Italy gets cold feet over EU greener buildings plan

ITALY is pushing back against a major European Union (EU) directive aimed at improving the energy efficiency of buildings, seeking to delay and offer exemptions to renovations it says neither the government nor homeowners can afford.

The EU directive is aimed at slashing greenhouse gas emissions and creating a building sector that is climate neutral by the middle of the century. EU countries and the European Parliament are set to negotiate binding legislation this year.

In one of its first acts after taking power last October, Italy’s right-wing government gave its blessing to the endeavour, but it got cold feet after realising that the cost of compliance could be enormous in a country which has older and less energy-efficient housing than many of its neighbours.

“Europe would like to impose on us a directive on energy efficiency that would be a disaster for our housing stock,” former prime minister Silvio Berlusconi, head of the co-ruling Forza Italia party, said on Monday (Jan 30).

The European Commission, which drafts EU laws, has proposed that the worst 15 per cent of residential buildings in each country be improved by 2030 and again by 2033. Non-residential buildings face a similar timetable.

Italy’s national building association Ance estimates that to meet these goals, some 1.8 million residential buildings will have to be upgraded over the next 10 years at a cost of 400 billion euros (S$572 billion). A further 190 billion euros will be needed to bring business properties to the required standards, it has forecast.

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Italian government officials want deadlines pushed back and have indicated that Italy will offer exemptions to a broad swathe of its older homes.

“We will take the necessary steps to ensure that the final text of the directive contains provisions that are compatible with the peculiarities of the Italian building heritage and that allow for gradual redevelopment,” European Affairs Minister Raffaele Fitto told parliament last month.

Environmental activists say the sudden opposition from Rome to a long-standing project risks undermining an initiative that is crucial if the 27-nation bloc is to meet its goal of becoming the first climate-neutral continent by 2050.

The European Commission estimates that the bloc’s buildings account for 40 per cent of the EU’s energy consumption and 36 per cent of its CO2 emissions, making the sector crucial in the fight against climate change.

However, some 74 per cent of Italians own the house or flat they live in, against 65 per cent in France and 50 per cent in Germany. This leaves Italians particularly exposed and its ageing housing adds to the problem, experts say.

“Italy’s building stock is more obsolete. In fact, 60 per cent of buildings here are in the two worst energy classes, against, for example, 17 per cent in France and 6 per cent in Germany,” said Federica Brancaccio, head of Ance, referring to Energy Performance Certificate (EPC) gradings.

Despite the high costs, the Buildings Performance Institute Europe (BPIE), an independent think-tank based in Brussels, said Italy had much to gain from the EU plan given the surge in energy prices following Russia’s invasion of Ukraine.

“If Italy just insulated the roofs and walls in its least efficient buildings, it would save 49 per cent of its gas consumption,” said Mariangiola Fabbri, head of research. “I can only see good reasons to embrace this vision.”

Critics say the pushback against the directive shows Prime Minister Giorgia Meloni’s administration is less committed to tackling climate change than its predecessor.

“The government wants to stay with the status quo when it comes to climate and energy,” said Eva Brardinelli, a buildings policy coordinator at the Climate Action Network in Brussels.

“I understand in a period of crisis people like staying with the status quo, but that doesn’t work when our activities are endangering our planet.”

Meloni has promised that Italy will play its part in fighting global warming, but has said that this effort should not harm the economy or be done by the state alone.

Under a deal struck with the EU by the previous government, Rome will use 15.3 billion euros from a post-Covid EU recovery fund to improve the energy efficiency of buildings.

This is just a fraction of what is needed.

Italy had been in the vanguard of efforts to green its buildings, offering homeowners since 2020 tax rebates worth 110 per cent of the cost of the building work – a popular measure that turbocharged the number of renovations to around 360,000 in 2021-2022 from just 2,900 a year between 2018 and 2020.

But the so-called superbonus cost the Treasury more than 60 billion euros. The new government, anxious to spend what limited resources are available on policies closer to its own heart, such as tax cuts, has reduced the rebate to 90 per cent and has drastically restricted the number of people who can apply.

Ministers say that in future the European Union will have to help pay for subsidies.

The BPIE think-tank says eventually a broad mix of financing will have to be tapped if the EU wants to achieve its ambitious targets in Italy and beyond.

“I could not imagine a situation where private owners have to pay for all the renovations out of their own pockets. That would represent a failure of the project,” said Fabbri. REUTERS