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This article is a translation of the original Finnish article: Rakennusten energiatehokkuusdirektiivi (EPBD) ja vaikutus asuinrakennuksiin ja taloyhtiöihin 2026-2035

The Energy Performance of Buildings Directive (EPBD) and its impact on residential buildings and housing companies 2026–2035

· updated

Update 29.9.2026: Directive (EU) 2024/1275 was finally adopted and signed on 24.4.2024. Member states must transpose it into national law by 29.5.2026. New public buildings must be zero-emission buildings from 1.1.2028 and all new buildings from 1.1.2030. The targets for reducing the average primary energy use of residential buildings (16% by 2030 and 20–22% by 2035) remained in the final directive. In Finland, the government proposal on implementing the directive (HE 155/2026) was submitted to Parliament on 3.9.2026 and is still being considered. In September 2026, a new energy grant for housing companies opened; we cover it in a separate article. The text below was written in February 2024, before the directive was finally adopted.

The Energy Performance of Buildings Directive (EPBD, in Finnish rakennusten energiatehokkuusdirektiivi) was approved by the European Parliament in March 2023, as proposed by the Industry Committee. Its purpose is to reduce greenhouse gas emissions and energy consumption of buildings across the EU. Had the EU energy performance directive stayed in force in that form, the impact on the housing costs of private individuals in Finland would have been significant because of mandatory energy efficiency renovations. In that form, the directive would have required 15% of every EU member state’s building stock to be renovated into a better energy class by 2030. In November 2023, however, it became public that the directive would include more flexibility and that the assessment would instead cover a member state’s entire residential building stock as a whole. Although member states now appear to have more freedom in how they reduce the average primary energy consumption of residential buildings, it is hard to see how the energy efficiency of older residential buildings could avoid being improved as well. Our energy consulting services help you find the most cost-effective energy efficiency solutions regardless of the final form of the directive and Finland’s future national legislation. Later in this article we take a closer look at the directive’s impact on detached houses and other residential buildings. (This article was published on 9 February 2024)

The new Energy Performance of Buildings Directive (EPBD) in practice

If the Energy Performance of Buildings Directive (EPBD) is confirmed in full in 2024, Finland’s national law on the energy performance of buildings will probably enter into force during spring 2026. In December 2023, the directive was moving on to the EU Council and Parliament for approval. Unlike before, based on the information available in December 2023, it seemed that each EU member state would decide for itself what energy efficiency measures it takes regarding buildings in order to reach the binding targets set by the EU, which include:

  • The average primary energy use of residential buildings falls by 16% by 2030.
  • The average primary energy use of residential buildings falls by 20–22% by 2035.
  • At least 55% of the reduction in primary energy use must be achieved through energy efficiency renovations of the worst-performing buildings (member states may exempt certain residential and other building categories, such as agricultural buildings and buildings of cultural and historical value, from the requirement).
  • New public buildings should be zero-emission from 2028 and all new buildings from 2030, and solar power should be installed on buildings from 2027 where possible.
  • By 2030 and 2033, non-residential buildings should meet a certain level of energy performance.

In February 2023, Parliament’s Committee on Industry, Research and Energy voted in favour of the proposal, and the final vote of the European Parliament and the Council is expected during spring 2024.

Impact on existing residential buildings and housing companies (speculation)

This section is entirely our energy consulting company’s own estimate and speculation about the effects of the EPBD energy performance directive on the future of residential buildings. At the time of writing, not even the final form of the EU directive is known, let alone how the directive will be interpreted and applied nationally in Finland. Although member states would appear to be left some room for manoeuvre in legislation and in how the binding targets are met, reducing the average primary energy use of the residential building stock by 16% by 2030 is a tough requirement. By focusing on the energy efficiency of new buildings and by improving the efficiency of energy production and distribution, it may be possible to reduce average primary energy consumption to some extent – but at the latest, the requirement that at least 55% of the reduction in primary energy use be achieved by renovating the worst-performing buildings means that energy efficiency renovations will be carried out.

*To clarify: primary energy is energy obtained from nature in unrefined form, so its sources include, for example, coal and peat. When these are converted into usable energy such as district heating and electricity, losses occur. If the efficiency of energy production plants can be improved, end users (e.g. residential buildings) also need less primary energy than before, because a larger share of the energy source’s energy is put to use. Another, at least theoretical, option for a member state is to improve the efficiency of distribution, i.e. to reduce energy losses on the way from the production plant to the residential buildings, but this is probably too challenging. The third way to reduce the average primary energy consumption of residential buildings is to reduce the energy consumption of the residential buildings themselves, in both new and old houses.

Detached houses and other small residential buildings (speculation)

For owners of detached houses and other small houses, the situation is probably the most challenging if these building types fall within the scope of the requirements. One person or one family is a small unit financially, and in many cases their time and opportunity to familiarise themselves with the requirements of new legislation are likely to be limited. However, the large number of small residential buildings will probably force legislation to require energy efficiency improvements for these building types in order to reach the targets. Presumably, improvements would be required at least in the worst-performing buildings. In Finland’s case, this would mean that at least small houses in energy class G would have to improve their energy efficiency. To soften the impact, the obligation might be tied to larger renovations that are due anyway. For example, when a ventilation unit reaches the end of its service life, it would have to be replaced with a considerably more energy-efficient model. Because of the short transition period (2026–2030), it is wise to be prepared for other legislative solutions as well.

It is also worth considering the possibility that energy efficiency measures would have to be carried out in all or nearly all residential buildings regardless of their energy class, so that the total investment cost needed in Finland is spread more evenly across households.

In Finland, ARA (the Housing Finance and Development Centre of Finland, Asumisen rahoitus- ja kehittämiskeskus; since 1.3.2025 Varke) has previously supported energy efficiency renovations of residential buildings financially with energy grants. One could imagine that some kind of energy grant scheme will be created to compensate owners of small houses for their investment costs. Previously, an energy calculation was required in which the granting and amount of the grant were tied to the E-value (E-luku). Energy calculations were therefore needed before and after the planned energy efficiency improvement. It can be assumed that a similar procedure would lie ahead.

Housing companies – blocks of flats, terraced houses etc. (speculation)

Housing companies (asunto-osakeyhtiö, taloyhtiö) often have better financial and time resources to adapt to changes in legislation than owners of small houses. Although there are fewer blocks of flats and terraced houses than detached and semi-detached houses, their absolute energy consumption is also large because of the large size of the buildings. For these reasons, one could assume that the energy efficiency improvement requirements for blocks of flats and terraced houses will be at least as strict as for smaller buildings. Housing companies in energy classes G and F would be well advised to follow the progress of the legislation. Energy efficiency improvements in buildings in energy classes E/D are not ruled out either.

It is also worth considering the possibility that energy efficiency measures must be carried out in all or nearly all residential buildings regardless of their energy class, so that the total investment cost needed in Finland is spread more evenly across households.

In Finland, ARA (the Housing Finance and Development Centre of Finland; since 1.3.2025 Varke) has previously supported energy efficiency renovations of residential buildings financially with energy grants. One could imagine that some kind of energy grant scheme will be created to compensate housing companies for their investment costs. Previously, an energy calculation was required in which the granting and amount of the grant were tied to the E-value. Energy calculations were therefore needed before and after the planned energy efficiency improvement. It can be assumed that a similar procedure would lie ahead.

How to prepare for the change? (speculation)

If an energy performance certificate (energiatodistus) has been prepared for your residential building, check your building’s energy class on it. The energy classes are A, B, C, D, E, F and G, where A is the best and G the worst. At the moment it is not known whether energy efficiency improvement requirements will apply to residential buildings in all energy classes, but they probably will apply to buildings in the worst classes. Everyone affected by the energy performance directive must decide at their own discretion how to prepare, or whether to prepare at all.

If you start preparing in advance by mapping out the most cost-effective energy efficiency solutions for your building with an energy efficiency study now, you can avoid the foreseeable congestion of energy consulting services as the deadlines approach. For example, preparing energy certificates is licensed work and there are only a small number of energy certificate assessors in Finland. If demand for energy consulting services exceeds supply, prices will probably rise and the services may not even be available. If/when a possible energy efficiency renovation becomes relevant, an energy efficiency study is a good tool for working out how to meet the energy efficiency requirements in the most financially viable way.

Commissioning an energy efficiency study in advance naturally carries the risk that no energy efficiency improvements will be required for your building after all, in which case, looking only at the directive, the study would have been unnecessary. In reality, energy efficiency studies are already popular with housing companies, because energy efficiency investments are financially viable projects with a direct effect on, for example, the size of maintenance charges (hoitovastike). In many cases, when financially viable energy efficiency solutions are investigated, it turns out that it pays for the housing company to invest in, for example, a ground source, exhaust air or air-to-water heat pump system, or in solar panels. Profitability is emphasised in the current situation, where energy prices are rising.

It can also be assumed that the services of contractors implementing energy efficiency solutions will become congested just like those of energy consultants. Presumably, a housing company that already knows which energy efficiency measures it will implement will also avoid (at least largely) price increases in its energy renovations, because it is ready to order before demand peaks. A price increase of a few per cent or tens of per cent in the investment costs of energy efficiency solutions lengthens the payback period significantly and means large financial losses compared with the earlier situation.