EU Buildings Directive in Austria: Decarbonization of the real estate sector in Austria remains on the agenda despite global uncertainties

Amid ongoing global challenges – from the war in Ukraine and the aftermath of the COVID-19 pandemic to economic uncertainties and volatile (energy) markets – many long-term political issues have temporarily faded into the background. Nevertheless, decisive action on climate protection remains a high piority for the European Union and therefor aldo the national legislator in Austria, particularly with regard to the decarbonization of the building sector. The revised EU Energy Performance of Buildings Directive (EPBD) is a direct response to the urgent need to reduce energy consumption and greenhouse gas emissions. Its goal is to future-proof Europe’s building stock and strengthen energy security.

EU Legal Framework and Goals of the Directive; national Implementation in Austria

The new EPBD establishes a comprehensive legal framework designed to transform the building sector, which currently accounts for around 40% of the EU’s total energy consumption and 36% of its greenhouse gas emissions. At its core, the directive seeks the full decarbonization of the building sector within the next 25 years, setting a clear trajectory towards a nearly zero-emission building stock by 2050.

To achieve these ambitious goals, the directive introduces a range of measures. It requires significant improvements in energy efficiency for both existing and new buildings, focusing particularly on the renovation and modernization of those with the lowest energy performance. The directive also sets out a phased exit from fossil fuels in heating and cooling systems: from 2028, new buildings will no longer be permitted to emit greenhouse gases from fossil fuel sources, and by 2040, existing fossil-fuel-based systems are to be largely replaced. In addition, a unified EU-wide system for energy performance certificates will be introduced, classifying buildings from A (zero-emission) to G (least efficient), with the possibility of an “A+” category for particularly innovative properties. The directive further promotes, to the widest extent mandatorily, the integration of renewable energy technologies, such as photovoltaic and solar thermal systems.

Austria’s new government has reaffirmed its commitment to transposing the revised EPBD into national law, making the directive’s requirements directly relevant for property owners, investors, and tenants in Austria.

Practical Consequences

The directive will have significant and direct implications for all stakeholders in the real estate sector:

• Owners of existing buildings will face new obligations to improve energy efficiency, particularly for properties with the lowest performance ratings. The new EU-wide system for energy performance certificates ensures, that buildings classified within the category G, will be the ones with the lowest performance ratings.
• Developers and investors will have to ensure that all new buildings are designed to meet zero-emission standards and are equipped for renewable energy integration. The total annual primary energy consumption of a zero-emission building must be covered by energy from renewable sources generated on site or nearby, by energy from renewable energy communities, by efficient district heating/cooling or by energy from carbon-free sources.
• Landlords and tenants may see changes in rental markets, as renovation costs and energy performance become increasingly important factors. Member States are obliged to take measures to prevent evictions due to renovations and resulting disproportionate rent increases. At the same time, they are obliged to create financial incentives and subsidies for renovation measures.
• Financial institutions are expected to increase their lending for building renovations and establish their own energy efficiency loans and mortgages. In addition, public subsidies will target low-income households to prevent energy poverty.

Conclusion: Early Action is Key

The revised EU Buildings Directive marks a decisive shift towards a climate-neutral real estate sector. While the transformation will require significant investment and careful planning, early action will help clients manage costs, secure financing, and avoid compliance risks. With Austria’s government committed to swift implementation, stakeholders are strongly advised to begin preparations now to ensure a smooth transition and to capitalize on the long-term benefits of a sustainable property portfolio.

We provide targeted, practical support for all questions relating to the revised EU Buildings Directive. We show you what obligations and opportunities arise for you as an owner, investor or company – from renovation requirements and energy performance certificates to funding opportunities and tenant protection.