring the nation can meet its ambitious climate goals. The country needs new, effective and, most important, complementary policies to drive renovation rate and depth.

Despite enjoying a relatively well-developed landscape of funding and incentives for building renovation, Germany has still not managed to raise the rate of renovation of existing buildings beyond around 1% of the stock a year.

Fortunately, a solution is on the horizon. In 2021, the European Commission will propose minimum energy performance standards across Europe. This instrument, which complements and leverages existing funding and pricing measures, can focus renovations on the worst-performing buildings first and set out a trajectory for decarbonisation. It is a regulated standard requiring targeted buildings to meet a minimum energy performance requirement by a given date or at a trigger point in the future.

The standards are introduced with a long lead time before enforcement and allow flexible routes to compliance. This gives building owners clarity and, importantly, flexibility to renovate at the most suitable time within the building’s lifecycle or investment cycle. Clearly communicated, this ambitious framework will allow Germany to expand markets, develop workforce skills, and mature innovative, cost-effective solutions.

Buildings stakeholders have already begun the process of engaging with the introduction of minimum energy performance standards in the German context and have identified three top‑line priorities. One priority is to enable compliance and ensure broad impact. Fair and unambiguous policy design, a strong enabling framework and social protections all work together to this end. Another priority is to avoid unambitious energy-saving measures that prevent deeper renovations. Finally it is important to safeguard compliance. Effective enabling measures can ensure very high levels of compliance well before the enforcement date.

With regulation, financial incentives and funding, practical support and carbon pricing working together in a smart and complementary way, we can accelerate much needed progress in this vital decade.

This short policy brief outlines the potential of minimum standards and reports on the first stage of ongoing stakeholder engagement. As such, it is an invitation to continue discussions.

A German version of the report is available here.