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5 January 2021

In a world that works from home, heating has become a major issue

The EU plans to turn the coronavirus crisis into an opportunity to change housing’s huge environmental impact. Will it work?

By Dave Keating

In the European Quarter, the drab grid of glass and steel at the heart of the EU in Brussels, the streets have been empty for many months. Offices sit vacant, buses drive around with no passengers and the restaurants that once buzzed with lobbyists are closed. As in office districts across the world, the Covid-19 crisis has led the quarter’s 50,000 civil servants, as well as the the still larger body of consultants, lobbyists and others who work alongside them, to work almost entirely from home.

But the European Commission sees an opportunity in this change. Last month, the EU executive adopted its Renovation Wave Strategy, a plan to double the rate of building upgrades over the next ten years. For construction companies, the transformation of homes into offices has huge potential.

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Pascal Eveillard, chairman of the insulation manufacturers association Eurima, told the European Policy Centre at a recent event that the pandemic and mass homeworking have led people “to realise the importance that buildings play in our lives”.

Eveillard said his company’s research showed that with more time at home people “start to realise that they do not feel always very comfortable in their homes. They now pay more attention to the indoor air quality, the acoustics.” They also notice the change in their heating bills; 93 per cent of buildings, Eveillard claimed, are inefficient.

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For the European Commission, updating homes and offices to fit the new world of work is an opportunity both for the economy and the environment. EU leaders have agreed to prioritise investments from the bloc’s €750bn coronavirus recovery fund that are compatible with the EU’s Green Deal.

The Commission estimates its strategy will create 160,000 new green construction jobs – 12 to 18 local jobs per million euros invested – while the cost of inaction on building emissions would be €175bn a year, or 1.4 per cent of the EU’s total GDP.

The cost of heating and cooling buildings is vast: buildings account for 40 per cent of Europe’s energy consumption, and a third of its CO2 emissions.

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The Renovation Wave strategy aims to decrease greenhouse gas emissions from Europe’s buildings by 60 per cent, but for the moment it remains a strategy. There is some scepticism as to whether its ambitious goals will be realised. The British government’s ten-point climate plan also sets out aims for buildings, and commits £1bn of new investment toward renovations – although it is unclear where this will be allocated.

The UK plan is also enthusiastic about electric heat pumps, with a target to install 600,000 a year. Heat pumps are highly efficient but expensive, and it is unclear what public finance will be provided to support this target.

But if home workers, rather than businesses, are to take on the cost of heating and insulating their workplaces, incentives will be needed. The Green Homes Grant, which provides assistance with energy-efficient upgrades, could be extended, or the Future Home Standard, which will require new homes to be more efficient, could be brought forward  from 2025 to 2023.

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Renovation reduces home workers’ bills, but the upfront costs are high and the financial benefits can take years to arrive – and they only apply if the homeworker owns their home.

But with homeworking here to stay – 74 per cent of UK companies recently told the Institute of Directors they plan to stick to increased home working after the pandemic ends – energy efficiency is likely to become a much more significant part of the way housing is built and sold.

One other way to get people excited about building renovation is to look beyond the monetary rewards. The EU strategy contains the New European Bauhaus programme, a project that is close to the heart of the Commission president, Ursula von der Leyen. The forum, designed to swap ideas and designs, is based on the famous German art school and architectural movement of the 1920s.

“Good design can improve lives,” Von der Leyen said, as she announced the programme last year, “the necessary can also be beautiful.” Few would dispute that the pandemic’s rapid remaking of the workplace has made energy efficiency an urgent necessity, but the question of whether the necessary can also be affordable – and who will pay – remains unsolved.