Properties that are rented, sold, renovated or newly built are obliged to satisfy prescribed minimum energy performance standards (MEPS) that conform to the requirements of increased sustainability and efficiency in buildings.

This legal obligation finds its roots in the Energy Performance in Buildings Directive as transposed into Maltese law via Legal Notice 376 of 2012, entitled the Energy Performance in Buildings Regulations (EPBR).

While the ramifications of this not-so-recent legislative enactment are still being established, and enforcement and monitoring mechanisms developed, the EPBR has the substance to cause a much needed shake-up in the building sector through binding MEPS that will affect home owners, commercial building owners and building developers alike.

MEPS are quite simply an energy rating for buildings provided by a registered building assessor following an energy audit. In establishing whether a building complies with MEPS, assessors take into account local conditions, the designated function and age of the building, and general indoor climate conditions.

MEPS are at present determined on the basis of a Technical Guidance Document on the EPBR, which provides a list of energy-saving measures that are to be adopted by affected developments.

Every building owner is bound to ensure that when buildings are constructed, sold or rented out, an EPC is handed over to the buyer or new tenant by not later than the date of entering the promise of sale or rent agreement

These technical guidelines provide that where energy-efficient design features are technically, environmentally and economically feasible, certain building features ought to be taken into account, as for instance, decentralised energy supply systems based on energy from renewable sources; cogeneration; district or block heating or cooling (particularly where it is based en­tirely or partially on energy from renewable sources); heat pumps and hot water systems; ventilation systems; intelligent metering; and rain water conservation, among others.

A more detailed and homogenous methodology for establishing MEPS is currently being formulated by the Building Regulation Office (BRO), which in collaboration with the Malta Environment and Planning Authority (Mepa), acts as the administrative authority responsible for monitoring and enforcement of energy performance upgrades, in so far as technically, functionally and economically feasible. Once this methodology is established it will be incorporated in the Technical Guidance Document.

It is expected that a similar procedure to that adopted in other EU countries will be established in Malta. The UK, for instance, introduced a system whereby buildings are categorised between ‘A grade’ and ‘G grade’. These benchmarks represent the most efficient and sustainable to least efficient and sustainable buildings respectively.

The UK has set the MEPS at ‘E grade’ buildings. This minimum standard may be reviewed and amended from time to time in line with market developments.

Compliance with MEPS is evidenced through the issuance of an energy performance certificate (EPC) once an assessor is satisfied with the building’s energy performance profile, and subsequently registered with the BRO. An infringement of this requirement and any other provision of the EPBR will result in administrative penalties and sanctions imposed by the BRO, as well as potential imprisonment of the building owner.

An EPC, as provided by an EPC assessor, is essentially a document attesting that the building concerned fulfils the MEPS through reference values or ratings, thereby providing owners or tenants with the opportunity to compare and assess the energy performance of their building or building unit.

The EPC is valid for a period of 10 years from the date of its first issue, provided that no major renovation or alterations are made upon the building from the date of issue. Each EPC shall include recommendations for the cost-optimal improvement of the building or building unit, unless no reasonable potential exists.

The requirement of MEPS as a legal obligation rather than a green option is not, however, without exemption, with certain categories of buildings falling outside the application of the EPBR. These buildings include buildings officially protected (in so far as compliance with certain minimum energy performance re­quirements would unacceptably alter their character or appearance); workshops; stand-alone buildings with a total useful floor area of less than 40 metres squared; and buildings classified as scheduled property (Grade One) by Mepa, among others.

Unless a building falls under one of the exhaustive exemptions listed, every building owner is bound to ensure that when buildings or building units are constructed, sold or rented out, an EPC or a copy thereof is shown to the prospective new tenant or buyer and handed over to the buyer or new tenant by not later than the date of entering the promise of sale or rent agreement.

The EPBR provides that two types of EPCs must be acquired: a design rating and asset rating EPC.

A ‘design rating’ of the building is issued if the building is not yet constructed or finished, while an ‘asset rating’ is issued once the building is already constructed and finished.

Examples of MEPS established overseas point to the likely success of this strategy in the local property market, with MEPS triggering cost-effective investments in a wide range of building types.

These measures will benefit property occupiers by reducing their energy costs and the wider economy and society by stimulating cost-effective investment and reducing carbon emissions. Furthermore, in many instances the costs associated with achieving MEPS will be relatively small as a proportion of the rental and capital values of the property.

The current MEPS and forthcoming revised building rating methodology have and will continue to be codified with the ultimate view of establishing a ‘nearly zero-energy’ performance in buildings post-2018. What constitutes ‘nearly zero-energy’ has not yet been established and is currently being defined by the BRO. However, it would likely refer to buildings which are largely, although not entirely, self-sufficient in relation to heating and cooling, ventilation, hot water and lighting.

This drive towards increased sustainability in the construction industry as reflected in the EPBR should result in a shift in ordinary unsustainable building practices once it is fully established through effective monitoring and enforcement mechanisms and methodical rating standards. Effective enforcement and monitoring mechanisms are the key elements to the success or otherwise of the MEPS.

The introduction of a MEPS system will necessitate a cultural change in the business-as-usual scenario of the construction industry as a whole, and if properly implemented should stimulate market changes and speed up the rate at which energy efficient upgrades to inefficient buildings occurs.

www.fenechlaw.com

Peter Grima is a lawyer at Fenech & Fenech Advocates specialising in energy law and policy.

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