EU Taxonomy: Estimating Future Energy Thresholds with new Methodology

The EU Taxonomy Regulation is a classification system for sustainable economic activities used by financial institutions for reporting purposes. However, demonstrating compliance with the technical criteria for this regulation can be challenging.

In the buildings sector, the EU Taxonomy Regulation requires proof that the primary energy demand of buildings (built before 2021) falls within the top 15 per cent of energy performance in the building stock. Determining which buildings meet this criterion is a challenge for financial institutions, as they often lack the necessary information. Additionally, this threshold will continue to shift as renovation measures and higher energy efficiency standards are implemented, reducing planning certainty for financial institutions and investors.

As part of the MHB-IR project, researchers at the Wuppertal Institute have developed a methodology that allows the 15 per cent criterion to be determined using comparatively limited data for both the current and future building stock. They have now published this methodology, along with thresholds for current and future German residential buildings, in the peer-reviewed article "Estimating future thresholds for the 15% eligibility criteria of the EU taxonomy with limited data availability" in Springer Nature. The findings are particularly relevant for financial institutions and investors seeking to demonstrate the taxonomy compliance of their building portfolios.

The article is available (open access) via the following link.