The EU taxonomy is a cornerstone of the EU's sustainable finance framework and a market transparency tool. It helps to channel investment into the sectors of the economy that the EU considers most urgently needed for the transition, in line with the objectives of the European Green Deal. The taxonomy is a classification system that sets out criteria for economic activities that are consistent with a net-zero profile by 2050 and the broader environmental objectives in addition to climate action.

The BMUV provides the EU taxonomy and the legal basis for this as follows: The taxonomy is an EU-wide system for categorising sustainable economic activities. It is intended to provide guidance to investors and incentivise capital for the green transformation of energy production and the economy. The financial system plays a key role in the transition to a low-emission, resource-conserving economy. The European Commission therefore presented initial criteria back in June 2021 to help channel more money into sustainable, climate-friendly activities in the European Union and make environmental performance more visible in company reports. The European Union itself issues a kind of checklist explaining what the taxonomy is and what it is not. An attempt to dispel prejudices on the subject right from the start

Picture 1:https://ec.europa.eu/sustainable-finance-taxonomy/

Together with the Disclosure Regulation (SFRD) and the Corporate Sustainability Reporting Directive (CSRD), the taxonomy forms one of the three pillars of the so-called ‘Sustainable Finance Strategy’ and its aim is to inform investors whether an economic activity is environmentally sustainable on the basis of common EU-wide criteria. The aforementioned environmental objectives relate to various ecological aspects, which are summarised in six objectives:

• Climate change mitigation;
• Adaptation to climate change;
• the sustainable use and protection of water and marine resources;
• the transition to a circular economy;
• the prevention and reduction of pollution;
• the protection and restoration of biodiversity and ecosystems.

The Regulation sets out the following criteria for the EU and its Member States to decide whether an economic activity is environmentally sustainable. An economic activity is considered environmentally sustainable if

• It contributes significantly to one or more of the environmental objectives listed above
• None of these six environmental objectives are significantly affected by the regulation. (also referred to as ‘Do No Significant Harm’ (DNSH))
• It is carried out in compliance with specified minimum protection measures
• It fulfils the technical assessment criteria set out in the Taxonomy Regulation for the specific activity

The online Taxonomy Navigator provides a good aid to a better understanding of the requirements.
The online Taxonomy Compass lists the criteria sorted by sector and activity. It enables users to check which activities are included in the EU taxonomy (so-called taxonomy-eligible activities), to which objectives they contribute significantly and which criteria must be met for the activities to be considered taxonomy-compliant.

Once the Taxonomy Regulation comes into force, it will apply to various players, mainly in the area of capital market-oriented companies. They are divided into three groups.

1. Companies with more than 500 employees, which fall under non-financial reporting.
2. Financial institutions including providers of occupational pensions that offer and distribute financial products in the EU (including those based outside the EU)
3. EU and its member states when defining public measures, standards or labels for green financial products or (corporate) bonds

With the entry into force of the Corporate Sustainability Reporting Directive 2023, the scope of application was also extended to other companies that are obliged to report on sustainability. These are

• all large corporations, regardless of their capital market orientation and
• capital market-orientated SMEs

The Commission has drawn up a list of environmentally sustainable activities in which it sets out technical assessment criteria for each of the six environmental objectives. These criteria are defined by delegated acts. Delegated acts on disclosure obligations and climate protection also apply. These specify the content, method and presentation of the information to be disclosed by financial and non-financial companies on the proportion of environmentally sustainable economic activities.

For reporting purposes, three indicators must be determined in order to categorise a company's activities. These indicators are revenue, capital expenditure and operating expenses.

Revenues are revenues from the sale of services or products that can be categorised as sustainable according to the characteristics of the taxonomy and are therefore taxonomy-compliant. For capital expenditures and operating expenses, (especially non-financial companies) indicate the portion related to assets or processes associated with economic activities that are categorised as environmentally sustainable.

The requirements of the EU taxonomy are initially important for players on the financial market. However, the EU taxonomy is also relevant for other players and their diverse work in the building sector, as it can be assumed that the taxonomy conformity of buildings will become increasingly important. Building owners, including companies subject to reporting requirements, for example, influence the sustainability of their properties through their wishes and investment decisions and can therefore influence their own taxonomy compliance. The work of planners and contractors is also of great importance, as both the building design and the documentation, realisation and commissioning are decisive for the sustainability and taxonomy compliance achieved.

Different actors within the building sector carry out a wide variety of activities, which in turn can be categorised under different sectors and activities of the EU taxonomy. Drawing up a checklist for taxonomy-compliant activities in the buildings sector is therefore not trivial and requires adjustments depending on the individual context. The main activities that are relevant here are new construction, the renovation of existing buildings, the acquisition and ownership of properties, as well as various individual measures and services (in particular installation, maintenance and repair). Of the six environmental objectives, ‘climate protection’, ‘climate adaptation’ and the ‘circular economy’ are mainly relevant for the consideration and assessment of the respective taxonomy conformity

The following table shows an overview of the minimum requirements for buildings in accordance with the EU Taxonomy Regulation Delegated Regulation (EU) 2021/2800).

These requirements are based on the technical assessment criteria for achieving the EU's climate targets and avoiding significant harm to other environmental objectives set out in the Regulation. All technical criteria are described in detail directly in the annexes to the regulation.

In addition to these minimum requirements in the ‘climate protection’ category, significant harm to the remaining five environmental objectives must be excluded (DNSH requirements). For new buildings and renovations in particular, additional topics are requested, such as consideration of the building under climate scenarios as a measure to adapt to climate change, specific requirements for water-saving fittings, requirements for the recycling of materials produced on the construction site, environmental requirements for materials used, as well as verification requirements in relation to biodiversity and ecosystems.

The reporting obligations and deadlines for companies are also set out in the Delegated Act of the Taxonomy Regulation and are as follows:

The Passive House standard is initially defined by a very low energy requirement for heating or cooling in new buildings (passive house or PHI energy-saving house) and a slightly higher but still very low energy requirement for refurbishments (EnerPHit). In addition, there are correspondingly demanding requirements for building airtightness, comfort and the total primary energy demand of the building, including the electricity demand for household appliances. Click here for the building criteria for the passive house, EnerPHit and PHI energy-saving house standard..

A cosy indoor climate can be achieved with very low energy consumption: To achieve this, the annual heating requirement must not exceed 15 kWh/(m²a) according to the Passive House Planning Package (PHPP). The comfort criteria must be met in every living space in both winter and summer. This results in certain component qualities. The demand for renewable primary energy PER, according to the PHI method for all household applications (heating, hot water preparation and household electricity) together must not exceed 60 kWh/(m²a). The calculation is also carried out according to PHPP.

EnerPHitis the established standard for modernising old buildings with passive house components. Despite slightly higher energy requirements, EnerPHit offers almost all the advantages of the passive house standard. The EnerPHit standard can be achieved by complying with the criteria of the building component method or alternatively by complying with the criteria of the energy requirement method. Depending on the utilisation of renewable energies, the EnerPHit classes Classic, Plus or Premium are achieved.

The PHI energy-saving house standard is suitable for buildings which, for various reasons, cannot fulfil the criteria for the Passive House Classic, but still offer many of its advantages. Here too, for example, a maximum heating requirement of 30 [kWh/(m²a)] must be achieved and other criteria must be met.

The central taxonomy requirement for a maximum permissible primary energy demand is met by the very high energy efficiency of Passive House (new build) and EnerPHit (renovation) by definition.

As different calculation methods and balance limits apply for the passive house and the taxonomy assessment (which in turn refers to the different national NZEB definitions of the member states), such a generalised statement is not entirely correct. However, it can be assumed that only rare exceptions occur in which a certified Passive House or EnerPHit building cannot demonstrate the taxonomy requirements for climate protection as a significant contribution.

1. The primary energy demand of a new building must be at least 10 per cent below the national values for nearly zero-energy building standards

Due to the very high efficiency requirements of the passive house standard by definition, 10 per cent savings compared to the legal minimum standard are usually easily achieved. Due in particular to the high requirements for the heating demand (which accounts for a high proportion of the total energy demand!), the Passive House Standard leads to buildings with a very high-quality building envelope and efficient ventilation concepts with heat recovery, which contribute significantly to falling below the taxonomy primary energy parameters.

For a differentiated assessment, however, the different balance limits and calculation methods must be pointed out and taken into account.

The Passive House and EnerPHit standards require fixed limit values (maximum permissible kWh/m² per year) for heating, cooling and primary energy. In this case, the primary energy characteristic value includes all uses in the building, including household electricity for residential buildings. The primary energy requirement stated on a passive house certificate is therefore always higher than the value stated on the statutory energy certificate for the same building. So if the limit values for Passive House/EnerPHit appear at first glance to be higher than the requirement values used for the taxonomy, this does not contradict the required 10% saving. An adjustment of the balance limit is necessary for a comparison.

Care must also be taken when defining the primary energy factors used in detail, as well as with any differences in the boundary conditions to be applied in the energy balance. At this point, the methods and also the energy limit values of the NZEB requirements differ in various member states.

In Germany, the reference building method is used for statutory verification, which requires a reduction in the primary energy demand compared to a defined reference building. For large-volume and compact buildings, this method leads to energy efficiency that can be in the range of the passive house standard in terms of primary energy. In such cases, it is not absolutely necessary (and not necessarily expedient!) to undercut the already quite demanding primary energy characteristic value by a further 10%. For smaller buildings, such as detached houses, terraced houses or even small apartment blocks, the statutory reference method leads to less efficient solutions. Here, the passive house is a clear improvement that usually fulfils the taxonomy requirement with ease.

2. For buildings larger than 5,000 m², the building must be tested for airtightness and thermal integrity on completion, with any deviations from the efficiency specified at the design stage or defects in the building envelope disclosed to investors and clients. Another option is to have robust and traceable quality testing procedures during the construction process as an acceptable alternative to thermal integrity testing.

Regardless of the size of the building, this quality assurance measure is an integral part of the certification of new passive house buildings or EnerPHit refurbishments by independent experts. An airtightness test result is required for certification, as well as the inspection of all component structures and component connections for thermal bridge-free or thermal bridge-reduced construction. The implementation on the building site is documented photographically as part of the certification and compared with the planning. On request, construction site supervision and inspections can also be carried out on site for some projects. Good planning and documentation are essential even before construction begins. An independent review of the energy efficiency planning, a so-called ‘Design Stage Approval’, is a good quality assurance measure. This enables the achievability of the Passive House or EnerPHit standard to be checked at various planning stages and should be carried out by accredited Passive House certifiers before the start of the construction or renovation process. However, actual compliance with the Passive House or EnerPHit Standard is only confirmed and established once the work has been completed and a valid airtightness test and adjustment protocols for the ventilation system are available.

3. for buildings with an area of more than 5000 m2 , the life cycle global warming potential (GWP) of the constructed building was calculated for each phase of the life cycle and is disclosed to investors and customers on request.

The passive house is a tried and tested building standard that is easy to implement in practice today. It leads to considerable savings in operating costs and secure energy savings in the utilisation phase. The additional energy required for production, although present, is low compared to the savings achieved during the life cycle.

However, both the primary energy expenditure for the use of electricity during the use phase and the grey energy in the building materials are becoming increasingly important in energy-efficient construction. Further progress can be made here through further efficiency improvements in the production of building materials as well as through the efficient use of materials; however, this must not be at the expense of increasing operating energy, as the latter still predominates.

Given the current level of new construction activity in Germany, it is by no means the case that additional new construction of anything will improve climate protection. As a rule, however, new construction increases overall emissions even today; only occasionally can a newly constructed building reduce emissions, and then only to a small extent. Even then, it is generally cheaper to modernise an existing building in a minimally invasive way to a good energy efficiency level - the reductions in greenhouse gas emissions achieved are usually significantly higher. In AkkP 60, the Passive House Institute has shown that a net-zero or slightly negative-emission building can be realised today with a certain amount of effort, but still cannot significantly compensate for other emissions. Careful planning, both in terms of production energy and operating energy requirements, means that not every new building is fundamentally bad in terms of GWP over its life cycle.

The Passive House Institute provides the MEETonline tool for simple calculation and sustainability assessment. This can be used as a supporting measure in the sustainable planning and optimisation of building projects. By comparing different external building components, it enables well-founded decisions to be made regarding the energy efficiency and environmental impact of the building envelope. For this purpose, the components are assessed on the basis of their manufacturing and operating energy per m2 of component. In addition, the greenhouse gas potential (GHG potential) is shown and users receive valuable information and tips to help them understand the basics of life cycle assessment and make more sustainable decisions.

1.The building must either fulfil the nationally applicable legal requirements for major renovations OR achieve a reduction of at least 30% of the primary energy demand compared to the unrenovated state of the building.

Building refurbishments to the EnerPHit standard should, as a rule, always fulfil the requirements of the taxonomy, at least in the case of complete refurbishments: Reducing the heating requirement to the EnerPHit standard by a factor of 5 to 10 results in a reduction in the primary energy requirement by a factor of 2-5, i.e. a saving of approx. 50% or more. This fulfils the reduction requirement compared to the unrenovated building. As a rule, the EnerPHit requirements are also significantly stricter or more ambitious than the statutory minimum requirements..

Depending on the measures selected, a step-by-step refurbishment can also lead to considerable savings and already fulfil the requirements of the taxonomy with the first measure(s). Before starting a step-by-step refurbishment, a refurbishment roadmap is useful, not only to provide information about the long-term goal and taxonomy compliance, but above all to avoid lock-in effects. A good option at this point is pre-certification as an EnerPHit or Passive House building on the basis of an EnerPHit refurbishment plan. .

1. buildings built before 31 December 2020 must have at least a class A energy performance certificate. Alternatively, the building is in the top 15% of the national or regional building stock in terms of primary energy demand in operation.

2. buildings built after 31 December 2020 must meet the above criteria for new buildings.

3. efficient operation through energy management is required for larger NiWo.

Above all, the contribution to ‘climate impact adaptation’ should not be overlooked. The summer comfort guidelines for passive houses, for example, contribute to climate change adaptation by ensuring that buildings remain comfortable even when outside temperatures and heat waves rise. This is in line with the objectives of the EU taxonomy, which requires buildings to adapt to climatic changes. The summer comfort stress test, as found in the PHPP, supplements these requirements with a simulation-based check of the heat resistance of buildings, which ensures long-term climate adaptation.

Looking at the above examples of technical assessment criteria and transferring them to the work of various stakeholders with the Passive House Standard, it becomes clear that compliance with the criteria for fulfilling the sub-goal is made much easier by applying the Passive House and EnerPHit standards! When applied correctly, the Passive House is therefore particularly valuable for the goals of ‘climate protection’ and ‘climate impact adaptation’. This applies to both new builds and refurbishments. The Passive House and the EnerPHit Standard represent a suitable solution for taxonomy-compliant construction, refurbishment or investment!

TÜV-Süd, which itself acts as a service provider for the classification of economic activities for the taxonomy, recommends passive houses as a solution for taxonomy conformity. In a catalogue of measures to achieve the climate targets, supported and enforced by the Taxonomy Regulation, TÜV-Süd calls for improvements in various areas of the reference building, as required by the GEG. Above all in the area of the building envelope, better insulation is required in the direction of a passive house standard. This standard should be aimed for in residential construction in particular and should also be applied to commercial properties, according to a TÜV white paper.

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outPHit - Deep retrofits made faster, cheaper and more reliable

Building Certification

Refurbishment with Passive House components