EPBD: the market is implementing the directive faster than the legislator

The regulation works before it becomes law

With the recast EPBD directive (2024/1275) we are dealing with an interesting phenomenon: its influence on business decisions is running ahead of the pace of legislative work. Even where national provisions are only being drafted and their final shape remains open, the directive is already shaping the way investors, banks and tenants look at property.

In conversations with building managers, technical directors and people responsible for energy procurement, the same questions keep coming back. Will a building that has just been refurbished meet the ZEB definition? What will happen to the old oil-fired boiler over the next few years? In a planned lighting upgrade, is it worth adding the modules the directive requires — or is it better to wait for the national provision? Until the final content of the regulation is known, the honest answer is: there is no hard reference point yet.

No final provision does not mean no consequences

And this is where it gets interesting. Some institutions are starting to treat the EPBD requirements as an established fact before they have been fully transposed into national law.

Banks ask in credit analyses about the pathway to a zero-emission standard. Institutions distributing EU funds write requirements aligned with the directive into their application assessment criteria. Retail chains put parameters lifted straight from the directive's articles into their briefs for new locations. Large tenants ask landlords about certificates and standards that are yet to be formalised.

A paradox emerges: the provision is not yet finalised, and the market is already bearing the cost of implementing it. An investor talking to a bank today is not negotiating on the basis of the law in force, but on the basis of what the bank assumes the law will say in six months or a year. It is paid for in the credit margin, in lease terms, in property valuations.

Two postures — and neither can be adopted blind

In our projects we see two postures. Some companies hold off on decisions, counting on the legislator to take the market's comments on board and soften selected requirements. Others adopt the quiet hypothesis that it is easier to adapt to the content of the directive today than, a few quarters from now, to whatever survives the national legislative process.

Both postures have their arguments, and neither can sensibly be adopted without an analysis of the specific building, its consumption profile and the investment horizon.

No decision is also a decision

Waiting for the final shape of the law is not a neutral state. It is also a decision — only one taken on your behalf, by someone else: a bank, a tenant, a fund. We do not yet know all the details, but the direction EPBD is heading in is clear, and it is hard to expect it to reverse.

The good news is that a large part of these changes can be prepared for today — without knowing the final letter of the law. The condition is to take a deliberate look at your own portfolio through the lens of the direction the directive is unmistakably taking, instead of waiting for the moment it formally enters into force.