New EU Directive for Energy Performance

28th Jul 2006

The UK property industry could be criticised for not keeping up with its European neighbours when it comes to considering the consequences of building work on the environment.

Half the greenhouse gas emissions in this country can be attributed to the energy used in the building and operation of buildings, according to government figures.

Buildings are major consumers of energy, and it?s something that has not gone unnoticed by legislators.
The new EU directive on the Energy Performance of Buildings came into force in January. Although not yet fully implemented in the UK ? we, like other member states, have a three-year window starting from January in which to implement certain provisions of the directive ? its principal objective is to reduce emissions from buildings by improving energy efficiency.

The directive introduces a methodology for calculating the energy performance of a building, which will be used throughout the EU.

However, member states will be able to specify the minimum energy standard of new and existing buildings in their countries.

The directive is likely to have a significant impact on developers and property investors.

If you are the seller, every time a new or existing building is sold or let an energy performance certificate that is no more than ten years old must be shown to the prospective buyer or tenant.

The three-year window referred to earlier will allow certification schemes to be developed and time for the accreditation and training of sufficient personnel to undertake the energy performance assessments.
Developers undoubtedly are going to have to be more mindful of energy efficiency for the outset, for example by providing more, higher quality insulation and energy efficient glazing.

Another consideration for developers is the energy used during the construction process. Here, the message has got to be greater use of more sustainable products. A good example of recycling would be a UK-based company taking the ash output (traditionally a waste material) from coal-fired power stations and re-engineering it into sustainable products for the construction industry.

The construction industry must also consider minimising the amount of waste produced from building sites due to the implementation of the Landfill Directive and the landfill tax that it imposes. As the pressure to reduce landfill grows, landfill taxes are inevitably set to increase.

Developers, therefore, will be reluctant to dispose of contaminated land via landfill and will be faced with the challenge of finding alternative ways to remediate such land, perhaps even in situ.

On the up side, the recent RICS Green Value Report, which considered green buildings in Canada, the US and the UK, concluded that the market value of a building may well be linked to its ?green? features.
The study indicated that ?green? buildings are not only likely to provide healthier places to live and be more productive workplaces, but that they are also likely to command higher rents and prices, attract tenants more quickly, reduce tenant turnover and cost less to operate and maintain ? factors that will undoubtedly be taken on board by property investors in the future.

Adam Wood is a member of the Property team at Blackett Hart & Pratt in Darlington. For more information, contact him on (01325) 466794.

Author: Bryan Hoare