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The EU Green House Directive Comes Into Force: Impact and Transformations

The entry into force of the EU Directive EPBD4 "Green Homes" is causing changes in the Italian real estate market, with millions of citizens selling or looking for energy efficient homes. The directive, to be implemented by 2026, imposes objectives for reducing emissions and improving energy efficiency, supported by technical and financial measures.

green home

The implementation of the EU Directive EPBD4, known as "Green Houses", is causing major transformations in the Italian real estate market. About 2.5 million Italians have decided to sell their homes to avoid future renovation costs imposed by the new legislation. At the same time, almost 3 million Italians are looking for energy-efficient homes, which will not be affected by the directive, changing the criteria for selecting buyers.

Timing and Objectives of the Directive

The directive, entered into force on May 28, must be transposed by 29 May 2026, with some provisions in force as early as 1 January 2025, such as the prohibition of incentives for fossil fuel heat generators (Article 17, paragraph 15). The energy efficiency targets are divided into the residential and non-residential sectors. In the residential sector, each member state must set a "trajectory" for the period 2030-2040-2050, aiming for zero emissions by 2050. The targets for reducing the average primary energy demand of residential buildings are:

  • 16% by 2030,
  • 20-22% by 2035,
  • Further reductions will be defined for 2040 and in the following five years.

55% of the reduction in average consumption will have to be achieved by renovating the 43% of the worst-performing residential buildings.

Support Measures and National Plans

To facilitate the achievement of these targets, member states need to implement:

  • Minimum energy performance standards (e.g. Ministerial Decree Minimum Requirements),
  • Technical assistance through one-stop shops at municipal level,
  • Financial support measures, such as incentives or tax deductions.

Each state must draw up a national restructuring plan, with starting data, objectives to be achieved and methodologies used. The European Commission will monitor progress, providing recommendations to member states.

Economic and Technological Implications

According to a study by the Politecnico di Milano, the estimated cost for Italy to comply with the "Green Houses" directive is 180 billion euros. However, for a real impact, the interventions should involve about 5 million buildings of energy class G, equal to 40% of the Italian real estate stock. These buildings would need to be adapted on almost half of their surface.

Photovoltaics remains a key technology, offered by more than 75% of ESCOs, with a prevalence in the public (97%) and residential (86%) sectors. The "turnkey" contract is the most widespread, while the EPC mode with the client's financial risk is rare.

Changes to the Energy Performance Certificate (EPC)

The approval of the directive will result in significant changes to the Energy Performance Certificate (EPC). New energy classes will be introduced, and the EPC will include more detailed information on energy performance, a renovation passport to guide interventions, and data on building intelligence, promoting transparency and awareness on energy efficiency.

Key Elements of the "New" EPA

By 29 May 2026, the EPA will have to comply with the European model, with a closed scale from A to G, with A being zero-emission buildings and G being the worst-performing buildings. The EPA will also include:

  • Energy Performance Class,
  • Annual primary and final energy consumption,
  • Percentage of renewable energy produced,
  • Life-cycle greenhouse gas emissions and GWP.

These data will ensure greater coherence and comparability between the various national systems, improving consumer information and awareness.

Conclusions

The entry into force of the "Green Homes" Directive represents a significant challenge and opportunity for Italy. Although the retrofitting costs are high, the necessary interventions will lead to a reduction in emissions and an improvement in the energy efficiency of the national building stock. With the support of appropriate technical and financial measures, Italy will be able to achieve its objectives, contributing to the fight against climate change and promoting sustainable development.

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