July 21, 2021
Renovation, regeneration, recovery
The Green Deal is touted as Europe’s industrial policy. Seen as a powerful vision and policy tool to steer the green transformation across various industries, including but not limited to construction and building. Malta most definitely should follow the principles and thinking laid out in this strategy as the local construction and real estate sector remain ripe for transformation.
There is no doubt that the construction and real estate remain an important economic contributor, although the direct contribution is possibly underestimated in national accounts due to several reasons. However, we need to start seeing the industry and sector with a broader lens and embrace a clustered approach. Construction needs to be seen as a whole lifecycle process from quarrying to finishing but also needs to include the ancillary services including M&E, landscaping, smart buildings, real estate services, maintenance and more. It is time that as a country, sectors are not seen as silos but as organic clusters. The coming together of all components will ensure that the sector can transform itself and reach new quality standards, provide value to society, and ensure that such value is sustainable.
As the sector transforms itself to embrace new construction methods and building materials for new projects; there is a unique opportunity in renovating existing buildings and in regenerating abandoned dwellings. Apart from the direct economic impact, these considerations also have important sustainability impacts. In fact, in view of this, the European Commission, in its Green Deal, has placed renovation as an important pillar of its strategy.
On October 14, the European Commission (EC) published its new Renovation Wave Strategy to improve the energy performance of buildings. It aims to double renovation rates in the next 10 years while ensuring that renovations lead to higher energy and resource efficiency. According to the EC, 35 million buildings could be renovated and up to 160,000 additional green jobs created in the construction sector by 2030. Such energy-efficiency renovations are considered crucial for making Europe climate-neutral by 2050.
The Renovation Wave seeks to improve the quality of life for people living in and using the buildings, reduce greenhouse gas emissions, promote digitalization, and enhance the reuse and recycling of materials. It will focus on action in three core areas; the decarbonization of heating and cooling; tackling energy poverty and worst-performing buildings; and the renovation of public buildings like schools, hospitals, and administrative buildings.
The strategy will include several lead actions, some of which should definitely be picked up by the Maltese authorities.
The first looks at setting stronger regulations, standards and information on the energy performance of buildings to set better incentives for public and private sector renovations, including a phased introduction of mandatory minimum energy performance standards for existing buildings, updated rules for Energy Performance Certificates (EPC), and a possible extension of building renovation requirements for the public sector. In Malta, although the EPC was introduced it has not triggered the wave of energy audits that one would have expected. It is therefore imperative that a new wave of focus on EPC and energy efficiency audits is started to ensure that buildings are truly energy efficient. The definition and launch of national building codes should also be seen as linked to this concept.
Secondly, ensuring accessible and well-targeted funding, including through the ‘Renovate’ and ‘Power Up’ Flagships in the Recovery and Resilience Facility under NextGenerationEU, simplified rules for combining different funding streams, and multiple incentives for private financing. Here, authorities need to try and find ways in which the construction sector can access funding schemes to support their transformation. The scheme to replace equipment with more energy efficient ones was well-received and several other tailored schemes aimed at supporting developers to renovate and regenerate buildings and make them energy efficient should be considered.
Thirdly, increasing capacity to prepare and implement renovation projects, from technical assistance to national and local authorities through to training and skills development for workers in new green jobs. The transition to a greener economy will not happen automatically. A whole ecosystem needs to be developed for this to happen and education & training will be an important cornerstone. As a country we need to ensure that our educational systems are aligned to this vision and more importantly we are preparing workers for the future, with the right skill sets that can support this green transition. Schemes to support reskilling and upskilling need to be designed as well as systems of vocational certification and training.
Fourth, expanding the market for sustainable construction products and services, including the integration of new materials and nature-based solutions, and revised legislation on marketing of construction products and material reuse and recovery targets> here the concept of a circular economy has great potential to develop economic activity through the reuse and recycling of construction and demolition waste. This would also be a direct answer to Malta’s challenges in this area and the formulation of reconstituted stone can therefore not only support the environment and sustainability through its energy efficient characteristics but also create new investment and employment.
Fifth, digitalization of the sector remains critical for sustainability and energy efficiency. The proliferation of AI, IoT and digital tools are contributing to making buildings smarter in terms of energy management, efficiency, and sustainability. As much as it is important to incentivise new developments to go down the smart route, it is even more important to support the retrofitting and the renovation of existing buildings. Here, there is a unique opportunity for Malta to start a new wave of investment in existing building stock, in renovating it and in ensuring that such buildings become more energy efficient.
As can be seen, the construction sector is ripe for transformation. So is the real estate sector. More and more, as a country, we need to start thinking in terms of a buildings and lifestyle cluster whereby all the different components are seen as part of a broader system. The Green Deal should serve as a guiding light for authorities to follow and to implement the key action points locally. In addition, accessing such funds to finance such initiatives should be a national priority. As we continue to chart our recovery with the premise of building back better, we need to start from our current position. Renovating and regenerating the existing building stock, should be a national priority.
JP Fabri is a co-founding partner at Seed.