Buildings account for over 30% of global CO₂ emissions and are therefore at the center of European climate and regulatory policy. The energy-efficient renovation of buildings is no longer a voluntary measure, but is enforced directly and indirectly by EU directives, national laws and market mechanisms.

For owners, investors and companies in the building sector, this creates significant regulatory, financial and strategic action constraints.

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EU Buildings Directive (EPBD): Stricter efficiency and automation requirements

A key regulatory driver is the Recast of the Energy Performance of Buildings Directive (EPBD) of the European Union. This prescribes specific minimum requirements for the energy efficiency and technical equipment of buildings.

Minimum energy performance standards (MEPS):

• Non-residential buildings must their efficiency class
  • Improve from G to at least F by 2027
  • At least E by 2030
• residential buildings must their energy consumption
  • by 16% by 2030
  • Reduce by 22% by 2035

These requirements affect a large part of the existing building stock and make renovations inevitable.

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Mandatory automation: Building automation becomes a regulatory standard

In addition to energy efficiency, the Building automation in the focus of regulation:

• From January 2025, automation systems in non-residential buildings with a peak energy consumption of >290 kW will be mandatory
• From 2030, the obligation applies from >70 kW

This often affects buildings with 1,000—1,500 m² of floor space.
The aim is to make energy consumption transparent, controllable and optimizable.

The EPBD has already been implemented in many EU countries — for example through the Building Energy Act (GEG) in Germany.

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Rising CO₂ prices increase economic pressure

Additionally tighten rising CO₂ costs the economic situation of inefficient buildings:

• From 2027 Will national emissions trading systems become part of the EU Emissions Trading Scheme for Buildings and Transport (ETS II) convicted
• Expected CO₂ prices: 60 to 380€ per ton (today approx. 55€)

For fossil fuels, this means:

• upto +7 ct/kWh on the gas price

Particularly relevant for owners:
In the case of inefficient buildings, most of these additional costs must be borne by yourself (e.g. as a result of the CO₂ Cost Allocation Act in Germany) — they cannot be fully passed on to tenants.

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EU taxonomy: transparency obligations and investment pressure

As part of EU taxonomy Companies must disclose what proportion of their:

• Turnover
• their investments (CapEx)
• their operating expenses (OpEx)

is taxonomy compliant.

Two activities in particular are relevant for the building sector:

• 7.3: Installing, maintaining and repairing energy-efficient equipment
• 7.5: Measurement, regulation and control systems for the energy performance of buildings

Both are regarded as “enabling activities” — i.e. key technologies for decarbonizing other sectors of the economy. Buildings without appropriate measures therefore lose strategic relevance for ESG-compliant investments.

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Brown Assets & Brown Discount: The market punishes inefficiency

Regulatory requirements are also increasingly having balance sheet and market effects:

Buildings that do not meet efficiency and automation requirements are considered to be “Brown Assets”:

• higher CO₂ footprint
• increasing operating costs
• increased financing risk

Banks and institutional investors Are already pricing in these risks:

• higher interest rates
• limited access to green bonds
• lower loan values

Show yourself on the market Price reductions of up to 10-20% (“Brown Discount”)
compared to taxonomy-compliant buildings. Increasing CO₂ costs further reinforce this effect and increase the risk of Stranded Assets.

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Conclusion: Energy efficiency and building automation are becoming a strategic obligation

The combination of Regulation, CO₂ pricing, EU taxonomy and capital market pressure makes it clear:
Energetic renovation and intelligent building automation are no optional ESG measures, but economic necessities.

For owners and investors, opts for todayswhether buildings are long-term:

• competitively
• financeable
• valuable

remain — or become cost and risk factors.

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Download the white paper now: “The role of building automation in the renovation strategy”

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