Almost Energy-Neutral Buildings - the new standard for the Real Estate sector in the Netherlands

Introduction

The real estate sector is key in meeting the requirements to reduce CO2 emissions and achieving a more sustainable society. Subsequently, the real estate sector is constantly faced with ever-tightening regulations that influence the value and (management and maintenance) costs of Dutch real estate. These regulations are becoming more significant when it comes to investment decisions and due diligence with regard to Dutch real estate and its stakeholders. In this article, we outline a new key legislative development for new buildings.

Almost Energy-Neutral Buildings

The European Energy Performance of Buildings (Directive 2010/31/EU) (EPB), has set ambitious goals regarding energy efficiency (eg achieving 20% energy efficiency by 2020 and an (almost) energy-neutral building environment by 2050). To achieve this, a new national standard for the energy performance of new buildings was recently introduced, effective as of 1 January 2021, in the Netherlands. This new standard, “Almost Energy-Neutral Buildings” (Bijna Energieneutrale Gebouwen (BENG)), is laid down in an amendment to the (national) Dutch Building Decree (Bouwbesluit 2012). This standard already applied, as of 2015, to new governmental buildings and is now extended to all new buildings (article 5.2 Building Decree 2012). This standard for new buildings sets new rules for: (i) maximum energy consumption (energiebehoefte); (ii) the use of fossil energy (fossiele energiegebruik); and (iii) the generation of renewable energy via the building (opwek hernieuwbare energie van de gebouwen). These standards to calculate and determine the energy balance of the new building itself and its energy use are now known as: BENG-1, BENG-2 and BENG-3.

• BENG-1: the façade/outside of a building must limit the energy-use/consumption (total energy-consumption of the new building).
• BENG-2: the remaining energy-use of fossil energy should be used and generated as efficiently as possible (percentage fossil energy).
• BENG-3: the energy-use should consist as much as possible of renewable and sustainable energy (percentage renewable energy).

Based on this energy balance, new buildings are required to adhere to the maximum values that are stipulated for the relevant form of use. In the event of mixed-use new buildings, this will be reviewed (pro rata) for each individual use.

The BENG assessment will no longer be based on the Energy Performance Coefficient (EPC) but will, as of 1 January 2021, be based on the NTA 8800 (Dutch technical standard). This will also be used in relation to energy performance certificates (energy label).

Several (specific) exemptions apply for functions with a low energy-use, refurbishments, temporary buildings and if the implementation of renewable energy sources is – from a practical perspective – not possible.

As of 1 January 2021, all new buildings and applications for new building permits need to comply with the aforementioned stipulations and standards.

Key observations for sector players

In our view, the new regulations will definitely have ramifications for the real estate sector and all sector players, especially for ongoing and future building developments, particularly because no transitional law has been introduced. In light of the cut-off date of 1 January 2021, it could be possible that a building permit is granted on the basis of EPC instead of NTA 8800. However, upon completion, the building will be reviewed under the NTA 8800. It is not yet clear how the government plans to address such discrepancies. Nevertheless, we foresee potential possibilities to deal with this temporary uncertainty.

Lenders

For lenders financing new assets and asset portfolios, key questions include whether the owners meet these new energy stipulations, as non-compliance may put debt service at risk. Additionally, non-compliant assets will substantially decrease in value.

Developers

Developers will be faced with these new requirements when it comes to new developments. The new rules on the energy performance of newly developed buildings are expected to prompt redevelopment and design issues to ensure that they comply with these stricter requirements.

Owners/Lessees

Property owners and lessees should review the energy performance and labels of their new buildings. Asset value effects of non-compliance versus compliance and running costs should also be factored into the decision whether to take measures or not.

This new requirement is a step towards a more sustainable real estate sector and will definitely not be the last in the global fight against climate change.