The revised Energy Performance of Buildings Directive (the “EPBD”) was finally adopted by the European Council on 12 April 2024. The EPBD has been established with the purpose of reducing greenhouse gas emissions and improving the energy performance of buildings in the EU with a view that all new buildings should be zero-emission buildings by 2030 and to achieve a zero-emission building stock by 2050. The EPBD is considered to be another milestone of the European Green Deal and it is also a part of the REPowerEU Plan, which main focus is to reduce dependence on Russian fossil fuels and fast forward the green transition. On an EU-level, the energy performance of buildings is a key factor for reducing the greenhouse gas emissions and dependence on import of gas since the energy consumption of buildings account for more than one third of EU’s total greenhouse gas emissions.  

The EPBD is a legislative framework and the EU has thereby allowed for each Member State to decide its own implementation and how to reduce the average primary energy use of buildings. This also allows each Member State to tailor the implementation to its specific conditions, such as geography, existing building stock, cost-effectiveness and outdoor climatic conditions, which further enables the national implementation to target the renovation measures best-suited and most effective to the specific national conditions. It will also be possible for the Member States to utilize all types of fossil-free energy (including nuclear power) to reach the zero-emission requirements. Member States may also choose to exempt certain categories of buildings, including holiday homes and buildings of architectural or historical significance.  

In addition, the EPBD also aims to make zero-emissions the standard for new buildings, and it will be mandatory for all new buildings to have zero on-site emissions from fossil fuels, beginning from 1 January 2028 for publicly-owned buildings and 1 January 2030 for all other new buildings. Further, fossil fuels will gradually have to be replaced from heating in buildings and the construction and use of solar power will be accelerated through the EPBD. All new buildings shall also be solar ready. The EPBD also lays down, among other things, requirements on sustainable mobility infrastructure in and adjacent to buildings with the purpose of enhancing the uptake of sustainable mobility.  

How does this affect the Swedish property market? 

Given that the Swedish legislation has not yet been published, it is still difficult to assess the consequences of the EPBD from a Swedish perspective. It can however be expected that the strive for zero-emission buildings and requirements on reducing the average primary energy use of buildings as well as investments in e.g., sustainable mobility infrastructure likely will entail major costs for all types of property owners, from industrial companies to large property companies. Financing of these costs will be one of the big topics for the national legislation. We know that some will be covered by subsidies, while others will have to be covered by the property owners and, in some cases, the tenants (if possible). It is not yet clear what the scope of the subsidies will be or to what extent they will cover renovations, but we know that the EU has allocated funds for this purpose.  

It is also likely that the property transaction market will be affected. We may see that some actors on the market will accelerate their focus on ‘brown’ buildings and that ‘brown’ buildings will suffer a negative effect given that renovations will be mandatory for some buildings following implementation. We have already seen a decrease in the attractiveness of ‘brown’ buildings in light of the EU taxonomy, and we would expect such decrease to continue.  

Member States now have two years to incorporate the provisions of the EPBD into their respective national legislation. The Swedish government has recently given the Swedish National Board of Housing, Building and Planning (Sw. Boverket) and the Swedish Energy Agency (Sw. Energimyndigheten) the assignment of investigating an implementation of the EPBD in Sweden, with their suggestions reported to the Swedish government during 2025. Snellman will continue to monitor the situation and the developments in Sweden closely.