Construction & Engineering

SUSTAINABILITY

Energy Efficiency Directive

The new Directive (EU) 2023/1791 on Energy Efficiency comes into effect on 10 October 2023 and, except where otherwise stated in the Directive, is to be transposed in domestic law by 11 October 2025. Further information is available here.

An obligation with an earlier transposition date of 15 May 2024 is Article 12(1) in relation to data centres. It states: “By 15 May 2024 and every year thereafter, Member States shall require owners and operators of data centres in their territory with a power demand of the installed information technology (IT) of at least 500kW, to make the information set out in Annex VII publicly available, except for information subject to Union and national law protecting trade and business secrets and confidentiality.” Article 12(3) requires the Commission to establish a European database that includes the information communicated by the obligated data centres, which will be publicly available on an aggregated level.

The Directive embeds in a number of obligations the “energy efficiency first” principle, as defined in Regulation (EU) 2018/1999 on Governance of the Energy Union and Climate Action. Energy efficiency first means “taking utmost account in energy planning, and in policy and investment decisions, of alternative cost-efficient energy efficiency measures to make energy demand and energy supply more efficient, in particular by means of cost-effective end-use energy savings, demand response initiatives and more efficient conversion, transmission and distribution of energy, whilst still achieving the objectives of those decisions”.

A new obligation under Article 3(1) will require Member States to ensure that energy efficiency solutions, including demand-side resources and system flexibilities, are assessed in planning, policy and major investment decisions of a value of more than €100 million each or €175 million for transport infrastructure projects, relating to the following sectors: (a) energy systems, and (b) non-energy sectors, where those sectors have an impact on energy consumption and energy efficiency such as buildings, transport, water, information and communications technology (ICT), agriculture and financial sectors.

The Directive also increases the energy efficiency target to be met across the EU in 2030. It requires Member States to revise requirements around energy management systems and energy audits, so that the threshold for determining which entities are in scope is not based on company size, but rather annual level of energy consumption.

There is also a change to the definition of efficient district heating and cooling systems: minimum requirements will gradually change to increase integration of renewable energy and waste heat and cold. Support for new high-efficiency cogeneration using natural gas and connected to district heating in efficient district heating and cooling may only be provided until 2030. Member States will be required to promote local heating and cooling plans in municipalities with populations over 45,000.

Energy Performance of Building Directive

We previously indicated that the Council has adopted its position, and the Parliament has also adopted amendments to the proposal at first reading and referred the proposal for trialogue. It has been reported that Germany is concerned about the extent of retrofitting required by the proposal.

CBAM Reporting

As reporting obligations begin in relation to greenhouse gas emissions arising in respect of a range of goods imported from outside the EU, we look at the CBAM in a recent article published by Irish Building Magazine here. In Ireland, the Environment Protection Agency will be the competent authority overseeing the operation of the CBAM, with administrative support from the Customs branch of Revenue. Fines can be imposed for failure to comply with reporting obligations.

Deforestation-free Supply Chains

The Regulation on deforestation-free supply chains is now in force, with operators and traders having 18 months to implement new rules. It will prohibit placement of relevant products (including timer) on the EU unless they are deforestation-free after 31 December 2020, produced in line with the relevant legislation of the country of production, and covered by a due diligence statement indicating that there is no more than a negligible risk of non-compliance. Further information is available here.

Whole Life Carbon Assessment

In the UK, the Royal Institute of Chartered Surveyors published a second edition of the whole life carbon assessment for the built environment. Further information is available here.