Update: Taxonomy - final version of the Delegated Regulation published

 Real Estate Taxonomy

Taxonomy Regulation

The final version from 04.06.2021 of the Delegated Regulation based on the Taxonomy Regulation (Regulation (EU) 2020/852) was published in all official EU languages on 08.06.2021. the Delegated Act sets out the technical assessment criteria relating to the environmental objectives mitigation of climate change (Annex 1) and adaptation to climate change (Annex 2) in two annexes, which are used to determine the conditions under which a particular economic activity can be considered to make a significant contribution to those environmental objectives, on the one hand, and not to cause significant harm to the other four environmental objectives, on the other. The Delegated Act together with the technical screening criteria will be binding from 01.01.2022

The other four environmental objectives for which technical screening criteria have not yet been published are:
(3) Sustainable use and protection of water and marine resources
(4) Transition to a circular economy
(5) Pollution prevention and control
(6) Protection and restoration of biodiversity and ecosystems.

The technical screening criteria for the real estate sector (“construction and real estate activities”) depend on the activity carried out. A distinction is made between the following activities:

  1. Construction of new buildings
  2. Renovation of existing buildings
  3. Installation, maintenance and repair of energy efficiency equipment
  4. Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings)
  5. Installation, maintenance and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings
  6. Installation, maintenance and repair of renewable energy technologies
  7. Acquisition and ownership of buildings



At this point, we will initially focus on what are probably the most important activities for investors: construction of new buildings and acquisition and ownership of buildings:

  1. Technical screening criteria forconstruction of new buildings:

    1. Environmental objective mitigation of climate change (Annex 1)

      1. Technical screening criteria for a significant contribution to the environmental objective mitigation of climate change

        1. The Primary Energy Demand (PED), defining the energy performance of the building resulting from the construction, is at least 10 % lower than the threshold set for the nearly zero-energy building (NZEB) requirements in national measures implementing Directive 2010/31/EU of the European Parliament and of the Council. The energy performance is certified using an as built Energy Performance Certificate (EPC).
        2. For buildings with an area of more than 5,000 m², special regulations (in particular disclosure requirements) apply to air-tightness and thermal integrity, as well as life-cycle Global Warming Potential (GWP).

      2. Technical screening criteria for the avoidance of significant harm to other environmental objectives (Do no significant harm ('DNSH'))

        1. With regard to the avoidance of significant harm, "adaptation solutions" - to be identified by means of a climate risk and vulnerability assessment - are to be implemented as well. These "adaptation solutions" should significantly reduce the main physical climate risks of this activity.
        2. For sustainable use and protection of water and marine resources, specified maximum water flow rates shall be certified for miscellaneous plumbing fixtures. An exception is made for installation in residential buildings.
        3. At least 70% of the non-hazardous construction and demolition waste generated on the construction site shall be prepared for reuse, recycling, and other material recovery, including backfilling operations using waste to substitute other materials.
        4. In order to prevent and reduce environmental pollution, building components and materials, especially those that may come into contact with occupiers, shall meet more closely defined criteria. During construction or maintenance works, measures to reduce noise, dust and pollutant emissions shall be taken.
        5. In order to protect and restore biodiversity and ecosystems, new buildings shall not be constructed on areas of particular value in this respect (defined in more detail).

    2. Environmental objective adaption to climate change (Annex 2)

      1. Technical screening criteria for a significant contribution to the environmental objective adaption to climate change

        For new construction projects, so-called "adaptation solutions" are to be implemented to significantly reduce the main physical climate risks of the new construction activity. These adaptation solutions are to be identified in advance by means of a more defined climate risk and vulnerability assessment.

        The following applies to the implemented adaptation solutions:

        Adaption Solutions:
        1. shall not adversely affect the adaptation efforts or the level of resilience to physical climate risks of other people, of nature, of cultural heritage, of assets and of other economic activities;
        2. shall favour nature-based solutions or rely on blue or green infrastructure to the extent possible;
        3. shall be consistent with local, sectoral, regional or national adaptation plans and strategies;
        4. shall be monitored and measured against pre-defined indicators and remedial action is considered where those indicators are not met;
        5. complies with the "do no significant harm" technical technical screening criteria for that activity, where the solution implemented is physical and consists in an activity for which technical screening criteria have been specified in this Annex.

      2. Technical screening criteria for the avoidance of significant harm to other environmental objectives (Do no significant harm ('DNSH'))

        1. The criteria for the avoidance of significant harm from Annex 1 apply.
        2. The building is not dedicated to extraction, storage, transport or manufacture of fossil fuels.
        3. The Primary Energy Demand (PED) setting out the energy performance of the building resulting from the construction does not exceed a certain threshold. The energy performance is certified using an as built Energy Performance Certificate (EPC).

  2. Technical screening criteria for acquisition and ownership of buildings:

    1. Environmental objective mitigation of climate change (Annex 1)

      1. Technical screening criteria for a significant contribution to the environmental objective mitigation of climate change

        1. Buildings built before 31 December 2020, shall have at least an Energy Performance Certificate (EPC) class A. As an alternative, the building is within the top 15% of the national or regional building stock expressed as the operational Primary Energy Demand (PED) and demonstrated by adequate evidence, which at least equals the energy performance of the relevant asset to the energy performance of the national or regional stock built before 31 December 2020 and at least distinguishes between residential and non-residential buildings.
        2. Buildings built after 31 December 2020, shall comply with the criteria for new construction activities (already set out above under "1. Technical screening criteria for construction of new buildings").
        3. Where the building is a large non-residential building (with an effective rated output for heating systems, systems for combined space heating and ventilation, air-conditioning systems or systems for combined air-conditioning and ventilation of over 290 kW), it shall be efficiently operated through energy performance monitoring and assessment.

      2. Technical screening criteria for the avoidance of significant harm to other environmental objectives (Do no significant harm ('DNSH'))

        The avoidance of significant harm ('DNSH') requires "adaptation solutions" - to be determined by means of a climate risk and vulnerability assessment - shall be implemented. These "adaptation solutions" should significantly reduce the main physical climate risks of this activity.

    2. Environmental objective adaption to climate change (Annex 2)

      1. Technical screening criteria for a significant contribution to the environmental objective adaption to climate change

        Acquisition or ownership of buildings requires "adaptation solutions" equivalent to those for new construction activities (see already above under A. 2. a) regarding the corresponding technical screening criteria for new buldings).

      2. Technical screening criteria for the avoidance of significant harm to other environmental objectives (Do no significant harm ('DNSH'))

        1. (The building is not dedicated to extraction, storage, transport or manufacture of fossil fuels.
        2. ( For buildings built before 31 December 2020, the building has at least an Energy Performance Certificate (EPC) class C. As an alternative, the building is within the top 30% of the national or regional building stock expressed as operational Primary Energy Demand (PED) and demonstrated by adequate evidence, which at least equals the energy performance of the relevant asset to the energy performance of the national or regional stock built before 31 December 2020 and at least distinguishes between residential and non-residential buildings.
        3. For buildings built after 31 December 2020, the Primary Energy Demand (PED) defining the energy performance of the building resulting from the construction does not exceed the threshold set for the nearly zero-energy building (NZEB) requirements in national regulation implementing Directive 2010/31/EU. The energy performance is certified using an as built Energy Performance Certificate (EPC).