European Recovery Fund: Climate-neutral construction as an opportunity for economic recovery | Agoria

European Recovery Fund: Climate-neutral construction as an opportunity for economic recovery

Published on 30/11/20 by Charlotte van de Water
More than one third of the recovery budget will have to be used for green investments. Discover here the proposals of Agoria that will support the transition towards a climate-neutral building park.

The Belgian economy is expected to shrink by almost 7.5% in 2020 as a result of the measures that had to be taken this year to combat the spread of the coronavirus; a shrinkage similar to that of the European Union. In order to make the recovery happen as quickly as possible, Europe has put in place a recovery plan of more than €700 billion in financial support. The largest part of this additional budget is intended for the 'Recovery and Resilience Facility (RRF)', for which each Member State must submit a plan in the context of the European Semester. 

Given the scale and impact of this support, Europe wants to ensure that the investment also contributes to the realisation of a green and digital transition. The realisation of a climate-neutral building park via a Renovation Wave is one of the main priorities. In addition to the climate renovation and climate-neutral construction of buildings, attention within the Renovation Wave is also paid to the possibilities for upscaling via digitalisation, the required renewable energy and the support of the necessary basic infrastructure for electric mobility.

What makes an investment in climate-neutral construction even more interesting is that it provides benefits in multiple areas:

  • it reduces greenhouse gas emissions,
  • provides the construction sector with an additional boost,
  • results in a higher quality of life
  • and yields a higher real estate value in the long term.

To maximise the return on investment complementing policies are necessary; for example to raise awareness on the possibilities for climate neutral renovation and to ensure that a choice for climate neutrality is rewarded. The basis for these policies lies in the renovation strategies submitted earlier this year as part of the energy and climate plans.

Currently, the main challenge lies in the realisation of an increase in the number of climate renovations per year to at least 3% of the buildings. The additional resources of the recovery plan can make a significant difference the financial reach of the provided support.  To maximise the impact of this investment, Agoria identified three success factors to take into account:

  • a target group-oriented policy approach,
  • solutions that increase both climate neutrality and comfort levels,
  • and a higher appreciation of a building's climate neutrality.

Agoria therefore proposes the following investments:

1. Targeted support for climate renovations of privately owned homes

The majority of climate renovations in Belgium will have to be carried out by current and future house owners. Agoria therefore proposes to strengthen the current support provided by the renovation strategies per target group including an overall climate performance requirement that needs to be achieved for the building. This allows owners who are motivated to undertake climate renovation to be supported as much as possible without distorting market dynamics. The impact of the investments can be further increased by, for example, providing each dwelling with an indication of their climate performance, solutions that increase both climate neutrality and comfort, and a tax policy that rewards climate-neutral living.

2. Increasing the range of affordable and climate-neutral newly built and rental housing

Everyone should have the opportunity to choose for climate-neutral living. That is why Agoria proposes to use the resources from the recovery plan also for the realisation of affordable climate-neutral newly built and rental housing. This has several advantages; it can provide interesting case studies to show how climate neutrality can also lead to a higher level of comfort. In addition, it helps the government fulfill their exemplary function. It also creates room on the rental market to cope with a decline in the offer in private rental housing as a result of the transition towards climate neutrality. This is also expected to have a positive impact on the long-term valuation of climate neutrality on the housing market.

3. Realisation of climate-neutral public buildings

In addition to reducing greenhouse gas emissions, investing in the climate renovation of public buildings also results in lower energy costs. This additional budget can be reinvested in the realisation of a climate-neutral building park upon finalisation of the recovery programme in 2023. Agoria therefore proposes that the efforts within the recovery plan also focus on the climate renovation of government buildings and buildings within the education and care sectors. These latter buildings are of particular interest now that infrastructural adaptations are a point of interest anyway as a result of COVID-19. An investment in public buildings also helps the government to fulfil its exemplary function.

Agoria cooperates with the Federal and Regional Governments in order to make the most of the opportunities offered to Belgium by the recovery plan.

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