Understanding EU Regulations on Renewable Energy A Guide for Homeowners and Businesses

So you’re an EU citizen looking to get into renewable energy. Perhaps you’re a concerned homeowner looking to save some money and save the environment all at once, maybe you're a business owner looking to cut costs and make more profit. You might be looking to expand into this thriving market with immense potential for the future. If any of these descriptions fit you, you’re at the right place. This post will clearly explain and lay out the EU’s regulations regarding renewable energy so that you as a consumer or a business owner can make an informed and responsible decision.

Now as we already know the EU is a global leader in renewable energy. Considering the difficult times we live in, the world has begun investing more than ever in cleaner forms of energy. The EU relied on expensive fuel imports for a whopping 62.5% of its energy consumption in 2022. In the same year, Ireland was found to spend a million euros AN HOUR just on imported fossil fuels. Needless to say, times are tough, and pivoting to renewable energy is the smarter and more sustainable move.

Renewable Energy Directive (RED):

In 2023 the EU released the Renewable Energy Directive or RED which is the main legislative framework to drive the implementation of renewable energy within the EU. It increased the renewables target for 2030 to at least 42.5% (ideally aspiring to reach 45%). New measures were also introduced to further the development of renewable energy projects, e.g. simplified permit-granting rules, and the use of renewables in sectors such as heating, cooling, industry, and transport. Following its execution on 20 November 2024. In May 2024, in order to speed up the deployment of renewable energy, the Commission already adopted guidance and recommendations relating to permitting and renewable acceleration areas, as well as the design of auctions for renewable energy.

Decarbonizing EU Buildings

Now having said all that, the question is what will you, the average consumer or business owner, have to consider regarding these new laws?

The Energy Performance of Buildings Directive (EPBD), is a notable step towards decarbonizing buildings across the EU, reducing emissions, and achieving the goal of climate neutrality by 2050.

The Directive is a fair and practical agreement that gives Member States a very high degree of autonomy to take into account local conditions. It aims to fully decarbonize EU buildings by the middle of this century, addressing the issue that buildings are responsible for 40% of energy consumption and 36% of greenhouse gas emissions in the EU.

85% of EU buildings were built before 2000 and of those, 75% have a poor energy performance. Acting on the energy efficiency of buildings is therefore critical to saving energy, reducing bills for citizens and small enterprises, and achieving a zero-emission and fully decarbonized building stock by 2050. The EPBD will make it easier for people to renovate their homes, ensuring your buildings consume less energy and rely on cheaper and greener renewable sources. It also supports better air quality, the digitalization of energy systems for buildings, and the roll-out of infrastructure for sustainable mobility and transport. Recognizing the variety within EU countries in factors such as the existing building stock, geography, and climate, the directive allows governments to decide on the renovation measures best suited to their specific national context. Countries can also exempt various categories of buildings from the rules including historical buildings and holiday homes.

The Goals of EPBD

a mandatory target to increase the average energy performance of the national residential building stock by 16% by 2030 in comparison to 2020, and by 20-22% by 2035, based on national trajectories.
The gradual introduction of minimum energy performance standards for non-residential buildings based on national thresholds to spur the renovation of buildings with the lowest energy performance
and an enhanced standard for new buildings to be zero-emission.
Enhanced long-term renovation strategies, to be renamed National Building Renovation Plans
increased reliability, quality, and digitalization of Energy Performance Certificates with energy performance classes to be based on common criteria.
The gradual introduction of minimum energy performance standards for non-residential buildings based on national thresholds to trigger the renovation of buildings with the lowest energy performance.
the introduction of building renovation passports to guide building owners in their staged and deep energy renovations
increased deployment of solar technologies on all new buildings and certain existing non-residential buildings where technically and economically feasible, and ensuring that new buildings are solar-ready (fit to host solar installations)
a gradual phase-out of boilers powered by fossil fuels
further roll-out of recharging points for electric vehicles in buildings, removing barriers to their installation, enabling smart charging, and introducing measures for bike parking in buildings
data collection and sharing, to improve knowledge on the building stock and awareness of energy consumption in building

Enhancing Energy performance

Improving the energy performance of buildings serves not only to save energy and reduce electricity bills but it also serves to help improve the health and wellbeing of EU citizens going forward. Furthermore, investments in energy efficiency help vitalize industrial sectors and create more green jobs. The EU’s construction industry contributes around 9.6% of the EU’s value-added and employs almost 25 million people in approximately 5.3 million firms. Small and medium-sized enterprises (SMEs) benefit from a boosted renovations market, as they make up 99% of EU construction companies and 90% of the employment in the sector.

Boosting EUs economy

The economic benefits of the legislation are clear For Europe, increasing energy efficiency will play a crucial role in developing economic resilience. The energy crisis has clearly demonstrated the dangers of leaving citizens, businesses, and industries posed to volatile global fossil-fuel markets and the crippling price spikes they bring with them, especially in recent times. Thus reducing dependence on external sources for the energy supply is better for the climate, better for Europe’s energy security, and most significantly - better for the economy and EU competitiveness in general. The importance of private investment and EU funding for the transition cannot be understated, financial institutions are encouraged to provide additional financing tools such as green mortgages and renovation loans.

Adjustments to the EPBD

The EPBD, initially met with resistance last year, underwent modifications to focus on reducing the energy use of residential buildings as a whole rather than mandatory individual revamps. As such the need for compulsory renovation hanging over millions of owners and tenants is now completely off the table so do not worry. In addition to a new target to double the existing share of renewable energy sources, a strong policy framework seeks to facilitate electrification in different sectors, with new increased targets for renewables in heating, cooling, transport, industry, buildings, and district heating/cooling, but also with the promotion of electric vehicles and smart recharging.

Strengthening Renewable Systems and Bioenergy Sustainability

To support the implementation of renewables in these sectors the revised directive establishes in EU law some of the concepts outlined in the energy system integration and hydrogen strategies, published in 2020. These aim at creating an energy-efficient renewable system that enables electrification and promotes the use of renewable fuels, including hydrogen, in sectors like transport or industry where electrification is not yet a feasible option. For these sectors, the directive sets new binding targets for renewable fuels of non-biological origin. The agreement bolsters the bioenergy sustainability criteria as well, in accordance with the increased climate and biodiversity ambitions of the European Green Deal. In the future, these criteria will apply to smaller installations (equal to or above 7.5 MW) rather than the 20 MW threshold under the current directive. The agreement includes arrangements to ensure that forest biomass is not sourced from certain areas with a particular importance from a carbon stock and biodiversity perspective. In addition, the agreed rules establish that woody biomass will have to be used according to its highest economic and environmental added value. As such, Financial support will be banned for energy produced through the use of saw logs, veneer logs, industrial-grade roundwood, and stumps and roots.

Empowering Citizens Through Renewable Energy Communities

Uniquely it also includes new provisions to allow citizens to play an active role in the development of renewables by enabling renewable energy communities and consumption of renewable energy. What’s a renewable energy community? You may ask. Well, these communities are legal entities that members form for the purpose of generating and consuming their own energy. The aim of these communities is to enhance citizen-driven energy efficiency while creating a sustainable environment. They can be structured within housing communities and even with local third-party entities.

The main activities in a local energy community are as follows:

• Generating energy from renewable energy sources.
• Providing energy efficiency services.
• Producing, supplying, consuming, storing, and distributing potentially clean energy.
• Providing electric mobility or other energy services.

These communities play a very vital role in building Europe’s sustainable future and it's highly recommended to get involved with one in your area if possible. In doing so you become an active participant in creating an environmentally friendly tomorrow.