France announces more financing for energy renovations

French Prime Minister Elisabeth Borne announced on Sunday (9 July) that the government would release an additional €7 billion from 2024 to finance the green transition, part of which will be allocated to energy renovations.

Read the original French story here.

The new measure follows the publication of a Senate report on Wednesday (5 July), which highlighted the lack of public incentives to increase the rate of building renovations to boost energy efficiency.

In France, the building sector represents around 48% of all energy consumed and about 28% of greenhouse gas emissions, compared to 40% and 36% at the EU level.

The need to decarbonise the sector is, therefore, more urgent than ever, and is even the subject of a “political consensus”, according to the Senate report.

In response, Prime Minister Elisabeth Borne announced on Sunday (9 July) that the government will provide an additional €7 billion a year in public funding as of next year to finance the energy transition.

Among other things, this money will be allocated to speeding up the energy renovation of buildings, Borne said.

The current rate of renovation in France ranges between 50,000 and 100,000 buildings per year. In its report, the Senate proposed to achieve 370,000 fully renovated homes per year by 2030 before doubling the pace to 700,000 per year.

This is the pace France needs to adopt in order to comply with the European Commission’s 2020 targets for doubling the number of comprehensive building renovations from 1% to 2% of the EU’s housing stock per year.

Loss of confidence

The Senate report noted that this situation is not unique to France since “energy renovation incentive policies in other EU countries are facing the same difficulties”, citing Germany and Belgium as examples.

For France, the report identified the need for legally stable financial aid schemes proportional to household income, combined with loan schemes with lower interest rates than today.

Against this backdrop, the additional €7 billion earmarked by the Prime Minister could help to raise the budget of MaPrimeRénov’, the main public financial support scheme for energy renovation in residential buildings, to €4.5 billion a year.

Guillaume Gontard, the senator who drafted the report, argued that these measures should be combined with “more reliable and robust” building energy performance diagnostics (ECD) that incorporate more parameters.

The French ECD scheme ranks homes according to their energy performance and indicates the worst performers that will be the first requiring renovation.

The rapporteur also welcomes the aim to have “harmonised thresholds” for EU-level renovations rather than a common ECD scheme valid for all buildings across all EU countries.

In the EU, the disparities in building performance between member states are such that harmonising constraints around a common ECD would be tantamount to condemning some states to overhaul almost their entire housing stock.

Rather than a single ECD for buildings, the current revision of the Energy Performance of Buildings Directive (EPBD) includes minimum energy performance standards adapted to each country, making it compulsory to renovate the 15% worst-performing buildings in each member state.

EU’s new buildings law aims to renovate 15% least efficient homes

The European Commission has proposed the introduction of minimum energy performance standards for the 15% worst performing buildings in Europe, which would be rated “G” on the EU’s energy performance scale, whether they are residential or not.

Keeping jobs in Europe

The senators are also keen to maintain an EU and French industry for the materials needed for renovation, particularly as the EU heating and cooling sector is, in their view, “extremely dynamic”.

The report pointed out that France builds more than 350,000 heat pumps annually, which the government wants to increase to 1.3 million annually by 2030.

However, the Senators said this does not mean a switch to 100% electric heating. On the contrary, Gontard insisted on the need for a “balanced and resilient” energy mix because “not all territories are suited to going full electric”, Estrosi-Sassone added.

The debate on heating has intensified since Borne raised the possibility in May of banning the installation of gas boilers in new buildings as of 2026.

However, according to Gontard, the real debate is about France’s capacity to reduce energy consumption: introducing minimum energy performance standards for the 15% worst performing buildings in Europe, which would be rated “G” on the EU’s energy performance scale. “We need to think differently,” he said.

Regardless, the report noted that the rise in demand for equipment and materials, particularly bio-sourced materials, offers significant opportunities for Europe’s many small and medium-sized enterprises in the field.

Hemp insulation, for example, could benefit in France from the sector’s already strong appeal.

In this respect, the senators endorsed the proposal made by Housing Minister Olivier Klein, who has called for introducing a CarbonScore to encourage the consumption of products and equipment built and assembled in the EU.

Finally, the report recommended different measures for older or heritage buildings to avoid “irreparable damage”.

However, while the EPBD currently under discussion leaves the definition of derogations to the discretion of the member states, the senators suggested postponing the need for compulsory renovation.

At the very least, “the establishment of specific ECDs for older buildings is imperative”, noted the report. In France, older buildings – typically built before 1948 – account for around a third of the building stock.

Heritage advocates 'vigilant' over revised EU green buildings law

A proposed update of the EU’s Energy Performance of Buildings Directive could threaten Europe’s cultural heritage, lawmakers and associations have warned, drawing attention to the thousands of unlisted buildings which could potentially fall under the directive’s renovation obligation.

[Edited by Frédéric Simon, Zoran Radosavljevic and Alice Taylor]

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