Sustainabilization of real estate: the most important rules in a nutshell

"Buildings” are the largest energy consumers in Europe. They are responsible for about 40% of the energy consumption and 36% of the CO₂ emissions in the EU. Therefore, on a European and national level, agreements have been concluded to make buildings more sustainable. As a result of these agreements, constructors, owners and residents of real estate are confronted with a substantial package of rules aiming to reduce the energy consumption of their buildings. We list the most important rules for you.

1. The energy label obligation

For most residential and non-residential buildings (such as offices, catering facilities, schools or hospitals), an energy label is required on the basis of the Energy Performance (Buildings) Decree (Besluit energieprestatie gebouwen). An energy label indicates how energy-efficient a building is and which energy-saving measures are still possible. The label must be made available by the owner upon completion, sale or lease of a building. Furthermore, the energy performance indicator of the energy label must be mentioned in advertisements wherein a building is offered for rent or sale. Finally, the energy label must be visibly displayed in larger buildings (>250 m²) that are frequently visited by the public. There is a number of exceptions. For example churches, certain industrial buildings and monuments are exempt from the energy label obligation. Find out more about the energy label obligation in this blog.

Since the first of January 2021, energy labels are determined using a new calculation method: the NTA 8800. This calculation method is also used to assess the Energy Label C-requirement and the BENG requirements (see below). Please also refer to this recent blog about the NTA 8800, written by my colleague Anton van den Heuvel.

2. Energy label C-obligation

From the first of January 2023 onwards, it will be forbidden to use office buildings of 100 m2 or larger without a valid energy label C. This translates to a primary fossil energy consumption with a  maximum of 225 kWh per m² per year. This obligation is laid down in article 5.11 of the Building Decree 2012 (Bouwbesluit 2012) and can force property owners to make substantial investments to make their premises more sustainable. A number of exceptions is applicable to the label C-obligation: the obligation not applicable when the office function is subordinate to other functions, with regard to office buildings smaller than 100 m2 or buildings as mentioned in article 2.2 Energy Performance (Buildings) Decree (for example national monuments). If the payback period of the required energy-saving measures is more than 10 years, it is sufficient to implement only the measures with a payback period of up to 10 years. For further information on the label-C requirement we refer to this blog.

3. BENG requirements

As of 1 January 2021, all permit applications for new buildings must meet the requirements for nearly energy neutral buildings (bijna energie neutrale gebouwen) (BENG). These building regulations set requirements for the maximum energy demand, the usage of fossil energy and the generation of renewable energy in buildings. The requirements are derived from the European Energy Performance of Buildings Directive (EPBD) and are implemented in Section 5.2 of the Building Decree 2012.

The Building Decree contains a numberof other sustainability requirements for buildings. In addition to energy performance requirements for new buildings, the Building Decree has long included requirements for rebuilding and renovation, for example pursuant to Section 5.6 of the Building Decree. Since 10 March 2020, in response to the EPBD, further requirements have been introduced in the Building Decree regarding the energy efficiency of installations in buildings, the inspection obligations for heating and air conditioning systems and the compulsory installation of charging infrastructure for new developments and renovations.

4. Energy-saving obligation

The Activities (Environmental Management) Decree (Activiteitenbesluit milieubeheer) (article 2.15) imposes the obligation on certain companies and institutions to implement all energy-saving measures with a payback period of five years or less. This energy-saving obligation applies to companies and institutions (Environmental Management Act-establishments (Wet milieubeheer-inrichtingen)) that consume 50,000 kWh or 25,000 m³ of natural gas or an equivalent per year. This means that the energy-saving obligation not only applies to many companies but also to many offices, public buildings and shops. The (legal) person running such an establishment must report to the competent authorities not later than 1 July 2019 and once every four years thereafter which energy-saving measures have been taken.

5. Audit obligation

Larger companies may also be subject to an audit obligation. The purpose of the audit is to make companies and institutions aware of their energy consumption and of the opportunities for energy-saving and sustainabalization. This obligation applies to Environmental Management Act-establishments with 250 FTE or more, or with an annual turnover of €50 million or more and an annual balance sheet total of more than €43 million. The audit obligation stems from the European Energy Efficiency Directive and has been implemented in the Temporary Regulation for the Implementation of Articles 8 and 14 of the Energy Efficiency Directive (Tijdelijke regeling implementatie artikelen 8 en 14 Richtlijn energie-efficiëntie). A new regulation is being prepared that will bring the audit obligation within the scope of the Energy Efficiency (Implementation of EU-Directives) Act (Wet implementatie EU-richtlijnen energie-efficiëntie).

To conclude

Real estate parties will be confronted with an increasing regulatory burden in the upcoming years in connection with the efforts to increase sustainability. For example, the Climate Agreement (p. 33) sets the goal of achieving low-carbon non-residential construction by 2050. At the end of 2020, the Minister of Economic Affairs and Climate announced in a letter to parliament that companies and institutions will be obliged to take CO₂-reducing measures in addition to energy-saving measures from 2023 onwards. Moreover, the cabinet is considering a so-called materials passport for buildings. This document will indicate which materials are released during the demolition of a building in order to stimulate reuse. Besides that, the rules relating to energy-saving and sustainability will change drastically when the Environment and Planning Act (Omgevingswet) and the Quality Assurance Building Sector Act (Wet kwaliteitsborging voor het bouwen) come into effect.

However, there are also opportunities. For example, the regulation Stimulating Sustainable Energy Production and Climate Transition (Stimulering Duurzame Energieproductie en Klimaattransitie) (SDE ++), the Energy Investment Deduction (Energie Investeringsaftrek) and the Energy Performance Fee (Energieprestatievergoeding) (EPV) for landlords stimulate the sustainabilization of real estate. That is why it is important to keep an eye on these rules when purchasing and managing real estate to prevent setbacks and seize opportunities.

Do you have any questions about the (sustainability) rules that apply to your real estate? Please contact Stephan Sluiter, partner in administrative and environmental law at Ploum, via s.sluiter@ploum.nl or 06 - 10 93 56 20.

- Stephan Sluiter and Aslihan Durmus